Exhibit 10.5

 

AMENDED AND RESTATED DESIGN-BUILD AGREEMENT

 

FOR

 

GUARANTEED MAXIMUM PRICE

ARCHITECTURAL, ENGINEERING AND

CONSTRUCTION SERVICES

 

BETWEEN

 

WYNN RESORTS (MACAU) S.A.

(“Owner”)

 

AND

 

LEIGHTON CONTRACTORS (ASIA) LIMITED,

 

CHINA STATE CONSTRUCTION ENGINEERING

(HONG KONG) LIMITED,

 

AND

 

CHINA CONSTRUCTION ENGINEERING

(MACAU) COMPANY LIMITED

 

(jointly and severally, “Contractor”)

 

FOR

LUXURY RESORT CASINO COMPLEX IN MACAU

 

As of September 14, 2005

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ARTICLE I. CERTAIN DEFINITIONS

   2

ARTICLE II. INTENT, INTERPRETATION AND CORRELATION

   13

2.1

  

Intent of the Contract Documents

   13

2.2

  

Order of Precedence

   14

2.3

  

Contractor’s Compliance with Contract Documents

   14

2.4

  

Joint and Several Liability

   15

ARTICLE III. GUARANTEED MAXIMUM PRICE

   16

3.1

  

Guaranteed Maximum Price

   16

3.2

  

Cost of the Work

   22

3.3

  

Non-Allowable Cost of the Work

   28

3.4

  

Contractor’s Responsibility For Taxes

   31

3.5

  

Discounts, Rebates and Refunds

   32

3.6

  

No Duplication

   32

ARTICLE IV. CONTRACT TIME AND INTERIM MILESTONE DATES

   32

4.1

  

Definitions

   32

4.2

  

Time of the Essence

   33

4.3

  

Completion Guarantees

   34

4.4

  

Liquidated Damages With Respect to Delays

   35

4.5

  

Early Completion

   37

4.6

  

Guarantees of Completion and Performance

   38

ARTICLE V. PAYMENTS TO CONTRACTOR

   39

5.1

  

Schedule of Values

   39

5.2

  

Applications For Progress Payments

   40

5.3

  

Time of Payments

   42

5.4

  

Owner’s Right To Withhold

   43

5.5

  

Joint Payee Checks

   46

5.6

  

Retention

   47

5.7

  

Substantial Completion Payments

   48

5.8

  

Final Payment

   49

5.9

  

Disputed Payments

   51

5.10

  

Ownership of Materials

   52

5.11

  

Deposits and Advance Payments

   52

5.12

  

Waiver

   52

5.13

  

Materials Off-Site

   53

ARTICLE VI. OWNER’S RESPONSIBILITIES

   54

6.1

  

Information and Services

   54

6.2

  

Limitations

   55

6.3

  

Owner’s Representative

   55

6.4

  

Site Access

   56

6.5

  

Payments

   56

6.6

  

Proof of Funding

   56

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6.7

  

Good Faith

   56

ARTICLE VII. CONTRACTOR’S RESPONSIBILITIES

   56

7.1

  

Contractor's Specific Representations, Warranties and Covenants

   56

7.2

  

Further Covenants

   61

7.3

  

Preconstruction Services

   64

7.4

  

Systems and Procedures

   65

7.5

  

Schedule Meetings and Records

   66

7.6

  

Contractor’s Operations

   67

7.7

  

Site Discipline

   68

7.8

  

Site Security

   70

7.9

  

Coordination With Others

   71

7.10

  

Product and Design Substitutions

   72

7.11

  

Tests and Inspections

   73

7.12

  

Access to Stored Material

   74

7.13

  

Shop Drawings, Product Data and Samples

   74

7.14

  

Project Record Documents and As-Built Requirements

   75

7.15

  

Site Clean Up

   76

7.16

  

Construction Facilities and Temporary Controls

   78

7.17

  

Cutting and Patching of Work

   79

7.18

  

On-Demand Bond Requirements

   79

7.19

  

Liens

   81

7.20

  

Royalties and Patents

   82

7.21

  

Training

   82

7.22

  

Construction Photographs

   83

7.23

  

Statement of Unpaid Claims

   83

7.24

  

Protection of Work

   83

7.25

  

Information to Authorities

   83

7.26

  

Hazardous Materials

   84

7.27

  

Taxes, Customs and Import Duties

   85

ARTICLE VIII. ARCHITECT/ENGINEER; DESIGN DOCUMENTS

   86

8.1

  

Architect’s/Engineer’s Administration of the Contract

   86

8.2

  

Design Information, Drawings and Manuals

   86

ARTICLE IX. SUBCONTRACTORS AND VENDORS

   91

9.1

  

Subcontractors and Vendors

   91

9.2

  

Consent To Use Proposed Subcontractors and Vendors

   91

9.3

  

Award of Subcontracts and Purchase Orders

   92

9.4

  

Subcontractors and Vendors Designated By Owner

   93

9.5

  

Payments to Subcontractors from the Contractor

   93

9.6

  

Subcontractor and Vendor Replacements

   93

9.7

  

Communications With Subcontractors and Vendors

   93

9.8

  

Assignment

   93

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ARTICLE X. WARRANTY OBLIGATIONS

   94

10.1

  

Contractor’s Warranty

   94

10.2

  

Contractor’s Defects Liability Period and Other Warranty Periods

   95

10.3

  

Compliance With Contract Documents

   95

10.4

  

Warranty Costs

   96

10.5

  

Timeliness of Corrective Services

   96

10.6

  

Warranty Survival

   97

10.7

  

Owner’s Right To Correct

   97

10.8

  

Owner’s Right to Supplement Work of Contractor

   97

10.9

  

Acceptance of Non-Conforming Work

   98

10.10

  

Warranty Exclusions

   98

10.11

  

Written Guaranty

   98

ARTICLE XI. SCHEDULING, DELAYS AND ACCELERATION

   99

11.1

  

Owner’s Right to Modify

   99

11.2

  

Project Schedule

   99

11.3

  

Schedule Updates

   99

11.4

  

Events of Force Majeure

   100

11.5

  

Owner Delay

   101

11.6

  

Extensions of Time and Guaranteed Maximum Price Increases for Delay

   101

11.7

  

Limitations

   104

11.8

  

Recovery Plans

   104

11.9

  

Accelerations for Owner’s Convenience

   107

11.10

  

Schedule Coordination

   107

11.11

  

Flow-Down Provisions

   108

11.12

  

Partial Occupancy Or Use

   108

11.13

  

Timely Completion

   108

ARTICLE XII. SUBSTANTIAL AND FINAL COMPLETION

   109

12.1

  

Substantial Completion Procedures and Requirements

   109

12.2

  

Final Completion Procedures and Requirements

   112

ARTICLE XIII. CONCEALED CONDITIONS AND UNCOVERING OF WORK

   115

13.1

  

Concealed Conditions

   115

13.2

  

Covering of Work

   115

ARTICLE XIV. INDEMNIFICATION

   116

14.1

  

Indemnity

   116

14.2

  

Defense Costs

   117

14.3

  

Hazardous Materials

   117

14.4

  

Other Limitations

   117

14.5

  

Survival of Indemnification Provisions

   118

14.6

  

Risk

   118

14.7

  

Limit on Consequential Damages

   118

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ARTICLE XV. INSURANCE

   119

15.1

  

Types of Insurance

   119

15.2

  

Evidence of Coverage

   121

15.3

  

Deductibles

   121

15.4

  

Cooperation by the Parties

   121

15.5

  

Duration

   121

ARTICLE XVI. SAFETY AND COMPLIANCE

   122

16.1

  

Contractor’s Site Safety Responsibilities

   122

16.2

  

Compliance

   123

ARTICLE XVII. TERMINATION OR SUSPENSION OF THE CONTRACT

   123

17.1

  

Material Default By Contractor

   123

17.2

  

Termination For Convenience

   128

17.3

  

Suspensions By Owner

   130

17.4

  

Limitations

   131

17.5

  

Other Rights and Remedies

   131

17.6

  

Contractor’s Remedies

   132

ARTICLE XVIII. CHANGE IN THE WORK

   133

18.1

  

Change

   133

18.2

  

Change Order

   133

18.3

  

Change Proposal Request

   133

18.4

  

Construction Change Directive

   134

18.5

  

Determination of Increases or Decreases in Guaranteed Maximum Price

   136

18.6

  

Simultaneous Submittal Requirements

   137

18.7

  

Continued Performance

   137

18.8

  

Effect of Change Orders

   138

18.9

  

Verbal Instructions and Minor Changes in the Work

   138

18.10

  

Waiver and Release of Contractor’s Rights

   139

ARTICLE XIX. RECORD KEEPING AND AUDIT RIGHTS

   139

19.1

  

Required Accounting Records

   139

19.2

  

Purpose and Extent of Record Access

   139

19.3

  

Record Keeping Formats

   140

19.4

  

Certifications

   140

19.5

  

Flow-Down Provisions

   140

19.6

  

Remedies

   140

19.7

  

Record Retention

   141

ARTICLE XX. CLAIMS

   141

20.1

  

Definition

   141

20.2

  

Notice

   141

20.3

  

Pending Resolution

   141

20.4

  

Final Settlement of Claims

   142

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20.5

  

Unresolved Claims

   142

ARTICLE XXI. OWNER’S LENDERS

   142

21.1

  

Owner’s Lenders

   142

21.2

  

Assignment and Default

   142

21.3

  

Owner’s Lenders Election

   143

21.4

  

Payment and Work Continuation

   143

21.5

  

Payments

   144

21.6

  

Audit Rights

   144

21.7

  

Access

   144

21.8

  

Material Changes

   144

21.9

  

General Cooperation

   144

ARTICLE XXII. DISPUTE RESOLUTION AND GOVERNING LAW

   145

22.1

  

Arbitration

   145

22.2

  

Consolidation of Disputes

   147

22.3

  

Legal Fees

   147

22.4

  

Continued Performance

   147

22.5

  

Governing Law

   147

22.6

  

Non-Waiver

   148

ARTICLE XXIII. PROPRIETARY INFORMATION AND USE OF OWNER’S NAME

   148

23.1

  

Proprietary Information

   148

23.2

  

Advertising and Use of Owner’s Name

   148

23.3

  

Use of Drawings

   148

ARTICLE XXIV. MISCELLANEOUS PROVISIONS

   148

24.1

  

Assignment

   148

24.2

  

Subordination

   149

24.3

  

No Third-Party Beneficiaries

   149

24.4

  

Enforceability

   149

24.5

  

Headings

   150

24.6

  

Counterparts

   150

24.7

  

Subcontractors

   150

24.8

  

Waiver

   150

24.9

  

Sovereign Immunity

   150

24.10

  

Survival

   150

24.11

  

Independent Contractor

   150

24.12

  

Privileged Business

   151

24.13

  

Entire Agreement

   151

24.14

  

Rights and Remedies

   152

24.15

  

Further Acts and Assurances

   152

24.16

  

Expenses

   152

24.17

  

Press Releases

   152

24.18

  

Late Payments by Contractor

   152

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24.19

  

Construction of Agreement

   152

24.20

  

Business Days

   153

ARTICLE XXV. NOTICES

   153

25.1

  

Notice Procedures

   153

25.2

  

Notices To Owner

   153

25.3

  

Notices To Contractor

   154

25.4

  

Change of Address

   154

ARTICLE XXVI. REPRESENTATIONS AND WARRANTIES

   154

26.1

  

Contractor’s Representations and Warranties

   154

26.2

  

Owner’s Representations and Warranties

   157

ARTICLE XXVII. CONTRACTOR’S BUSINESS PRACTICES

   158

27.1

  

Business Practices

   158

ARTICLE XXVIII. GENERAL PROPRIETY

   160

28.1

  

Alcoholic Beverages and Drugs

   160

28.2

  

Arms and Ammunition

   160

28.3

  

Riotous and Disorderly Conduct

   160

28.4

  

Epidemics

   160

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AMENDED AND RESTATED DESIGN-BUILD AGREEMENT

FOR

GUARANTEED MAXIMUM PRICE

ARCHITECTURAL, ENGINEERING AND

CONSTRUCTION SERVICES

 

LUXURY RESORT CASINO COMPLEX IN MACAU

 

This Amended and Restated Design-Build Agreement for Guaranteed Maximum Price
Architectural, Engineering and Construction Services (this “Agreement”), which
amends and restates the Original Agreement (defined below), made as a Deed
effective as of September 14, 2005 (the “Effective Date”), is entered into
between WYNN RESORTS (MACAU) S.A., a company incorporated in the Macau Special
Administrative Region having its registered office at 335-341, Alameda
Dr. Carlos d’Assumpção, 9th Floor, Hotline Center, Macau (“Owner”), and LEIGHTON
CONTRACTORS (ASIA) LIMITED, a private limited company incorporated in the Hong
Kong Special Administrative Region, having its registered office at 39th Floor,
Sun Hung Kai Centre, 30 Harbour Road, North Wanchai, Hong Kong (“Leighton”),
CHINA STATE CONSTRUCTION ENGINEERING (HONG KONG) LIMITED, a private limited
company incorporated in the Hong Kong Special Administrative Region, having a
registered office at 29th Floor, China Overseas Building, 139 Hennessy Road,
Hong Kong (“China/HK”), and CHINA CONSTRUCTION ENGINEERING (MACAU) COMPANY
LIMITED, a private limited company incorporated in the Macau Special
Administrative Region, having a registered office at Rua do Campo, No 78,
Edificio Commercial Zhang Kian, 18 andar, Macau (“China/Macau”; Leighton,
China/HK, and China/Macau being jointly and severally referred to as the
“Contractor”).

 

RECITALS

 

A. Owner has been granted a concession to operate a casino and resort complex in
Macau pursuant to a certain Concession Contract for the Operation of Games of
Chance or Other Games in Casinos in the Macau Special Administrative Region
dated June 24, 2002, between the Macau Special Administrative Region (the “Macau
SAR”) and Owner (the “Gaming Concession Agreement”).

 

B. Owner has been granted a leasehold interest in the real property described in
Exhibit A hereto (the “Site”) pursuant to a certain Land Concession Contract
dated June 4, 2004, between the Macau SAR and Owner (the “Land Concession
Agreement”).

 

C. Owner desires to construct on the Site a “five-star”, first-class, Las
Vegas-style luxury resort and casino, including high-rise hotel space and low
rise space comprised of casino and gaming areas, restaurants, retail, spa,
convention and meeting areas, together

 

1

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with all exterior features, and all on-Site and off-Site improvements and
infrastructure related thereto, all in accordance with the Contract Documents
(as defined below).

 

D. The Contractor has commenced the design and construction of a high-rise hotel
and low rise space comprised of casino and gaming areas and restaurants, retail,
spa, convention and meeting areas, (as more fully described in this Agreement,
the “Original Project”) in accordance with the Original Agreement (as defined
below). Owner desires to engage Contractor to design and construct a new front
feature, a theatre, additional casino and gaming areas and additional retail and
restaurant areas (as more fully described in this Agreement, the “Expansion
Project”; the Original Project and Expansion Project, together, the “Project”).

 

E. Owner and Contractor entered into that certain Design-Build Agreement for
Guaranteed Maximum Price Architectural, Engineering and Construction Services
(the “Original Agreement”), made as a Deed effective as of May 10, 2004,
pursuant to which the Contractor commenced construction of the Original Project
on or about June 28, 2004.

 

F. In order to document the Expansion Project, Owner and Contractor desire to
amend and restate the Original Agreement to set forth the terms and conditions
governing both the Original Project and the Expansion Contract.

 

G. Owner desires (i) to engage Contractor to design and construct the Expansion
Project and (ii) for Contractor to continue its design and construction of the
Original Project, as more fully described in this Agreement, and Contractor
desires to accept such engagement with respect to the Expansion Project and
continue its engagement and construction with respect to the Original Project,
upon the terms and conditions contained in this Agreement.

 

AGREEMENT

 

In consideration of the mutual covenants and agreements set forth below, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Contractor and Owner hereby adopt and incorporate the
foregoing Recitals and agree as follows:

 

ARTICLE I.

CERTAIN DEFINITIONS

 

As used in this Agreement, the following terms shall have the meanings
respectively set forth in this Article 1:

 

“Actions” has the meaning given to it in Section 14.1.

 

“Agreement” has the meaning given to it in the introductory paragraph.

 

2

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“Anticipated Cost Report” has the meaning given to it in Section 7.5.4.

 

“Applications For Final Payment” has the meaning given to it in Section 5.8.

 

“Architect/Engineer” for the Project means Wong & Ouyang (HK) Limited pursuant
to the Architect/Engineer Agreement.

 

“Architect/Engineer Agreement” means that certain Designer Professional Services
Agreement among Wynn Design and Development, LLC and Wong & Ouyang (HK) Limited,
dated as of February 28, 2003, which agreement was transferred to the Contractor
pursuant to that certain Novation Agreement, dated June 3, 2005, among Wynn
Design and Development, LLC, Wong & Ouyang (HK) Limited and Contractor.

 

“As Built” has the meaning given to it in Section 12.2.1.7.

 

“Auditable Subcontractors” has the meaning given to it in Section 19.1.

 

“Bases for Withholding” has the meaning given to it in Section 5.4.

 

“Casino Area 4” means that portion of the Expansion Project Casino depicted on
Attachment 4 of Exhibit B as “Area 4” on the ground floor, including all
associated support and external features.

 

“Casino Area 5” means that portion of the Expansion Project Casino depicted on
Attachment 4 of Exhibit B as “Area 5” on the ground floor, including all
associated support and external features.

 

“Change” has the meaning given to it in Section 18.1.

 

“Change Order” has the meaning given to it in Section 18.2.

 

“Change Proposal” has the meaning given to it in Section 18.3.1.

 

“Change Proposal Request” has the meaning given to it in Section 18.3.

 

“Claim” has the meaning given to it in Section 20.1.

 

“Consequential Damages” has the meaning given to it in Section 14.7.

 

“Construction Change Directive” has the meaning given to it in Section 18.4.1.

 

“Contract” means the Contract Documents, collectively.

 

3

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“Contract Documents” means, collectively, the following documents which are
hereby incorporated herein by this reference:

 

  a) this Agreement;

 

  b) the description of the Site attached hereto as Exhibit A;

 

  c) Drawings;

 

  d) Specifications;

 

  e) the Original Project Schedule attached hereto as Exhibit B-1;

 

  f) the Expansion Project Schedule attached hereto as Exhibit B-4;

 

  g) the preliminary list of construction machinery and equipment to be rented
or purchased by Contractor for use in the Work pursuant to Section 3.2.6 of this
Agreement, attached hereto as Exhibit D;

 

  h) the Original Project Schedule of Approved Values;

 

  i) Expansion Project Schedule of Values;

 

  j) the Original Project Guaranteed Maximum Price Premises and Assumptions
attached hereto as Exhibit G;

 

  k) the Expansion Project Guaranteed Maximum Price Premises and Assumptions
attached hereto as Exhibit G;

 

  l) all other exhibits to this Agreement, as set forth on the list of exhibits
appearing at the end of this Agreement; and

 

  m) all supplements, addenda, modifications and amendments to any of the
foregoing documents described in (a) through and including (i), from time to
time approved by Owner (and Contractor, to the extent required by the terms of
this Agreement) in writing, including, but not limited to, any Change Orders and
Construction Change Directives, and such other documents expressly referred to
in the foregoing documents as being a part of the Contract Documents. The
Contract Documents do not include other documents such as bidding requirements
(advertisement or invitation to bid, instructions to bidders, sample forms, and
Contractor’s bid or portion of addenda relating to bidding requirements).

 

“Contract Time” has the meaning given to it in Section 4.1.5.

 

“Contractor” has the meaning given to it in the introductory paragraph.

 

“Contractor’s Certificate” has the meaning given to it in Section 5.2.5.

 

4

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“Cost of the Work” has the meaning given to it in Section 3.2.

 

“day” has the meaning given to it in Section 4.1.1.

 

“Defects Liability Retainage” has the meaning given to it in Section 5.6.2.

 

“Design Documents” has the meaning given to it in Section 8.2.8.

 

“Design Information” has the meaning given to it in Section 8.2.1.

 

“Dispute” has the meaning given to it in Section 22.1.

 

“Dispute Date” has the meaning given to it in Section 22.1.

 

“Drawings” means the graphic and pictorial portions of the Contract Documents,
in both digital and paper form, wherever located and whenever issued, which are
approved for use during construction and show the design, location and
dimensions of the Work and Project including plans, elevations, sections,
diagrams and other details. Owner and Contractor acknowledge that as of the
Effective Date the Drawings with respect to the Expansion Project are not
complete. The Drawings include, but are not limited to, those listed on
Exhibit E attached hereto and incorporated herein by this reference.

 

“Effective Date” has the meaning given to it in the preamble.

 

“Excepted Risks” has the meaning given to it in Section 5.10.

 

“Entry Feature” means the collective components of the Feature as depicted on
Attachment 3 of Exhibit E (including the dome, tree, lifts and other features
described therein), and associated support and external features.

 

“Expansion Project” has the meaning given to it in preamble.

 

“Expansion Project Casino” means, collectively, those portions of the Expansion
Project comprising the casino and support facilities located in the lowrise
podium, and associated support and external features. The footprint of the
Expansion Project Casino on the Site is generally depicted on Attachment 4 of
Exhibit B.

 

“Expansion Project Certificate of Final Completion” has the meaning given to it
in Section 12.2.2.4.

 

“Expansion Project Certificate of Substantial Completion” has the meaning given
to it in Section 12.1.2.7.

 

5

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“Expansion Project Construction Contingency” has the meaning given to it in
Section 3.1.8.2.

 

“Expansion Project Contractor’s Fee” has the meaning given to it in
Section 3.1.3.2.

 

“Expansion Project Cost Control Incentive” has the meaning given to it in
Section 3.2.

 

“Expansion Project Date of Commencement” means the “Expansion Project Date of
Commencement” specified in Section 4.1.3 with respect to the Expansion Project
Work.

 

“Expansion Project Defects Liability Period” has the meaning given to it in
Section 10.2.

 

“Expansion Project Final Completion” has the meaning given to it in
Section 12.2.1.

 

“Expansion Project Final Payment” has the meaning given to it in Section 5.8.2.

 

“Expansion Project Guaranteed Maximum Price” has the meaning given to it in
Section 3.1.

 

“Expansion Project Guaranteed Maximum Price Premises and Assumptions” means the
contents of Exhibit G attached hereto, which describe Owner’s requirements for
the Expansion Project.

 

“Expansion Project Interim Milestone Dates” has the meaning given to it in
Section 4.1.4.

 

“Expansion Project Interim Milestones” has the meaning given to it in
Section 4.1.4.

 

“Expansion Project Liquidated Damages” has the meaning given to it in
Section 4.4.1.

 

“Expansion Project Owner Contingency” has the meaning given to it in
Section 3.1.7.2.

 

“Expansion Project Punch List Items” has the meaning given to it in
Section 12.1.2.5.

 

6

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“Expansion Project Schedule” has the meaning given to it in Section 4.1.4.

 

“Expansion Project Schedule of Values” has the meaning given to it in
Section 5.1.1.

 

“Expansion Project Substantial Completion” has the meaning given to it in
Section 12.1.1.

 

“Expansion Project Work” means those portions of the Work to be executed by
Contractor with respect to the Expansion Project.

 

“FCPA” has the meaning given to it in Section 27.1.1.

 

“Fill Materials” has the meaning given to it in Section 7.1.11.1.

 

“Force Majeure” has the meaning given to it in Section 11.4.

 

“Force Majeure Delay” has the meaning given to it in Section 11.4.

 

“Gaming Concession Agreement” has the meaning given to it in the preamble.

 

“Guarantee” means the Amended and Restated Parent Completion Guarantee in the
form of Exhibit K attached hereto, whereby the Guarantors absolutely and
unconditionally guarantee to Owner each and all of Contractor’s obligations and
liabilities under this Agreement.

 

“Guaranteed Date of Expansion Project Final Completion” has the meaning given to
it in Section 4.1.8.

 

“Guaranteed Date of Expansion Project Substantial Completion” has the meaning
given to it in Section 4.1.9.

 

“Guaranteed Date of Original Project Final Completion” has the meaning given to
it in Section 4.1.6.

 

“Guaranteed Date of Original Project Substantial Completion” has the meaning
given to it in Section 4.1.7.

 

“Guaranteed Maximum Price” means, collectively, the Expansion Project Guaranteed
Maximum Price and the Original Project Guaranteed Maximum Price.

 

“Guarantor” and “Guarantors” have the meaning given to them in Section 4.6.1.

 

“Hotel” means collectively those portions of the Project comprising the hotel
guestrooms and suites as well as the sky casino, and ancillary facilities. The
footprint of the Hotel on the Site is generally depicted on Attachment 2 of
Exhibit B.

 

7

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“ICC” has the meaning given to it in Section 22.1.

 

“ICC Rules” has the meaning given to it in Section 22.1.

 

“Independent Expert” has the meaning given to it in Section 7.18.1.2.

 

“Land Concession Agreement” has the meaning given to it in the preamble.

 

“Laws” has the meaning given to it in Section 7.2.

 

“Lender Liens” has the meaning given to it in Section 24.2.

 

“Lender’s Notification” has the meaning given to it in Section 21.2.

 

“Liquidated Damages” has the meaning given to it in Section 4.4.1.

 

“Minor Changes” has the meaning given to it in Section 18.9.

 

“Modification” means any of the following:

 

  (a) a written amendment to the Contract identified as such and signed by both
parties;

 

  (b) a Change Order;

 

  (c) a Construction Change Directive; or

 

  (d) a Minor Change.

 

“Non-Allowable Cost of the Work” has the meaning given to it in Section 3.3.

 

“Notice to Proceed” has the meaning given to it in Section 4.1.2.

 

“Notices” has the meaning given to it in Section 25.1.

 

“Official” has the meaning given to it in Section 27.1.3.

 

“On-Site Property” has the meaning given to it in Section 7.8.

 

“Original Agreement” has the meaning given to it in the preamble.

 

“Original Agreement Guaranteed Maximum Price” means Two Hundred Fifty-Five
Million Five Hundred Thousand United States Dollars (US$255,500,000).

 

“Original Project” has the meaning given to it in the preamble.

 

8

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“Original Project Casino” means, collectively, those portions of the Original
Project comprising the casino and support facilities located in the lowrise
podium, and associated support and external features. The footprint of the
Casino on the Site is generally depicted on Attachment 2 of Exhibit B.

 

“Original Project Certificate of Final Completion” has the meaning given to it
in Section 12.2.2.4.

 

“Original Project Certificate of Substantial Completion” has the meaning given
to it in Section 12.1.2.7.

 

“Original Project Construction Contingency” has the meaning given to it in
Section 3.1.8.1.

 

“Original Project Contractor’s Fee” has the meaning given to it in
Section 3.1.2.2.

 

“Original Project Cost Control Incentive” has the meaning given to it in
Section 3.2.

 

“Original Project Date of Commencement” means June 28, 2004.

 

“Original Project Defects Liability Period” has the meaning given to it in
Section 10.2.

 

“Original Project Early Completion Component” has the meaning given to it in
Section 3.2.

 

“Original Project Final Completion” has the meaning given to it in
Section 12.2.1.

 

“Original Project Final Payment” has the meaning given to it in Section 5.8.1.

 

“Original Project Guaranteed Maximum Price” has the meaning given to it in
Section 3.1.

 

“Original Project Guaranteed Maximum Price Premises and Assumptions” means the
contents of Exhibit G attached hereto, which describe Owner’s requirements for
the Original Project.

 

“Original Project Interim Milestone Dates” has the meaning given to it in
Section 4.1.4.

 

“Original Project Interim Milestones” has the meaning given to it in
Section 4.1.4.

 

“Original Project Liquidated Damages” has the meaning given to it in
Section 4.4.1.

 

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“Original Project Owner Contingency” has the meaning given to it in
Section 3.1.7.1.

 

“Original Project Punch List Items” has the meaning given to it in
Section 12.1.2.5.

 

“Original Project Schedule” has the meaning given to it in Section 4.1.4.

 

“Original Project Approved Schedule of Values” means the Schedule of Values
delivered by Contractor to Owner on July 27, 2004.

 

“Original Project Substantial Completion” has the meaning given to it in
Section 12.1.1.

 

“Original Project Work” means those portions of the Work to be executed by
Contractor with respect to the Original Project.

 

“Owner Delay” has the meaning given to it in Section 11.5.

 

“Owner Indemnitees” has the meaning given to it in Section 14.1.

 

“Owner Recovery Plan” has the meaning given to it in Section 11.8.6.

 

“Owner’s Consultants” means the Principal Interior Designer together with the
additional interior design and other consultants retained by Owner to perform
the Owner’s Design and other services as set out in the Guaranteed Maximum Price
Premises and Assumptions.

 

“Owner’s Contractors” means the contractors, vendors and suppliers (other than
Owner’s Consultants) retained by Owner in connection with the Project. The
Contractor shall be responsible for managing and coordinating the activities of
the Owner’s Consultants and Owner’s Contractors with the Work.

 

“Owner’s Design” means those design services related to the Project prepared by
Owner or the Owner’s Consultants, which shall, as may be required, be included
in Contractor’s Work.

 

“Owner’s Lenders” has the meaning given to it in Section 21.1.

 

“Owner’s Pre-Opening Work” has the meaning given to it in Section 11.8.6.

 

“Owner’s Representative” has the meaning given to it in Section 6.3.

 

“Permissible Delay” means any Owner Delay, Force Majeure Delay, any other delay
for circumstances specified in this Agreement as providing for an extension of
the

 

10

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Contract Time and/or an increase in the Guaranteed Maximum Price, and any other
delay for causes which Owner and Contractor agree may justify delay.

 

“Personnel” has the meaning given to it in Section 3.2.1.

 

“Plant” has the meaning given to it in Section 7.27.1.

 

“pre-existing hazardous materials” has the meaning given to it in
Section 7.26.1.

 

“Principal Interior Designer” means Wynn Design and Development, LLC, which in
turn shall be retaining additional interior design consultants for the Project.

 

“Product Data” has the meaning given to it in Section 7.13.2.

 

“Project” has the meaning given to it in the preamble.

 

“Recovery Plan” has the meaning given to it in Section 11.8.

 

“Recovery Plan Liabilities” has the meaning given to it in Section 4.2.

 

“Reimbursable Taxes” means all those Taxes described on Exhibit N attached
hereto as being reimbursable to Contractor as a Cost of the Work.

 

“Related Entities” has the meaning given to it in Section 27.1.1.

 

“Request” has the meaning given to it in Section 22.1.

 

“Retention” has the meaning given to it in Section 5.6.1.

 

“RFI” has the meaning given to it in Section 7.3.3.

 

“Right to Audit” has the meaning given to it in Section 19.5.

 

“Samples” has the meaning given to it in Section 7.13.3.

 

“Schedule Update” has the meaning given to it in Section 11.3.

 

“Schedule Update No. 1” has the meaning given to it in Section 11.3.

 

“Shop Drawings” has the meaning given to it in Section 7.13.1.

 

“Site” has the meaning given to it in the preamble.

 

“Specifications” means that portion of the Contract Documents, in both digital
and paper form, wherever located and whenever issued, which are approved by
Owner for use during construction and set forth the written requirements for
materials, equipment,

 

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construction systems, standards and workmanship for the Work. Owner and
Contractor acknowledge that as of the Effective Date the Specifications are not
complete. The Specifications include, without limitation, those listed on
Attachment 2 to Exhibit E attached hereto and incorporated herein by this
reference.

 

“Subcontractor” means any person or entity (including employees, agents and
representatives thereof) who has a contract with or is engaged by Contractor, or
with any other Subcontractor, at any tier to construct or perform a portion of
the Work and/or provide construction related services for the Work at the Site,
and includes any party any of them are responsible or liable for at law or under
the Contract Documents.

 

“Substitution” means the substitution of any materials or equipment specified in
the Contract Documents, or any design change, initiated by the Contractor and
approved by Owner in advance and in writing pursuant to Section 7.10 of this
Agreement after the Effective Date.

 

“Tax” or “Taxes” mean all taxes, charges, fees, duties, levies, penalties or
other assessments imposed by any governmental authority, including income, gross
receipts, excise, property, sales, gain, use, license, custom duty,
unemployment, capital stock, transfer, franchise, payroll, withholding, social
security, minimum estimated, profit, gift, severance, value added, disability,
premium, recapture, credit, occupation, service, leasing, employment, stamp and
other taxes.

 

“TCO” has the meaning given to it in Section 12.1.2.2.

 

“Theatre” means collectively those portions of the Project comprising the
theatre and its ancillary facilities. The footprint of the theatre on the Site
is generally depicted on Attachment 4 of Exhibit B.

 

“TPL” has the meaning given to it in Section 15.1.6.

 

“Vendor” means any person or entity (including employees, agents and
representatives thereof) 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 Site for the Work, through a
contract, purchase order or other arrangement with Contractor or any
Subcontractor at any tier, and includes any party any of them are responsible or
liable for at law or under the Contract Documents.

 

“Work” means the totality of the obligations imposed upon Contractor by the
Contract Documents with respect to each of the Original Project and the
Expansion Project, including, but not limited to, (a) the design, supply and
performance by Contractor, directly and through Architect/Engineer,
Subcontractors and Vendors, of all things (labor, services, materials,
equipment, tools, machinery, fabrication, etc.) necessary and/or reasonably
inferable from the Contract Documents (including those prepared by Owner) as
being required or necessary to fully complete the tasks and improvements
described as

 

12

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Contractor’s Work with respect to each of the Original Project and the Expansion
Project in the Contract Documents (b) the management of Owner’s Consultants and
the coordination of the Owner’s Design with the Architect/Engineer as may be
required, and (c) the management of Owner’s Contractors, all in accordance with
the requirements of the Original Project Guaranteed Maximum Price Premises and
Assumptions, the Expansion Project Guaranteed Maximum Price Premises and
Assumptions and the other Contract Documents. The term “Work” includes the
Original Project Work and the Expansion Project Work. The term “Work” does not
include the exclusions or Owner’s separate work as identified in Attachment 1 to
Exhibit G.

 

ARTICLE II.

INTENT, INTERPRETATION AND CORRELATION

 

2.1 Intent of the Contract Documents. The intent of the Contract Documents is
for the Contractor to perform, supply and complete, and Owner hereby engages
Contractor to and Contractor hereby agrees to perform, supply and complete, the
Work. Contractor’s obligation to perform, supply, complete and commission the
Work shall include, without limitation, providing all necessary architectural
design (except for the Owner’s Design); engineering; scheduling, procurement,
supervision, construction, and construction management services; the management
and coordination of Owner’s Consultants and Owner’s Contractors and Owner’s
Vendors with the Work; and the supplying of all necessary labor, materials,
equipment and related work and services, including all things reasonably
inferable from the Contract Documents as being necessary to fully complete the
Work and obtain the intended results described in the Original Project
Guaranteed Maximum Price Premises and Assumptions, and the Expansion Project
Guaranteed Maximum Price Premises and Assumptions, all in accordance with the
requirements of the Contract Documents (including, but not limited to, the
requirements of the Original Project Schedule, the Expansion Project Schedule,
the Original Project Guaranteed Maximum Price requirements set forth in Article
3 below and Expansion Project Guaranteed Maximum Price requirements set forth in
Article 3 below). Contractor shall be solely responsible for the preparation of
the Drawings and Specifications (other than those to be prepared by Owner’s
Consultants with respect to Owner’s Design); for the means, methods, techniques
and sequences of construction; and for the finished construction fully complying
with the Project requirements established pursuant to the Contract Documents and
with applicable Laws. Contractor recognizes that Owner is not retaining its own
architect or engineer on the Project and Contractor acknowledges that it is
solely responsible for Project Site analysis and for the design (except for the
Owner’s Design) and construction of the Work, including coordinating the Owner’s
Design with the Architect/Engineer’s design, and that Owner is relying upon
Contractor for such services. Contractor accepts the relationship of trust and
confidence thus imposed and shall efficiently design, administer, construct and
supervise the Work in a professional manner, timely delivering the completed
Original Project and completed Expansion Project to Owner with all applicable
mechanical, electrical, plumbing, fire safety and other building systems fully
operational. The enumeration of particular items in the Specifications and/or
Drawings and/or other Contract Documents shall not be

 

13

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construed to exclude other items reasonably inferable from the Contract
Documents or being necessary to fully complete the Work. The Contract Documents
are complementary, and what is required by or reasonably inferable from any one
of the Contract Documents (including either a Drawing or Specification) as being
necessary to produce the intended results shall be binding and required as a
part of the Work as if required by all Contract Documents. Notwithstanding that
Exhibit F attached hereto sets forth Contractor’s estimated breakdown of the
Original Project Guaranteed Maximum Price and the Expansion Project Guaranteed
Maximum Price into line items and categories and that Contractor’s acceptance of
the Original Project Guaranteed Maximum Price and the Expansion Project
Guaranteed Maximum Price may have been based on such estimates, Contractor
agrees that the scope of the Work to be performed by Contractor shall be
determined by the Original Project Guaranteed Maximum Price Premises and
Assumptions, the Expansion Project Guaranteed Maximum Price Premises and
Assumptions and the other Contract Documents. Contractor further agrees that in
the event of any discrepancy between (a) the Original Project Guaranteed Maximum
Price Premises and Assumptions, the Expansion Project Guaranteed Maximum Price
Premises and Assumptions and the other Contract Documents (other than Exhibit F)
and (b) Exhibit F, the Original Project Guaranteed Maximum Price Premises and
Assumptions, the Expansion Project Guaranteed Maximum Price Premises and
Assumptions (as applicable) and the other Contract Documents (other than Exhibit
F) shall control, and no adjustment to the Original Project Guaranteed Maximum
Price, the Expansion Project Guaranteed Maximum Price or the Contract Time shall
be made as a result thereof.

 

2.2 Order of Precedence. Subject to the provisions of Section 2.3 and the last
two sentences of Section 2.1 hereof, in the event of any conflicts or
inconsistencies which cannot be resolved by reading the Contract Documents as a
whole, the provisions of the Contract Documents shall be controlling in
accordance with the following order of precedence:

 

2.2.1 this Agreement;

 

2.2.2 the Original Project Guaranteed Maximum Price Premises and Assumptions and
the Expansion Project Guaranteed Maximum Price Premises and Assumptions (as
applicable);

 

2.2.3 the Drawings;

 

2.2.4 Specifications; and

 

2.2.5 the other Contract Documents.

 

2.3 Contractor’s Compliance with Contract Documents. Contractor hereby agrees
and accepts that Contractor has a duty to refer all questions with respect to
any doubts or concerns over the intent or appropriate interpretation of the
Contract Documents to Owner for Owner’s decision. Contractor agrees, accepts and
assumes that Owner’s decision will require implementation of the most stringent
requirements among any conflicting

 

14

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provisions of the Contract Documents as being part of the Work. Contractor
agrees to be bound by all decisions by Owner to implement the most stringent of
any conflicting requirements within the Contract Documents. Any failure by
Contractor to seek such clarifications shall in no way limit Owner’s ability to
require such implementation, including replacement by Contractor of installed
Work at a later date (as a Cost of the Work, subject to the provisions of
Section 3.3, and without increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable)), to achieve
compliance with the standard required pursuant to this Section 2.3.

 

2.3.1 The failure of Owner to insist in any one or more instances upon a strict
compliance with any provision of this Contract, or to exercise any option herein
conferred, shall not be construed as a waiver or relinquishment of Owner’s right
thereafter to require compliance with such provision of this Contract, or as
being a waiver of Owner’s right thereafter to exercise such option, and such
provision or option will remain in full force and effect.

 

2.3.2 If there is any inconsistency in the Drawings or any conflict between the
Drawings and Specifications, Contractor shall provide the better quality or
greater quantity of Work or materials, as applicable, unless Owner directs
otherwise in writing.

 

2.3.3 Contractor shall be responsible for dividing the Work among the
appropriate qualified Subcontractors and Vendors. No claim will be entertained
by Owner based upon the organization or arrangement of the Specifications and/or
the Drawings into areas, sections, subsections or trade disciplines.

 

2.3.4 Detail drawings shall take precedence over scale drawings, and figured
dimensions on the Drawings shall govern the setting out of the Work.

 

2.3.5 Unless the Specifications expressly state otherwise, references to
documents and standards of professional organizations shall mean the latest
editions published prior to the Effective Date.

 

2.3.6 Technical words, abbreviations and acronyms in the Contract Documents not
defined therein shall be used and interpreted in accordance with customary usage
in the construction industry.

 

2.3.7 Whenever consent, permission or approval is required from any party
pursuant to the provisions of the Contract Documents, such consent, permission
or approval shall, unless expressly provided otherwise in this Agreement, be
given or obtained, as applicable, in writing and shall not be unreasonably
withheld or delayed.

 

2.4 Joint and Several Liability. Leighton, China/HK and China/Macau shall be
jointly and severally liable to Owner for the fulfillment by Contractor of the
terms of this Agreement. All references to Contractor in the Contract Documents
shall be deemed to include references to Leighton, China/HK and China/Macau
jointly and severally. Each of

 

15

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Leighton, China/HK and China/Macau shall be fully responsible for the proper
performance of the obligations of Contractor under the Contract Documents.
Leighton, China/HK and China/Macau shall be liable to Owner and the Owner
Indemnities on a joint and several basis for any and all acts or omissions of
Contractor, whether under this Agreement or pursuant to the Contract Documents.
The composition of the joint venture formed by Leighton, China/HK and
China/Macau, as well as the terms and conditions of the written joint venture
agreement among such parties, shall be subject to Owner’s prior written consent
and shall not be materially altered without Owner’s prior written consent, which
consent shall not be unreasonably withheld or delayed; and any direct or
indirect transfers of interests in the joint venture by or among any of such
parties shall be subject to Owner’s prior written consent. Contractor’s
Representative shall have the authority to bind the joint venture constituting
Contractor and each of its members. The Contractor’s Representative is
authorized to act on behalf of Contractor with regard to the Work and the
Contract Documents and his decisions will be binding upon Contractor. Owner may
rely on, and Contractor shall be bound by, any notice or correspondence
delivered by Contractor’s Representative in connection with the Contract
Documents.

 

ARTICLE III.

GUARANTEED MAXIMUM PRICE

 

3.1 Guaranteed Maximum Price. Subject to additions and deductions which may be
made only in accordance with the Contract Documents, Contractor represents,
warrants and guarantees to Owner that the total maximum cost to be paid by Owner
for Contractor’s complete performance under the Contract Documents, including,
but not limited to, Original Project Final Completion and Expansion Project
Final Completion (as applicable) of all Work, all services of Contractor under
the Contract, and all fees, compensation and reimbursements to Contractor, shall
not exceed the total amount of:

 

(a) with respect to the Original Project, Three Hundred Million Four Hundred
Sixty-Four Thousand Six Hundred Fifty-Eight United States Dollars
(US$300,464,658) (“Original Project Guaranteed Maximum Price”); and

 

(b) with respect to the Expansion Project, One Hundred Fifty-Six Million Seven
Hundred Fifty-Nine Thousand Three Hundred Twenty-Six United States Dollars
(US$156,759,326) (“Expansion Project Guaranteed Maximum Price”).

 

Costs which would cause either the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as each may be adjusted pursuant to
the Contract Documents) to be exceeded shall be paid by the Contractor without
reimbursement by Owner. Contractor acknowledges that each of the Original
Project Guaranteed Maximum Price and the Expansion Project Guaranteed Maximum
Price is stated and is payable in United States dollars, and that no adjustment
will be made thereto on account of change in any exchange rate relevant to the
performance of the Work, including, but not

 

16

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limited to, any changes in exchange rates of the United States dollar, Hong Kong
dollar, Macau pataca and People’s Republic of China renminbi. Each of the
Original Project Guaranteed Maximum Price and Expansion Project Guaranteed
Maximum Price is inclusive of all Taxes assessed in any jurisdiction for the
performance by Contractor (including Subcontractors and Vendors at any tier) of
its obligations under the Contract Documents. Further, Contractor shall be
deemed to have satisfied itself before entering into this Agreement as to
(a) all of the conditions and circumstances which may affect each of the
Original Project Guaranteed Maximum Price and the Expansion Project Guaranteed
Maximum Price, including the nature and character of the Work to be executed,
the prevailing geotechnical, environmental and ambient conditions, local uses,
the existing installations (if any), the general circumstances at the Site, the
general labor position at the Site and in the region generally and the
coordination and interrelation of the execution of the Original Project Work and
the Expansion Project Work; and (b) the correctness and sufficiency of the each
of the Original Project Guaranteed Maximum Price and the Expansion Project
Guaranteed Maximum Price to cover all of its obligations under the Contract
Documents. Contractor shall be responsible for obtaining all information
necessary for the Work and shall be deemed to have included and accounted for in
each of the Original Project Guaranteed Maximum Price and the Expansion Project
Guaranteed Maximum Price all risks, contingencies, Taxes, local and national
conditions, laws, customs, policies and practices and other conditions affecting
the Work, the Project or the performance thereof, in each case whether known or
unknown, or foreseeable or unforeseeable (subject to the provisions of this
Agreement relating to Permissible Delay and Excepted Risks). Contractor shall be
responsible for all errors made and for any misunderstanding or incorrect
information provided by any person or entity or relied upon by Contractor,
except to the extent otherwise provided for in the Contract Documents.
Notwithstanding the preceding sentence, Contractor shall not be responsible for
errors made or for any incorrect information provided by any of Owner’s
Consultants or Owner’s Contractors, except to the extent that Contractor has
failed in its duty of coordination, supervision and management with respect to
Owner’s Consultants and Owner’s Contractors, as set forth in this Agreement.

 

3.1.2 Original Project Guaranteed Maximum Price Components. The Original Project
Guaranteed Maximum Price is comprised of the maximum amount payable by Owner
for:

 

3.1.2.1 the Cost of the Work listed in Section 3.2 hereof for full and complete
performance of the Work in strict accordance with Contract Documents, and

 

3.1.2.2 a fixed fee to Contractor in the amount of Twenty Million Five Hundred
Forty-One Thousand Nine-Hundred Sixty-Seven United States Dollars
(US$20,541,967) (“Original Project Contractor’s Fee”).

 

The Original Project Contractor’s Fee shall be the Contractor’s sole and
exclusive compensation for all costs described as Non-Allowable Costs of the
Work in Section 3.3

 

17

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hereof and is inclusive of all overhead and profit arising out of or relating to
the Contractor’s Work. The Original Project Guaranteed Maximum Price is further
broken down into line items and categories on Exhibit F attached hereto.

 

3.1.3 Expansion Project Guaranteed Maximum Price Components. The Expansion
Project Guaranteed Maximum Price is comprised of the maximum amount payable by
Owner for:

 

3.1.3.1 the Cost of the Work listed in Section 3.2 hereof for full and complete
performance of the Work in strict accordance with Contract Documents, and

 

3.1.3.2 a fixed fee to Contractor in the amount of Eleven Million Five Hundred
Eighteen Thousand Three Hundred Fifty-Eight United States Dollars
(US$11,518,358) (“Expansion Project Contractor’s Fee”).

 

The Expansion Project Contractor’s Fee shall be the Contractor’s sole and
exclusive compensation for all costs described as Non-Allowable Costs of the
Work in Section 3.3 hereof and is inclusive of all overhead and profit arising
out of or relating to the Contractor’s Work. The Expansion Project Guaranteed
Maximum Price is further broken down into line items and categories on Exhibit F
attached hereto.

 

3.1.4 Cost Overruns. Subject to any adjustment to each of the Original Project
Guaranteed Maximum Price and the Expansion Project Guaranteed Maximum Price (as
applicable) which may be made in accordance with the Contract Documents,
Contractor shall be solely liable and responsible for and shall pay any and all
costs, fees and other expenditures in excess of the Original Project Guaranteed
Maximum Price and the Expansion Project Guaranteed Maximum Price (as applicable)
for and/or relating to the Original Project Work and Expansion Project Work (as
applicable), without entitlement to reimbursement from Owner.

 

3.1.5 Proof of Funds. The Contractor shall, within five (5) days of receipt of
any request by Owner or Owner’s Lenders therefor, provide Owner and Owner’s
Lenders with evidence satisfactory to Owner’s Lenders that (i) based on the
progress of the Work and Cost of the Work already incurred, the remaining Work
can be completed for the Original Project Guaranteed Maximum Price and the
Expansion Project Guaranteed Maximum Price, or (ii) sufficient funds are
available to Contractor (directly, or through any of the Guarantors) to pay any
anticipated overage.

 

3.1.6 Inferable Work. Contractor agrees that the scope of each of the Original
Project Guaranteed Maximum Price and the Expansion Project Guaranteed Maximum
Price includes Work not expressly indicated on the Contract Documents, but which
is reasonably inferable from the Contract Documents, or consistent therewith,
and such Work shall be performed by Contractor without any increase in the
Original Project Guaranteed Maximum Price or the Expansion Project Guaranteed
Maximum Price (as applicable). The intent of the Contract Documents is described
in Section 2.1 and shall

 

18

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include all additional items reasonably inferable from the Contract Documents as
being necessary to conform with this Contract and applicable Laws. Contractor
acknowledges that it bears responsibility for consequences resulting from its
design and construction processes and acknowledges its responsibility to manage
and coordinate all of the design and construction processes for the Project so
that the requirements of the Contract are achieved.

 

3.1.7 Owner Contingency.

 

3.1.7.1 The Original Project Guaranteed Maximum Price includes an Owner
contingency in the amount of Three Million Twelve Thousand Eight Hundred
Twenty-One United States Dollars (US$3,012,821) (“Original Project Owner
Contingency”).

 

3.1.7.2 The Expansion Project Guaranteed Maximum Price includes an Owner
contingency in the amount of Two Million Five Hundred Thousand United States
Dollars (US$2,500,000) (“Expansion Project Owner Contingency”).

 

To allocate a portion of the Original Project Owner Contingency or the Expansion
Project Owner Contingency (as applicable) to a portion of the Original Project
Work or Expansion Project Work, respectively, for any purpose, Owner shall
submit a Construction Change Directive to Contractor with respect to such
allocation. Contractor and Owner will then follow the procedure described in
Article 18 of this Agreement. Each allocation of either the Original Project
Owner Contingency or the Expansion Project Owner Contingency shall be reflected
on the respective Application for Progress Payment for the period during which
Owner makes such approved allocation. Any portion of either of the Original
Project Owner Contingency or the Expansion Project Owner Contingency remaining
unallocated at Original Project Final Completion and Expansion Project Final
Completion, respectively, shall revert to the Owner as provided for in
Section 3.2. Contractor shall have the right to propose to Owner at any time an
allocation of either of the Original Project Owner Contingency or the Expansion
Project Owner Contingency (as applicable), setting forth in reasonable detail
why Contractor considers such an allocation to be appropriate, but Owner may in
its sole discretion agree or disagree to such use or allocation of the Original
Project Owner Contingency or the Expansion Project Owner Contingency (as
applicable),.

 

3.1.8 Construction Contingency.

 

3.1.8.1 The Original Project Guaranteed Maximum Price includes a construction
contingency in the amount of Thirteen Million Three Hundred Fifty-Two Thousand
Eight Hundred Twenty-Two United States Dollars (US$13,352,822) (“Original
Project Construction Contingency”).

 

3.1.8.2 The Expansion Project Guaranteed Maximum Price includes a construction
contingency in the amount of Twelve Million Seven Hundred Forty-Five Thousand
Five Hundred Forty-Six United States Dollars (US$12,745,546) (“Expansion Project
Construction Contingency”).

 

19

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Subject to the terms of the Contract Documents, Contractor shall be entitled to
allocate from and apply against the Original Project Construction Contingency or
the Expansion Project Construction Contingency (as applicable) Costs of the Work
for the following, and no other, purposes relating to the Original Project Work
or Expansion Project Work (as applicable): (a) implementation of any Recovery
Plan, (b) cost overruns, (c) Minor Changes in the Original Work or Expansion
Project Work (as applicable), (d) warranty costs prior to Original Project Final
Completion and Expansion Project Final Completion (as applicable), (e) those
circumstances where the actual cost of an item exceeds the amount allocated to
such item in the Original Project Guaranteed Maximum Price or the Expansion
Project Guaranteed Maximum Price (as applicable) (pursuant to Section 3.1.9.2 or
3.1.9.3 of this Agreement), (f) the costs described in Sections 3.2.13.7,
3.2.13.10, 3.3.6, 3.3.9, 3.3.13, 3.3.15, 3.3.17 or 7.17, (g) any other purpose
expressly authorized in this Agreement, and (h) concealed conditions; provided,
however, that Contractor may not apply, use or allocate from the Original
Project Construction Contingency or the Expansion Project Construction
Contingency any amounts for any of the foregoing purposes that are the result
of, relate to or arise from any gross negligence, willful misconduct, fraud,
material breach or material failure to perform by, Contractor, any Subcontractor
or Vendor (except as necessary to replace any Subcontractor or Vendor because of
the bankruptcy or failure to perform of such Subcontractor or Vendor), or any
party for which any of them are liable or responsible at law or under the
Contract Documents, or for any Non-Allowable Costs of the Work except as
provided above. Each use of the Original Project Construction Contingency or the
Expansion Project Construction Contingency (as applicable) by Contractor shall
be reflected (with a narrative explanation) on the respective Application for
Progress Payment for the period during which Contractor makes such use and
application. Any portion of the Original Project Construction Contingency or the
Expansion Project Construction Contingency remaining unused at Original Project
Final Completion and Expansion Project Final Completion, respectively, shall be
allocated as provided in Section 3.2.

 

3.1.9 Subcontractor Bids. As Drawings and Specifications are deemed sufficient
to call for tenders for a particular portion of the Work, Contractor shall
propose and obtain bona fide bids from a minimum of three Subcontractors and/or
Vendors for such portion of the Work and, in accordance with Section 9.2 hereof,
make a recommendation to Owner in writing as to which bid Owner should select.

 

3.1.9.1 If the amount of the bid selected by Owner exceeds the amount budgeted
in the Original Project Guaranteed Maximum Price or the Expansion Project
Guaranteed Maximum Price (as applicable) for that item or portion of the Work
and the increase in cost is due to the failure of the Drawings and
Specifications to substantially conform to the Original Project Guaranteed
Maximum Price Premises and Assumptions or the Expansion Project Guaranteed
Maximum Price Premises and Assumptions (as applicable), then to the extent that
the applicable Drawings and Specifications were not prepared by any of Owner’s
Consultants, there shall be no adjustment to the Original Project Guaranteed
Maximum Price or the Expansion Project Guaranteed Maximum Price (as applicable)
and, at Owner’s option, (a) Contractor shall cause Architect/Engineer to rework

 

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the Drawings and Specifications to cause the Work depicted therein to conform to
the Original Project Guaranteed Maximum Price Premises and Assumptions or the
Expansion Project Guaranteed Maximum Price Premises and Assumptions (as
applicable); or (b) Contractor shall allocate a portion of the Original Project
Construction Contingency or the Expansion Project Construction Contingency (as
applicable) to such increased cost pursuant to Section 3.1.8; or (c) Owner may
require Contractor to cause some revisions to be made to such Drawings and
Specifications to bring down the cost while allocating a portion of the Original
Project Construction Contingency or the Expansion Project Construction
Contingency (as applicable) to any remaining increased cost.

 

3.1.9.2 If the amount of the bid selected by Owner exceeds the amount budgeted
in the Original Project Guaranteed Maximum Price or the Expansion Project
Guaranteed Maximum Price (as applicable) for that item or portion of the Work
and the increase in cost is due to the failure of the Drawings and
Specifications to substantially conform to the Original Project Guaranteed
Maximum Price Premises and Assumptions or the Expansion Project Guaranteed
Maximum Price Premises and Assumptions (as applicable), then to the extent any
of the applicable Drawings and Specifications were prepared by any of Owner’s
Consultants, Owner shall, at its option, (a) increase the Original Project
Guaranteed Maximum Price or the Expansion Project Guaranteed Maximum Price (as
applicable) by the amount of such increase in cost; or (b) cause such Owner’s
Consultant(s) to rework such Drawings and Specifications to cause the Work
depicted therein to conform to the Original Project Guaranteed Maximum Price
Premises and Assumptions or the Expansion Project Guaranteed Maximum Price
Premises and Assumptions (as applicable); or (c) allocate a portion of the
Original Project Owner Contingency or the Expansion Owner Contingency (as
applicable) to such increased cost pursuant to Section 3.1.7; or (d) do any
combination of the foregoing as necessary to cover such increase in cost.

 

3.1.9.3 If the amount of the bid recommended by Contractor and accepted by Owner
exceeds the amount allocated or budgeted in the Original Project Guaranteed
Maximum Price or the Expansion Project Guaranteed Maximum Price (as applicable)
for that item or portion of the Work, and the Drawings and Specifications
substantially conform to the Original Project Guaranteed Maximum Price Premises
and Assumptions or the Expansion Project Guaranteed Maximum Price Premises and
Assumptions (as applicable), then Contractor shall perform such Work and such
increase in costs shall be solely Contractor’s responsibility, except that
Contractor shall be entitled to use a portion of the Original Project
Construction Contingency or the Expansion Project Construction Contingency (as
applicable) to cover such cost increase to the extent permitted under
Section 3.1.8 hereof (provided, however, if no funds remain in the Original
Project Construction Contingency or the Expansion Project Construction
Contingency (as applicable), Contractor shall still be responsible for the
increased cost of the Work), and Contractor shall not be entitled to, and will
not seek, any increase in the Original Project Guaranteed Maximum Price or the
Expansion Project Guaranteed Maximum Price (as applicable) with regard thereto.

 

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3.1.9.4 Notwithstanding the provisions of Sections 3.1.9.1 through 3.1.9.3
above, if Contractor failed to comply with its obligations under Section 7.3 of
this Agreement and, as a result, the amount of the bid selected by Owner exceeds
the amount allocated or budgeted in the Original Project Guaranteed Maximum
Price or the Expansion Project Guaranteed Maximum Price (as applicable) for that
item or portion of the Work, Contractor shall perform such Work and such
increase in costs shall be solely Contractor’s responsibility, except that
Contractor may use a portion of the Original Project Construction Contingency or
the Expansion Project Construction Contingency (as applicable) to cover such
increased costs to the extent permitted under Section 3.1.8 hereof (provided,
however, if no funds remain in the Original Project Construction Contingency or
the Expansion Project Construction Contingency (as applicable), Contractor shall
still be responsible for the increased costs of such Work), and Contractor shall
not be entitled to, and will not seek, any increase in the Original Project
Guaranteed Maximum Price or the Expansion Project Guaranteed Maximum Price (as
applicable) with regard thereto.

 

3.1.9.5 If the amount of the bid selected by Owner plus the additional and
customary cost to complete the bid Work (if such additional and customary amount
is so required as mutually determined between Owner and Contractor) is less than
the amount budgeted in the Original Project Guaranteed Maximum Price or the
Expansion Project Guaranteed Maximum Price (as applicable) for that item or
portion of the Work, then the savings shall remain within the Original Project
Guaranteed Maximum Price or the Expansion Project Guaranteed Maximum Price (as
applicable) and be made available to pay for the Cost of the Work, but shall not
be allocated to the Original Project Construction Contingency or the Expansion
Project Construction Contingency (as applicable) until Original Project
Substantial Completion or the Expansion Project Substantial Completion (as
applicable) of the applicable portion of the Work.

 

3.1.9.6 Notwithstanding the foregoing provisions of this Section 3.1.9, if Owner
elects in accordance with the terms of this Agreement to have a party other than
the Contractor perform a portion of the Work, or otherwise eliminates or reduces
the scope of a portion of the Work to be performed by the Contractor, the
Original Project Guaranteed Maximum Price or the Expansion Project Guaranteed
Maximum Price (as applicable)e shall be reduced in accordance with Article 18.

 

3.2 Cost of the Work. “Cost of the Work” means those elements of costs described
in this Section 3.2 up to the Original Project Guaranteed Maximum Price or the
Expansion Project Guaranteed Maximum Price (as applicable) (subject to change
only as provided in this Agreement) which are chargeable to Owner and payable to
Contractor when reasonably, actually and necessarily incurred by the Contractor
during or in connection with performance of the Work, without mark-up or add on
of any kind by or at the request of Contractor. Such costs shall be actual costs
paid or to be paid by Contractor during the applicable billing period and agreed
upon by Owner, less all discounts, rebates and salvages taken by Contractor. All
amounts paid or payable as Costs of the Work shall be subject to verification by
audit pursuant to Article 19 of this Agreement. Contractor covenants and

 

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agrees to use reasonable efforts to achieve the lowest price or cost available
and consistent with the Contract Documents, for all Cost of the Work items. Upon
Original Project Substantial Completion or the Expansion Project Substantial
Completion (as applicable) of the Original Project Work and the Expansion
Project Work (as applicable), all savings on any and all components of the Cost
of the Work, including, but not limited to, all savings on labor costs and other
general conditions costs, as well as any savings resulting from early delivery
of the completed Project, shall be allocated to and included within the Original
Project Construction Contingency or the Expansion Project Construction
Contingency (as applicable). Upon Original Project Final Payment, any unused
amounts in the Original Project Owner’s Contingency and sixty percent (60%) of
any unused amounts in the Original Project Construction Contingency shall revert
to the Owner, and forty percent (40%) of any unused amounts in the Original
Project Construction Contingency shall be paid to Contractor as a “Original
Project Cost Control Incentive” at the time of payment by the Owner of the
Original Project Final Payment; provided, however, that if (a) Original Project
Substantial Completion is achieved at least fifteen (15) calendar days prior to
the Guaranteed Date of Original Project Substantial Completion, and
(b) Contractor provides Owner with a written notice accurately confirming to
Owner the date of Original Project Substantial Completion of the Original
Project Work not less than one hundred fifty-two (152) calendar days prior to
such date, then upon Original Project Final Payment a portion of the One Million
Two Hundred Eighty-Two Thousand Fifty-One United States Dollars (US$1,282,051)
component of the Original Project Construction Contingency representing the cost
of anticipated project preliminaries associated with the twenty-sixth month of
the Work (such US$1,282,051 component, the “Original Project Early Completion
Component”) shall be paid to Contractor as part of the “Original Project Cost
Control Incentive”, which portion shall be calculated as follows: (i) if
Original Project Substantial Completion of the entire Original Project Work is
achieved between fifteen (15) and thirty (30) calendar days prior to the
Guaranteed Date of Original Project Substantial Completion, then a percentage of
the Original Project Early Completion Component shall be so paid to Contractor
equal to (A) the number of calendar days by which Original Project Substantial
Completion of the entire Original Project Work is achieved prior to the
Guaranteed Date of Original Project Substantial Completion, divided by
(B) thirty (30) for example, if Original Project Substantial Completion of the
entire Original Project Work is achieved twenty-four (24) calendar days prior to
the Guaranteed Date of Original Project Substantial Completion, then Contractor
would be paid eighty percent (80%) (24 / 30 = 80%) of the Original Project Early
Completion Component; and (ii) if Original Project Substantial Completion of the
entire Work is achieved more than thirty (30) calendar days prior to the
Guaranteed Date of Original Project Substantial Completion, then one hundred
percent (100%) of the Original Project Early Completion Component shall be so
paid to Contractor. In no event shall the total payment to Contractor of any
unused amounts in the Original Project Construction Contingency, excluding any
payment to Contractor of any portion of the Original Project Early Completion
Component, exceed the sum of Four Million United States Dollars (US$4,000,000).
Upon Expansion Project Final Payment, any unused amounts in the Expansion
Project Owner’s Contingency and sixty percent (60%) of any unused amounts in the
Expansion Project Construction Contingency shall revert to the Owner, and forty
percent

 

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(40%) of any unused amounts in the Expansion Project Construction Contingency
shall be paid to Contractor as an “Expansion Project Cost Control Incentive” at
the time of payment by the Owner of the Expansion Project Final Payment. In no
event shall the total payment to Contractor of any unused amounts in the
Expansion Project Construction Contingency exceed the sum of Two Million Two
Hundred Fifty Thousand United States Dollars (US$2,250,000). Costs of the Work
shall be strictly limited to and include only the following items, unless
otherwise agreed by the Owner in writing:

 

3.2.1 Contractor’s Salaried Employees. Direct cost of amounts actually paid by
Contractor for the salaries paid to Contractor’s employees (excluding craft
labor) while and only to the extent they are performing Work at the Site, except
to the extent approved otherwise by Owner, and except for those off-Site
personnel listed in Exhibit C attached hereto (all such on-Site and off-Site
personnel collectively being “Personnel”). Such direct costs include
Contractor’s actual costs of statutory payroll taxes and payroll burden and
customary employee benefits (including vacation) to the extent stated in this
Section 3.2.1, pro-rated for the time they are performing Work. Such employee
benefits shall include the Chinese New Year bonus, if applicable, and any
reasonable and customary costs considered a normal part of the employee’s salary
and not a bonus (other than the Chinese New Year bonus). Contractor shall submit
to Owner all documentation necessary to support the referenced rate and
benefits. Costs for Contractor’s staff shall exclude any elements of overhead or
profit. Any changes to the Personnel listed in Exhibit C during the course of
the Work must be approved in advance and in writing by Owner, which approval
shall not be unreasonably withheld or delayed. The Contractor shall submit a
rate schedule for each of its Personnel for Owner’s audit and approval,
including any increases other than increases solely for annual standard cost of
living adjustments and merit raises in Contractor’s normal and customary
practice, but not to exceed three percent (3%) of an employee’s direct annual
salary (excluding benefits) per year, unless approved otherwise by Owner. Costs
included in such proposed rates shall, however, be strictly limited to actual
payroll costs including actual labor burden, and excluding any element for
overhead or profit. Items covered by or included within the labor burden shall
not be separately or otherwise included in Costs of the Work or billed to Owner.

 

3.2.2 Contractor’s Site Craft Labor. Direct cost of amounts actually paid for
Contractor’s craft labor, including actual labor burden and any Chinese New Year
bonus paid to such workers. Contractor shall submit daily rates for regular time
and hourly rates for premium time hours for Owner’s review and approval, which
approval shall not be unreasonably withheld or delayed. In no event shall such
rates exceed the lesser of (a) those daily or hourly rates, as applicable,
specified in collective bargaining agreements applicable to such labor,
including stated increases, or (b) the amount actually paid by Contractor for
such craft labor, unless approved in writing in advance by Owner.

 

3.2.3 Subcontractor and Vendor Costs. Direct cost of amounts actually paid or
payable during the applicable billing period by Contractor to its Subcontractors
and Vendors for Work performed pursuant to subcontracts and purchase orders
(including any

 

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change orders or other modifications thereto) which have been reviewed and
approved in advance and in writing by Owner (except to the extent Owner’s prior
written consent is not required pursuant to Section 9.3 of this Agreement).

 

3.2.4 Materials and Equipment Incorporated in the Work. Direct cost of amounts
actually paid or to be paid during the applicable billing period by Contractor
and approved by Owner for all materials and equipment incorporated or to be
incorporated into the Work by Contractor, including the actual direct costs of
transportation, insurance and temporary storage (including any materials stored
off-Site so long as the requirements of Section 5.13 of this Agreement are
fulfilled to Owner’s satisfaction). Contractor shall promptly disclose to Owner
all relevant details regarding any such materials, equipment and other items if
any of the foregoing is being provided for purchase by Contractor or any company
which is a subsidiary or otherwise affiliated with Contractor or its parent
company. Said costs shall be invoiced at actual prices, net of any available
trade and quantity discounts. Contractor shall use reasonable efforts to achieve
the lowest cost or price available and consistent with the Contract Documents.
Any salvage value received by Contractor for any excess items, materials or
equipment paid for by Owner, to be determined prior to the Original Project
Final Payment or the Expansion Project Final Payment (as applicable) upon
Original Project Final Completion or Expansion Project Final Completion (as
applicable), shall reduce the Cost of the Work and be a credit to Owner.

 

3.2.5 Materials and Equipment Consumed at the Site. Direct cost of amounts
actually paid or to be paid during the applicable billing period by Contractor
for all materials, equipment, supplies and small tools which are provided by
Contractor, its Subcontractors or Vendors at the Site and fully consumed at the
Site during performance of the Work, including, but not limited to, the actual
direct costs of transportation and related insurance costs and temporary storage
on-Site or pursuant to Section 5.13 hereof. Contractor shall promptly disclose
to Owner all relevant details regarding any such materials, equipment and other
items if any of the foregoing is being provided for purchase by Contractor or
any company which is a subsidiary or otherwise affiliated with Contractor or its
parent company. Said costs shall be at lowest rates reasonably available and
consistent with the Contract Documents and shall be invoiced at actual prices,
net of any available trade and quantity discounts. Contractor shall use
reasonable efforts to achieve the lowest cost or price available and consistent
with the Contract Documents. Any salvage value received by the Contractor for
any excess items paid for by Owner, to be determined prior to the Original
Project Final Payment or the Expansion Project Final Payment (as applicable)
upon Original Project Final Completion or Expansion Project Final Completion (as
applicable), shall reduce the Cost of the Work and be a credit to Owner.

 

3.2.6 Rental Equipment. Direct cost of amounts actually paid or to be paid
during the applicable billing period by Contractor for rental charges for all
necessary construction machinery and equipment utilized at the Site (exclusive
of small tools), including, but not limited to, the direct costs of
transportation, delivery, installation, dismantling, removal, maintenance, and
insurance. Contractor shall use reasonable efforts

 

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to achieve the lowest cost or price available and which is consistent with the
Contract Documents. Contractor shall promptly disclose to Owner all relevant
details regarding any such construction machinery or equipment that is being
provided, either for purchase or rental, by Contractor or any company which is a
subsidiary or otherwise affiliated with Contractor or its parent company. The
rental rates for any machinery and equipment owned by Contractor or an
affiliated entity shall be agreed upon by Owner and Contractor in advance;
provided that the aggregate amount of rental costs charged for any individual
piece of Contractor or affiliate-owned machinery or equipment shall not exceed
75% of its actual acquisition cost. The preliminary list of machinery and
equipment to be rented or purchased by the Contractor for use in the Work is set
out on Exhibit D attached hereto.

 

3.2.7 Site Office Costs. Direct cost of amounts actually paid or to be paid
during the applicable billing period by Contractor for Site office facilities
and Site office general expenses, telephone services, long distance telephone
calls, photocopying, postage, reasonable and customary petty cash expenses not
to exceed US$250 monthly, facsimile transmissions, office supplies, standard
printing required by the Contract Documents, express and air courier mail
delivery services, Site office equipment such as computers, telephones, copiers,
facsimile machines, typewriters and similar items used in connection with the
Work. Contractor shall use reasonable efforts to achieve the lowest cost or
price available and consistent with the Contract Documents, provided, however,
such costs shall be expressly limited to such of the foregoing items as are not
otherwise made available or provided by Owner to Contractor at the Site to the
Contractor’s reasonable satisfaction. Contractor shall promptly advise Owner of
any such Site office equipment which is charged to the Work and provide Owner
with all purchase and rental agreements pertaining thereto for Owner’s approval.
Contractor shall promptly disclose to Owner all relevant details if any such
Site office equipment is being provided, either for purchase or rental, by
Contractor or any company which is a subsidiary or otherwise affiliated with the
Contractor or its parent company. Any salvage value received by Contractor for
any excess items paid for by Owner, to be determined prior to the Original
Project Final Payment or the Expansion Project Final Payment (as applicable)
upon Original Project Final Completion or Expansion Project Final Completion (as
applicable), shall reduce the Cost of the Work and be a credit to Owner.

 

3.2.8 Reimbursable Taxes. Direct cost of amounts properly and actually paid by
Contractor for Reimbursable Taxes arising from or payable in connection with the
execution of the Work.

 

3.2.9 Bond Premiums. Direct cost of amounts actually paid or to be paid during
the applicable billing period by Contractor for premiums solely attributable to
the Work for Contractor’s On-Demand Bonds to the extent required by Owner, and
direct cost of amounts paid or to be paid during the applicable billing period
for Subcontractor bond premiums.

 

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3.2.10 Course of Constructions Repairs. Actual and reasonable costs incurred and
paid by Contractor in repairing minor damage to trade Work caused as a normal
by-product during the course of construction and not otherwise a Non-Allowable
Cost of the Work.

 

3.2.11 Royalties. Royalties and license fees necessarily and reasonably paid or
to be paid during the applicable billing period by Contractor for an express
design, process or product required by the Contract Documents in accordance with
Section 7.20 hereof.

 

3.2.12 Cost of Hedging Exchange Rate. Reasonable costs incurred and paid by
Contractor in connection with hedging the exchange rate risk under this
Contract, provided that such costs shall not exceed, in the aggregate, Fifty
Thousand United States Dollars (US$50,000).

 

3.2.13 Miscellaneous Costs. Miscellaneous costs are chargeable as a Cost of the
Work only as follows:

 

3.2.13.1 Direct costs actually incurred or paid by Contractor for clean-up and
removal of debris;

 

3.2.13.2 Direct costs actually incurred or paid to respond to an emergency
affecting the safety of persons and property, and not otherwise a Non-Allowable
Cost of the Work;

 

3.2.13.3 Direct costs actually incurred or paid by Contractor and approved by
Owner for Site security services for protection of the Work;

 

3.2.13.4 Direct costs actually incurred or paid by Contractor for blueprinting
of Drawings as required by the Contract Documents and required postage, express
mail and long distance costs in the performance of the Work;

 

3.2.13.5 Direct costs actually incurred or paid for building permit fees,
including plan check fees, licenses and other authorizations which are required
by governmental authorities to be taken out in Owner’s or Contractor’s name for
construction and completion of the Work, including, but not limited to,
temporary and final certificates of occupancy, and licenses (such as the kitchen
license) required by governmental authorities strictly for the operation of the
completed Project;

 

3.2.13.6 Direct costs actually and reasonably incurred and paid or to be paid
during the applicable billing period by Contractor’s Personnel and required for
travel or while traveling in the performance of the Work, all in accordance with
travel policies agreed upon in advance by Owner and Contractor;

 

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3.2.13.7 Losses and expenses from property damage not compensated by insurance
and incurred by Contractor directly relating to the performance of the Work and
not relating to or arising from the failure of Contractor to comply with the
Contract Documents or otherwise a Non-Allowable Cost of the Work;

 

3.2.13.8 The costs of insurance required to be carried by Contractor and
Subcontractors relating to the Work pursuant to Section 15.1.1 hereof;

 

3.2.13.9 Direct costs actually incurred or paid by the Contractor for the
purpose of correcting minor defects in the Work, subject to the provisions of
Section 3.3.6, prior to or during the Original Project Defects Liability Period
or the Expansion Project Defects Liability Period (as applicable) and not
otherwise a Non-Allowable Cost of the Work and provided that any such costs
shall only be payable to Contractor from amounts available in the Original
Project Construction Contingency or the Expansion Project Construction
Contingency (as applicable), if any;

 

3.2.13.10 The cost of an insurance policy obtained by Contractor in its name
(but naming Owner as an additional insured) relating to the Project and
providing coverage for the difference between Contractor’s normal and customary
insurance coverage and the insurance required to be maintained by Owner pursuant
to Section 15.1 of this Agreement; provided, however, that any portion of the
cost of such policy in excess of Two Hundred Thousand United States Dollars
(US$200,000) shall only be payable to Contractor from amounts available in the
Original Project Construction Contingency or the Expansion Project Construction
Contingency (as applicable), if any;

 

3.2.13.11 Other actual direct costs specifically stated in this Agreement as
being payable to Contractor as a Cost of the Work; and

 

3.2.13.12 Other actual direct costs incurred in the performance of the Work, but
limited solely to those costs which are approved in writing by Owner in advance.

 

3.3 Non-Allowable Cost of the Work. “Non-Allowable Cost of the Work” means the
direct and/or indirect costs described in this Section 3.3 and all similar costs
and all other costs not included within the Cost of the Work, which are paid or
incurred by Contractor during or in connection with the performance of the Work.
All such Non-Allowable Costs of the Work are included in the Original Project
Contractor’s Fee and the Expansion Project Contractor’s Fee set forth in
Sections 3.1.2 and 3.1.3 above, regardless of whether they exceed the amount of
the Original Project Contractor’s Fee or the Expansion Project Contractor’s Fee
(as applicable). Notwithstanding any provision of this Contract to the contrary,
(a) an item of cost which would otherwise be included in the Cost of the Work
shall be deemed a Non-Allowable Cost of the Work if any of the provisions of
Sections 3.3.1 through 3.3.26 below shall apply to such item of cost, and
(b) Contractor shall not be entitled to receive any additional reimbursement for
Non-Allowable Costs of the Work, including, but not limited to, any of the types
of cost items described as follows:

 

3.3.1 The cost of any item not specifically and expressly included as a Cost of
the Work in Section 3.2 above;

 

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3.3.2 Costs in excess of the Original Project Guaranteed Maximum Price or the
Expansion Project Guaranteed Maximum Price (as applicable);

 

3.3.3 Salaries and all other compensation of the Contractor’s personnel and
representatives performing any function at any location other than at the Site,
except for those Personnel individually named as approved in Exhibit C attached
hereto, and to the extent described therein;

 

3.3.4 All direct and indirect operating, maintenance and overhead costs of any
nature whatsoever arising out of or in any way relating to any of the
Contractor’s principal or branch offices, including, but not limited to: office
space; furniture and equipment which is dedicated to or reserved for use for the
Work; leasing and rental costs; maintenance; local telephone; utilities;
depreciation; security; office supplies; property taxes; the development of
engineering and construction manuals, standards or computer programs; personnel
training of any kind; and janitorial services; excepting only those actual and
direct costs incurred and permitted to the extent described in Sections 3.2.7
and 3.2.13 above;

 

3.3.5 Any expenses relating to Contractor’s operating capital, including
interest on the Contractor’s capital employed in support of the Work (provided,
however, as to interest, only so long as Owner timely pays amounts properly due
and owing to Contractor in accordance with and subject to the Contract
Documents);

 

3.3.6 All direct and indirect costs arising out of the fault or negligence of,
or failure to comply with the terms of the Contract Documents or any
subcontracts by, the Contractor, any Subcontractor or Vendor,
Architect/Engineer, or anyone directly or indirectly employed by any of them, or
for whose acts or omissions any of them are responsible or liable at law or
under the Contract Documents;

 

3.3.7 Except to the extent provided in Section 7.2, all direct and indirect
costs arising out of the failure of any portion of the Work to comply with
applicable Laws; all direct and indirect costs of any nature relating to work
arising during the Original Project Defects Liability Period or the Expansion
Project Defects Liability Period defined in Section 10.2 of this Agreement, for
correction, removal, replacement or disposal of any non-conforming Work,
materials or equipment to the extent defined in Article 10 of this Agreement

 

3.3.8 All costs incurred by Contractor for bonuses (other than the Chinese New
Year bonus, as applicable), stock options, profits sharing arrangements and
similar incentive programs;

 

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3.3.9 All direct and indirect costs of any nature resulting from or attributable
to either delays, disruptions or interferences, excepting only for those costs
which are expressly identified and permitted in accordance with Article 11 of
this Agreement;

 

3.3.10 All direct and indirect costs of any nature resulting from or
attributable to terminations, cancellations for convenience or suspensions,
excepting only for those costs which are expressly identified and permitted in
accordance with Article 17 of this Agreement;

 

3.3.11 Rental costs of Contractor or affiliate owned machinery and equipment,
except as specifically provided in Section 3.2.6 of this Agreement;

 

3.3.12 All costs and fees relating to business and/or operating permits,
licenses and taxes, required by any governmental authorities (except as provided
in Sections 3.2.8 and 3.2.13.5, and other than work visas and/or work permits,
which shall be included in the Cost of the Work) or by labor agreements to
enable the Contractor, its Subcontractors or Vendors of any tier to be qualified
to do business and/or perform trade activities and/or any Work pursuant to the
Contract Documents;

 

3.3.13 Costs incurred by Contractor in satisfying its indemnification
obligations pursuant to Article 14 of this Agreement or any other Contractor
indemnification provision of the Contract Documents;

 

3.3.14 Payments on account of materials, supplies, and equipment until delivered
and suitably stored at the Site for subsequent incorporation or consumption in
the Work, except as specifically provided in Sections 3.2.4, 5.11 and 5.13 of
this Agreement or as otherwise approved by Owner on a case-by-case basis (if,
however, in Owner’s reasonable opinion, such warehousing and storage costs are
due to Contractor caused delays and/or poor sequencing of the Work by
Contractor, these costs shall not be considered a Cost of the Work and will be
at Contractor’s sole cost and expense);

 

3.3.15 Payments made to Subcontractors or Vendors in violation of the provisions
of this Agreement;

 

3.3.16 Legal costs incurred by Contractor relating to the preparation, response
to or defense of any Claim, or of any claims by third parties for copyright or
patent infringement, for which Contractor or any Subcontractor or Vendor are
liable or responsible at law or under the Contract Documents;

 

3.3.17 Any cost incurred by Contractor relating to a Change in the Work without
a Change Order or Construction Change Directive (other than a Minor Change or
unless approved otherwise in writing by Owner and Owner’s Lenders);

 

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3.3.18 Costs reimbursed by insurance to Contractor or any Subcontractor or
Vendor;

 

3.3.19 The costs of any insurance premiums for insurance coverage, and the
amounts of any insurance deductibles, beyond that required or permitted,
respectively, by Section 15.1 hereof, except to the extent provided in
Section 3.2.13.10 hereof or as otherwise provided for in this Agreement;

 

3.3.20 Costs that Owner has already paid;

 

3.3.21 All direct and indirect costs of any nature relating to work arising
during the Original Project Defects Liability Period or the Expansion Project
Defects Liability Period defined in Section 10.2 of this Agreement, for
correction, removal, replacement or disposal of any non-conforming Work,
materials or equipment, except to the extent provided in Section 3.2.13.9
hereof;

 

3.3.22 Costs incurred for the purpose of correcting any defects in the Work
after the Original Project Defects Liability Period and the Expansion Project
Defects Liability Period;

 

3.3.23 Costs of repairing defective or non-conforming Work or Work damaged by
Contractor, any Subcontractor or Vendor, anyone directly or indirectly employed
by any of them, or for those acts or omissions any of them are responsible or
liable at law or under the Contract Documents, except to the extent provided in
Section 3.2.10 hereof;

 

3.3.24 Costs that are incurred or are submitted to Owner for payment after
Original Project Final Payment or Expansion Project Final Payment (as
applicable) has been made, except for the specific dollar amounts of any
unresolved claims specifically identified in its Application for Original
Project Final Payment or Expansion Project Final Payment (as applicable);

 

3.3.25 Any cost specifically stated in this Agreement as not reimbursable to the
Contractor or not includable in the Cost of the Work; and

 

3.3.26 All other direct, indirect and/or overhead costs of any nature
whatsoever, except as otherwise expressly provided to the contrary in the
Contract Documents.

 

3.4 Contractor’s Responsibility For Taxes. Other than as provided in
Section 3.2.8, Exhibit N or elsewhere in this Agreement, it is expressly
understood that no Taxes of any nature whatsoever are considered a Cost of the
Work and that Contractor will not be separately reimbursed for any Taxes.
Contractor shall be responsible for and shall timely pay, all Taxes relating to
or arising out of the performance of the Work or Contractor’s obligations under
the Contract.

 

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3.5 Discounts, Rebates and Refunds. All cash discounts (so long as Owner has
made payment to Contractor to the extent advance or timely payment is necessary
to obtain such cash discount), trade discounts, rebates and refunds obtained by
Contractor during the course of the Work shall be credited to the Original
Project Construction Contingency or the Expansion Project Construction
Contingency based on whether such trade discount, rebate or refund arises out of
the Original Project Work or the Expansion Project Work, and allocated in
accordance with Section 3.2. Contractor shall take all necessary steps to
obtain, secure and pass on such credits to Owner and all such discounts, rebates
and refunds shall be fully reflected in Contractor’s monthly Applications for
Progress Payment submitted pursuant to Article 5 of this Agreement. Title to all
materials, tools, and equipment paid for by Owner shall be vested in Owner. At
the completion of the Work and when no longer required, such tools, equipment
and materials as remain and have been or shall be paid for by the Owner shall
belong to Owner and be, as Owner may direct (a) sold at the direction of Owner
and all sums and allowances realized and received by Contractor shall be
credited against the Cost of the Work for all purposes under this Agreement or
(b) delivered to Owner, all as Owner shall direct.

 

3.6 No Duplication. Notwithstanding the breakdown or categorization of any costs
in this Article 3 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.

 

ARTICLE IV.

CONTRACT TIME AND INTERIM MILESTONE DATES

 

4.1 Definitions.

 

4.1.1 The term “day” means any calendar day including public holidays.

 

4.1.2 The term “Notice to Proceed” means the written notice from Owner to
Contractor providing Contractor with a “Date of Commencement” for the Work,
which Date of Commencement shall not be earlier than thirty (30) days after the
date on which the Notice to Proceed is delivered to Contractor. At Owner’s
option, the Notice to Proceed may specify a Date of Commencement with respect to
only a specific portion or aspect of the Work or may specify varying Dates of
Commencement for different portions or aspects of the Work. Contractor will not
commence or perform any Work or portion thereof, or enter upon the Site except
with the prior written consent of Owner, prior to the Date of Commencement for
such Work in Owner’s Notice to Proceed.

 

4.1.3 The Contractor and the Owner hereby agree (i) that the Notice to Proceed
given by the Owner to the Contractor with respect to the Original Project Work
was properly provided in accordance with the terms and conditions of this
Agreement on June 11, 2004 and (ii) with respect to the Expansion Project,
July 15, 2005 shall be the Expansion

 

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Project Date of Commencement, and no Notice to Proceed with respect to the
Expansion Project Work is required.

 

4.1.4 The term “Original Project Interim Milestone Dates” means either the fixed
dates, or the fixed number of calendar days, available to Contractor to achieve
the key schedule “Original Project Interim Milestones” identified in Attachment
2 to Exhibit B (as it may be updated or revised from time to time in accordance
with Section 11.2, the “Original Project Schedule”). The term “Expansion Project
Interim Milestone Dates” means either the fixed dates, or the fixed number of
calendar days, available to Contractor to achieve the key schedule “Expansion
Project Interim Milestones” identified in Attachment 5 to Exhibit B (as it may
be updated or revised from time to time in accordance with Section 11.2, the
“Expansion Project Schedule”).

 

4.1.5 The term “Contract Time” means (a) with respect to Original Project
Substantial Completion, the period of time between the Original Project Date of
Commencement and Guaranteed Date of Original Project Substantial Completion,
(b) with respect to Original Project Final Completion, the period of time
between the Guaranteed Date of Original Project Substantial Completion and the
Guaranteed Date of Original Project Final Completion, (c) with respect to
Expansion Project Substantial Completion, the period of time between the
Expansion Project Date of Commencement and Guaranteed Date of Expansion Project
Substantial Completion and (d) with respect to Expansion Project Final
Completion, the period of time between the Guaranteed Date of Expansion Project
Substantial Completion and the Guaranteed Date of Expansion Project Final
Completion.

 

4.1.6 The term “Guaranteed Date of Original Project Final Completion” means the
date which is sixty (60) calendar days after the date of Original Project
Substantial Completion or such longer period as is permitted pursuant to
Section 12.2.

 

4.1.7 The term “Guaranteed Date of Original Project Substantial Completion”
means the date which is seven hundred ninety-one (791) calendar days from and
after the Original Project Date of Commencement.

 

4.1.8 The term “Guaranteed Date of Expansion Project Final Completion” means the
date which is sixty (60) calendar days after the date of Expansion Project
Substantial Completion or such longer period as is permitted pursuant to
Section 12.2.

 

4.1.9 The term “Guaranteed Date of Expansion Project Substantial Completion”
means the date which is seven hundred twenty-six (726) calendar days from and
after the Expansion Project Date of Commencement.

 

4.2 Time of the Essence. Contractor hereby accepts and confirms that, subject to
the terms of this Agreement, the Contract Time is reasonable for completing the
Work and hereby agrees to dedicate such personnel and other resources as are
necessary to assure that the Work is continuously managed and performed in a
diligent, skilled and workmanlike manner to achieve the Original Project Interim
Milestone Dates, the Expansion Project

 

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Interim Milestone Dates, the Guaranteed Date of Original Project Substantial
Completion and the Guaranteed Date of Expansion Project Substantial Completion.
Contractor and Owner acknowledge that TIME IS OF THE ESSENCE with respect to
their respective obligations under the Contract Documents, and that Owner’s
business interests will suffer substantial losses in the event that any Original
Project Interim Milestone or Expansion Project Interim Milestone is not achieved
by the applicable Original Project Interim Milestone Date or Expansion Project
Interim Milestone Date and/or Original Project Substantial Completion or
Expansion Project Substantial Completion is not achieved by the Guaranteed Date
of Original Project Substantial Completion or Guaranteed Date of Expansion
Project Substantial Completion (as applicable) in accordance with and subject to
the terms of this Agreement. Notwithstanding the foregoing, the liability of
Contractor due solely to the failure to achieve one or more of the Original
Project Interim Milestones or the Expansion Project Interim Milestones by the
applicable Original Project Interim Milestone Date or Expansion Project Interim
Milestone Date shall be limited to (a) the cost of preparing and implementing an
acceptable Recovery Plan with respect to the applicable milestone(s) in
accordance with Section 11.8 to address such failure, (b) all costs and expenses
incurred by Owner in preparing and implementing an Owner Recovery Plan to
address such failure as described in and subject to any limitation set forth in
Section 11.8.6 (any such amounts described under clauses (a) and (b),
collectively, “Recovery Plan Liabilities”), and (c) the Original Project
Liquidated Damages or the Expansion Project Liquidated Damages (as applicable)
provided for under Section 4.4.1.1 with respect to each such milestone.
Contractor’s liability with respect to the failure to achieve Original Project
Substantial Completion by the Guaranteed Date of Original Project Substantial
Completion is covered under Section 4.4. Contractor’s liability with respect to
the failure to achieve Expansion Project Substantial Completion by the
Guaranteed Date of Expansion Project Substantial Completion is covered under
Section 4.4. Notwithstanding anything to the contrary contained herein, the
aggregate liability of Contractor with respect to Original Project Work for
(i) Recovery Plan Liabilities, as provided in this Section 4.2, and
(ii) Original Project Liquidated Damages, as provided in Section 4.4.1, shall
not exceed the sum of Twenty Million United States Dollars (US$20,000,000) and
the aggregate liability of Contractor with respect to Expansion Project Work for
(i) Recovery Plan Liabilities, as provided in this Section 4.2, and
(ii) Expansion Project Liquidated Damages, as provided in Section 4.4.1, shall
not exceed the sum of Ten Million United States Dollars (US$10,000,000).

 

4.3 Completion Guarantees. Contractor and Owner agree that the Original Project
Work commenced on the Original Project Date of Commencement. Subject to changes
in the Contract Time which are mutually agreed to in accordance with the
Contract Documents, Contractor hereby guarantees to cause the Expansion Project
Work to be commenced on the Expansion Project Date of Commencement as provided
in Section 4.1.2 hereof, and (a) to timely achieve each of the Original Project
Interim Milestones and the Expansion Project Interim Milestones on or before the
applicable Original Project Interim Milestone Date or Expansion Project Interim
Milestone Date, and (b) to timely achieve Original Project Substantial
Completion and Expansion Project Substantial Completion in

 

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accordance with the requirements of Section 12.1 of this Agreement on or before
the Guaranteed Date of Original Project Substantial Completion and the
Guaranteed Date of Expansion Project Substantial Completion (as applicable).
Contractor shall and hereby agrees to indemnify Owner from and against any and
all costs, damages, expenses, losses, liabilities and obligations relating to
and/or arising out of Contractor’s failure to achieve either of Original Project
Substantial Completion or Expansion Project Substantial Completion by the
Guaranteed Date of Original Project Substantial Completion or the Guaranteed
Date of Expansion Project Substantial Completion (as applicable), except
pursuant to schedule extensions which are set forth in Change Orders in
accordance with the Contract Documents.

 

4.4 Liquidated Damages With Respect to Delays.

 

4.4.1 If any Original Project Interim Milestone or Expansion Project Interim
Milestone is not achieved by the applicable Original Project Interim Milestone
Date or Expansion Project Interim Milestone Date and/or Original Project
Substantial Completion or Expansion Project Substantial Completion is not
achieved by the Guaranteed Date of Original Project Substantial Completion or
the Guaranteed Date of Expansion Project Substantial Completion (as applicable),
as such time periods may be adjusted pursuant to the Contract Documents,
Contractor acknowledges and agrees that Owner will suffer significant damages.
Accordingly, if any Original Project Interim Milestone or Expansion Project
Interim Milestone is not achieved by the applicable Original Project Interim
Milestone Date or Expansion Project Interim Milestone Date and/or Original
Project Substantial Completion or Expansion Project Substantial Completion is
not achieved by the Guaranteed Date of Original Project Substantial Completion
or the Guaranteed Date of Expansion Project Substantial Completion (as
applicable), Contractor shall pay to Owner on demand (or, at Owner’s option
Owner may deduct, withhold and/or set off the whole or any portion of the
following liquidated damages amounts from or against any amounts then or
thereafter payable or due to Contractor from Owner), as liquidated damages for
such delay and not as a penalty, the following amounts:

 

4.4.1.1 If any Original Project Interim Milestone is not achieved by the
applicable Original Project Interim Milestone Date, the amount identified in
Attachment 2 to Exhibit B with respect to such Original Project Interim
Milestone per day for each day of delay from and after such Original Project
Interim Milestone Date until such Original Project Interim Milestone is
achieved;

 

4.4.1.2 If Original Project Substantial Completion is not achieved by the
Guaranteed Date of Original Project Substantial Completion, Three Hundred
Thousand United States Dollars (US$300,000) per day for each day of delay from
and after the Guaranteed Date of Original Project Substantial Completion until
Original Project Substantial Completion is achieved;

 

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4.4.1.3 If any Expansion Project Interim Milestone is not achieved by the
applicable Expansion Project Interim Milestone Date, the amount identified in
Attachment 5 to Exhibit B with respect to such Expansion Project Interim
Milestone per day for each day of delay from and after such Expansion Project
Interim Milestone Date until such Expansion Project Interim Milestone is
achieved; and

 

4.4.1.4 If Expansion Project Substantial Completion is not achieved by the
Guaranteed Date of Expansion Project Substantial Completion, One Hundred Fifty
Thousand United States Dollars (US$150,000) per day for each day of delay from
and after the Guaranteed Date of Expansion Project Substantial Completion until
Expansion Project Substantial Completion is achieved;

 

The liquidated damages payable by Contractor pursuant to this Section 4.4.1 are
referred to herein as “Liquidated Damages”. The Liquidated Damages payable by
Contractor with respect to Original Project Work are referred to herein as
“Original Project Liquidated Damages”. The Liquidated Damages payable by
Contractor with respect to Expansion Project Work are referred to herein as
“Expansion Project Liquidated Damages”. Notwithstanding anything to the contrary
contained herein, the aggregate liability of Contractor with respect to Original
Project Work for (i) Recovery Plan Liabilities, as provided in Section 4.2, and
(ii) Original Project Liquidated Damages, as provided in this Section 4.4.1,
shall not exceed the sum of Twenty Million United States Dollars (US$20,000,000)
and the aggregate liability of Contractor with respect to Expansion Project Work
for (i) Recovery Plan Liabilities, as provided in Section 4.2, and
(ii) Expansion Project Liquidated Damages, as provided in this Section 4.4.1,
shall not exceed the sum of Ten Million United States Dollars (US$10,000,000).

 

4.4.2 Owner and Contractor hereby agree that it would be impractical or
impossible to ascertain at the outset of the Project the exact amount of damages
in the case of Contractor’s failure to cause any Original Project Interim
Milestone or Expansion Project Interim Milestone to be achieved by the
applicable Original Project Interim Milestone Date or Expansion Project Interim
Milestone Date or Original Project Substantial Completion or Expansion Project
Substantial Completion to be achieved by the Guaranteed Date of Original Project
Substantial Completion or Guaranteed Date of Expansion Project Substantial
Completion (as applicable) and agree to stipulate that Owner’s loss in the case
of any such failure will be deemed equal to the amounts set forth herein as
liquidated damages for the specific periods set forth in Section 4.4.1 above,
which amounts both parties agree represent the parties’ best efforts at the
outset in making a genuine pre-estimate of Owner’s actual damages in such event,
and which amount shall be the only monies due from the Contractor for such
failure and which the parties agree shall be the Owner’s sole remedy for delay
in the execution of the Work, except as set forth in Section 4.2. Other than
with respect to Owner’s right to claim damages for delay in the execution of the
Work, the imposition or payment of Original Project Liquidated Damages or
Expansion Project Liquidated Damages (as applicable) under Section 4.4.1 shall
not in any way limit Contractor’s liability for any other act or omission, or
for any breach or default of

 

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Contractor, Subcontractor or any Vendor under any of the Contract Documents,
other than for delay in the execution of the Work, or any way limit Owner’s
other rights and remedies under this Agreement, including, but not limited to,
Owner’s right to terminate Contractor as the contractor with respect to the Work
and to retain a different contractor to complete the Work.

 

4.4.3 Notwithstanding the provisions of this Section 4.4, the foregoing Original
Project Liquidated Damages and Expansion Project Liquidated Damages shall not
apply to or limit in any way any of Contractor’s obligations and covenants under
Section 11.8 hereof, including, but not limited to, Contractor’s obligation to
provide and implement any Recovery Plan and/or take all available steps to
overcome or mitigate against the adverse effects of all delays identified by
Owner; provided, however, that the aggregate liability of Contractor with
respect to Original Project Work for (i) Recovery Plan Liabilities, as provided
in Section 4.2, and (ii) Original Project Liquidated Damages, as provided in
this Section 4.4.3, shall not exceed the sum of Twenty Million United States
Dollars (US$20,000,000) and the aggregate liability of Contractor with respect
to Expansion Project Work for (i) Recovery Plan Liabilities, as provided in
Section 4.2, and (ii) Expansion Project Liquidated Damages, as provided in this
Section 4.4.3, shall not exceed the sum of Ten Million United States Dollars
(US$10,000,000).

 

4.5 Early Completion.

 

4.5.1 If Original Project Substantial Completion is achieved by Contractor prior
to the Guaranteed Date of Original Project Substantial Completion, as may be
adjusted pursuant to the Contract Documents, and Contractor has fully and timely
performed all of its obligations under the Contract Documents and is not in
default or breach thereunder, Contractor shall be entitled to an early
completion bonus payment (in addition to the Original Project Contractor’s Fee),
to be paid to Contractor concurrently with the Original Project Final Payment,
in the amount of Fifty Thousand United States Dollars (US$50,000) per day for
each day, up to but not to exceed a maximum total early completion bonus payment
of One Million United States Dollars (US$1,000,000), that the Contractor
achieves Original Project Substantial Completion in advance of the Guaranteed
Date of Original Project Substantial Completion. The early completion bonus will
only be owed to Contractor if (a) Contractor is able to accelerate Original
Project Substantial Completion without the use of excessive overtime labor
funded as a Cost of the Work or other increase in the Cost of the Work which is
incurred or arranged with the intent to achieve Original Project Substantial
Completion prior to the Guaranteed Date of Original Project Substantial
Completion and (b) the amount of the early completion bonus exceeds the cost of
any recovery plan under Section 11.8.

 

4.5.2 If Casino Area 4 is completed by Contractor prior to its applicable
Expansion Project Interim Milestone identified in Attachment 5 to Exhibit B, as
may be adjusted pursuant to the Contract Documents, and Contractor has fully and
timely performed all of its obligations under the Contract Documents and is not
in default or breach

 

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thereunder, Contractor shall be entitled to an early completion bonus payment
(in addition to the Expansion Project Contractor’s Fee), to be paid to
Contractor concurrently with the Expansion Project Final Payment, in the amount
of Twenty-Five Thousand United States Dollars (US$25,000) per day for each day,
up to but not to exceed a maximum total early completion bonus payment, when
aggregated with the early completion bonus payment under Section 4.5.3, of Five
Hundred Thousand United States Dollars (US$500,000), that the Contractor
completes Casino Area 4 in advance of its applicable Expansion Project Interim
Milestone. The early completion bonus will only be owed to Contractor if
(a) Contractor is able to accelerate the completion of Casino Area 4 without the
use of excessive overtime labor funded as a Cost of the Work or other increase
in the Cost of the Work which is incurred or arranged with the intent to
completes Casino Area 4 in advance of its applicable Expansion Project Interim
Milestone and (b) the amount of the early completion bonus exceeds the cost of
any recovery plan under Section 11.8. The determination of whether Casino Area 4
has been completed for purposes of this Section 4.5.2 shall be made in
accordance with the provisions in Section 12.1 governing substantial completion,
as if Casino Area 4 is the “Expansion Project” thereunder.

 

4.5.3 If Casino Area 5 is completed by Contractor prior to its applicable
Expansion Project Interim Milestone identified in Attachment 5 to Exhibit B, as
may be adjusted pursuant to the Contract Documents, and Contractor has fully and
timely performed all of its obligations under the Contract Documents and is not
in default or breach thereunder, Contractor shall be entitled to an early
completion bonus payment (in addition to the Expansion Project Contractor’s
Fee), to be paid to Contractor concurrently with the Expansion Project Final
Payment, in the amount of Twenty-Five Thousand United States Dollars (US$25,000)
per day for each day, up to but not to exceed a maximum total early completion
bonus payment, when aggregated with the early completion bonus payment under
Section 4.5.2, of Five Hundred Thousand United States Dollars (US$500,000), that
the Contractor completes Casino Area 5 in advance of its applicable Expansion
Project Interim Milestone. The early completion bonus will only be owed to
Contractor if (a) Contractor is able to accelerate the completion of Casino Area
5 without the use of excessive overtime labor funded as a Cost of the Work or
other increase in the Cost of the Work which is incurred or arranged with the
intent to completes Casino Area 5 in advance of its applicable Expansion Project
Interim Milestone and (b) the amount of the early completion bonus exceeds the
cost of any recovery plan under Section 11.8. The determination of whether
Casino Area 5 has been completed for purposes of this Section 4.5.3 shall be
made in accordance with the provisions in Section 12.1 governing substantial
completion, as if Casino Area 5 is the “Expansion Project” thereunder.

 

4.6 Guarantees of Completion and Performance.

 

4.6.1 Parent Completion Guarantee. Contractor shall cause Leighton Holdings
Limited and China Overseas Holdings Limited (each, a “Guarantor”, and jointly
and severally, the “Guarantors”) to execute and deliver to Owner, on or before
the date that is the earlier of (A) thirty days following the execution of this
Agreement and (B) the consummation of Owner’s refinancing of

 

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the Project (currently scheduled to be on or about August 15, 2005), (i) the
Guarantee and (ii) a consent to the assignment of the Guarantee by Owner to
Owner’s Lenders.

 

ARTICLE V.

PAYMENTS TO CONTRACTOR

 

In consideration of Contractor’s performance of the Work in full compliance with
the Contract Documents, Owner shall pay Contractor as follows:

 

5.1 Schedule of Values.

 

5.1.1 Upon execution of this Agreement, Contractor shall submit to Owner and
Owner’s Lenders an initial “Expansion Project Schedule of Values” for the
Expansion Project Work, allocating values among all categories or portions of
the Expansion Project Work. the Expansion Project Schedule of Values shall be
prepared in such form and supported by data to substantiate its accuracy to the
extent as Owner may reasonably require, shall be based upon the latest cost
information available to Contractor, and shall be subject to Owner’s approval
which approval shall not be unreasonably withheld or delayed. By way of example
and not by limitation, the Expansion Project Schedule of Values should include
and delineate: (a) each trade subcontract and major component thereof; (b) each
significant purchase order and the installation costs for all procured materials
and equipment, so that logical and realistic cost breakdowns are established and
set forth for all facilities, phases, areas, trade disciplines, utility and
electrical systems, FF&E items and major components of each of the foregoing.
The Owner accepted Expansion Project Schedule of Values together with the
payment terms of subcontracts and purchase orders approved by Owner (as Work is
performed pursuant to such subcontracts and purchase orders) shall be used as a
basis for the Contractor’s Applications For Progress Payments described in
Section 5.2 below. Owner shall have the right to reject all or any portion of
the Expansion Project Schedule of Values which Owner determines does not
accurately define the Work in reasonable detail, or if the detail provided does
not accurately reflect an appropriate cost, allocation or proportion of the
Work. At any time and from time to time if it reasonably appears to Owner or
Contractor that any aspect of the Expansion Project Schedule of Values is
incomplete or inaccurate, and following any Change Order or Construction Change
Directive, the Expansion Project Schedule of Values shall be adjusted by
Contractor, in each case subject to Owner’s written approval, to reflect
accurately the values of the various portions of the Expansion Project Work.

 

5.1.2 The Original Project Schedule of Approved Values was delivered by
Contractor to Owner on or about July 27, 2004.

 

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5.2 Applications For Progress Payments.

 

5.2.1 Format of Applications

 

5.2.1.1 On or before the first (1st) day of each month, Contractor shall submit
to Owner and Owner’s Lenders an initial draft of a Contractor’s Application for
Progress Payment for the previous month itemized with respect to Original
Project Work and Expansion Project Work.

 

5.2.1.2 On or before the fifth (5th) day of each month, Contractor shall submit
to Owner and Owner’s Lenders fully completed Applications For Progress Payment
for Original Project Work and Expansion Project Work for the previous month in a
format reasonably satisfactory to Owner and supported by such documentation to
verify entitlement as Owner and Owner’s Lenders may reasonably require, and
certified by Contractor as correct. Each Application for Progress Payment,
identified as a Original Project Work application or a Expansion Project Work
application, shall be separately and sequentially numbered by Original Project
Work or Expansion Project Work, and shall clearly identify, itemize and
attribute all Costs of the Work in a manner which facilitates review by Owner.
Such Applications for Progress Payment may only request payment for Cost of the
Work actually incurred prior to the date of such Application for Progress
Payment and that the Contractor has paid or intends to pay to a Subcontractor or
Vendor promptly after receipt by the Contractor of the corresponding payment
from the Owner, and may not 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. Contractor shall not submit more than one Application
for Progress Payment per Original Project Work or Expansion Project Work per
month, unless otherwise requested by Owner. In addition, each Application for
Progress Payment shall separately identify and itemize the following:

 

(a) Work performed during such preceding calendar month, together with a
statement indicating what portion of such Work relates to the Hotel or the
Casino, respectively.

 

(b) Amounts due for Contractor’s initial scope of Work satisfactorily completed
during the preceding month as measured by the Contractor’s direct and actual
costs incurred in accordance with the Cost of the Work described in Section 3.2
of this Agreement, a list of all bills for supplies, materials, equipment, and
fixtures incorporated or to be incorporated in the Work (in detail reasonably
sufficient to allow Owner to determine where each item is incorporated or to be
incorporated) and labor performed (in detail reasonably sufficient to allow
Owner to determine where and on what portion of the Work the labor was
performed, including, but not limited to, labor payrolls with names, dates,
hours and rates) in connection with the Work, together with copies of the actual
bills payable to Subcontractors and Vendors under lump sum agreements or
otherwise as they relate to such Application for Payment.

 

(c) For each category and portion of the Work as shown on the Original Project
Schedule of Approved Values or Expansion Project

 

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Schedule of Values (as applicable): (1) the amount requested on all previous
Applications for Progress Payment, (2) the amount requested on the current
Application for Progress Payment, and (3) the amount allocated to the Work yet
to be completed.

 

(d) The percentage completion of each portion of the Work as of the end of the
period covered by the Application for Progress Payment, shown as the percentage
obtained by dividing (a) the expense which has actually been incurred by
Contractor on account of that portion of the Work for which Contractor has made
or intends to make actual payment prior to the next Application for Progress
Payment, by (b) the amount allocated to that portion of the Work in the Original
Project Schedule of Approved Values or Expansion Project Schedule of Values (as
applicable).

 

(e) Amounts due which are attributable to the Original Project Contractor’s Fee
or Expansion Project Contractor’s Fee (as applicable) earned as a result of the
completion of Contractor’s scope of Work during such period covered by and
included in the Application for Progress Payment and approved by Owner. Under no
circumstances shall Contractor include in any Application for Progress Payment,
nor shall Owner be required to pay, an Application for Progress Payment for
funds to pay an amount in excess of the then applicable pro rata portion of the
Original Project Contractor’s Fee or Expansion Project Contractor’s Fee (as
applicable), using the ratio that the portion of the Work then completed bears
to the total Work (as determined by the total Costs of the Work disbursed to
date for the Original Project Work or Expansion Project Work (as applicable)
compared to the total approved Costs of the Work amount on the Original Project
Schedule of Approved Values or Expansion Project Schedule of Values (as
applicable)).

 

(f) For all amounts due as the result of Change Orders and Construction Change
Directives, the Contractor shall make submittals for each Change Order and
Construction Change Directive.

 

(g) Reflect Retention in the amount provided for pursuant to Section 5.6 of this
Agreement.

 

(h) Such additional information and documentation regarding the progress of the
Work as Owner or Owner’s Lenders may reasonably require.

 

5.2.2 Substantiation of Costs. Contractor shall support its Applications for
Progress Payment with relevant documentary evidence for cost verification
purposes as Owner and Owner’s Lenders may reasonably require. This obligation
shall include providing Owner with such supporting documentation as necessary to
enable Owner to verify Costs of the Work submitted pursuant to Section 3.2 of
this Agreement, including any

 

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Costs of the Work attributable to Change Orders or Construction Change
Directives. To the extent requested by Owner, this shall include providing audit
access to Contractor’s books and records to the extent described in Article 19
of this Agreement. All blanks and columns in the Application for Progress
Payment must be completed. With respect to all costs associated with deposits,
advance payments or materials stored off-Site, Contractor must comply with the
provisions of Sections 5.11 and 5.13 of this Agreement.

 

5.2.3 Additional Costs For Change Orders and Claims. Except for Construction
Change Directives or pursuant to an Owner signed Change Order, Owner shall not
have any obligation to pay any amounts to Contractor or any Subcontractor or
Vendor for work outside the scope of Contractor’s Work.

 

5.2.4 Lien Waivers. Each Application for Progress Payment shall include signed
(along with company seal or chop, at Contractor’s option) Waiver and Release of
Lien Upon Progress Payment in the form attached hereto as Exhibit H from
Contractor with regard to Work that is covered on the Application for Progress
Payment. Owner’s receipt of such executed waiver shall be a condition precedent
to Owner’s obligation to pay any amounts pertaining thereto. In addition, Owner
may at any time direct Contractor to submit a certificate that all payrolls,
invoices for material and equipment, and other indebtedness connected with the
Work and associated with an Application For Progress Payment have been paid.

 

5.2.5 Contractor Statements. Each Application for Progress Payment (and for
Original Project Final Payment and Expansion Project Final Payment) shall
include a “Contractor’s Certificate,” in form and substance identical to
Exhibit I attached to this Agreement, signed by Contractor. Further, unless
otherwise stated by Contractor in the Contractor’s Certificate and accepted by
Owner, the issuance of an Application for Payment by Contractor will constitute
a representation by Contractor to Owner that (a) the Work has progressed in
accordance with the Original Project Schedule or Expansion Project Schedule (as
applicable), (b) the quality of the Work performed up to the date of such
Application for Payment is in compliance with the requirements set forth in the
Contract Documents, (c) Contractor is not in breach of any of the provisions of
the Contract Documents, and (d) Contractor is entitled to payment in the amount
certified. The payment by Owner of any amount requested in an Application for
Progress Payment shall not be deemed to represent in any way that (i) Owner has
inspected the quality or quantity of the Work, (ii) Owner has reviewed the
construction means, methods, techniques, sequences or procedures used by
Contractor, or (iii) Owner has made any examination to ascertain how Contractor
has used the progress payments previously made to it.

 

5.3 Time of Payments. Subject to the terms of the Contract Documents, Owner
shall make to Contractor progress payments properly due and undisputed based on
an approved Application for Progress Payment within twenty-five (25) calendar
days after receipt of such fully completed Applications for Progress Payment
which are submitted along with all requirements under Section 5.2 above, and
substantiated in accordance with

 

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Section 5.2.2 above, and otherwise reasonably satisfactory to and approved by
Owner and Owner’s Lenders, less any amounts that may be retained or withheld
pursuant to the Contract Documents. Contractor recognizes that (i) any payment
to it by the Owner is conditional upon the approval by Owner’s Lenders of the
related Application for Progress Payment, and that (ii) Owner’s Lenders are
entitled to request that the Contractor deliver further documents or
substantiation of costs before approving any Application for Progress Payment.
Owner shall promptly inform Contractor if Owner becomes aware that any of
Owner’s Lenders will not be funding all or any portion of a particular
Application for Progress Payment, notwithstanding that Owner shall have approved
such Application for Progress Payment.

 

5.4 Owner’s Right To Withhold. Notwithstanding anything to the contrary herein,
and in addition to Retention, Owner may, upon written notice to Contractor,
together with a written explanation of all such withholding and the calculation
of the amounts withheld, withhold from any payments otherwise due to the
Contractor (including Final Payment), up to one hundred percent (100%) of the
amount which, in Owner’s reasonable opinion, is necessary to protect Owner
against or compensate Owner for any and all damages, costs, lawsuits claims,
overpayments, expenses and losses, including, but not limited to, for the cure
of any breach, default or failure to perform, or to assure the payment of claims
of third persons, in each case attributable to any of the items or circumstances
listed below in this Section 5.4 (such items or circumstances, the “Bases for
Withholding”). Owner, at its option, may 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, and Owner shall not be deemed in default by reason of
withholding payment under this Agreement in good faith. Contractor shall not be
entitled to receive payment with respect to any portion of an Application for
Progress Payment that is inaccurate or incomplete or that contains any
misrepresentation. If Owner becomes aware of any problems developing with
respect to the Contractor or the Work which could form the basis for
withholding, Owner shall notify Contractor thereof (provided, however, that any
failure by Owner to so notify Contractor shall in no way limit Owner’s right to
withhold funds as provided in this Section 5.4). The rights and remedies of
Owner under this Section 5.4 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. The Bases for Withholding shall be limited to the following:

 

5.4.1 The overall percentage of Original Project Work or Expansion Project Work
(as applicable) satisfactorily completed by Contractor and each relevant
Subcontractor and/or Vendor (determined by comparing the amount of Original
Project Work or Expansion Project Work (as applicable) satisfactorily completed
to the total amount of Original Project Work or Expansion Project Work (as
applicable) to be completed), is less than the overall percentage of payments
determined by comparing (i) the sum of (a) all amounts previously paid by Owner
with respect to the Original Project Work or Expansion Project Work (as
applicable); and (b) the pending invoice to be paid, to (ii) the total amount of
the Cost of Work for the Original Project Work or Expansion Project Work (as
applicable) within the Original Project Guaranteed Maximum Price or Expansion
Project

 

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Guaranteed Maximum Price (as applicable); provided, however, that Owner shall
not be entitled to withhold on such basis to the extent that Contractor is
otherwise entitled to receive the applicable payment from amounts available in
the Original Project Construction Contingency or Expansion Project Construction
Contingency (as applicable).

 

5.4.2 Contractor’s failure to perform any Original Project Work or Expansion
Project Work (as applicable) and its other obligations hereunder in accordance
with the Contract Documents, including, but not limited to, failing to comply
with any applicable Laws, failure to submit or carry out Recovery Plans in
accordance with Section 11.8 of this Agreement, and/or failure to maintain
insurance in compliance with the requirements of this Agreement; provided,
however, that Owner shall not be entitled to withhold on such basis to the
extent that Contractor is otherwise entitled to receive the applicable payment
from amounts available in the Original Project Construction Contingency or
Expansion Project Construction Contingency (as applicable).

 

5.4.3 Defective Work not remedied in a timely manner after receipt of notice
from Owner during the course of the Work, during the Original Project Defects
Liability Period or during the Expansion Project Defects Liability Period (as
applicable). If any Work inspected by Owner is not to Owner’s reasonable
satisfaction in accordance with the Contract Documents, a condition of any
additional payments to Contractor shall be the correction of any such
unsatisfactory Work to Owner’s reasonable satisfaction in accordance with the
Contract Documents.

 

5.4.4 Failure by Contractor to make timely or properly due payments to
Subcontractors or Vendors in the amounts for which Contractor has received
payments from Owner.

 

5.4.5 Contractor’s failure to submit lien waivers as required pursuant to
Section 5.2.4 above.

 

5.4.6 The exercising by Contractor or any Subcontractor or Vendor of mechanic’s
lien rights or other claims relating to the Work against Owner, the premises of
Owner, the Project and/or the Site, or the making of any claim against the same
by any other party arising out of or relating to the Work or acts or omissions
of Contractor, any Subcontractor or any other person for whose acts Contractor
is responsible or liable at law or under the Contract Documents, except for
those lien rights exercised as a result of Owner’s failure to make payment when
due to Contractor under the Contract.

 

5.4.7 Contractor’s failure to expeditiously remove or release mechanic’s or
similar liens made against the premises of Owner and/or the Site, except for
those liens made as a result of Owner’s failure to make payment when due to
Contractor under the Contract.

 

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5.4.8 Any failure by the Contractor to provide timely access to the Contractor’s
books and records for audit purposes to the extent described in Article 19 of
this Agreement.

 

5.4.9 Any failure by Contractor to provide the Schedule Updates as required by
Article 11 of this Agreement.

 

5.4.10 Any failure by Contractor to satisfy any of its obligations under this
Agreement to provide certificates or other information requested by Owner’s
Lenders.

 

5.4.11 Any failure by Contractor to satisfy its obligations under Section 3.1.5
of this Agreement.

 

5.4.12 Regarding any particular portion of the Original Project Work or
Expansion Project Work (as applicable) as shown on the Original Project Schedule
of Approved Values or Expansion Project Schedule of Values, respectively, any
amount requested is attributable to a portion of the Work not actually
completed; provided, however, that Owner shall not be entitled to withhold on
such basis to the extent that the applicable payment to be made to Contractor is
in respect of a deposit or advance payment to be made by Contractor to a
Subcontractor or Vendor and Contractor is otherwise entitled to receive such
payment in accordance with the terms of this Agreement.

 

5.4.13 Owner’s or Owner’s Lenders’ good faith belief based on reasonable
evidence that any Work will not be completed within the applicable Contract
Time, provided that Contractor has been notified of such belief and fails to
provide within seven (7) days either satisfactory evidence to the contrary or an
acceptable Recovery Plan pursuant to Section 11.8.

 

5.4.14 Damage to property or Work or injury to persons attributable to the acts
or omissions of Contractor, any Subcontractor or any person for whose acts or
omissions Contractor is responsible or liable at law or under the Contract
Documents.

 

5.4.15 Deviations from the Contract Documents other than those approved or
permitted in accordance with the Agreement without an applicable Change Order or
Construction Change Directive.

 

5.4.16 Any material breach or default or failure to perform by Contractor under
the Contract Documents, including, but not limited to, failure to maintain any
required insurance, or any material inaccuracy in any of Contractor’s
representations or warranties.

 

5.4.17 A determination by Owner to nullify in whole or in part a prior approval
of an Application for Progress Payment and/or prior payment made, because of
subsequently discovered evidence or subsequent observations which otherwise
would allow Owner to withhold pursuant to this Section 5.4 or elsewhere in the
Contract Documents.

 

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5.4.18 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 Site, 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 Original
Project Final Completion or Expansion Project Final Completion on or before the
applicable Contract Time.

 

5.4.19 Except as contemplated by the Contract Documents or otherwise approved by
Owner, encroachments by any part of the Work being constructed on property
located outside the boundaries of the Site.

 

5.4.20 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 Laws, 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.

 

5.4.21 Contractor’s failure to comply with the requirements of Section 5.13 of
this Agreement relating to off-Site materials.

 

5.5 Joint Payee Checks. Owner shall have the right at any time and from time to
time upon notice to Contractor, to issue one or more checks for portions of a
progress payment, Original Project Final Payment or Expansion Project Final
Payment which are payable jointly to Contractor and its Subcontractors or
Vendors of any tier or the parties owed. This right includes, but is not limited
to, issuing jointly payable checks in circumstances where a dispute exists
between Owner and Contractor with respect to the value of any partially or fully
completed Work, including disputed Change Proposal Requests and Claims, and
circumstances where Contractor has failed to provide lien waiver documents as
required herein. Any such checks shall be forwarded to Contractor for further
handling. 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 for which Contractor has been
paid by Owner, Owner shall have the right (but not the obligation), after giving
Contractor written notice thereof, and provided that Contractor fails within
fifteen (15) days after such notice to cure such situation or to put forward
satisfactory reasons to justify such non-payment, to make payments directly for
any and all such labor, materials, or equipment and to deduct the amount of such
payment from any payments otherwise due to Contractor and from the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
(as applicable).

 

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5.6 Retention.

 

5.6.1 From each Progress Payment made by Owner on an approved Application for
Progress Payment, Owner shall retain and withhold “Retention” in an amount equal
to ten percent (10%) of the approved amounts to be paid with respect to the Work
performed directly by Contractor (as distinguished from Work performed by
Subcontractors, Vendors or any other third party). Upon Original Project
Substantial Completion, fifty percent (50%) of the Retention withheld with
respect to the Original Project Work shall be released on the next regularly
scheduled payment date. Subject to Section 5.6.2, all remaining Retention
withheld with respect to the Original Project Work shall be released on the
first (1st) anniversary of the date of Original Project Substantial Completion.
Upon Expansion Project Substantial Completion, fifty percent (50%) of the
Retention withheld with respect to the Expansion Project Work shall be released
on the next regularly scheduled payment date. Subject to Section 5.6.2, all
remaining Retention withheld with respect to the Expansion Project Work shall be
released on the first (1st) anniversary of the date of Expansion Project
Substantial Completion.

 

5.6.2 With respect to any portions of the Work for which the Original Project
Defects Liability Period or the Expansion Project Defects Liability Period has
been extended pursuant to Section 10.2 of this Agreement, Owner shall retain and
withhold from the Retention an amount (the “Defects Liability Retainage”) equal
to three times the Owner’s reasonable estimate of the cost to correct, repair or
replace such portions of the Work; thereafter, at the expiration of the Original
Project Defects Liability Period or Expansion Project Defects Liability Period
(as extended) for such Work, the Defects Liability Retainage shall be either
(i) retained by Owner in the event the Owner exercised its right to correct such
Work in accordance with Section 10.7 hereof prior to the expiration of the
Original Project Defects Liability Period or Expansion Project Defects Liability
Period (as extended)or (ii) released to Contractor.

 

5.6.3 Except as may otherwise be agreed to by Owner pursuant to Section 9.3,
Contractor shall retain and withhold from payments due to Subcontractors and
Vendors a retention as follows: (i) in the case of Work performed by
Subcontractors providing labor and materials, ten percent (10%) on the approved
amounts to be paid, provided that after retaining an aggregate amount equal to
five percent (5%) of the total contract price of the applicable subcontract or
purchase order, Contractor is not required to withhold further retention with
respect to such Work; (ii) in the case of Work performed by Subcontractors
providing only labor, an amount equal to two and one-half percent (2-1/2%) on
the approved amounts to be paid; and (iii) in the case of materials or equipment
to be supplied by Vendors, ten percent (10%) on the approved amounts to be paid,
provided that Owner in its sole discretion may agree to reduce such amount in
the case of certain Vendors. Except as may otherwise be agreed to by Owner
pursuant to Section 9.3, Contractor shall not request in any Application for
Progress Payment, and Owner shall have no obligation to include in any Progress
Payment made pursuant thereto, any retention amounts that Contractor is required
to withhold pursuant to the foregoing, until such time as the retention is
required to

 

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be released to the Subcontractor or Vendor in accordance with the applicable
approved subcontract or purchase order. For purposes of clarity, as used in this
Section 5.6.3, “approved amounts to be paid” means the approved amounts payable
to the applicable Subcontractor or Vendor without subtraction of the required
retention.

 

5.7 Substantial Completion Payments.

 

5.7.1 Payment by Owner of the first half of the Retention withheld with respect
to Original Project Work upon Original Project Substantial Completion shall be
in consideration of Contractor’s unconditional covenant and agreement to
complete all final Original Project Punch List Items. At Owner’s option, upon
Original Project Substantial Completion, Owner may elect to release any
Retention withheld with respect to Original Project Work then being held by
Owner, less a sum equal to one hundred percent (100%) of the costs reasonably
estimated by Owner to be necessary to complete any such Original Project Punch
List Items, which sum shall be retained by Owner until such Original Project
Punch List Items are completed. Thereafter, Owner shall pay to the Contractor
monthly the amounts retained for such Original Project Punch List Items to the
extent that each Original Project Punch List Item is satisfactorily completed by
Contractor and accepted by Owner. It shall be a condition precedent to payment
to Contractor of the first half of the Retention withheld with respect to
Original Project Work related to Original Project Substantial Completion that
Contractor obtain and deliver to Owner all certificates of occupancy (or any
other equivalent permits required for occupancy and use) as may be required by
Owner. Contractor shall obtain all such certificates of occupancy and other
permits as soon as practicable after they are first available to be obtained
(unless due to the fault of Owner such certificates are not obtainable).

 

5.7.2 Payment by Owner of the first half of the Retention withheld with respect
to Expansion Project Work upon Expansion Project Substantial Completion shall be
in consideration of Contractor’s unconditional covenant and agreement to
complete all final Expansion Project Punch List Items. At Owner’s option, upon
Expansion Project Substantial Completion, Owner may elect to release any
Retention withheld with respect to Expansion Project Work then being held by
Owner, less a sum equal to one hundred percent (100%) of the costs reasonably
estimated by Owner to be necessary to complete any such Expansion Project Punch
List Items, which sum shall be retained by Owner until such Expansion Project
Punch List Items are completed. Thereafter, Owner shall pay to the Contractor
monthly the amounts retained for such Expansion Project Punch List Items to the
extent that each Expansion Project Punch List Item is satisfactorily completed
by Contractor and accepted by Owner. It shall be a condition precedent to
payment to Contractor of the first half of the Retention withheld with respect
to Expansion Project Work related to Expansion Project Substantial Completion
that Contractor obtain and deliver to Owner all certificates of occupancy (or
any other equivalent permits required for occupancy and use) as may be required
by Owner. Contractor shall obtain all such certificates of occupancy and other
permits as soon as practicable after they are first available to be obtained
(unless due to the fault of Owner such certificates are not obtainable).

 

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5.8 Final Payment. Contractor’s “Applications For Final Payment” shall be
submitted in accordance with the following:

 

5.8.1 “Original Project Final Payment” means the payment to Contractor of all
amounts due and owing and remaining to be paid to Contractor under the Contract
Documents with respect to Original Project Work, including any Retention, based
on Contractor’s Application for Original Project Final Payment and Owner’s
Original Project Certificate of Final Completion. Original Project Final Payment
shall not be due, and Contractor’s Application for Original Project Final
Payment shall not be considered, until (i) the Contractor completes all of the
Original Project Work in accordance with the Contract Documents, including the
requirements set forth in this Section 5.8.1 and the prerequisites for a
Original Project Certificate of Final Completion set forth in Section 12.2 of
this Agreement, and (ii) the first (1st) anniversary of the date of Original
Project Substantial Completion has occurred.

 

5.8.2 “Expansion Project Final Payment” means the payment to Contractor of all
amounts due and owing and remaining to be paid to Contractor under the Contract
Documents with respect to Expansion Project Work, including any Retention, based
on Contractor’s Application for Expansion Project Final Payment and Owner’s
Certificate of Expansion Project Final Completion. Expansion Project Final
Payment shall not be due, and Contractor’s Application for Expansion Project
Final Payment shall not be considered, until (i) the Contractor completes all of
the Expansion Project Work in accordance with the Contract Documents, including
the requirements set forth in this Section 5.8.2 and the prerequisites for a
Certificate of Expansion Project Final Completion set forth in Section 12.2 of
this Agreement, and (ii) the first (1st) anniversary of the date of Expansion
Project Substantial Completion has occurred.

 

5.8.3 It shall be a condition to each of Original Project Final Payment and
Expansion Project Final Payment that Contractor deliver to Owner the following:

 

5.8.3.1 A certificate that all payrolls (including all union dues, health,
welfare, pension plan and other labor associated contributions), invoices for
all labor, materials and equipment and all other indebtedness connected with the
Original Project Work or Expansion Project Work (as applicable) for which Owner
or its property might in any way be responsible, and for which Owner has paid
the Contractor, have been paid or otherwise satisfied.

 

5.8.3.2 Final Waivers in a form acceptable to Owner from Contractor and all
Subcontractors and Vendors and all other persons providing any services, labor,
materials or equipment in relation to the Original Project Work or Expansion
Project Work (as applicable), including certified copies of waivers of all lien
rights exercised during the course of the Original Project Work or Expansion
Project Work (as applicable) and not previously provided to Owner, and no lien
rights have been exercised, or other claims or encumbrances have been filed or
are outstanding, with respect to the whole or any part of or

 

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interest in either the Site or the Original Project Work or Expansion Project
Work (as applicable).

 

5.8.3.3 A certificate that Contractor has timely paid all applicable Taxes due
and payable prior to Original Project Final Payment or Expansion Project Final
Completion (as applicable) and arising out of the Original Project Work or
Expansion Project Work (as applicable) in a form satisfactory to Owner.

 

5.8.3.4 An accounting of the credits due to Owner for the value of any excess
items paid for by Owner and a complete detailed statement of the Cost of the
Original Project Work or Expansion Project Work (as applicable) showing, without
limitation, all expenditures for which tax credits or deductions may be allowed
(if applicable).

 

5.8.3.5 Any documents, instruments, releases, certificates and indemnitees
reasonably required and that Contractor is able to obtain using its best efforts
in order to establish that no mechanics or materialmen’s lien rights have been
exercised, that all Lender Liens are of first priority (including prior to any
other liens or lien rights) as it relates to Contractor’s obligations under the
Contract, and that there are no encroachments or violations of any covenants,
conditions or restrictions affecting the Site.

 

5.8.3.6 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, the
Original Project Work or the Expansion Project Work which may then or in the
future affect Owner, Owner’s property, the Original Project, the Expansion
Project or the Site, 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 7.19 hereof furnish a bond satisfactory to Owner 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 money that Owner may be
compelled to pay in releasing Owner, Owner’s property, the Original Project, the
Expansion Project or the Site from such lien, including all costs and reasonable
attorneys’ fees.

 

5.8.3.7 Such other certificates and instruments relating to the Original Project
Work or Expansion Project Work (as applicable) as Owner’s Lenders may reasonably
require.

 

5.8.4 Owner will have no obligation to make either of the Original Project Final
Payment or the Expansion Project Final Payment as long as any unresolved
mechanic’s liens or claims exist relating to Owner, Owner’s property, the Site,
the Original Project and/or the Expansion Project, regardless of whether such
liens are exercised or claims are made by Contractor, any Subcontractor or
Vendor or any other party relating to the Work;

 

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unless and until Contractor releases or causes the release of Owner, Owner’s
property, the Site, the Original Project or the Expansion Project, as
applicable, from such liens and claims or, as directed by Owner, Contractor
provides Owner and Owner’s Lenders with indemnitees acceptable to Owner and
Owner’s Lenders and/or bonds around any mechanic’s lien or claim in a manner
acceptable to Owner and Owner’s Lenders, all in accordance with Section 7.19
hereof.

 

5.8.5 The Applications For Final Payment shall include a statement of all
unresolved Claims (and for which payment has been and/or shall be withheld by
Owner). Contractor shall separately list by Claim number the specific dollar
amounts which have previously been submitted as Claims by Contractor in good
faith and in full compliance by Contractor with this Agreement.

 

5.8.6 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 an Application For Final
Payment 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 with respect to Original Project Work or
Expansion Project Work (as applicable). This release and waiver shall include,
without limitation, any and all claims for amounts in addition to the specific
dollar amounts relating to the unresolved Claims so identified by Contractor,
and all other 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 an
Application For Final Payment. Contractor shall evidence such release and waiver
by delivering a fully executed release and waiver with respect to the Original
Project Work and the Expansion Project Work, as applicable, in the form attached
hereto as Exhibit J.

 

5.8.7 Upon Owner’s concurrence that all conditions listed in Section 12.2 of
this Agreement with respect to the Original Project Work or the Expansion
Project Work have been fulfilled and that the balance set forth in the relevant
Application For Final Payment is due and payable, and subject to the approval of
Owner’s Lenders, Owner shall make the Original Project Final Payment or
Expansion Project Final Payment (as applicable) to Contractor in accordance with
this Agreement.

 

5.8.8 Original Project Final Payment or Expansion Project Final Payment (as
applicable) shall not relieve Contractor of any warranty obligations (including,
but not limited to, warranty obligations contained in the Contract Documents or
at law).

 

5.9 Disputed Payments. When the reason(s) for withholding a particular payment
are removed to Owner’s reasonable satisfaction, Owner will pay such previously
withheld amounts for such matters (less amounts properly withheld or retained)
with the next regularly scheduled payment. In the event of a dispute with
respect to amounts payable under an Application for Progress Payment, the
Original Project Final Payment or the

 

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Expansion Project Final Payment, Owner shall pay all undisputed amounts. If
Contractor disputes any determination by Owner with regard to any Application
for Progress Payment or any withheld amounts, Contractor shall nevertheless
expeditiously continue to execute the Work. Any amounts in dispute and withheld
by Owner shall be promptly paid after the earlier of: (a) settlement of the
dispute by execution of a final Change Order document; or (b) final resolution
of the dispute pursuant to Section 22.1 of this Agreement. The payment of any
undisputed amounts shall not waive or otherwise limit Owner’s rights as set
forth in this Agreement, including, but not limited to, in Article 19 below.

 

5.10 Ownership of Materials. All material and work covered by progress payments
made shall upon such payment become the sole property of Owner, however the
Contractor shall not be relieved from the risk of loss and responsibility for
all material and Work upon which payments have been made or the restoration of
any damaged Work. Contractor represents and warrants to Owner that (i) title to
all of the Work, materials and equipment covered by any Application for Progress
Payment 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, except for Excepted Risks, until responsibility for the Work has
been accepted by Owner in the manner set forth in Article 12 of this Agreement;
and (iv) no Work covered by an Application for Progress Payment and no material
or equipment incorporated in the Work will have been acquired or incorporated
into the Work, subject to an agreement under which an interest in the Work or an
encumbrance on the Work is retained by the seller or otherwise imposed by
Contractor or any other person. “Excepted Risks” means all events listed in
Section 11.4 as events of Force Majeure, except to the extent that any damage to
or loss of the Work is caused by Contractor’s failure to comply with the
provisions of Section 7.2.7.

 

5.11 Deposits and Advance Payments. If any deposits or advance payments are
required in connection with the execution of the Work, such deposits or advance
payments will be specifically identified by category and credited against
amounts as billed in that category. Contractor shall provide Owner with a
monthly statement of the total amount of all such deposits and advance payments
then outstanding. In addition, 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 are deemed advisable
by Owner or Contractor, provided such purchases in excess of US$25,000 are
approved by Owner and Owner’s Lenders. Upon Owner’s request, Contractor shall
provide Owner with an assignment of Contractor’s rights relating to such deposit
made and agreement for purchase of such item.

 

5.12 Waiver. Any waiver by Owner of the requirement that Contractor provide lien
waivers with respect to any Application for Progress Payment, the Application
for

 

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Original Project Final Payment or the Application for Expansion Project Final
Payment shall not constitute a waiver of the obligation of Contractor to remove
or satisfy any and all liens exercised against Owner, Owner’s property, the
Site, the Original Project or the Expansion Project, which obligation shall at
all times remain the responsibility of Contractor hereunder. Owner’s allowance
or payment of any item pursuant to any Application for Progress Payment or
otherwise shall not constitute approval of the Work or the Application for
Progress Payment, or result in Owner’s waiver of any claims, all of Owner’s
rights being specifically reserved, and no such payments shall operate as an
admission on the part of Owner as to the propriety or accuracy of any amounts on
such Application for Progress, Original Project Final Payment or Expansion
Project Final Payment. A progress payment or partial or entire use or occupancy
of the Original Project or the Expansion Project by Owner shall not constitute
acceptance of Work not in accordance with the Contract Documents. Owner shall
not be bound by any entries in previous Applications for Progress Payment and
shall be permitted to make corrections for errors therein. Owner’s final
Original Project Contractor’s Fee installment payment, final Expansion Project
Contractor’s Fee installment payment, Original Project Final Payment and
Expansion Project Final Payment shall in no way relieve Contractor of any
obligations or responsibilities under the Contract Documents which extend beyond
the date of such payment.

 

5.13 Materials Off-Site. Subject to Section 5.11 and except as otherwise
approved by Owner pursuant to Article 9, all materials which are the subject of
an Application for Progress Payment (or an application for Original Project
Final Payment or Expansion Project Final Payment, if applicable) 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. All materials that are stored off-Site
shall be marked and identified as the property of Owner, and Owner shall have
the right to access all materials stored off-Site and to remove them from such
off-Site location(s). Furthermore, Contractor shall:

 

5.13.1.1 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;

 

5.13.1.2 take or cause to be taken all actions necessary to insure, maintain,
preserve and protect the materials and keep them in good condition and repair,
and

 

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to comply with all laws, regulations and ordinances relating to the ownership,
storage or use of the materials;

 

5.13.1.3 cause to be delivered to Owner any applicable bailee waivers where such
bailee rights exists, and the original warehouse receipt 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

 

5.13.1.4 if Contractor shall fail to perform any of its obligations under this
Section 5.13 after Owner has made payment to Contractor for the materials, Owner
or Owner’s Lender may, but shall not be obligated to, take such actions and
expend such sums as either may deem necessary to protect and preserve Owner’s
and/or Owner’s Lenders’ security interest in such materials, and all such
expenditures so incurred (including, but not limited to, attorneys’ fees and
disbursements) shall be reimbursed by Contractor promptly on demand and shall be
Non-Allowable Costs of the Work.

 

ARTICLE VI.

OWNER’S RESPONSIBILITIES

 

6.1 Information and Services. Owner shall, at such times as are reasonably
required for the successful and expeditious completion of the Work, provide
Contractor with the following information and services at Owner’s expense and/or
perform the following obligations:

 

6.1.1 Purchase and deliver to Contractor in accordance with the Original Project
Schedule and the Expansion Project Schedule (as applicable), the material and
equipment to be provided by Owner for installation by the Contractor, if any;

 

6.1.2 Pay any real property taxes assessed against the Work, to the extent
applicable (Owner acknowledging that such taxes shall not be included in the
Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price);

 

6.1.3 Prepare the Owner’s Design or cause the Owner’s Design to be prepared in
accordance with the Original Project Schedule and Expansion Project Schedule (as
applicable) in order not to delay the execution of the Work, provided that
Contractor agrees to use all reasonable efforts to mitigate the effect of any
delay in the performance of the Owner’s Design (provided, however, that the
foregoing shall in no way alter the definition of what constitutes an Owner
Delay or the application of the provisions of this Agreement relating to any
Owner Delay);

 

6.1.4 Generally perform in a timely manner all of Owner’s obligations under the
Contract Documents;

 

6.1.5 Prior to the Original Project Date of Commencement, obtain all licenses,
approvals, consents, permits and authorizations required to be obtained by Owner

 

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under the Contract Documents to allow the commencement of the Original Project
Work, all of which Contractor acknowledges that, to the best of its knowledge,
have been obtained; provided, however, that upon Owner’s request, Contractor
shall use commercially reasonable efforts to assist Owner in obtaining any
remaining licenses, approvals, consents, permits and authorizations necessary
for the orderly prosecution of the Original Project Work;

 

6.1.6 Prior to the Expansion Project Date of Commencement, obtain all licenses,
approvals, consents, permits and authorizations required to be obtained by Owner
under the Contract Documents to allow the commencement of the Expansion Project
Work; provided, however, that upon Owner’s request, Contractor shall use
commercially reasonable efforts to assist Owner in obtaining all licenses,
approvals, consents, permits and authorizations necessary for the orderly
prosecution of the Expansion Project Work; and

 

6.1.7 Include in all subcontracts, purchase orders and other agreements entered
into with any of Owner’s Contractors or Owner’s Consultants a requirement that
such Owner’s Contractor or Owner’s Consultant must comply with the direction of
Contractor in connection with the execution of the Work.

 

6.2 Limitations. Information on the Site and local conditions affecting the Site
and any and all other information, reports, studies, surveys and materials
provided by, or on behalf of, Owner is furnished solely for the convenience of
Contractor only, and without any representation, warranty or guarantee of
accuracy, adequacy, correctness or completeness by Owner and Owner hereby
disclaims all such warranties, guarantees and representations. Except to the
extent set forth in Article 13 below, and except to the extent the information
and materials supplied by Owner contain inaccurate information that was not
known to Contractor to be inaccurate (and such inaccuracy would not have been
reasonably discovered by Contractor in the exercise and/or performance of its
obligations under the Contract Documents), Contractor assumes the risk of such
conditions and shall fully complete the Work without an increase in the
Expansion Project Guaranteed Maximum Price or the Original Project Guaranteed
Maximum Price (as applicable) and within the applicable Contract Time (subject
to Contractor’s right to use the Original Project Construction Contingency and
the Expansion Project Construction Contingency (as applicable) as provided in
Section 3.1.8 hereof, to the extent there remain funds therein).

 

6.3 Owner’s Representative. Owner has designated Todd Nisbet and Gary Chin, each
as “Owner’s Representative” to be Owner’s authorized representative (each acting
alone) to provide approvals and directives necessary for the day-to-day
administration of the Project, including the Work. Each Owner’s Representative
shall have the authority to bind the Owner and the decision of any Owner’s
Representative shall be binding on the Owner. Contractor acknowledges and
confirms that no apparent authority, agency or similar claims may be made by
Contractor with respect to any approval, authorization, order or decision given
or made from and after the execution date of this Agreement by any purported
representative or employee of Owner other than any of Owner’s Representatives in
writing

 

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(or such other individual authorized in writing by Owner), and all such claims
are hereby waived by Contractor.

 

6.4 Site Access. Owner, Owner’s Lenders, Owner’s Lenders’ technical advisor,
Owner’s Consultants, Owner’s Contractors, Macau SAR representatives and any
party designated by Owner shall at all times have, and Contractor shall provide,
complete and unfettered access to the Site and the Work in progress and
preparation wherever located at all times for any and all purposes as Owner
and/or Owner’s Lenders may desire or as may be required under the Gaming
Concession Agreement. Visits to the Site or observations of the Work by Owner,
Owner’s Consultants, Owner’s Contractors, Macau SAR representatives, any party
designated by Owner, Owner’s representatives or contractors, or Owner’s Lenders
or Owner’s Lenders’ technical advisor shall in no way relieve Contractor from
its obligations to carry out the Work in accordance with the Contract Documents.
Subject to the terms of the Contract Documents, Owner shall, and shall require
Owner’s Consultants and Owner’s Contractors to, work without causing labor
disharmony, coordination difficulties, delays, disruptions or interferences with
Contractor, Subcontractors and Vendors.

 

6.5 Payments. Owner shall timely make payment to Contractor of amounts properly
due to Contractor under and subject to (including Owner’s right to offset and
withhold as provided in) the Contract Documents.

 

6.6 Proof of Funding. Upon Contractor’s request, and subject to availability to
Owner and the rights of the Owner’s Lenders, Owner will provide to Contractor a
copy of the loan commitment and loan common terms agreement between Owner and
Owner’s Lenders relating to the provision and disbursement of funds to Owner for
its obligations under this Contract (excluding therefrom information deemed
proprietary or confidential by Owner or Owner’s Lenders).

 

6.7 Good Faith. Owner shall use good faith in performing its obligations under
the Contract Documents, and, in addition to any specific obligations of Owner
hereunder in this respect, it is agreed that Owner shall not unreasonably delay
its review of and/or response to matters requiring Owner’s review and/or
response under the Contract Documents.

 

ARTICLE VII.

CONTRACTOR’S RESPONSIBILITIES

 

7.1 Contractor’s Specific Representations, Warranties and Covenants. By entering
into this Contract, Contractor undertakes to furnish its best skill and judgment
and to cooperate with Owner in furthering the best interests of Owner, the Work
and the Project, and shall use good faith in performing its obligations under
the Contract Documents. By entering into this Contract, Owner is relying upon
the specific undertakings, representations and warranties of Leighton, China/HK
and China/Macau in favor of Owner as follows, and

 

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Leighton, China/HK and China/Macau each hereby represents, warrants and
covenants to Owner that:

 

7.1.1 As of the Original Project Date of Commencement and the Expansion Project
Date of Commencement, Contractor shall be duly authorized and shall have the
necessary license(s), approvals, consents, permits and other authorizations to
practice and perform all Work in this jurisdiction, and Contractor shall remain
so licensed at all times relevant to the Work. Contractor shall ensure that all
Subcontractors are duly authorized and have the necessary license(s), approvals,
consents, permits and other authorizations to practice and perform all Work to
be performed by such Subcontractors in this jurisdiction and will remain so
licensed at all times relevant to the Work. Contractor shall produce such
license(s), approvals, consents, permits and other authorizations to the Owner
upon request, and Contractor shall be responsible to obtain copies of such
license(s) from all Subcontractors prior to allowing them to perform Work on
Site. Contractor has substantial experience in performing major projects with
scopes of work similar to the Work defined herein, is familiar with the
activities of the governmental bodies having authority over the Project and has
expertise and experience managing Subcontractors on projects of similar scope
within the region. Contractor also represents that such experience includes
performing major projects with stringent time constraints and where construction
begins before all drawings and specifications have been issued for construction
purposes, as is the case with the Work and Project. The standard by which
Contractor shall be judged in its performance of this Agreement and its exercise
of judgment hereunder shall be that of a contractor with the level of skill,
experience and expertise necessary for the planning and construction of a
“five-star” first class international luxury resort and casino, including the
foregoing qualifications and consistent with such other Contractor
representations, warranties and covenants contained in the Contract Documents.

 

7.1.2 All of Contractor’s management involved with the Project and key
supervisory personnel shall speak fluent English and shall remain committed to
and available for full-time assignments (except when on leave approved in
advance by Owner) devoted to the Work until at least sixty (60) days after the
later of Expansion Project Substantial Completion and Original Project
Substantial Completion. If Owner is dissatisfied with the services rendered by
any of such persons, then upon Owner’s written request, Contractor shall
promptly substitute a person who is fluent in English of at least equal
qualifications to perform the same function. Owner shall include in its written
request Owner’s reasons for requiring such removal and substitution. If any of
such persons or any replacements thereof under the preceding sentence are no
longer employed by Contractor, then Contractor shall promptly substitute a
person who is fluent in English of at least equal qualifications to perform the
same function and notify Owner of the name of the substitute and his or her
qualifications. Owner shall retain the right to approve all key personnel of
Contractor involved in the Project. The individuals who shall be responsible on
behalf of Contractor for supervising the Work are set forth on Contractor’s
Personnel list attached as Exhibit C to this Agreement. Except for reasons
beyond its control, Contractor shall not change any of the individuals
designated in said Exhibit C during the term of the Agreement

 

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without the prior approval or specific direction of Owner, which approval shall
not be unreasonably withheld or delayed. At least one Project Superintendent or
Project Manager shall be at the Site on a full-time basis and at all times while
any Work is being performed. In no event shall Mr. Michael Derrington Harvey be
removed as a Contractor’s Representative from the Project (other than due to
death, serious illness or incapacity), or be transferred to a different position
with respect to the Project, without Owner’s prior written consent, which Owner
may withhold in its sole discretion.

 

7.1.3 Contractor has examined and will continue to examine all Contract
Documents provided by Owner pertaining to the Work and the Site. Contractor
fully accepts the lack of completeness of such documents. Contractor also
represents that the Original Project Guaranteed Maximum Price Premises and
Assumptions and the Expansion Project Guaranteed Maximum Price Premises and
Assumptions were sufficiently detailed and comprehensive to enable Contractor to
have reliably estimated and established each of the Original Project Guaranteed
Maximum Price and the Expansion Project Guaranteed Maximum Price set forth in
Article 3 of this Agreement. Subject to the provisions of this Agreement,
Contractor further agrees that all Work shall be performed within the Original
Project Guaranteed Maximum Price and the Expansion Project Guaranteed Maximum
Price and within the applicable Contract Time set forth in Article 4 of this
Agreement, notwithstanding that the Contract Documents, including the Drawings
and Specifications, are not complete in every detail and are still being
developed.

 

7.1.4 Contractor has had ample time to and has visited and examined the Site and
has reviewed the physical conditions affecting the Work, and will continue to do
all of the foregoing, and, subject to the provisions of Article 13 hereof, is
familiar with all of the conditions on, under, and affecting the Site, as
Contractor deemed necessary or desirable based on Contractor’s skill, experience
and knowledge and the scope of the Work and terms of the Contract Documents.
Furthermore, Contractor has satisfied itself as to the nature and location of
the Work, the general and local conditions, and traffic, particularly those
bearing upon transportation, handling, and storage of materials, availability of
labor, water, power, roads, weather, above-ground and sub-surface conditions at
the Site and all other matters which can affect the Work or the cost thereof.
Contractor has verified field conditions, and carefully and fully compared such
field conditions, Site observations and other information known to Contractor
with the Contract Documents (including the requirements thereof) and has not
found any omissions, errors or discrepancies and has satisfied and will continue
to satisfy itself as to: (a) access thereto; (b) the location of all utility
pipelines and wiring conduits which can be ascertained through Site visits or by
any documents which are provided by Owner; (c) the type of equipment and
facilities needed before and during prosecution of the Work; (d) the general and
local labor and weather conditions and availability of materials and equipment
under which the Work is to be performed; (e) the presence of construction
hazards, if any; (f) the nature, location, and character of the Work and the
Site, including, but not limited to, all improvements and obstructions on and
under the Site, both natural and man-made, and coordination of the execution and
completion of all phases of the Original Project and Expansion Project; and
(g) all other matters which may

 

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affect the Contractor’s means, methods, techniques and procedures necessary to
construct the Work in strict accordance with the Contract Documents and
otherwise fulfill its obligations under the Contract Documents, including but
not limited to its obligation to complete the Work for an amount not in excess
of the Original Project Guaranteed Maximum Price and the Expansion Project
Guaranteed Maximum Price on or before the applicable Contract Time. Any
condition at the Site, whether or not consistent with conditions shown or called
for on the Contract Documents, shall not be allowed as a basis for claims for
increase of the Original Project Guaranteed Maximum Price and the Expansion
Project Guaranteed Maximum Price or extensions of the applicable Contract Time,
except as otherwise specifically provided for in Article 13 below or otherwise
in this Agreement, notwithstanding any statements or representations by Owner or
any party on behalf of Owner, oral or written, with respect to the conditions of
the Site or improvements thereon, or regarding the completeness, correctness, or
adequacy of any Contract Documents (provided that such statements or
representations were made in good faith).

 

7.1.5 Prior to commencing its procurement and construction activities,
Contractor shall further verify at the Site all measurements and levels
necessary for proper construction of the Work, including the fabrication,
assembly and installation of materials and equipment to be incorporated into the
Work and shall further carefully compare such verified field measurements and
conditions with the requirements of the Contract Documents.

 

7.1.6 If the Contractor observes any failure of the Contract Documents to
conform with applicable Laws, Contractor shall immediately notify Owner in
writing and identify any such discrepancies and shall be responsible for
rectifying the Contract Documents so that they shall conform with all applicable
Laws. Subject to Section 7.2, if the Contractor performs Work that it knows or
reasonably should have known to be in non-compliance with applicable Laws, the
Contractor shall assume full responsibility for such Work and shall bear all
costs (including loss and damage due to delays) of correction, repair and
replacement attributable thereto as Non-Allowable Costs of the Work.

 

7.1.7 If Contractor discovers or otherwise becomes aware of any errors,
discrepancies, omissions, duplications or conflicts in the Contract Documents at
any time during the course of the Work, Contractor shall immediately notify
Owner in writing and shall be responsible for rectifying the same. If the
Contractor performs any Work relating to any such errors, discrepancies,
omissions, duplications or conflicts in the Contract Documents, neither the
Original Project Guaranteed Maximum Price nor Expansion Project Guaranteed
Maximum Price shall be increased. Contractor shall continue being paid for the
Cost of the Work (but shall not be entitled to payment and/or reimbursement with
respect to Non-Allowable Costs of the Work), all in accordance with the terms of
this Agreement.

 

7.1.8 Contractor will not use the Site for any purpose other than the
performance of the Work. 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

 

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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.

 

7.1.9 Contractor acknowledges (a) that the Project involves the construction of
a “five-star” first class Las Vegas-style luxury resort and casino in accordance
with the Original Project Guaranteed Maximum Price Premises and Assumptions, the
Expansion Project Guaranteed Maximum Price Premises and Assumptions and the
Contract Documents, (b) that the Contract Price reflects a premium in the amount
Contractor (or a third party contractor with similar experience, skill and
reputation as Contractor) would charge for the construction of the Work, and
(c) that such premium is a direct reflection of Owner’s stringent requirements
and high expectations for the quality of the Work. Contractor agrees that it
will utilize the highest level of care and diligence in carrying out its
obligations hereunder.

 

7.1.10 Gaming Concession Agreement. Contractor has been provided with a copy of
the Gaming Concession Agreement and (a) has reviewed the provisions thereof,
(b) has familiarized itself with each of the obligations of Owner under the
Gaming Concession Agreement (including, but not limited to, Clauses 3, 4, 35,
36, 37, 40, 42, 67, 69, 79, 80, 84, 85 and 92 thereof), and (c) is aware of the
consequences of Owner’s non-compliance with such obligations. Contractor hereby
covenants that (i) it will comply with each of the provisions of the Gaming
Concession Agreement applicable to the Work and the duties and obligations of
Contractor hereunder, and (ii) it will not, and it shall procure that the
Subcontractors and Vendors to not, cause Owner to breach Owner’s obligations
under the Gaming Concession Agreement. In furtherance of the foregoing, if
Contractor becomes aware of any action or omission by any Subcontractor or
Vendor that could reasonably be expected to result in a breach by Owner of
Owner’s obligations under the Gaming Concession Agreement, Contractor shall
immediately notify Owner thereof and immediately terminate such Subcontractor or
Vendor. Without limiting the foregoing provisions of this Section 7.1.10,
Contractor acknowledges that pursuant to Clause 37 of the Gaming Concession
Agreement, the Macau SAR may suspend construction of the Project if it
determines that the construction plans are not adequately implemented.

 

7.1.11 Land Concession Agreement. Contractor understands that the Land
Concession Agreement entered into by Owner contains various obligations on the
part of Owner with respect to the use of the Site. Owner has provided a copy of
the Land Concession Agreement to Contractor. Contractor hereby covenants that it
shall comply with each of the following requirements set forth below in this
Section 7.1.11 (it being acknowledged and agreed by Contractor that such
requirements represent excerpts of certain of Owner’s obligations under the Land
Concession Agreement):

 

7.1.11.1 Contractor shall not, and shall not permit any of its subcontractors
(of any tier) to, remove or allow the removal from the Site of any materials
such as land, rocks, fill, sand or other similar materials (collectively
referred to as “Fill Materials”) without the prior written consent of Owner.
Contractor recognizes that such

 

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prior written consent may be subject to Owner’s obtaining prior written consent
from the Macau SAR under the Land Concession Agreement, and that Owner cannot
ensure the timing or approval of such consent from the Macau SAR. Any such
removal of any Fill Materials from the Site without Owner’s prior written
consent shall constitute a breach hereunder. Contractor shall cause any Fill
Materials removed from the Site to be deposited in such location as may be
specified by the Macau SAR.

 

7.1.11.2 Contractor will take necessary and appropriate measures to ensure that
no Fill Materials are removed from the Site by others (including without
limitation by providing adequate 24 hour security at the Site, and ensuring that
trucks and other vehicles are inspected prior to their exit from the Site).

 

7.1.11.3 Contractor shall provide adequate training and instructions to all
Persons who enter the Site so that all such Persons are made aware of the
restriction against removal of Fill Materials described herein. The Contractor
shall post appropriate signage in and around the Site advising of the
restriction.

 

7.1.11.4 Contractor shall inform its Subcontractors about the restriction on
removal of Fill Materials, and shall (unless otherwise agreed by Owner) include
in every subcontract similar provisions to those provided herein regarding the
restriction on removal of Fill Materials and the other precautionary and
remedial measures set out herein.

 

7.1.11.5 Owner shall have the right to require the immediate removal or
dismissal of any employee or agent of Contractor or any Subcontractor who Owner
believes has violated the restrictions against removal of Fill Materials set
forth herein, including the right to remove or dismiss any supervisory personnel
and others who permitted, or failed to prevent, the removal of Fill Materials as
provided herein.

 

7.2 Further Covenants. Contractor covenants and agrees that all Work performed
by Contractor or any Subcontractor or Vendor shall be carried out: (a) with a
proper supply of skilled labor, materials and equipment; (b) in full compliance
with the requirements contained in, indicated on and reasonably inferable from
the Contract Documents given Contractor’s status as a contractor experienced
with construction projects similar in size, quality and complexity to the Work,
(c) in full compliance with all applicable laws, consents, ordinances,
mitigation measures, codes, rules, directives, orders, permits, approvals,
entitlements, statutes, and regulations, whether governmental or public
administrative (including, but not limited to, all applicable Laws of Macau
relating to noise control and pollution) (collectively, “Laws”); (d) diligently
and in the best manner to assure completion on or before the respective Original
Project Interim Milestone Dates, the Expansion Project Interim Milestone Dates,
the Guaranteed Date of Original Project Substantial Completion and the
Guaranteed Date of Expansion Project Substantial Completion, (e) by qualified
design professionals where applicable, and (f) in full compliance with the terms
of insurance applicable to the Work. Contractor shall be

 

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responsible for ensuring that the Drawings and Specifications (including, but
not limited to, the construction documents prepared by Owner’s Consultants)
conform to Laws applicable to the design aspects of the Drawings or
Specifications. Applicable Laws shall supersede the Contract Documents if there
is any conflict; provided, however, that if any applicable Laws shall
necessitate a Change to or deviation from the Contract Documents, Contractor
shall obtain Owner’s written consent prior to implementing that Change.
Contractor shall be responsible for failing to report any discrepancy between
the Contract Documents and applicable Laws of which Contractor knows or should
have reasonably known in the exercise of due diligence and prudent judgment and
consistent with the terms of the Contract Documents. If Contractor performs any
part of the Work in violation of any such applicable Laws, Contractor shall bear
the costs of remedying such Work so as to be in compliance with such Laws, the
Original Project Guaranteed Maximum Price and the Expansion Project Guaranteed
Maximum Price shall not be adjusted and Contractor shall not have the right to
use the Original Project Construction Contingency or the Expansion Project
Construction Contingency to pay the costs arising therefrom. If any new Law is
enacted or any change to existing Law applicable to the Work occurs after the
Effective Date, and to the extent that such new Law or change in Law has an
impact on the Work and/or the cost of performing the Work, Contractor shall
(i) subject to consultation with and the written approval of Owner, perform and
construct the Work in accordance with such applicable Law, and (ii) such impact
shall constitute a Change and the provisions of Article 18 shall apply
(including with respect to the determination of any adjustment to the Guaranteed
Maximum Price and/or the Contract Time). In fulfilling its responsibilities
under the Contract Documents, Contractor shall furnish, coordinate, manage and
pay for all services and personnel, labor, machinery, tools, materials and
equipment, necessary to:

 

7.2.1 Cause the Work to be constructed in compliance with: (a) the latest
approved Drawings and Specifications for construction purposes; and (b) all
applicable Laws (including all changes in Laws as provided above in this
Section 7.2);

 

7.2.2 Provide at all times until the later of the Expansion Project Final
Completion or the Original Project Final Completion a sufficient and competent
organization, which shall include the skilled services of all senior managers,
architects, designers, engineers, site supervisors, qualified scheduling
personnel, superintendents, foremen, engineers, skilled and unskilled craft
labor and supervisors and all other personnel necessary or desirable to plan,
prosecute and construct the Work in accordance with the Contract Documents;

 

7.2.3 Provide the skilled services of buyers, expediters and other personnel
necessary to achieve the timely delivery and use of (a) all materials, supplies
and equipment to be incorporated into the Work by Contractor, Subcontractors and
Vendors, and (b) all construction machinery and equipment, tools and expendable
construction materials and supplies necessary or desirable for the Work;

 

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7.2.4 Prepare and provide the Original Project Schedule and the Expansion
Project Schedule and Schedule Updates for the Work in accordance with Article 11
below, or as reasonably requested by Owner’s Lenders;

 

7.2.5 Coordinate the schedules and operations of all Subcontractors and Vendors
of every tier and cooperate with Owner, Owner’s Consultants and Owner’s
Contractors so that the Contractor’s Work and the work of others will progress
smoothly with a minimum of disruptions and interference to any party;

 

7.2.6 Obtain and provide to Owner and pay for (as a Cost of the Work): (a) all
Work-related authorizations, building permits, licenses, consents and approvals
which are required by governmental authorities to be taken out in Owner’s name
for construction and completion of the Work, and (b) all temporary and final
certificates of occupancy;

 

7.2.7 Be responsible for protection of the Work, including all materials and
equipment to be utilized during the Work, from theft or damage or other harm,
whether in transit or in storage on-Site or off-Site, until the later of the
Expansion Project Final Completion or Original Project Final Completion pursuant
to Section 12.2 of this Agreement, provided that Contractor shall not be
responsible for damage resulting from the occurrence of Excepted Risks so long
as Contractor has used reasonable efforts to protect the Work, including said
materials and equipment, from damage due to the occurrence of such Excepted
Risks;

 

7.2.8 Promptly notify Owner in writing of any errors, omissions or discrepancies
discovered by Contractor in the Contract Documents, including any observed
failures to comply with applicable Laws, and advise on how the same should be
resolved and rectified;

 

7.2.9 Enforce strict discipline and good order among the employees of
Contractor, Subcontractors and Vendors while at the Site or otherwise performing
this Contract;

 

7.2.10 Give all notices and secure all required certificates of inspection,
testing or approval necessary or incidental to the prosecution of the Work, for
delivery to Owner;

 

7.2.11 Be responsible for and pay (as a Cost of the Work to the extent provided
in Section 3.2.8 hereof) all Taxes relating to or arising out of the
Contractor’s performance of the Work;

 

7.2.12 Provide Owner with the full benefit of all Vendor’s warranties applicable
to all equipment and materials furnished by the Contractor;

 

7.2.13 Maintain at the Site one record copy of all Drawings, Specifications and
revisions thereto, the Project Schedule, all Schedule Updates, all Change Orders
and

 

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other Modifications, approved material lists, brochures, technical data
submissions and RFI’s, RFI responses, submittals, Construction Change
Directives, Samples, all correspondence and transmittals pertaining to the Work
and all other records relating to the status of all Work-related materials,
equipment and construction activities;

 

7.2.14 Provide Owner with three (3) complete sets of operating and maintenance
manuals for all equipment installed as part of the Work;

 

7.2.15 Provide Owner with two (2) sets each of complete as-built drawings
(electronically when available and otherwise on reproducible mylar) with respect
to the Original Project Work, prior to Original Project Final Payment and with
respect to the Expansion Project Work, prior to Expansion Project Final Payment;

 

7.2.16 Copy Owner on all correspondence, memoranda and bulletins by Contractor
to Architect/Engineer, Owner’s Consultants, Owner’s Contractors and public or
governmental agencies and deliver to Owner on a current and up-to-date basis
copies of all written communications received from public or governmental
agencies relating to the Work or the Project. Provide to all Subcontractors
(with concurrent written notice to Owner), and cause all Subcontractors to
provide, all notices required by applicable Laws relating to the Contract and/or
Work, including but not limited to notice of payments received. Copy Owner on
all default, stop work or termination notices sent to or received from
Subcontractors at every tier, and any others performing any Work;

 

7.2.17 Contractor shall maintain records, in duplicate, of principal building
layout lines, elevations of the bottom of footings, floor levels and key site
elevations certified by a qualified surveyor or professional engineer to Owner’s
and Owner’s Lender’s satisfaction; and

 

7.2.18 Michael Derrington Harvey is authorized to act on behalf of Contractor as
the Contractor’s Representative with regard to the Work and Contract Documents,
and is the individual with whom Owner may consult at all reasonable times, and
the instructions, requests and decisions of said individual will be binding upon
Contractor as to all matters pertaining to this Contract and the performance of
the parties hereunder.

 

7.3 Preconstruction Services. Contractor shall as a Cost of the Work furnish,
coordinate, manage and pay for all services, personnel, labor, material,
equipment, machinery and tools for the Work, and shall:

 

7.3.1 Search for and timely recommend from time to time to Owner various value
engineering and other cost savings measures during the entire progress of the
Work to reduce the Cost of the Work to the fullest extent possible while
maintaining the quality required by the Contract Documents. Owner will then
elect, in its sole discretion, whether or not to implement such measures in
connection with the Work.

 

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7.3.2 Timely review designs with Owner, including, but not limited to, to the
extent applicable, architectural designs, structural, HVAC, plumbing, fire
protection, power and lighting, security systems and communications, interior
designs, and vertical transportation and assure compliance thereof with the
Original Project Guaranteed Maximum Price Premises and Assumptions and the
Expansion Project Guaranteed Maximum Price Premises and Assumptions, and the
Project requirements established pursuant to the Contract Documents. Advise on
the Site use and improvements, selection of materials, Project and Site systems
and equipment, improvements to the Project and Site, call and security systems,
and methods of Project delivery. Provide recommendations on relative feasibility
of construction methods, availability of materials and labor, time requirements
for procurement, installation and construction, integration into existing
Project and Site systems, and factors related to cost including, but not limited
to, costs of alternative designs or materials, preliminary budgets and possible
economics.

 

7.3.3 Advise Owner in writing promptly upon discovery if, in the judgment of
Contractor, the information provided on architectural or engineering documents
is inadequate for the current purposes intended or if requirements of such
documents conflict with other documents issued or with existing conditions at
the Site. In any such event, Contractor will issue a Request for Information
(“RFI”) to the Architect/Engineer or Owner’s Consultant (with a copy to Owner).

 

7.3.4 Systematically review the Contract Documents (including, but not limited
to, the documents prepared by Owner’s Consultants), as the same are being
prepared and check the same for (a) obvious conflicts, discrepancies and
omissions, and (b) variations from customary construction practices and methods
which, in the opinion of Contractor, may cause difficulties or occasion delay in
the performance of the Work and timely advise Owner, Owner’s Consultants and
Owner’s Contractors (if applicable) and the Architect/Engineer promptly, in
writing, of any such observed problems. Coordinate the Contract Documents
(including, but not limited to, the documents prepared by Owner’s Consultants)
by consulting with Owner, Owner’s Consultants (if applicable) and the
Architect/Engineer regarding Drawings and Specifications as they are being
prepared, and recommending alternative solutions whenever design details affect
construction feasibility, cost or schedule. Timely advise Owner, using
Contractor’s professional skill and judgment, regarding any missing or
incomplete aspects of the Work scope.

 

7.3.5 Assist Owner as Owner may reasonably request in the bidding preparation
process, solicitation and requests for bids, and review of bids received for
items specifically outside Contractor’s scope of Work.

 

7.4 Systems and Procedures. Contractor shall develop, for Owner’s review and
approval, and implement a system and procedures for:

 

7.4.1 Reviewing its own Work and the Work of its Subcontractors and Vendors for
defects and deficiencies, including the preparation of all appropriate quality

 

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control documentation, to assure that all such defects and deficiencies are
discovered and corrected as soon as possible. Contractor represents and warrants
that Contractor is ISO certified and covenants to conform such quality control
procedures to ISO standards.

 

7.4.2 Reviewing, processing, recording and paying Subcontractors and Vendors in
a manner fully consistent with the requirements to be fulfilled by the
Contractor pursuant to Article 9 of this Agreement.

 

7.4.3 Preparing, reviewing and processing Change Orders in a manner that fully
complies with Article 18 of this Agreement.

 

7.4.4 Evaluating all Change Proposal Requests and Claims submitted by
Subcontractors or Vendors for compliance with the requirements of the Contract
Documents, recommending resolutions and options to Owner in writing with respect
to such Change Proposal Request and Claims; and implementation of written
Construction Change Directives and Change Orders issued in accordance herewith.

 

7.4.5 Implementing a Site access and staging plan to ensure the smooth, orderly,
organized and efficient movement and staging of Subcontractors and Vendors at
the Site.

 

7.5 Schedule Meetings and Records. After execution of the Agreement and prior to
commencement of the Expansion Project Work, Owner shall schedule one or more
meetings with Contractor for the purpose of outlining and clarifying the
proposed Expansion Project Work, security and use of the Site, potentially
difficult aspects of the Work of which Owner is actually aware, interface and
coordination issues between the Original Project and the Expansion Project and
responding to questions of those attending.

 

7.5.1 Contractor shall schedule and conduct pre-construction and construction
progress meetings at the Site on a regular basis (at least weekly) at which
Owner, Architect/Engineer, Contractor and Subcontractors may jointly discuss
such matters as Work procedures, progress, scheduling and coordination. Owner’s
Lenders, Owner’s Consultants and Owner’s Contractors may attend such meetings.
Contractor shall be responsible for securing attendance of its Subcontractors,
Vendors, suppliers and other personnel as are required at such meetings.
Contractor shall keep and distribute timely in advance of the next meeting
minutes of such meetings, including a list of the action items, responsible
parties and dates necessary to complete actions to enable the Contractor to
maintain the progress of the Work in accordance with the Original Project
Schedule and the Expansion Project Schedule.

 

7.5.2 Contractor shall regularly monitor and provide to Owner and Owner’s
Lenders written reports on a monthly basis describing the status of the actual
progress of the Work in relation to the Original Project Schedule and the
Expansion Project Schedule, in accordance with Article 11 below.

 

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7.5.3 For purposes of Schedule Updates and requested changes in Contract Times,
Contractor shall maintain daily logs which shall be available for Owner’s and
Owner’s Lenders review at any time during normal working hours, and which shall
record the progress of the Work.

 

7.5.4 Contractor shall also provide monthly to Owner and Owner’s Lenders, on or
before the tenth (10th) day of each month, an “Anticipated Cost Report” prepared
by Contractor in substantial conformance with Owner’s standards and containing
detailed information on pending Change Orders, contracts awarded and to be
awarded, and similar budget related items.

 

7.6 Contractor’s Operations.

 

7.6.1 Contractor shall: (a) confine its operations at the Site to areas
designated by Owner; (b) not unreasonably encumber the Site or encumber areas in
the vicinity of the Site with materials, equipment or debris; (c) coordinate its
activities with the Owner’s Representative, Owner’s Consultants and Owner’s
Contractors in advance; and (d) not block or hinder parking facilities without
Owner’s prior written approval. To the extent reasonably possible, Contractor
shall preserve and protect all existing vegetation on or adjacent to the Site
which is not to be removed or required to be disturbed in the performance of the
Work. Contractor shall be solely responsible for all costs and expenses incurred
as a result of failure to adhere to the requirement of this Section 7.6.1
(subject to Contractor’s right to use the Construction Contingency as provided
in Section 3.1.8 hereof, to the extent there remain funds therein and regardless
of whether any funds remain in the Original Project Construction Contingency or
the Expansion Project Construction Contingency, Contractor shall still be liable
for such damages, costs and expenses). Contractor shall make itself familiar
with and use all best efforts to protect all existing improvements and/or
utilities at or near the Site from damage. Contractor shall be solely
responsible for repairing any such damage and for the related costs and expenses
(subject to Contractor’s right to use the Original Project Construction
Contingency or the Expansion Project Construction Contingency as provided in
Section 3.1.8 hereof, to the extent there remain funds therein and regardless of
whether any funds remain in the Original Project Construction Contingency or the
Expansion Project Construction Contingency, Contractor shall still be liable for
such damages, costs and expenses). Neither Contractor nor any Subcontractor or
Vendor shall post, erect or place on the Site, the Work, Owner’s premises or the
Project any sign, banner, billboard, flag 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 Project where such
name or identification will be seen by the general public, except as approved in
writing by Owner and except as may be required by the Laws of Macau. In the
performance of the Work, Contractor shall, at all times, exercise every
reasonable precaution to protect, preserve and prevent from accident, damage and
injury arising out of the Work, all persons and property, including the Work and
any existing structures. Contractor shall, in addition, comply with all
applicable Laws (including those on safety and health) and all requirements of
the insurance carriers providing insurance for the Project.

 

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7.6.2 Contractor acknowledges and understands that Original Project and
Expansion Project are contiguous to and/or in some cases contained within one
another. Execution of each of the Original Project Work and Expansion Project
Work may affect, and be effected by, the Expansion Project Work and Original
Project Work, respectively; furthermore, upon the Original Project Substantial
Completion or Expansion Work Substantial Completion, or the Original Project
Final Completion or Expansion Project Final Completion, Contractor’s preferred
access to certain portions of the uncompleted Project will be subject to
additional restrictions and rules required by Owner in furtherance of Owner’s
intent to open portions of the Site (such as the Original Project Casino) to the
public as soon as practicable consistent with the terms of this Agreement, all
as set forth in the Original Project Guaranteed Maximum Price Premises and
Assumptions or the Expansion Project Guaranteed Maximum Price Premises and
Assumptions (as applicable). Contractor and Owner agree that at the meetings
contemplated in Section 7.5 either party may also address the scheduling and
coordination of the Original Project Work and Expansion Project Work as
necessary, it being understood that all scheduling and coordination issues
related to the Original Project Work and Expansion Project Work are included in
the Original Project Guaranteed Maximum Price Premises and Assumptions or the
Expansion Project Guaranteed Maximum Price Premises and Assumptions (as
applicable), and any revisions thereto shall be addressed as a Change Order or
Construction Change Directive.

 

7.7 Site Discipline. Contractor shall employ, and require all Subcontractors and
Vendors to employ, only skilled workers properly qualified by experience and
ability to perform the tasks assigned to them, who are properly credentialed
with visas and/or work permits allowing them to be legally employed at the Site.
Contractor shall at all times be responsible for strict discipline and good
order among its employees, craft labor, agents and representatives as well as
the employees, craft labor, agents and representatives of its Subcontractors and
Vendors while performing Work and all other persons performing any Work. When
requested by Owner, Contractor shall remove and shall not re-assign to the Work
any person who, in Owner’s reasonable opinion, is disorderly, insubordinate,
unsafe, unskilled, incompetent or otherwise unfit for tasks assigned to them or
lacks proper work credentials for the tasks assigned or proper immigration
papers. No workers shall be permitted to reside at the Site under any
circumstances.

 

7.7.1 At all times during performance of the Work, including during any partial
use or occupancy by Owner or others, Contractor shall, and shall require all
Subcontractors and Vendors to, abide by each and all of the following
requirements:

 

7.7.1.1 Access to the Work area by construction personnel shall be the most
inconspicuous route available, in order that the general public and the Owner’s
personnel are not inconvenienced. Access shall be arranged with Owner prior to
commencement of Work. Access to restricted and/or limited access areas required
by Work shall be coordinated with Owner. Alterations to and restrictions of
access to Work areas in connection with the Original Project Substantial
Completion, Expansion Project Substantial Completion, Original Project Final
Completion and/or Expansion Project Final Completion,

 

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in order that remaining portions of the Project can be opened, and with as
little inconvenience as possible, to the general public, are included in the
Original Project Guaranteed Maximum Price Premises and Assumptions or the
Expansion Project Guaranteed Maximum Price Premises and Assumptions (as
applicable).

 

7.7.1.2 Owner’s toilet facilities and the Project’s permanent toilet facilities
are not to be used by construction personnel.

 

7.7.1.3 During the FF&E and finish phase of construction, construction personnel
are not permitted to eat or smoke where materials are in place nor use tables
and chairs or other furniture that are part of the Project. During this phase of
the Project, Owner will designate appropriate places for eating.

 

7.7.1.4 Quiet and courtesy with respect to Owner’s employees and guests is
mandatory.

 

7.7.1.5 Use all best efforts to insure that Contractor’s and all Subcontractors’
activities do not interfere with any Project and Site systems (i.e., electric,
elevator, plumbing, fire protection, HVAC, etc.) necessary to maintain ongoing
operations of the Project and Site.

 

7.7.1.6 Power outages, mechanical shutdown and so forth shall be carefully
coordinated with Owner. Contractor will provide Owner with two (2) full business
days, advance notice of any planned shutdowns of any basic Project or Site
systems, and will obtain Owner’s written approval prior to commencing any such
shutdown.

 

7.7.1.7 All life safety systems requiring shut-down or tie-ins, in accordance
with the above clause 7.7.1.6, shall be coordinated with Owner and shall be
performed at such a time to minimize any effect of the safety, health and
welfare of the building’s occupants. At the conclusion of each work-day, all
operable life safety systems shall be energized and operative.

 

7.7.1.8 Without limiting any other provision in this Section 7.7.1, any planned
shutdowns of any basic Project or Site systems for the Original Project or
Expansion Project following the Expansion Project Substantial Completion or
Original Project Substantial Completion, respectively, require advance notice to
and written advance approval from Owner prior to commencing any such shutdown.

 

7.7.1.9 Contractor shall be responsible to Owner for acts and omissions of
Contractor’s employees and agents, Subcontractors and Vendors and their
respective agents and employees, and other persons performing portions of the
Work under a contract or arrangement with or under the direction of Contractor
or with or under the direction of any Subcontractor or Vendor. Except to the
extent expressly provided otherwise in this Agreement, 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

 

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Architect/Engineer, or, by any request, approval or consent of Owner or
Architect/Engineer, or by tests, inspections or approvals required or performed
by persons other than Contractor. Contractor shall require and ensure that each
Subcontractor and Vendor complies with all applicable requirements set forth in
the Contract Documents for Contractor. Except to the extent the Contract
Documents expressly provide otherwise, if any dispute arises between Owner, on
the one hand, and Contractor, on the other hand, unless Owner directs otherwise,
Contractor shall proceed with the performance of its obligations under the
Contract with reservation of all rights and remedies it may have under and
subject to the terms of the Contract Documents.

 

7.7.1.10 Without limiting the provisions of Sections 7.7.1.1 through 7.7.1.9,
Contractor acknowledges that upon opening portions of the Project to the general
public, such portions are intended to be operated as a “five-star” first class
Las Vegas-style resort; accordingly, Contractor shall, and require all
Subcontractors and Vendors to, carry out their obligations under the Contract
Documents with the utmost duty of care with respect to the general public.

 

7.8 Site Security. In cooperation with Owner, Contractor shall develop and
implement an effective security program for protection of the Work in progress.
Contractor shall secure, protect and be responsible for, and shall provide all
necessary or desirable measures for security and protection at and on the Site
and the Work, and of all materials, supplies, tools and equipment and all other
improvements and personal property at the Site or in the vicinity of the Site,
whether or not incorporated into the Work (collectively, the “On-Site
Property”), including, but not limited to, utilizing fences, gates, cameras, and
patrols (which shall include such number of duly qualified guards, on a 24-hour
basis, as Contractor (in consultation with and to the satisfaction of Owner)
shall deem adequate or such larger number as shall be required to ensure
security of the Site, the Work and the On-Site Property). Contractor shall bear
the cost of, and be liable for as a Non-Allowable Cost of the Work (subject to
Section 3.2 hereof), and promptly shall remedy, all loss and damage to any Work,
tools, equipment and all other improvements and personal property of the Site
from any cause whatsoever, except to the extent of loss or damage caused by
Force Majeure, by Owner’s negligence or willful misconduct or by the negligence
or willful misconduct of Owner’s separate contractors and their agents and
employees (subject to Contractor’s obligations under the Contract Documents to
coordinate and monitor the work of such other Owner contractors). Owner may
elect to provide and/or maintain security (including patrol guards) of its own
choosing for the whole or portions of the Work and/or Site and/or adjacent
property, but Owner shall not have any obligation, responsibility or liability
of any kind to any party whether or not Owner arranges for any security. Such
Owner arranged or provided security shall in no event release Contractor from or
diminish any of Contractor’s obligations under the Contract Documents,
including, but not limited to, this Section 7.8, and Contractor shall be solely
responsible for security at and of the Work and Site, regardless of any security
arranged for by Owner. Owner shall not assume or incur any responsibility or
liability relating to any security arranged by Owner. Contractor shall

 

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cooperate with Owner’s security personnel and shall comply with all requests
made by such personnel to secure and protect the Work and the Site.

 

7.9 Coordination With Others. Contractor acknowledges that Owner reserves the
right to engage other contractors, engineers, inspectors, consultants and/or its
own personnel to provide work or services relating to the Project which may be
carried out concurrently with Contractor’s Work. Specifically, and without
limitation, Contractor acknowledges that FF&E procurement is excluded from
Contractor’s Work but completion of installation of the same within the times
set forth on the agreed upon Original Project Schedule and the Expansion Project
Schedule is necessary to achieve Original Project Substantial Completion and
Expansion Project Substantial Completion. Contractor further acknowledges that a
portion of Contractor’s Work will include installing materials and equipment in
the Project procured by Owner and provided by Owner to Contractor. Owner shall
retain separate contractors and vendors for FF&E procurement as Owner desires;
provided, however, upon Owner’s request Contractor agrees to cooperate with
Owner, including joint purchase arrangements, with respect to purchases of
materials, supplies and equipment, including FF&E, where such cooperation and
joint purchase may lead to a savings in purchase costs relating to such items as
determined by Owner. Contractor shall fully cooperate by coordinating its Work
with any work or services being performed by Owner, Owner’s Consultants, Owner’s
Contractors and Owner’s other engineers and inspectors as follows:

 

7.9.1 Contractor shall coordinate its construction activities with the
activities of Owner, Owner’s Consultants, Owner’s Contractors and Owner’s other
engineers and inspectors and provide the necessary personnel and services to
coordinate and interface its Work with Owner’s activities at the proper time and
in a manner not to delay others or increase costs.

 

7.9.2 Contractor shall provide Owner and Owner’s Contractors with opportunities
for the necessary storage and handling of materials and equipment necessary for
execution of their activities.

 

7.9.3 Contractor shall participate with Owner, Owner’s Consultants and Owner’s
Contractors in reviewing their respective construction schedules when requested
to do so. Contractor acknowledges that the time allowed for each of Original
Project Substantial Completion and Expansion Project Substantial Completion
includes the necessary allowance of time for Contractor to coordinate and
schedule the work of Owner’s Consultants and Owner’s Contractors, and Contractor
has included a specific allowance of time as it relates to Owner’s pre-opening
activities with respect to each of the Original Project and the Expansion
Project.

 

7.9.4 At its own expense as a Non-Allowable Cost of the Work, Contractor shall
promptly remedy any damage wrongfully caused by Contractor or any Subcontractor
or Vendor to Owner’s existing property or completed or partially completed
construction

 

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work performed by Owner, Owner’s Consultants, Owner’s Contractors or Owner’s
other engineers and inspectors.

 

7.9.5 If any part of the Work depends upon proper execution of any completed
work and services performed or otherwise provided by or on behalf of Owner,
Contractor shall, prior to proceeding with its Work, inspect such work and
promptly report to Owner any apparent discrepancies or defects in Owner’s
activities. The failure of Contractor to examine and report any such apparent
discrepancies which are or should have been reasonably apparent to Contractor in
the exercise of due diligence and prudent judgment and consistent with the terms
of the Contract Documents shall bar any Claims thereafter that any defects or
delays in Contractor’s Work are due to defects, delays or disruptions in the
activities performed or otherwise provided by Owner.

 

7.9.6 Contractor shall use, and Contractor shall cause its Subcontractors and
Vendors to 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 Consultants, Owner’s
Contractors and Owner’s other engineers and inspectors.

 

7.9.7 Contractor shall cooperate with Owner’s contractors, engineers, inspectors
and vendors performing FF&E procurement and installation services and shall
incorporate such services in the Original Project Schedule and the Expansion
Project Schedule and provide vertical transportation for the timely installation
of FF&E. Contractor agrees to cause the Work to be performed in such a manner so
that prior to achievement of Original Project Substantial Completion and
Expansion Project Substantial Completion (and as early as reasonably
practicable), Owner will have access to the Site and the Original Work and
Expansion Project Work (as applicable) in order to (a) begin installing FF&E,
the installation of which is not part of the Work except as otherwise provided
in the Contract Documents, at the Site, (b) begin training its personnel at the
Site, and (c) and perform other tasks Owner deems necessary in connection with
the opening of each of the Original Project and Expansion Project.

 

7.10 Product and Design Substitutions

 

7.10.1 All requests for Substitutions shall be made in writing and sufficiently
in advance of Work performance needs to permit a reasonable time for evaluation
and written response by Owner without jeopardizing the Contract Time.

 

7.10.2 The acceptance of any Substitutions shall be at Owner’s sole discretion.

 

7.10.3 All Substitutions, including design changes recommended by the
Contractor, must be specifically accepted in writing by Owner prior to the use
or implementation thereof by Contractor or any Subcontractor.

 

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7.10.4 In reviewing any Substitution, including design changes, Owner may
consider, without limitation, the comparative advantages and responsibilities,
including, but not limited to,: (a) any and all additional costs pertaining to
any redesign and adverse consequences of such redesign, (b) any and all costs of
replacement, corrections or adjustments to the Work, adjoining Work and Owner’s
existing property, and (c) any and all costs arising from adverse impacts to the
critical path of the Original Project Schedule or the Expansion Project Schedule
and/or any delays in the Contract Time arising out of such Substitution.

 

7.10.5 Contractor shall promptly notify Owner in writing if any items in the
Contract Documents shall not be readily available, and Contractor shall propose
an available substitute item for Owner’s approval. Nothing in this
Section 7.10.5 or elsewhere in the Contract Documents 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, then upon at least five (5) days’ prior written notice to
Contractor, Owner may (but is not obligated to) arrange for delivery or order
such items and materials and in such event the Original Project Guaranteed
Maximum Price or the Expansion Project Guaranteed Maximum Price (as applicable)
shall be reduced pursuant to a Construction Change Directive in accordance with
Article 18.

 

7.11 Tests and Inspections

 

7.11.1 All on-Site and off-Site material testing and inspections required by the
Contract Documents or by Laws shall be arranged and supervised by Contractor in
a timely manner to avoid any delays in the Work.

 

7.11.2 Owner may elect to require additional testing and inspections at any time
during the course of the Work and for a period of one (1) year after the date of
issuance of the Original Project Certificate of Substantial Completion with
respect to the Original Project Work and a period of one (1) year after the date
of issuance of the Expansion Project Certificate of Substantial Completion with
respect to the Expansion Project Work, pursuant to Section 12.1 below. Such
additional testing shall be paid for by Owner (from the Owner’s Contingency or
otherwise) unless such testing discloses material deficiencies not discovered
during initial testing. In the event material deficiencies are disclosed,
Contractor shall be responsible for all costs of such additional testing and
inspections, and Contractor shall pay such costs to Owner on demand therefor
(or, at Owner’s option, Owner may deduct, withhold and/or set off such costs
from or against any amounts then or thereafter payable or due to Contractor from
Owner). Contractor’s responsibility with respect to the costs of additional
tests and inspections shall survive any termination of the Contract.

 

7.11.3 All certificates of such testing, inspection or approvals issued by all
independent testing companies or governmental authorities shall be promptly
delivered to Owner.

 

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7.11.4 No inspection, or failure to inspect, by Owner or the independent testing
companies or Owner’s Lenders shall be construed as approval or acceptance of the
Work or as a waiver of Contractor’s obligations to perform the Work in full
compliance with the Contract Documents.

 

7.12 Access to Stored Material. Owner, Owner’s Lenders and Macau SAR
representatives may enter upon the location where any material or equipment is
manufactured or stored for purposes of inspection, checking, testing or for any
other purpose Owner, Owner’s Lenders or Macau SAR representatives deem
reasonably necessary.

 

7.13 Shop Drawings, Product Data and Samples

 

7.13.1 “Shop Drawings” are drawings, diagrams, schedules and other data
specially prepared for the Work by Contractor, its Subcontractors or Vendors of
any tier to illustrate how certain specific Work components fit together and
will be located in relation to each other.

 

7.13.2 “Product Data” are illustrations, standard schedules, performance charts,
instructions, brochures, diagrams and other information furnished by Contractor,
its Subcontractors or Vendor of any tier to illustrate materials or equipment to
be utilized for a portion of the Work.

 

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

 

7.13.4 Contractor shall timely prepare and submit a schedule of Shop Drawings,
Product Data, test reports, Samples etc., required to be submitted for the Work,
in a format acceptable to Owner and Architect/Engineer.

 

7.13.5 Contractor shall review, approve (to the extent of their conformance to
the Contract Documents) and submit to Owner or Architect/Engineer or the
appropriate consultant all Shop Drawings, Product Data, Samples and similar
submittals required by the Contract Documents in accordance with the schedule
therefor with promptness and in such sequence as to cause no delays in the Work
or in the activities of Owner, Owner’s Consultants or Owner’s Contractors.

 

7.13.6 Contractor’s submittal of Shop Drawings, Product Data, Samples and
similar submittals shall be Contractor’s representation that Contractor has
determined and verified all materials, field measurements and field construction
criteria, as appropriate, related thereto, and that Contractor has checked and
coordinated the information contained within such submittals with the
requirements of the Work and of the Contract Documents.

 

7.13.7 Contractor shall not perform any portion of the Work requiring submittal
and review of Shop Drawings, Product Data, Samples or similar submittals until
such submittals have been accepted by Architect/Engineer. Such review and
acceptance

 

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shall be in a timely manner so as not to delay the progress of the Work.
Contractor shall carry out the Work in such submittals as accepted by
Architect/Engineer.

 

7.13.8 Contractor shall make any corrections required by Owner or
Architect/Engineer and shall resubmit the required number of corrected copies of
Shop Drawings, Product Data, Samples or similar submittals until approved by
Architect/Engineer. Contractor shall direct specific attention, in writing or on
resubmitted Shop Drawings, Product Data, Samples or similar submittals, to any
revisions other than those requested by Owner or Architect/Engineer on previous
submittals.

 

7.13.9 Contractor shall not be relieved of responsibility for errors or
omissions contained in Shop Drawings, Product Data, Samples or similar
submittals based upon the approval, modification or acceptance thereof by Owner
or Architect/Engineer unless the Contractor has specifically informed Owner in
writing of such deviation at the time of submittal and Owner has given prior
written approval to the specific deviation.

 

7.13.10 Contractor shall be responsible for furnishing its Subcontractors and
Vendors with sufficient copies of Shop Drawings, Product Data and Samples,
including any such construction data supplied by other Subcontractors and
Vendors, as may be necessary for the coordination of the activities of all
Subcontractors and Vendors.

 

7.13.11 Contractor shall submit one (1) reproducible transparency copy and six
(6) blue line prints therefrom of all Shop Drawings for all shop-fabricated
items and all detailed assemblies indicated on the Shop Drawings.

 

7.14 Project Record Documents and As-Built Requirements. Contractor shall
maintain at the Site one (1) record copy of all Specifications, Drawings,
approved Shop Drawings, Change Orders and other modifications, addenda,
schedules and instructions, in good order.

 

7.14.1 The record Drawings shall be one (1) set of black (or blue) and white
prints of the Drawings on which must be recorded all “as-built” changes during
the course of construction. This record set shall be maintained separate and
apart from documents used for construction reference as described in
Section 7.2.13 above.

 

7.14.2 All as-built documents shall be kept current and Contractor shall not
permanently conceal or cover any Work until all required information has been
recorded.

 

7.14.3 Records of exterior underground utilities shall be made at the time of
installation.

 

7.14.4 In marking any as-built conditions, Contractor shall ensure that such
Drawings indicate by measured dimension to building corners or other permanent
monuments the exact locations of all piping, conduit or utilities concealed in
concrete slabs, behind walls or ceilings or underground. As built Drawings shall
be made to scale and shall

 

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also include exact locations of valves, pull boxes and similar items as required
for maintenance or repair service. Prior to Original Project Final Completion
and Expansion Project Final Completion (as applicable) and as a condition to
Original Project Final Payment and Expansion Project Final Payment (as
applicable), Contractor shall be responsible for providing Owner with a fully
completed and accurate set of all as-built Drawings with respect to each of the
Original Project and the Expansion Project (as applicable) in an acceptable
electronic format, as Contract Documents for Owner’s permanent records.

 

7.14.5 All documents described in this Section 7.14, including the as-built
Drawings, shall be readily accessible at the Site for inspection upon request by
Owner, Owner’s Lenders, Owner’s Consultants, Owner’s Contractors and/or their
authorized representatives throughout the course of the Work.

 

7.15 Site Clean Up. All Work performed under this Contract shall comply with all
Laws governing applicable noise, dust and pollution control requirements.

 

7.15.1 Daily Clean Up. Contractor shall regularly and on a daily basis during
the course of the Work keep the Site and all Work-related areas in a clean and
safe condition to Owner’s reasonable satisfaction by promptly removing and
properly disposing of all debris and rubbish generated by Contractor’s
operations. Contractor shall maintain ingress or egress from the Site in a clean
condition, and shall remove from these areas all of Contractor’s (and
Subcontractors’ and Vendors’) spillage and tracking arising from the performance
of the Work, and shall promptly repair any damage to the same. Contractor shall
minimize to the extent reasonably possible the impact and effect of the Work and
other activity on the Site on properties adjoining and nearby the Site, and
shall take all necessary and commercially practical and reasonable precautions
(and comply with all applicable Laws) to prevent any debris including, but not
limited to, fugitive dust, from entering or interfering with any adjacent or
nearby property.

 

7.15.2 Substantial Completion Clean Up. Except to the extent that Owner may
designate otherwise in writing, the Contractor shall perform the following
“clean up items” (a) with respect to the Original Project, prior to the date of
issuance of the Original Project Certificate of Substantial Completion and
(b) with respect to the Expansion Project, prior to the date of issuance of the
Expansion Project Certificate of Substantial Completion (as applicable) pursuant
to Section 12.1 below:

 

(a) removal of all wastes and rubbish;

 

(b) cleaning of all walls and other surfaces including tile, wood and glass
surfaces, and cleaning of all corridors, skylights, doors, architectural metals,
carpets, rugs, floors, woodwork and all other items to have the Work ready to
operate for the purpose for which it is intended;

 

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(c) replacement of all broken glass (including removing labels, washing and
polishing both sides);

 

(d) cleaning and polishing of all plumbing fixtures and equipment;

 

(e) restoring existing facilities such as roads, other paved surfaces, fencing
and curbing at the Site to their pre-existing condition unless more is required
by the Contract Documents;

 

(f) requiring affected Subcontractors to promptly remove from the Site all
temporary offices, tools, equipment, machinery and surplus materials not
required for the continued performance of the Work and otherwise leaving the
designated areas “vacuum clean;”

 

(g) machine-sweep and clean all drive-way surfaces;

 

(h) grind, smooth, and sweep clean any concrete surfaces, as necessary or
desirable;

 

(i) remove temporary protections;

 

(j) remove marks, spots, dust, stains, fingerprints and other soil or dirt from
all floors, tile, walls, finishes, marble, finished materials, fixtures,
equipment and other Work, and wash or wipe clean and leave the same in
undamaged, new condition;

 

(k) clean tubs, toilets and other fixtures, cabinet work and equipment, removing
stains, paint, dirt and dust, and leave the same in undamaged new condition;

 

(l) clean all metal finished in accordance with recommendations of the
manufacturer and accepted industry standards;

 

(m) clean resilient floors thoroughly with a well rinsed mop containing only
enough moisture to clean off any surface dirt or dust and buff dry by machine to
bring the surfaces to sheen;

 

(n) clean all light fixtures and insure that they are fully lamped and
operating; and

 

(o) other items related to clean-up of the Site, as identified by the Owner’s
Representative.

 

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The foregoing clean up items shall not include but shall be in addition to, any
items of defective workmanship or omissions which are to be corrected at
Contractor’s cost pursuant to Article 10 of this Agreement.

 

7.15.3 Final Completion Clean Up. Prior to Original Project Final Completion and
Expansion Project Final Completion (as applicable) pursuant to Section 12.2
below, Contractor shall complete any of the clean up items described above which
were either not required by Owner at the time of Original Project Substantial
Completion or Expansion Project Substantial Completion (as applicable) or which
were not satisfactorily completed and accepted by Owner at the time of Original
Project Substantial Completion or Expansion Project Substantial Completion (as
applicable).

 

7.15.4 Site Clean Up By Owner. In the event Contractor fails to maintain the
Site in a manner satisfactory to Owner, and fails to complete appropriate clean
up and/or removal activities within twenty-four (24) hours after receipt of
Owner’s written notice to do so, Owner shall have the right to perform such
clean up and removal activities and the Original Project Guaranteed Maximum
Price and Expansion Project Guaranteed Maximum Price (as applicable) shall be
reduced by the amount of all costs incurred by Owner in connection therewith,
provided that if the unspent balance of the Original Project Guaranteed Maximum
Price and Expansion Project Guaranteed Maximum Price (as applicable) is
insufficient to cover such amount, Contractor shall immediately pay the
difference to Owner.

 

7.16 Construction Facilities and Temporary Controls. Contractor shall be solely
responsible for the design (except as otherwise provided in the Contract
Documents), transport, erection, inspection and maintenance of all temporary
supports and structures; including, but not limited to, electricity and
lighting, heat, telephone and fax, water, sanitary facilities, fire protection,
hoisting equipment and machinery, staging and scaffolding, temporary equipment
and materials, all shoring and bracing, all cranes, hoists, derricks and
supports, barriers and fencing, water control, field office, storage facilities
and all other types of temporary supports and structures required for the Work
and provided by Contractor or its Subcontractors while performing the Work.
Contractor shall provide and maintain reasonable safety precautions to protect
the public and avoid obstruction or interference with vehicular or pedestrian
traffic in public streets, alleyways or private rights-of-way. Contractor shall,
or shall cause Subcontractors to, leave proper access to hydrants and other
similar places, and shall provide sufficient lighting during working hours and
from twilight of each day until full daylight of each following day. When work
is suspended, Contractor shall, or shall cause Subcontractors to leave roadways
and sidewalks in proper condition and restore all such to good condition on
completion of the Work and in compliance with all Laws. Contractor shall, or
shall cause Subcontractors to, maintain, keep in good repair, and shift and
alter as conditions may require, all guard rails, passageways and temporary
structures and remove the same when the Work is completed or when the need for
their use has ceased.

 

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7.17 Cutting and Patching of Work. Contractor shall be responsible for all
cutting, fitting or patching of the Work that may be required to properly
complete the Work or make its parts fit together properly. Any costs resulting
from improper cutting, fitting and patching to any work performed by Owner or
Owner’s Consultants shall be Contractor’s responsibility as a Cost of the Work.
Contractor shall not damage or endanger a portion of the Work or fully or
partially completed construction of Owner or separate contractors by cutting,
patching or otherwise altering such construction, or by excavation. Contractor
shall not cut or otherwise alter such construction by Owner or a separate
contractor except with consent of Owner, which shall not be unreasonably
withheld or delayed. Contractor, if required by Specifications and Drawings,
shall make connections to materials or equipment furnished, set, and/or
installed by other contractors. No Work connecting to such materials or
equipment provided by other contractors shall be done without giving such
contractors a reasonable length of time to complete their work or until
permission to proceed has been obtained from Owner. Owner shall secure and
provide to Contractor the Shop Drawings from Owner’s Contractors for such of
their work as is to be built into Contractor’s Work, or to which Contractor must
make connection, and Contractor shall review and advise Owner of any discrepancy
or unsuitability relative to its own Work. Each party shall cause its
contractors to provide all openings and chases in its own work necessary for the
installation of process equipment, and shall fill in around the same afterwards,
if required.

 

7.18 On-Demand Bond Requirements

 

7.18.1 Contractor’s Bond Requirements.

 

7.18.1.1 On or before the date that is the earlier of (A) thirty days following
the execution of this Agreement and (B) the consummation of Owner’s refinancing
of the Project (currently scheduled to be on or about August 15, 2005),
Contractor shall furnish two (2) fully executed On-Demand Bonds, substantially
in the form attached hereto as Exhibit L (with such changes to such form as may
be required by Owner’s Lenders prior to the actual issuance of the On-Demand
Bond, so long as such changes do not materially or substantially alter
Contractor’s rights, duties or obligations thereunder), naming Owner and, if
requested by Owner’s Lenders, Owner’s Lenders (as Owner’s Lenders may change
from time to time), as obligees and beneficiaries, covering both the
Contractor’s faithful performance of this Contract and the payment of all
obligations arising hereunder. The On-Demand Bonds shall be in the aggregate
amount equal to ten percent (10%) of the initial Original Project Guaranteed
Maximum Price and ten percent (10%) of the initial Expansion Project Guaranteed
Maximum Price, respectively. Thereafter, neither On-Demand Bond shall be
increased or decreased unless Owner grants advance written approval of such
increase or decrease. Each On-Demand Bond shall provide that it may be freely
assignable by Owner to Owner’s Lenders, and by Owner’s Lenders to any subsequent
lenders or successors and assigns. Each On-Demand Bond and all supplements shall
be issued by a bank approved in writing by Owner and Owner’s Lenders. Without
limiting the approval rights of Owner and Owner’s Lenders set forth in the
previous sentence, the issuer of the On-Demand Bonds shall, both prior to the
issuance of the On-Demand Bonds and at all times until such

 

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On-Demand Bond expires or terminated pursuant to the terms thereof, be rated “A”
or higher by Standard & Poor’s Corporation or by Moody’s Investors Service, Inc.
(or an equivalent rating provided by a locally available rating agency, with
such rating and such rating agency acceptable to Owner and Owner’s Lenders). If
the issuer of the On-Demand Bonds ceases to be rated at least “A” by either
Standard & Poor’s Corporation or by Moody’s Investors Service, Inc. (or falls
below the acceptable rating set by Owner and Owner’s Lenders with respect to the
local rating agency, if applicable), Contractor shall, within five (5) business
days of such down-grading, obtain replacement On-Demand Bonds which conforms to
the requirements of this Section 7.18.1. Concurrently with Contractor’s delivery
of the On-Demand Bonds pursuant to this Section 7.18.1.1, Owner shall return the
On-Demand Bond previously delivered by Contractor to Owner pursuant to the
Original Agreement.

 

7.18.1.2 The parties acknowledge that the On-Demand Bonds specify that any
demand made thereunder shall be accompanied by a written statement signed by the
Owner or by an “Independent Expert” certifying that the Contractor has failed to
perform all or any of its obligations under this Agreement and the amount of the
damages claimed by the Owner as a result of such failure. Owner and Contractor
hereby agree to appoint Geoff McCauley of WT Partnership as the Independent
Expert for purposes of the On-Demand Bonds. If Geoff McCauley (or any successor
Independent Expert) resigns, dies, becomes incapacitated or is otherwise unable
to serve as the Independent Expert, Owner and Contractor shall attempt in good
faith to agree upon a successor Independent Expert. If Owner and Contractor are
unable to name a successor Independent Expert within thirty (30) days, the
dispute shall be resolved by arbitration in accordance with Section 22.1. If
Owner desires to make demand under either or both On-Demand Bonds, Owner shall
deliver a notice to the Independent Expert requesting that the Independent
Expert make a determination whether or not Contractor has failed to perform all
or any of its obligations under this Agreement and the amount of the damages due
Owner as a result of any such failure. If the Independent Expert determines that
Contractor has failed to perform all or any of its obligations under this
Agreement, the Independent Expert shall deliver a “Statement” pursuant to (and
as defined in) the On-Demand Bonds. Except as provided in the next sentence,
only the Independent Expert, and not Owner, shall have the right to deliver a
Statement pursuant to the On-Demand Bonds. If (a) the Independent Expert fails
to make a determination whether or not Contractor has failed to perform all or
any of its obligations under this Agreement within twenty-one (21) days after
receipt of Owner’s notice, (b) the Independent Expert determines that Contractor
has failed to perform all or any of its obligations under this Agreement and the
Independent Expert fails to deliver a Statement pursuant to the applicable
On-Demand Bond within twenty-one (21) days after receipt of Owner’s notice, or
(c) no Independent Expert is then serving and no successor has yet been
appointed, then Owner shall have the right to deliver a Statement pursuant to
the applicable On-Demand Bond if Owner determines in good faith that Contractor
has failed to perform all or any of its obligations under this Agreement.

 

7.18.2 Subcontractor’s Bond Requirements. On a case-by-case basis for
subcontracts with a contract value in excess of Five Million United States
Dollars

 

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(US$5,000,000), Owner may elect to require that Contractor’s Subcontractors
provide an On-Demand Bond as described in Section 7.18.1 above using a form
approved by Owner and Owner’s Lenders. The amount of each such On-Demand Bond
shall be equivalent to a minimum of ten percent (10%) of the full value of the
relevant subcontract or such lesser amount as Owner may approve in writing. All
costs of each On-Demand Bond for those Subcontractors so designated by Owner
shall be quoted separately to Owner for Owner’s prior written approval before
such bond is obtained. Contractor shall recommend to Owner whether or not to
require such On-Demand Bonds as to each respective Subcontractor. Nothing in
this Section 7.18 shall preclude Contractor from requiring a bond, guarantee or
other security from any Subcontractor or Vendor; provided, however, that in the
event Owner does not grant prior written approval for an On-Demand Bond with
respect to such Subcontractor or Vendor, Contractor’s election to require such
bond, guarantee or other security shall be at Contractor’s sole cost and
expense.

 

7.19 Liens.

 

7.19.1 If at any time Owner receives any stop notice, mechanic’s lien or similar
claim pertaining to unpaid amounts for any labor, goods, materials, equipment or
services provided as part of Contractor’s scope of Work (and provided Owner has
paid all sums then due and owing to Contractor pursuant to and within the time
period set forth in the Contract Documents), Contractor agrees to immediately
release or cause the release of Owner, Owner’s property, the Site, the Original
Project and/or the Expansion Project, as applicable, from such notices, liens or
claims, or, at Contractor’s option, to file a bond in lieu thereof in an amount
satisfactory to Owner. All costs incurred by Contractor in effecting the
foregoing shall be at Contractor’s sole expense as a Non-Allowable Cost of the
Work, except that should Contractor be successful in having Owner’s property,
the Site the Original Project and/or the Expansion Project, as applicable,
released from such notices, liens or claims without the necessity of Contractor
posting any bond and without the payment by Contractor to the lien claimant of
any monies to effect such release, all of Contractor’s reasonable fees and costs
incurred in effecting such release shall be a Cost of the Work. It is expressly
understood that all of Contractor’s obligations with respect to this
Section 7.19 begin immediately at the outset of any notice of a claim, either by
correspondence or court proceeding or otherwise, and without regard to any
showing of fault on the Contractor’s part, and in all cases Contractor shall
cause Owner, Owner’s property, the Site, the Original Project and/or the
Expansion Project, as applicable, to be released from all such liens and claims
or, at Contractor’s option, bond against such liens and claims in accordance
with Section 7.19.2 below, in either case within fifteen (15) days of receipt of
notice thereof (or such lesser period in any loan documents relating to Owner’s
Lenders).

 

7.19.2 If any such notice or claim is received and Contractor does not release,
or cause the release, of Owner, Owner’s property, the Site, the Original Project
and/or the Expansion Project, as applicable, from the lien or claim within the
fifteen (15) day period set forth in Section 7.19.1 or, at Contractor’s option,
obtain a bond and file with the appropriate court a petition to substitute the
bond for such lien or claim within fifteen

 

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(15) 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) days after filing such petition, allowing substitution of the bond for such
lien, Owner shall have the right to pay all sums necessary to obtain the release
of Owner, Owner’s property, the Site, the Original Project or the Expansion
Project, as applicable from such lien or claim and deduct all sums to be paid
(including attorneys’ fees and the amount of any obligations assumed by Owner)
from the Original Project Guaranteed Maximum Price or the Expansion Project
Guaranteed Maximum Price (as applicable).

 

7.19.3 Contractor acknowledges (a) that pursuant to Clause 42 of the Gaming
Concession Agreement, Owner is required to keep the Project and the Work free
and clear of any liens, encumbrances or security interests, and (b) that a
breach of this provision of the Gaming Concession Agreement will cause Owner to
suffer substantial losses. Contractor agrees that it will not, and it shall use
reasonable precautions to ensure that the Subcontractors and Vendors do not,
impose, or exercise their rights with respect to, any liens, encumbrances or
security interests on the Project and the Work. Further, all materials and
equipment supplied by Contractor pursuant to the Contract Documents shall be
delivered free and clear of all liens and not be subject to any conditional
sale, purchase-money lien, security agreement, financing agreement or chattel
mortgages. Contractor agrees that, to the extent it is permitted by law to claim
a lien on any material or equipment at the Site or any component of the Work in
accordance with the Contract Documents or applicable Law, it will not exercise
such right.

 

7.20 Royalties and Patents. Contractor shall pay as a Cost of the Work in
accordance with Section 3.2.11 hereof all royalties and license fees relating to
the Work. Contractor shall defend suits or claims for infringement of patent
rights and shall indemnify and hold Owner harmless from loss on account thereof,
but shall not be responsible for such defense or loss when a particular design,
process or product of a particular manufacturer or manufacturers is required by
the Contract Documents. However, if Contractor knows, or should know following
due inquiry, that the required design, process or product is an infringement of
a patent, Contractor shall be responsible for such loss unless such information
is promptly furnished to Owner.

 

7.21 Training.

 

7.21.1 With respect to the Original Project, prior to and as a condition to
payment of the Original Project Final Payment, Contractor shall orient and
instruct the responsible maintenance personnel designated by Owner in the
operations of all equipment and shall provide the maintenance personnel with
pertinent literature and operational manuals for all equipment designated by
Owner.

 

7.21.2 With respect to the Expansion Project, prior to and as a condition to
payment of the Expansion Project Final Payment, Contractor shall orient and
instruct the responsible maintenance personnel designated by Owner in the
operations of all equipment

 

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and shall provide the maintenance personnel with pertinent literature and
operational manuals for all equipment designated by Owner.

 

7.22 Construction Photographs. Contractor shall submit color construction
photographs to Owner and Owner’s Lenders with each month’s Application For
Progress Payment during the Work. Each month, such photographs shall consist of
at least four (4) views of the building from ground-view points as directed by
Owner and any interior views requested by Owner or Owner’s Lenders.

 

7.23 Statement of Unpaid Claims. Whenever requested by Owner or Owner’s Lenders,
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 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.

 

7.24 Protection of Work. Contractor shall design, furnish, erect and maintain in
a safe manner to cause to be designed, furnished and erected, such barricades,
fences, and railings; give such warnings; display such lights, signals and
signs; exercise such precautions against fire; adopt and enforce the rules,
regulations or requirements of governmental authorities, and take such
precautions as may be necessary. Contractor shall immediately report in writing
to Owner all accidents howsoever arising out of or in connection with the
performance of the Contract Documents, whether on or adjacent to the Site, which
result in death, injury or property damage, giving full details and statements
of witnesses. In addition, if death or serious injury or serious damage is
caused, the accident shall be reported by telecopy to Owner and the insurance
carrier or its representative providing insurance for the Project. If any claim
is made by any third party against Contractor, any Subcontractor or Vendor, on
account of any accident or similar event, Contractor shall immediately report
the fact in writing to Owner, giving details of the claim and Contractor’s
explanations as to the same.

 

7.25 Information to Authorities. Contractor acknowledges that (a) Owner and its
affiliates are subject to stringent and comprehensive Laws in Macau and in the
United States of America (including those issued by the gaming authorities
thereof); and (b) Contractor (as well as Subcontractors and Vendors at any tier)
may, at the request of Owner or the appropriate governmental authority, be
required to submit from time to time such information regarding its operations,
businesses or ownership to Owner or the appropriate governmental authority, as
the case may be. Contractor shall provide to Owner English translations of all
non-English documents (a) filed with applicable governmental authorities in
connection with the construction of the Work or (b) delivered to Owner under
this Agreement. Contractor shall ensure that all translations submitted to Owner
are true and accurate in all material respects.

 

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7.26 Hazardous Materials.

 

7.26.1 Title to, ownership of and legal responsibility for all pre-existing
hazardous materials at the Site shall remain with Owner. In this Agreement,
“pre-existing hazardous materials” shall be limited to all substances that are
considered hazardous or toxic under the laws of Macau that (a) existed as of the
Original Project Date of Commencement, (b) have not been introduced to the Site
by Contractor, and (c) have not been negligently disturbed by Contractor,
including asbestos and poly-chlorinated biphenyl (PCB).

 

7.26.2 Contractor shall have no responsibility for the handling, removal or
disposal of pre-existing hazardous materials at the Site except to the extent
addressed or covered in the Contract Documents or otherwise made known to or is
known to or, as of the date hereof, is reasonably foreseeable by Contractor.

 

7.26.3 In the event Contractor encounters pre-existing hazardous materials or
materials reasonably expected to be hazardous to health, Contractor shall,
within one (1) day of discovering such materials, notify Owner and stop work in
the affected area until an environmental laboratory properly certified by the
applicable Authority retained directly by Owner shall have verified that the
relevant materials have been removed or rendered harmless. Notwithstanding the
foregoing, Contractor shall use its best efforts to minimize any delay to the
Original Project Schedule and the Expansion Project Schedule caused by the
discovery of pre-existing hazardous materials.

 

7.26.4 In the event Contractor shall reasonably determine that the either or
both of the Original Project Schedule or the Expansion Project Schedule will be
delayed due to the presence of pre-existing hazardous materials, it shall,
within ten (10) days of the initial discovery of such pre-existing hazardous
materials, submit to Owner a Change Proposal Request for an extension of time
and/or an adjustment to the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable) in accordance with
Article 18 hereof. Contractor’s failure to submit a Change Proposal Request
within the time period stated in this Section 7.26.4 shall amount to a waiver of
its rights hereunder. Contractor shall not be entitled to an extension of time
or an adjustment to the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) for hazardous materials that
are not pre-existing hazardous materials.

 

7.26.5 All solid and liquid wastes, hazardous substances, and hazardous
materials used by Contractor (including all solvents, cleaners, waste oils and
trash) shall be handled and disposed of in full compliance with all applicable
Laws (including, but not limited to, environmental laws of Macau). Contractor
shall be responsible for any environmental contamination that occurs at the Site
as the result of the acts or omissions of Contractor or its Subcontractors,
Vendors or invitees.

 

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7.26.6 Contractor and its Subcontractors and Vendors shall have no
responsibility for the discovery, presence, handling, removal or disposal of
pre-existing hazardous materials discovered on the Site, including asbestos,
asbestos products, poly-chlorinated biphenyl (PCB) or other substances
classified as hazardous by the Environmental Protection Agency of the U.S.
Government or any other federal, state or local government agency of the United
States, except to the extent addressed or covered in the Contract Documents or
otherwise made known to or reasonably foreseeable by Contractor. If Contractor
discovers the presence of any hazardous materials at the Site not otherwise
called out in the Contract Documents or otherwise made known to or reasonably
foreseeable by Contractor, Contractor shall promptly report the presence and
precise location of any such materials to Owner and immediately stop Work in the
affected area unless requested otherwise by Owner.

 

7.27 Taxes, Customs and Import Duties.

 

7.27.1 Contractor shall be responsible for the payment of all Taxes imposed on
or as a consequence of the importation of any machinery, hardware and software,
articles, equipment, apparatus, materials, supplies, appliances, parts,
instruments or other things of all kinds which are required to construct the
Work (collectively, the “Plant”) into Macau and delivery to and erection on the
Site for the purposes of this Agreement. Contractor shall indemnify Owner from
and against all liability, cost, damages, loss and expense:

 

(a) arising from the Contractor’s failure to pay the whole or any part of any
such Taxes; or

 

(b) resulting from the Contractor’s failure to co-operate with, or follow
instructions from the Owner or the Owner’s Representative, to maintain such
exemptions from or reductions of such Reimbursable Taxes as may be granted by
any governmental authority to the Owner.

 

7.27.2 In addition to the foregoing, Contractor shall:

 

(a) timely obtain all exemptions from or reductions of all Reimbursable Taxes
which are reasonably capable of being obtained, having regard to all applicable
Laws at the date of importation;

 

(b) not make changes to the type or country of origin of any Plant or in the
method of packaging, shipment or importation which would result in any increase
in the Reimbursable Taxes payable (unless the overall cost of such Plant would
be reduced); and

 

(c) not knowingly provide information on, or exclude information from, any
Project import list or packing list, which would attract Tax at a rate higher
than the applicable concessionary rate.

 

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ARTICLE VIII.

ARCHITECT/ENGINEER; DESIGN DOCUMENTS

 

8.1 Architect’s/Engineer’s Administration of the Contract

 

8.1.1 The term Architect/Engineer includes the Architect/Engineer and the
Architect’s/Engineer’s authorized representatives. Architect/Engineer shall act
in its professional capacity as a Subcontractor during the course of the Work.
Contractor shall have direct responsibility of all work performed by the
Architect/Engineer, whether occurring prior or subsequent to the date the
Architect/Engineer Agreement is transferred to Contractor. The Guaranteed
Maximum Price includes all fees and expenses due to the Architect/Engineer.

 

8.1.2 The Architect/Engineer shall at all times have access to the Work wherever
it is in preparation or being performed.

 

8.1.3 The Architect/Engineer shall have authority to require additional
inspection or testing of the Work, whether or not such Work is fabricated,
installed or completed, by giving reasonable advance notice in writing to both
Owner and Contractor. However, only Owner shall have authority to reject any
Work which does not conform to the Contract Documents.

 

8.1.4 The Architect/Engineer shall review and approve or take other appropriate
action upon the Contractor’s submittals such as Shop Drawings, Product Data and
Samples, for the limited purposes of checking for conformance with the
Specifications and related design intent expressed in the Contract Documents.
The Architect/Engineer shall provide its response to all such submittals in a
timely manner to avoid delays in the Work.

 

8.1.5 Contractor acknowledges that Owner’s Design is an integral part of the
design process and understands and accepts the responsibility of coordinating
the Owner’s Design with the Architect/Engineer’s design.

 

8.2 Design Information, Drawings and Manuals.

 

8.2.1 Draft Design Information. Not less than sixty (60) days prior to the
commencement of each construction activity as shown on the then current Original
Project Schedule or Expansion Project Schedule (as applicable), Contractor shall
submit to Owner’s Representative Drawings, Specifications and related design
information (collectively, “Design Information”) in relation thereto in a form
and to a level of detail acceptable to the Owner’s Representative. The Design
Information shall describe the size, quality and character of the applicable
portion of the Work as it relates to the Project (including the interrelation of
the Original Project and Expansion Project, if applicable); its architectural,
structural, mechanical, electrical, plumbing and fire safety systems; and the
materials and other elements of the applicable portion of the Work necessary for
construction to be

 

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completed in compliance with the requirements of the Contract Documents and all
applicable Laws. In the event that Contractor submits any Design Information
that does not comply with or is inconsistent with the Original Project
Guaranteed Maximum Price Premises and Assumptions and/or Expansion Project
Guaranteed Maximum Price Premises and Assumptions, or prior Design Information,
it shall clearly identify and give particulars of such non-compliance or
inconsistency.

 

8.2.2 Approval of Design Information. If Contractor shall request Owner’s
approval of particular Design Information, then within thirty (30) days of
receipt of such Design Information, the Owner’s Representative shall either
(a) if it considers the same to comply with the Original Project Guaranteed
Maximum Price Premises and Assumptions or Expansion Project Guaranteed Maximum
Price Premises and Assumptions (as applicable) and the prior Design Information,
approve the same in writing or (b) raise objections thereto in writing, in which
case the same shall be modified by Contractor as often and to the extent
necessary to comply, in the opinion of the Owner’s Representative, with the
Original Project Guaranteed Maximum Price Premises and Assumptions or Expended
Project Guaranteed Maximum Price Premises and Assumptions (as applicable) and
the prior Design Information, whereupon approval will be given. Failure by Owner
to raise objections in writing within said thirty (30) day period shall be
deemed an approval by Owner under clause (a); provided that Contractor shall
have provided Owner with an additional notice not less than five (5) nor more
than eight (8) days prior to the expiration of such thirty (30) day period
stating that Owner’s failure to respond shall constitute a deemed approval of
the particular Design Information. On each re-submission of the Design
Information objected to by the Owner’s Representative, the Owner’s
Representative shall give his consent or raise further objections to the
re-submitted Design Information within fourteen (14) days of its receipt by the
Owner’s Representative. Notwithstanding the foregoing, the Owner’s
Representative’s approval shall be required on all Design Information relating
to aesthetics (colors, finishes, etc.) or major building systems or equipment
having long-term maintenance requirements (such as elevators). In addition,
Owner shall have the right to raise objections to any other Design Information
regardless of whether Contractor requested Owner’s approval thereof, provided
that any such objections are made within thirty (30) days after Owner first has
knowledge of the particular Design Information.

 

8.2.3 Further Information. For the purpose of exercising his power hereunder,
the Owner’s Representative may call for such further or other Design Information
as may be reasonably necessary.

 

8.2.4 No Relief from Liability. Contractor acknowledges that neither:

 

(a) the examination of or the giving or withholding of approval to any Design
Information under this Article 8, or the making of objections, representations,
comments or suggestions, or any failure to make the same in relation to the
Design Information or any other aspect of the Work; nor

 

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(b) any other act or omission of Owner, the Owner’s Representative, the Owner’s
Lenders or of any other person acting or purporting to act on their behalf in
relation to any aspect of the Work;

 

shall relieve Contractor from its responsibility for the acts and omissions of
its employees, architects, engineers and consultants (including, but not limited
to, Architect/Engineer) in the preparation of the Design Information or relieve
Contractor in whole or in part of any duty, obligation or liability undertaken
by Contractor in relation to the Work (including, but not limited to,
Contractor’s obligation to complete the Work in accordance with the Original
Project Guaranteed Maximum Price Premises and Assumptions and Expansion Project
Guaranteed Maximum Price Premises and Assumptions), whether under this Agreement
or otherwise, or diminish or vary any such duty, obligation or liability,
whether by way of contribution or otherwise; provided that nothing in this
Section 8.2.4 shall exclude or otherwise affect any right of the Contractor to
be discharged from its obligations under the Contract. The Drawings and
Specifications shall be adequately prepared by or on behalf of Contractor such
as to be approved for use by all authorities having jurisdiction over the
Original Project or Expansion Project construction without undue delay to the
Original Project or Expansion Project (as applicable).

 

8.2.5 No Variation. If any Design Information does not comply with or is
inconsistent with the Original Project Guaranteed Maximum Price Premises and
Assumptions or Expansion Project Guaranteed Maximum Price Premises and
Assumptions (as applicable), there will be no increase in either the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
or adjustment to the Contract Time awarded in respect of the time taken for, or
other circumstances whatsoever surrounding, approval being given or withheld by
the Owner’s Representative in relation to such Design Information, or the
subsequent carrying out of the works of construction the subject thereof.

 

8.2.6 Work to Comply with Design Information. Contractor shall execute the Work
strictly in accordance with the Original Project Guaranteed Maximum Price
Premises and Assumptions or Expansion Project Guaranteed Maximum Price Premises
and Assumptions (as applicable) and the prior Design Information, using new and
high grade materials and workmanship of first class and sound quality. Work
carried out by the Contractor other than as aforesaid shall be removed at the
request of the Owner’s Representative.

 

8.2.7 Erection Information. Without limiting the generality of the foregoing
obligations, Contractor shall provide, within the times stated in this
Agreement, drawings showing how the Work is to be constructed, assembled or
affixed and any other information required for:

 

(a) preparing suitable foundations or other means of support; and

 

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(b) providing suitable access on the Site for the Work and any necessary
equipment to the place where the Work is to be erected.

 

8.2.8 Ownership of Documents. (a) Contractor hereby represents and warrants that
it is the owner of, or it will obtain upon the payment by Owner of the
applicable monthly progress payment corresponding thereto, all right, title and
interest (to the fullest extent possible under applicable Laws) in and to all
plans, drawings, specifications and other documents prepared by or on behalf of
Contractor hereunder for the Project (excluding, for the purpose of clarity, the
Owner’s Design), as such plans, drawings, specifications and other documents may
be added to or modified from time to time (collectively, the “Design
Documents”), whether created by the Contractor, Architect/Engineer or their
respective consultants or engineers as instruments of service, and that the
Design Documents do not infringe any copyright held by third parties. Contractor
hereby transfers to Owner or Owner’s assigns, to the fullest extent possible
under applicable Laws and upon the payment by Owner of the applicable monthly
progress payment corresponding thereto, all of Contractor’s right, title and
interest (including, but not limited to, the copyright thereto and all other
intellectual property therein and all rights and privileges pertaining thereto)
in and to the Design Documents. Owner shall have the right to use all of the
Design Documents for any purpose whatsoever, including, but not limited to,
completion of the Project (or any portion thereof) by others or use on other
projects, upon termination of this Contract, without notice to or further
compensation to Contractor, Architect/Engineer or any other party. Contractor
shall not use, and shall ensure that Architect/Engineer shall not use, the
Design Documents on other projects or disclose the contents of the Design
Documents to other parties without the prior written consent of Owner in each
instance. Contractor shall deliver the Design Documents to Owner in a timely
manner. Subject to Section 8.2.12, Contractor, Architect/Engineer and their
respective consultants and engineers shall be permitted to retain copies of the
Design Documents as necessary to perform their respective services in connection
with the Project.

 

(b) Contractor hereby further represents and warrants that it has received or
will receive all necessary licenses and consents in respect of any copyright,
design rights and other proprietary rights that are required from any other
person or entity (except Owner’s Consultants) in connection with the
construction, operation, maintenance, adjustment or repair of the Work; that all
such licenses, consents and rights are or will be in full force and effect; and
that such licenses, consents and rights permit the Owner to operate and maintain
the Work in perpetuity free of charge and without interference from any third
party, and the Contractor shall indemnify Owner from any and all losses, claims,
costs and liabilities sustained or incurred by Owner to any such person in
respect thereof.

 

(c) Contractor covenants that the Design Information does not, and its use will
not, infringe the rights of any third party.

 

(d) Contractor shall be liable for all errors and omissions in, and copyright
infringement by, the Design Documents and shall cause Architect/Engineer to

 

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perform, at Architect/Engineer’s sole cost and expense, such architectural and
engineering services as may be required to correct or remedy such errors or
omissions. The foregoing shall be in addition to, and not in limitation of, any
other rights that Owner may have hereunder or at law or in equity.

 

(e) Contractor shall indemnify Owner against any penalties and liability of
every kind for Contractor’s breach of the covenants contained in this
Section 8.2.8 whether such penalty or liability shall arise before or after
Original Project Final Completion or Expansion Project Final Completion (as
applicable). The provisions of this Section 8.2.8 shall survive termination of
this Agreement.

 

8.2.9 Provision of Owner Drawings. All drawings, specifications, documents and
designs provided by Owner to Contractor shall remain the sole property of Owner.

 

8.2.10 Further Drawings. Contractor shall provide the Owner’s Representative and
the Owner’s Lenders with any additional copies of Design Information, as
reasonably requested by the Owner’s Representative.

 

8.2.11 Design Responsibility for Drawings. Where any part of the Work has been
designed by or on behalf of Owner, including, but not limited to, the Drawings
and Specifications prepared by Owner’s Consultants, and that design has been
included in the Original Project Guaranteed Maximum Price Premises and
Assumptions or Expansion Project Guaranteed Maximum Price Premises and
Assumptions (as applicable), Contractor shall check the design and confirm in a
timely manner that it conforms to the Original Project Guaranteed Maximum Price
Premises and Assumptions or Expansion Project Guaranteed Maximum Price Premises
and Assumptions (as applicable).

 

8.2.12 Return of Design Information and Other Documents. At the completion of
this Contract or, at Owner’s election, the portion of this Contract relating to
the Original Project or Expansion Project (as applicable), Contractor shall hand
over to Owner all Design Information in its or its Subcontractors’ or Vendors’
possession (or related only to the Original Project or Expansion Project if
requested by Owner) and return to Owner all documents, drawings, specifications
and designs provided by Owner under this Contract (or related only to the
Original Project or Expansion Project if requested by Owner).

 

8.2.13 Drawings from Subcontractors. Contractor shall include in each
Subcontract a requirement that the Subcontractor, at its own cost and expense,
must furnish all Design Information within the scope of such Subcontract. The
Owner Representative’s review of such Design Information delivered by the
Subcontractor shall not relieve Contractor or the Subcontractor from
responsibility for deviations from the Contract Documents, Specifications and/or
Drawings, nor shall it relieve Contractor from

 

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responsibility for errors and/or omissions. Contractor shall make, and shall
cause Subcontractor to make, any changes required by the Owner’s Representative.

 

ARTICLE IX.

SUBCONTRACTORS AND VENDORS

 

9.1 Subcontractors and Vendors. Except as otherwise provided in this Agreement,
Contractor shall be responsible for the performance of Subcontractors and
Vendors of every tier to the same extent as if performed by Contractor on a
direct basis, including coordination of those portions of the Work performed by
Subcontractors and Vendors.

 

9.2 Consent To Use Proposed Subcontractors and Vendors.

 

9.2.1 To the extent practicable, Contractor shall propose a minimum of three
(3) qualified lump sum or cost of the work plus a fee bidders for each element
of the Work to be performed by Subcontractors and Vendors (including those who
are to furnish materials or equipment fabricated to a special design). Owner
shall, within five (5) calendar days after receipt thereof, reply to Contractor
stating whether or not Owner has a reasonable objection to any such proposed
person or entity. Owner’s failure to reply in writing to Contractor’s proposed
list within ten (10) calendar days after the receipt thereof shall constitute
Owner’s acceptance of such list. Owner’s consent with respect to any
Subcontractor or Vendor pursuant to this Article 9 shall not in any way relieve
the Contractor from its obligations to fully manage, administer and assure that
the Subcontractor complies with the requirements of the Contract Documents,
including all dates identified in the Original Project Schedule or Expansion
Project Schedule (as applicable).

 

9.2.2 Contractor shall analyze all of the bids for each element of the Work and
shall make a recommendation to the Owner as to which bid should be selected.
Owner shall then make the selection with assistance from the Contractor within
fifteen (15) days following receipt of Contractor’s recommendation (and if Owner
fails to respond within said fifteen (15) day period, then the bid recommended
by Contractor shall be deemed approved by Owner). In the event the Subcontractor
chosen by Owner is different from the Subcontractor recommended by Contractor,
and the bid amount from the Subcontractor chosen by Owner exceeds by the lesser
of 5% or US$25,000 the bid amount from the Subcontractor recommended by
Contractor, such bid difference in excess of the lesser of said 5% or US$25,000
shall be cause for an increase in the Original Project Guaranteed Maximum Price
or Expansion Project Guaranteed Maximum Price (as applicable) (or Owner may
choose to apply amounts from the Original Project Owner Contingency or Expansion
Project Owner Contingency (as applicable) without an increase in the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price,
respectively) provided that the bid recommended by Contractor was substantially
in compliance with the requirements of the Contract Documents.

 

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9.3 Award of Subcontracts and Purchase Orders. Contractor shall furnish Owner
and Owner’s Lenders with a copy of Contractor’s proposed forms for use as
subcontracts and purchase orders (which includes professional services
agreements) for Owner’s review and approval prior to Contractor’s use thereof,
and Contractor shall only enter into those subcontracts approved by Owner in
writing, without material modification; provided, however, subcontracts and
purchase orders which do not have a contract value in excess of HK$2,000,000
individually, and otherwise are in accordance with the Contract Documents, shall
not require Owner’s prior written approval. Failure by Owner to disapprove in
writing a subcontract or purchase order submitted by Contractor within fifteen
(15) days after Owner’s receipt thereof shall be deemed to constitute Owner’s
approval of such subcontract or purchase order. Contractor shall furnish to
Owner a copy of each subcontract and purchase order it enters into in connection
with the Work within ten (10) calendar days after execution of such subcontract
or purchase order. All subcontracts and purchase orders shall require all
Subcontractors and Vendors to assume toward Contractor the same legal
obligations and responsibilities which Contractor assumes toward Owner in this
Contract, including requiring the indemnitees provided in Article 14 hereof,
except as specifically provided otherwise in the Contract Documents or approved
by Owner in writing. Owner recognizes that under certain circumstances it will
not be possible to obtain all such flow-down provisions (including the
indemnitees) in a particular subcontract or purchase order. Owner agrees to
review in good faith a request by Contractor for a waiver of the requirement
that a particular subcontract or purchase order must include any such flow-down
provision that Contractor is unable, using its best efforts, to so obtain. All
subcontracts and purchase orders shall (a) require that the subcontract may not
be assigned by the Subcontractor or Vendor but shall permit the assignment of
the subcontract or purchase order by Contractor to Owner or a third party
designated by Owner, including Owner’s Lenders, as provided in Section 9.8 and
Article 21 of this Agreement, (b) require that the Subcontractors and Vendors
shall not have the right to assign the whole or any part of the benefit of the
subcontracts or purchase orders or to sublet or further subcontract the whole or
any part of the Work to be performed under the subcontract or purchase order
without the prior written consent of Owner and Contractor, (c) provide that any
warranties contained or referenced therein shall run to the benefit of and be
enforceable by Owner and Owner’s Lenders, (d) provide for the applicable
retentions specified in Section 5.6.3. Contractor shall establish and implement
a system to monitor Subcontractors and Vendors to ensure that they comply with
the requirements of this Section 9.3. 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 or purchase
order with a contract value in excess of HK$500,000 without Owner’s prior
written approval. Contractor, the Subcontractors and the Vendors shall be
subject to audit by the Owner’s Representative to ensure compliance with the
requirements of this Agreement. If any Subcontractor or Vendor is found to be
assigning, subletting or subcontracting all or any part of the Work under its
subcontract or purchase order without the prior approval of Owner, Contractor
shall immediately notify Owner thereof and shall, if the circumstances are such
that the Work has been or is likely to be affected, as determined by Owner in
its sole discretion, either remedy such situation (i.e., put an end to such
assignment, subletting or

 

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subcontracting) or remove the offending Subcontractor or Vendor from the Project
(and if Contractor fails to effect such remedy or removal, Owner shall have the
right to remove the offending Subcontractor or Vendor from the Project), unless
Owner shall agree otherwise in writing. In such case, Contractor shall be fully
responsible for finding a suitable replacement, and the costs involved in making
such replacement shall not be the basis for a Change Order, increase in the
Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable) or extension of the Contract Time.

 

9.4 Subcontractors and Vendors Designated By Owner. Contractor shall not be
required to contract with a Subcontractor or Vendor to whom Contractor has a
reasonable objection, provided that the reason for such objection is identified
to Owner in writing within five (5) calendar days of Owner’s designation
thereof.

 

9.5 Payments to Subcontractors from the Contractor. Contractor agrees to pay
each Subcontractor and Vendor within five (5) calendar days of receipt of each
progress payment from Owner an amount equal to the amount received by the
Contractor from Owner for the purpose of paying the related Subcontractor or
Vendor, as set forth in the applicable Application for Progress Payment.
Contractor further agrees to require each Subcontractor to make similar payments
to its Subcontractors and Vendors. The obligation of Contractor to pay
Subcontractors and Vendors (and their obligation to pay their Subcontractors and
Vendors) is an independent obligation from the obligation of Owner to make
payment to Contractor. Owner shall have no obligation to pay or to see to the
payment of any monies to any Subcontractor or Vendor.

 

9.6 Subcontractor and Vendor Replacements. Contractor shall not replace any
Subcontractor or Vendor who has been approved by Owner, unless Owner gives prior
written approval to the replacement, which approval shall not be unreasonably
withheld or delayed.

 

9.7 Communications With Subcontractors and Vendors. In cooperation with, and
upon notice to Contractor, Owner and Owner’s Lenders shall have the right at any
time and from time to time to contact Contractor’s Subcontractors and Vendors to
discuss the progress of their portion of the Work. Contractor shall have the
right to be present at the time of any such direct communications, excepting
only if Contractor is in default under the Contract or unreasonably refuses to
attend meetings after Owner has given Contractor reasonable advance notice and
opportunity to be present. Notwithstanding such rights of direct communication,
Contractor shall be responsible and liable to Owner for all acts or omissions of
Subcontractors and Vendors and their respective agents and employees and any
other person performing any of the Work under an agreement with Contractor or
any Subcontractor or Vendor.

 

9.8 Assignment. 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

 

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upon (a) the termination by Owner of this Agreement or the portion of the Work
to which the applicable subcontracts or purchase orders relate or (b) the
occurrence of any event described in Section 17.1.2.1, and acceptance by Owner
in writing of such assignment, 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 expiration of the Original Project Defects
Liability Period or Expansion Project Defects Liability Period (as applicable),
and Owner may accept said assignment at any time after the termination of this
Agreement prior to expiration of the Original Project Defects Liability Period
or Expansion Project Defects Liability Period (as applicable). Upon such
acceptance by Owner: (i) Contractor shall promptly furnish to Owner the
originals or copies of the designated subcontract agreements and purchase
orders, and (ii) Owner shall only be required to compensate the designated
Subcontractor(s) or Vendor(s) for compensation accruing to same for Work done or
materials delivered from and after the date as of which Owner accepts assignment
of the subcontract agreement(s) or purchase order(s) in writing (and Contractor
shall not be responsible and Owner shall indemnify and hold Contractor harmless
for such Work done or materials delivered from and after such date or for
compensating such Subcontractor(s) or Vendor(s) therefor). 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 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 such sums or any other obligations of Contractor. It is further
agreed that all subcontract agreements and purchase orders shall provide that
they are freely assignable by Contractor to Owner and Owner’s assigns (including
Owner’s Lenders) under the terms and conditions stated in this Section 9.8 and
that all such Subcontractors and Vendors shall continue to perform their Work
for Owner (or Owner’s Lenders as the case may be) pursuant to the terms of the
respective subcontract or purchase order. Owner agrees not to accept such
assignment solely for the purpose of intentionally causing Contractor harm and
in bad faith.

 

ARTICLE X.

WARRANTY OBLIGATIONS

 

10.1 Contractor’s Warranty. Contractor represents 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
defects whatsoever (including, without limitation, patent, latent or developed
defects or inherent vice), commensurate with construction practices and quality
applicable to first class projects associated with luxury resorts, and in strict
conformance with the Contract Documents (including, but not limited to, the
Original Project Guaranteed Maximum Price Premises and Assumptions or Expansion
Project Guaranteed Maximum Price Premises and Assumptions (as applicable)), and
(b) all materials, appliances, mechanical devices, equipment and supplies
incorporated into the Work shall be new and of such quality to strictly meet or
exceed the Specifications and requirements of the Contract Documents. If
requested by Owner at any time and from

 

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time to time, Contractor will furnish satisfactory evidence to Owner as to the
kind and quality of materials, appliances, mechanical devices, equipment and
supplies. All Work not conforming to the requirements of this Section
(including, but not limited to, substitutions or deviations not properly
approved and authorized by Owner in writing) shall be considered defective.

 

10.2 Contractor’s Defects Liability Period and Other Warranty Periods. The
“Original Project Defects Liability Period” shall commence upon the issuance of
the Original Project Certificate of Substantial Completion for the Original
Project Work taken as a whole in accordance with this Agreement and shall extend
for a period of one (1) year from the date of issuance of such Certificate. The
“Expansion Project Defects Liability Period” shall commence upon the issuance of
the Expansion Project Certificate of Substantial Completion for the Expansion
Project Work taken as a whole in accordance with this Agreement and shall extend
for a period of one (1) year from the date of issuance of such Certificate. A
separate warranty shall exist for ten (10) years in the case of watertightness
and leakage, as provided in Section 10.4, and other warranties shall apply for
such periods as are set forth in the applicable manufacturer’s warranties or as
may be required by applicable Laws. If any major repair or replacement is made
or other major corrective work or service is performed pursuant to any warranty
obligation under this Contract during the Original Project Defects Liability
Period or Expansion Project Defects Liability Period (as applicable), the
applicable warranty for the related repair, replacement or corrective work shall
be automatically extended by one (1) year from the date of completion of such
repair, replacement or corrective work, but in no event shall the total of all
extensions with respect to such particular warranty exceed two (2) years.
Nothing contained in this Article 10 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, in equity or otherwise to the Work. Contractor shall ensure that all
warranties from Subcontractors and Vendors in respect of subcontracted work or
the supply of any materials forming a part of the Work that extend beyond the
Original Project Defects Liability Period or Expansion Project Defects Liability
Period (as applicable) are capable of being assigned by Contractor to Owner, and
Contractor shall, within fourteen (14) days after the earlier to occur of the
termination of this Agreement or the expiration of the Original Project Defects
Liability Period or Expansion Project Defects Liability Period (as applicable),
assign the benefit of all such warranties to Owner. Contractor shall remain
liable and obligated to enforce such warranties on behalf of Owner until the end
of the Original Project Defects Liability Period or Expansion Project Defects
Liability Period (as applicable), even if such warranties extend beyond the end
of the Original Project Defects Liability Period or Expansion Project Defects
Liability Period (as applicable).

 

10.3 Compliance With Contract Documents. Upon receipt of Owner’s written notice
at any time during the course of the Work, during the Original Project Defects
Liability Period or Expansion Project Defects Liability Period (as applicable)
or during any other warranty period, and during any longer period of time as may
be prescribed by any

 

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applicable Laws or other applicable terms, Contractor shall promptly perform all
corrective services (including, but not limited to, furnishing all labor,
materials, equipment and other services at the Site and elsewhere) to Owner’s
satisfaction as may be necessary to remedy any defective workmanship or
omissions in the Contractor’s Work, including, but not limited to, promptly
correct or replace any Work rejected by Owner in accordance with the Contract
Documents or which is incomplete, defective or fails to conform to the Contract
Documents, whether observed before or after Original Project Final Completion or
Expansion Project Final Company of the applicable portion of the Work and
whether or not fabricated, installed, or completed. When any defects, omissions,
corrective services, Original Project Punch List Items or Expansion Project
Punch List Items (as applicable) or other faults which Owner may have required
Contractor to make good shall have been satisfactorily completed, Owner shall,
upon request, issue a written statement to that effect, which shall not be
unreasonably withheld or delayed, and completion of making good such defects,
omissions, corrective services, Original Project Punch List Items or Expansion
Project Punch List Items (as applicable) or other faults shall be deemed for all
purposes under this Agreement to have taken place on the date of such written
statement. Contractor’s compliance with its obligations as stated in this
Article 10, 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 reasonable satisfaction with both the written and
reasonably inferable requirements contained in the Contract Documents.

 

10.4 Warranty Costs. All costs incurred by Contractor in fulfilling Contractor’s
remedial defects liability obligations and/or warranty obligations as set forth
on this Article 10 shall be at Contractor’s sole cost and expense. Contractor
shall also, as part of Contractor’s warranty and guarantee, repair or replace
any other damaged components, material, finishes, furnishings and other Work or
portions of the Project or other property 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. In addition, and
notwithstanding anything to the contrary in this Agreement, if within ten
(10) years after Original Project Substantial Completion or Expansion Project
Substantial Completion (as applicable) any portion of the respective Original
Project Work or Expansion Project Work (including, but not limited to, any roof
and any walls) is not watertight and leakproof at every point and in every area
(except where leaks can be attributed to damage to such Work proximately caused
by extraordinary, external forces beyond Contractor’s control and which
Contractor could not reasonably have anticipated), Contractor shall, immediately
upon notification by Owner of water penetration, determine the source of water
penetration and, at Contractor’s own expense, do any work necessary to make such
Work watertight.

 

10.5 Timeliness of Corrective Services. Contractor shall use all reasonable
efforts to 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

 

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is prepared to and shall immediately undertake and diligently pursue to enable
the Work to achieve strict compliance with the Contract Documents, including the
latest Drawings 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. Additionally, the provisions of
Section 7.6 and 7.7 of this Agreement relating to cooperation with Owner,
access, avoidance of disruption and related matters as set forth therein shall
also apply to the performance of any warranty related work.

 

10.6 Warranty Survival. Contractor’s Original Project Defects Liability Period
and Expansion Project Defects Liability Period obligations and other warranty
obligations set forth in this Article 10 shall apply to Work done by
Subcontractors or Vendors, as well as to Work done by direct employees of
Contractor, and such provisions shall survive acceptance of the Work and survive
any termination of the Contract and Contractor shall be responsible to fully
indemnify and hold Owner harmless from any and all liens, claims, lawsuits,
costs and expenses which may arise out of the failure of the Contractor to
fulfill its warranty obligations pursuant to this Contract.

 

10.7 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 10.5 above, Owner shall have the right to correct or
arrange for the correction of any defects or omissions in the Work. The Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
shall be reduced by the amount of all costs incurred by Owner in correcting such
defective Original Project Work or Expansion Project Work respectively,
including, but not limited to, additional costs for redesigns by the
Architect/Engineer and other design consultants, replacement contractors,
materials, equipment and all services provided by Owner’s personnel; provided
that if the unspent balance of the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable) is insufficient to
cover such amount, then, at Owner’s election, Contractor shall on demand pay the
difference to Owner, or Owner shall withhold and offset 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 then or thereafter due
to Contractor are not sufficient to cover such amounts, Contractor shall on
demand pay the difference to Owner.

 

10.8 Owner’s Right to Supplement Work of Contractor. If the Contractor violates
or breaches any of the terms, conditions or covenants of the Contract, then
Owner may, without prejudice to any other remedy it may have and following the
expiration of any applicable cure periods, provide such reasonable 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 all costs thereof from any money due or thereafter becoming due to the
Contractor and reduce the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) by all such amounts. If the
unspent balance of the Original Project Guaranteed Maximum Price or

 

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Expansion Project Guaranteed Maximum Price (as applicable) is insufficient to
cover such amount, Contractor shall on demand pay the difference to Owner.

 

10.9 Acceptance of Non-Conforming Work. Owner may, in its sole 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 Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable) 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.

 

10.10 Warranty Exclusions. Contractor’s warranty obligations shall not apply to
defects caused by ordinary wear and tear, insufficient maintenance or improper
operation or use by Owner.

 

10.11 Written Guaranty. At Owner’s request, Contractor shall require
Subcontractors and Vendors to enter into a warranty agreement directly with
Owner in a form reasonably acceptable to Owner. Such guarantees and warranties
to be provided by Subcontractors or Vendors shall be in writing on the
letterhead of the respective Subcontractor or Vendor, shall be in form and
substance reasonably satisfactory to Owner, and shall be signed jointly by
Contractor and such Subcontractor or Vendor. The ten (10) year Contractor
warranties specified in Section 10.2 as to watertightness and leakage shall be
in form and substance reasonably satisfactory to Owner and shall also be in
writing on Contractor’s letterhead and signed by Contractor (the parties
acknowledging that the warranty of Contractor with respect to the Original
Project Defects Liability Period and Expansion Project Defects Liability Period
(as applicable) shall be governed by the provisions of this Agreement without a
separate written warranty). Copies of all Subcontractor and Vendor guarantees
and warranties, as well as the original Contractor’s watertightness and leakage
warranty, shall be furnished to Owner upon Substantial Completion. Prior to the
expiration of the Original Project Defects Liability Period or Expansion
Projects Defects Liability Period (as applicable) and as a condition to the
Original Project Final Payment or Expansion Project Final Payment, respectively,
Contractor shall assign to Owner all applicable Subcontractor and Vendor
guarantees and warranties and deliver to Owner the originals thereof. Owner
shall, in addition to the guarantees and warranties provided in this Article 10,
also have the benefit of, and Contractor shall assign to Owner in form and
substance satisfactory to Owner, all warranties, service life policies,
indemnitees and guarantees with respect to any and all materials, appliances,
mechanical devices, supplies and equipment incorporated into the Original
Project Work or Expansion Project Work (as applicable) 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 to Original Project Final Payment or Expansion Project Final
Payment, respectively. Further, at Owner’s request, after the expiration of the
Defects Liability Period, Contractor shall assist Owner in enforcing all such
warranties, guarantees, policies and indemnitees.

 

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ARTICLE XI.

SCHEDULING, DELAYS AND ACCELERATION

 

11.1 Owner’s Right to Modify. Notwithstanding the Original Project Schedule or
Expansion Project Schedule, Owner has the right, upon notice to Contractor, to
modify or otherwise change the sequence of the Work and Contractor shall comply
therewith and adjust schedules accordingly. If Contractor believes such
modification or change causes a delay or acceleration in the completion of the
Work, Contractor shall provide written notice to Owner in accordance with
Section 11.6 below. Any such modifications or changes in sequence applies only
to scheduling and shall not be construed to mean a change in the method or means
employed by Contractor for the execution of the Work.

 

11.2 Project Schedule. Within five (5) days after receipt of the Original
Project Notice to Proceed or Expansion Project Date of Commencement (as
applicable), Contractor shall furnish a detailed update of the Original Project
Schedule attached hereto as Attachment 2 of Exhibit B or Expansion Project
Schedule attached hereto as Attachment 5 of Exhibit B describing the activities
to be accomplished and their dependency relationships, for approval by Owner.
The Original Project Schedule shall include an agreed upon design schedule
setting forth time periods for Contractor to require Architect/Engineer to
produce Drawings for the Original Project Work, time periods when Owner’s
Consultants and Owner’s Contractors on the Original Project must provide their
respective documents and services, and an agreed upon construction schedule
setting forth the Original Project Interim Milestone Dates. The Expansion
Project Schedule shall include an agreed upon design schedule setting forth time
periods for Contractor to require Architect/Engineer to produce Drawings for the
Expansion Project Work, time periods when Owner’s Consultants and Owner’s
Contractors on the Expansion Project must provide their respective documents and
services, and an agreed upon construction schedule setting forth the Expansion
Project Interim Milestone Dates. Contractor’s performance will be measured
against the Original Project Schedule or Expansion Project Schedule (as
applicable). The Original Project Schedule and Expansion Project Schedule (and
any revisions thereto) shall be updated and revised at appropriate intervals as
reasonably required by Owner or the current and projected conditions of the
Original Project Work or Expansion Project Work (as applicable) and Original
Project or Expansion Project (as applicable), shall designate those items on the
critical path of the Original Project Work or Expansion Project Work (as
applicable), shall be related to the entire Original Project or Expansion
Project (as applicable) to the extent required by the Contract Documents, shall
indicate dates necessary to vacate various work areas, and shall provide for
expeditious and practicable execution of the Work.

 

11.3 Schedule Updates. Contractor shall submit a “Schedule Update” along with
each monthly Application For Progress Payment for comparison to the Original
Project Schedule or Expansion Project Schedule (as applicable). The first
Schedule Update shall be dated and identified as “Schedule Update No. 1” and
shall identify the then current status of all major Original Work or Expansion
Work activities (as applicable) identified in the Original Project Schedule or
Expansion Project Schedule (as applicable). All Schedule

 

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Updates shall include a comprehensive narrative setting forth (i) actual
activity completion dates, (ii) the effect on the Original Project Schedule or
Expansion Project Schedule (as applicable) of any delays in any activities in
progress and/or the impact of known or suspected delays which are expected to
effect future Work, (iii) the effect of Changes on the Original Project Schedule
or Expansion Project Schedule (as applicable), (iv) all actual and potential
variances between latest Schedule Update and probable actual completion dates
(including completion dates related to the Contract Time and/or relevant
Original Project Interim Milestone Dates or Expansion Project Interim Milestone
Dates); (v) all Work activities not started or completed in accordance with the
Original Project Schedule or Expansion Project Schedule (as applicable), and
(vi) recommendations of specific Recovery Plans to Owner which may be necessary
to achieve the Contract Time and/or relevant Original Project Interim Milestone
Dates or Expansion Project Interim Milestone Dates. All subsequent Schedule
Updates shall be dated and numbered sequentially. In addition, each Schedule
Update shall be clearly labeled to state the effective date of the current
status information contained therein.

 

11.4 Events of Force Majeure. “Force Majeure” means fires, explosions, strikes
being conducted on an industry-wide basis and that are not limited to the
Project, unusually adverse weather conditions, war (whether war be declared or
not), hostilities, invasion, riot, civil insurrection, civil war, terrorist
acts, ionising radiation, contamination by radioactivity on the Site from any
nuclear fuel, radioactive toxic explosive or nuclear explosive, epidemics,
quarantine, plague, and any other event beyond the reasonable control of
Contractor (other than bad weather generally or insufficiency of funds, except
to the extent such insufficiency is due to the failure of Owner to pay Costs of
the Work pursuant to an approved Application for Progress Payment). “Force
Majeure Delay” means a delay due to Force Majeure that, in each case,
(a) materially adversely affects the performance by Contractor of its
obligations hereunder, (b) based on Contractor’s extensive experience in
constructing projects of similar scope and complexity in similar types of
locations and Contractor’s representations contained in the Contract Documents,
is not reasonably foreseeable and is beyond Contractor’s reasonable control,
(c) despite the exercise of reasonable diligence, cannot be prevented, avoided
or removed by Contractor and is not attributable to the negligence, willful
misconduct or bad faith of Contractor, and (d) is not the result of the failure
of Contractor to perform any of its obligations under any of the Contract
Documents. Notwithstanding the foregoing, a Force Majeure Delay shall not be
deemed to have occurred unless Contractor has notified Owner of such occurrence
of Force Majeure within three (3) days after such occurrence and has provided
Owner with the details of such event and the length of the anticipated delay
within an additional five (5) days thereafter. During the occurrence and
continuance of a Force Majeure Delay, the affected party shall be excused from
performance of its obligations under this Agreement to the extent the Force
Majeure prevents such party from performing such obligations, except for Owner’s
obligation to make timely payment of amounts properly due and payable to
Contractor.

 

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11.5 Owner Delay. As used in this Agreement, the term “Owner Delay” means any
actual delay in the critical path of Contractor’s Work that is caused by Owner,
Owner’s Lenders or any of Owner’s Consultants or Owner’s Contractors as a result
of their acts or omissions, but only to the extent not the fault of Contractor
or any Subcontractor or Vendor or any party for which any of them is responsible
or liable at law or under the Contract). Owner and Contractor agree to use best
efforts to provide all information and documentation reasonably required by
Owner’s Lenders in order for Owner’s Lenders to render approvals under this
Agreement. In addition to and without derogation of Contractor’s rights with
respect to extensions of the Contract Time set forth in Section 11.6, Owner may,
in its sole and absolute discretion, at any time and from time to time, whether
before or after Original Project Final Completion or Expansion Project Final
Completion, prospectively or retrospectively, and for any reason, whether for
Owner’s sole benefit or otherwise (including, without limitation, in connection
with a delay caused solely by Owner), grant to Contractor an extension of the
time specified in this Agreement for the performance by Contractor of any of its
covenants or obligations under this Agreement or any of the other Contract
Documents (including, without limitation, the Original Project Guaranteed Date
of Substantial Completion or Expansion Project Guaranteed Date of Substantial
Completion (as applicable) and the Original Project Interim Milestone Dates or
Expansion Project Interim Milestone Dates (as applicable)).

 

11.6 Extensions of Time and Guaranteed Maximum Price Increases for Delay.

 

11.6.1 To the extent the Contractor is delayed at any time in the progress of
the Work by a Permissible Delay, then the Contract Time shall be reasonably
extended and the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable) increased (or a portion of the Owner
Contingency applied if available), if at all, in accordance with the procedures
described in this Section 11.6 and in Article 18 below. Such extension and/or
increase shall be pursuant to a Change Order if the delay is a Permissible Delay
or where otherwise agreed by Owner and Contractor. In all other cases, the
extension and/or increase shall be pursuant to a Construction Change Directive.

 

11.6.2 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 or an increase
in the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable) in the event such item is delayed. Further, to the
extent any Permissible Delay could have been prevented or reduced if Contractor
had, 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 Contract Time and/or increase in the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
(as applicable) (except for that portion, if any, of such Permissible Delay
which could not have been mitigated or reduced consistent with the

 

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foregoing and subject to the other requirements of the Contract Documents,
including this Section 11.6).

 

11.6.3 Extensions of the Contract Time for the Work and/or an increase in the
Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable) will be authorized by Owner only if (a) Contractor
has been actually and necessarily delayed in meeting the Original Project
Guaranteed Date of Substantial Completion or Expansion Project Guaranteed Date
of Substantial Completion (as applicable) by a cause which constitutes a
Permissible Delay, or a Change to the Work initiated by the Owner; (b) the
completion of the Work by the applicable Original Project Interim Milestone Date
or Expansion Project Interim Milestone Date (as applicable) or the total
Original Project Work or Expansion Project Work by the Original Project
Guaranteed Date of Substantial Completion or Expansion Project Guaranteed Date
of Substantial Completion, respectively, is actually and necessarily delayed by
such cause; and (c) Contractor has met any notice requirements set forth in the
Contract Documents for it to be entitled to any extension of time or increased
costs. All extensions of time and/or increases in the Original Project
Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price (as
applicable) to which Contractor is entitled hereunder will be confirmed by
Change Order.

 

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

 

11.6.5 The amount of increase, if any, in the Original Project Guaranteed
Maximum Price or Expansion Project Guaranteed Maximum Price (as applicable) due
to a delay shall be equal to the additional cost actually, reasonably and
necessarily incurred by Contractor in Cost of the Work items (a) as a result of
continuing to maintain dedicated personnel, materials and equipment at the Site
at Owner’s request during such delay and (b) other reasonable and unavoidable
Costs of the Work, if any, which are directly related to any subsequent
re-mobilization of the delayed Work caused solely by such delay, but (as to both
of the foregoing (a) and (b)), only if and to the extent such delay exceeds a
period of thirty (30) days in the aggregate following commencement of the Work,
and to the extent such actions are necessary, if at all, to be performed by
Contractor to maintain the extended Contract Time and Original Project Schedule
or Expansion Project Schedule (as applicable) after taking into account any
extension of time as provided for in this Section 11.6.

 

11.6.6 Contractor shall not be entitled to receive a separate extension of time
and/or an increase in the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) 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

 

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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 and/or an increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable) will be
allowed to the extent of the period of delay resulting from such act, fault or
omission. Further all such extensions and increases shall be netted out with any
reductions in Contract Time and/or Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable), before implementing
any such extension or increase.

 

11.6.7 As a condition precedent to the granting of an extension of time or an
increase in the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable), Contractor shall use best efforts to
give Owner immediate written notice (but in any event shall give such written
notice to Owner within thirty (30) calendar days) after the time when Contractor
knows of any cause which might result in delay, for which it may claim an
extension of time and/or an increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable), including
those causes of which Owner has knowledge, specifically stating in such notice
that an extension and/or an increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable) is or may be
claimed, and identifying such cause and describing, as fully as practicable, at
that time, the nature and expected duration of the delay and its effect on the
completion of that part of the Work identified in the notice.

 

11.6.8 Since the possible necessity for an extension of time and/or an increase
in the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable) may materially alter the scheduling plans, and
other actions of Owner and since, with sufficient notice, Owner may, if it
should so elect, attempt to mitigate the effect of a delay for which an
extension of time and/or an increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable) might be
claimed, the giving of written notice as required above is of the essence of
Contractor’s obligations hereunder and failure of Contractor to give written
notice as required above shall be a conclusive waiver of an extension of time
and/or an increase in the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) for the cause of delay in
question.

 

11.6.9 It shall in all cases be presumed that no extension, or further
extension, of time and no increase in the Original Project Guaranteed Maximum
Price or Expansion Project Guaranteed Maximum Price (as applicable) is due
unless Contractor shall affirmatively demonstrate the extent thereof to the
reasonable satisfaction of Owner. Contractor shall maintain adequate records
supporting any claim for an extension of time and/or increase in the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
(as applicable).

 

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11.6.10 Notwithstanding the provisions of this Section 11.6, if pursuant to this
Section 11.6 Contractor is entitled to an increase in the Original Project
Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price (as
applicable), Owner shall have the right, in lieu of any increase, to apply a
portion of the Original Project Owner Contingency or Expansion Project Owner
Contingency (as applicable and to the extent funds remain therein) to cover such
increase in the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable) due to such delay covered by this
Section 11.6.

 

11.7 Limitations. Contractor agrees for itself and, to the fullest extent
allowed by applicable Laws, for its Subcontractors, and will use its best
efforts to require each Subcontractor to agree, that it will make no claim or
claims against the Site, 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 Permissible Delay, except as provided in Section 11.6. Contractor
acknowledges that (a) an extension of the Contract Time, and/or (b) an increase
in the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable), strictly in accordance with Section 11.6 above,
shall be the sole and exclusive remedy for Contractor and all Subcontractors and
Vendors for all delays. Contractor agrees to accept such extensions at no
additional cost to Owner (except as provided in this Section 11.7), and waives
and relinquishes any right to separate claims of any kind for any delays.
Further, the limitations in Section 17.4 hereof shall also apply to any delay.

 

11.8 Recovery Plans. The Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) is based on Contractor working
as many hours as necessary to properly perform the Work and achieve the Original
Project Schedule and Expansion Project Schedule requirements. “Recovery Plan”
means a detailed narrative explanation clearly stating the scope and extent of
any and all resource loading, activity re-sequencing and other acceleration
activities required for all affected elements of the Work to enable Contractor
to either: (a) complete the respective Original Project Interim Milestones or
Expansion Project Interim Milestones by the respective Original Project Interim
Milestone Dates or Expansion Project Interim Milestone Dates; or (b) obtain
Original Project Substantial Completion or Expansion Project Substantial
Completion (as applicable) within the applicable Contract Time.

 

11.8.1 If Owner determines at any time based on reasonable evidence that
Contractor is behind schedule or is otherwise in jeopardy of failing to complete
any Original Project Interim Milestones or Expansion Project Interim Milestones
by the applicable respective Original Project Interim Milestone Dates or
Expansion Project Interim Milestone Dates or the Work within the Contract Time,
Owner shall issue a written notice to Contractor identifying areas of concern
and requiring that Contractor provide a Recovery Plan to Owner.

 

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11.8.2 Upon receipt of Owner’s notice, Contractor shall immediately undertake
all reasonably available steps to overcome or mitigate against the adverse
effects of all delays identified by Owner. Contractor’s failure to undertake all
reasonably available steps to mitigate the effects of such delays shall
constitute a waiver of Contractor’s right to claim relief for any schedule
extensions and/or additional compensation to the extent that Contractor’s
failure to act timely contributed to such delays.

 

11.8.3 Contractor shall, within seven (7) calendar days after receipt of Owner’s
notice, provide its Recovery Plan to Owner notwithstanding whether or not
Contractor disputes responsibility for the cause(s) of such delays.

 

11.8.4 Within seven (7) calendar days after submission of the Recovery Plan by
Contractor, Owner shall advise Contractor in writing whether or not to proceed
with the Recovery Plan as submitted, or in accordance with reasonable revisions
thereto established by Owner.

 

(a) If the delay addressed by the Recovery Plan is a Permissible Delay, such
notice to proceed shall be by an agreed Change Order in accordance with
Section 11.6 and Article 18 (and Contractor shall be entitled to request an
increase in the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable) in accordance therewith). As part of
such notice, Owner shall have the right to require Contractor to work its own
construction crews and Subcontractors and other personnel overtime, and to
direct Contractor to take all other necessary reasonable action, including, but
not limited to, increasing the number of personnel and implementing double
shifts (provided the same does not result in the Contractor breaching any
applicable labor laws or regulations in Macau). 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 then most recently Owner
approved Original Project Schedule or Expansion Project Schedule (as
applicable).

 

(b) If the delay addressed by the Recovery Plan is the result of any cause other
than a Permissible Delay, such notice to proceed shall be by a Construction
Change Directive in accordance with Section 11.6 and Article 18. As part of such
notice, Owner shall have the right to require Contractor to work its own
construction crews and Subcontractors and other personnel overtime, and to
direct Contractor to take all other necessary action, including, but not limited
to, increasing the number of personnel and implementing double shifts (provided
the same does not result in the Contractor breaching any applicable labor laws
or regulations in Macau), all at no increase to the Original Project Guaranteed
Maximum Price or Expansion Project Guaranteed Maximum Price (as applicable).
Such overtime work and other actions shall continue until such time as the Work

 

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has progressed so that it complies with the stage of completion required by the
then most recently Owner approved Project Schedule. Additional costs incurred
due to such overtime work and other actions shall not result in any adjustment
in the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (as applicable).

 

11.8.5 Intentionally Omitted.

 

11.8.6 Contractor acknowledges that Owner, Owner’s Consultants and Owner’s
Contractors must perform certain work and other tasks in connection with the
Project (including, without limitation, the installation of certain FF&E and the
training of Owner’s personnel) (collectively, “Owner’s Pre-Opening Work”), and
that the Owner’s Pre-Opening Work is to be completed concurrently with the
Original Project Substantial Completion or Expansion Project Substantial
Completion (as applicable), so that the Casino, Hotel and other portions of the
Project intended to be open to the general public, may be opened to the general
public concurrently with the Original Project Substantial Completion or
Expansion Project Substantial Completion (as applicable). Contractor further
acknowledges that the ability of Owner, Owner’s Consultants and Owner’s
Contractors to complete the applicable Owner’s Pre-Opening Work concurrently
with the Original Project Substantial Completion or Expansion Project
Substantial Completion (as applicable) is dependent in part on Contractor’s
achievement of certain Original Project Interim Milestones or Expansion Project
Interim Milestones (as applicable) by a date that is prior to the scheduled date
of the Original Project Substantial Completion or Expansion Project Substantial
Completion (as applicable) by a number of days that is not less than (i) in the
case of the Original Project, the number of days between the applicable Original
Project Interim Milestone Dates and the Original Project Guaranteed Date of
Substantial Completion specified in the Original Project Schedule and (ii) in
the case of the Expansion Project, the number of days between the applicable
Expansion Project Interim Milestone Dates and the Expansion Project Guaranteed
Date of Substantial Completion specified in the Expansion Project Schedule. If
Contractor fails to achieve any Original Project Interim Milestone or Expansion
Project Interim Milestone by the applicable Original Project Interim Milestone
Date or Expansion Project Interim Milestone Date, respectively, and, as a
result, Owner determines based on reasonable evidence that Owner’s Pre-Opening
Work will not be completed concurrently with the then-scheduled date of Original
Project Substantial Completion or Expansion Project Substantial Completion (as
applicable) (as mutually agreed upon by Owner and Contractor), Owner shall have
the right, but not the obligation, to formulate its own recovery plan (an “Owner
Recovery Plan”) stating the scope and extent of any and all resource loading,
activity re-sequencing and other acceleration activities with respect to Owner’s
Pre-Opening Work necessitated by any such delay. Owner and Contractor agree to
meet to consult with each other regarding the scope and implementation of any
such Owner Recovery Plan. If the delay addressed by an Owner Recovery Plan is
the result of any cause other than a Permissible Delay, Contractor shall be
liable to Owner for all costs and expenses incurred by Owner, Owner’s
Consultants and Owner’s Contractors in preparing and implementing such Owner
Recovery Plan.

 

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11.9 Accelerations for Owner’s Convenience

 

11.9.1 In the event Owner desires to accelerate the Project Schedule for reasons
other than delays caused by or attributable to the Contractor, Owner shall so
notify Contractor in writing.

 

11.9.2 Upon receipt of such written instruction, Contractor shall require its
personnel and its Subcontractors and Vendors to work such overtime hours and/or
to increase their respective work forces as are reasonably necessary to meet
Owner’s acceleration goals.

 

11.9.3 In the event such an acceleration is ordered by Owner, Contractor shall
be entitled to an adjustment in the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable) determined in
accordance with Article 18 of this Agreement.

 

11.10 Schedule Coordination

 

11.10.1 Contractor shall schedule and coordinate the performance of the Work by
Contractor’s personnel, Subcontractors and Vendors of any tier, and the
performance of the Project-related work by Owner’s Consultants and Owner’s
Contractors, in a manner that will enable Contractor to achieve Original Project
Interim Milestones or Expansion Project Interim Milestones by the respective
Original Project Interim Milestone Dates or Expansion Project Interim Milestone
Dates and completion within the Contract Time. Contractor acknowledges that at
least a portion of the Work will be performed under joint occupancy conditions
at the Site.

 

11.10.2 Contractor shall cooperate with Owner, Owner’s Consultants and Owner’s
Contractors so that both the Contractor’s Work and the work of others will
progress smoothly with a minimum of disruptions and interference to any party.

 

11.10.3 Contractor shall schedule its Work and delivery of materials to comply
with all reasonable requests and suggestions of Owner in order to maintain the
Original Project Schedule or Expansion Project Schedule (as applicable) within
the limitations of all existing Site conditions and business operations of
Owner.

 

11.10.4 Contractor shall use all best efforts to not utilize any labor,
materials or means whose employment or utilization during the course of this
Contract may tend to or in any way cause or result in strikes, work stoppages,
delays, suspension of Work or similar trouble by workman employed by its
Subcontractors, or by any of the trades working in or about the Project and Site
where Work is being performed under this Contract, or by other contractors or
their subcontractors pursuant to other contracts, or on any other project and
project site or premises owned or operated by Owner. Any violation by Contractor
of this requirement may be considered as proper and sufficient cause for
declaring Contractor to be

 

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in default, and for Owner to take action against Contractor as set forth in the
Contract Documents.

 

11.10.5 In case of disagreements or disputes regarding the schedule of Work by
Owner’s Consultants and Owner’s Contractors or unnecessary interference to the
Work caused by lack of cooperation between Owner’s Consultants or Owner’s
Contractors and Contractor, Contractor shall fully cooperate to resolve any such
disputes. In case of disagreements or disputes between two or more contractors,
Owner shall be consulted and Owner’s decisions as to proper methods for
coordinating the Work shall be final, subject to any rights or remedies of
Contractor under this Agreement or applicable Law.

 

11.11 Flow-Down Provisions

 

11.11.1 Contractor shall include the requirements of Sections 11.1, 11.6 and
11.7, Sections 11.9 through 11.13, Article 14, Section 17.4, Article 19,
Sections 23.2, 24.2 and 24.16, and any other provisions of this Agreement
required by Owner, in all of its subcontracts and purchase orders. As to
sub-tier subcontracts and sub-tier purchase orders, Contractor shall use
reasonable efforts to require Subcontractors and Vendors with agreements
totaling in excess of HK$2,000,000 to include the requirements of the Sections
enumerated above in all sub-tier subcontracts and sub-tier purchase orders.

 

11.11.2 Contractor shall be responsible to fully indemnify and hold Owner
harmless from any and all liens, claims, lawsuits, costs and expenses, including
attorneys’ fees, which may arise out of either the failure of the Contractor to
fulfill its obligations pursuant to this Article 11 and/or the Contractor’s
failure to enforce the flow-down provisions as stated above.

 

11.12 Partial Occupancy Or Use. Owner may occupy or use any completed or
partially completed portion(s) of the Work at any stage, provided that such
occupancy and use shall not impede Contractor from completing other portions of
the Work. Notwithstanding any other provision of the Contract, any such partial
occupancy or use shall not: (a) constitute final acceptance of any Work or be
deemed Original Project Substantial Completion or Expansion Project Substantial
Completion of such Work, or (b) 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; provided, however, Contractor
shall not be liable for damage caused by Owner or Owner’s Contractors or from
vandalism or for ordinary wear and tear resulting from such partial occupancy
and use. Contractor shall cooperate fully with Owner, as Owner may reasonably
request, in all aspects of Owner’s partial use and occupancy of the Work and
Project, including, but not limited to, scheduling, allocation of utilities,
access and storage, and all other arrangements.

 

11.13 Timely Completion. Contractor agrees to prosecute the Work and to require
all trade contractors to prosecute the Work in a timely and proper method and

 

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manner so as to meet the dates reflected on the Original Project Schedule or
Expansion Project Schedule (as applicable), including the Original Project
Guaranteed Date of Substantial Completion or Expansion Project Guaranteed Date
of Substantial Completion.

 

ARTICLE XII.

SUBSTANTIAL AND FINAL COMPLETION

 

12.1 Substantial Completion Procedures and Requirements

 

12.1.1 Notice of Substantial Completion. (A) “Original Project Substantial
Completion” means the stage in the progress of the Original Project Work when
(a) the Original Project is sufficiently complete in accordance with the
Contract Documents and all applicable Laws to enable Owner to fully occupy and
utilize the same for all of its intended purposes and can be open to the general
public; (b) all Original Project systems included in the Original Project Work
for such portion of the Original Project (including, but not limited to, all
life safety systems) are operational and functioning as designed and scheduled;
(c) all instruction of Owner’s personnel in the operation of the Original
Project systems included in such Original Project Work has been completed;
(d) all final finishes within the Contract applicable to such Original Project
Work are in place; and (e) such Original Project Work is otherwise satisfactory
to Owner in accordance with the Contract Documents. (B) “Expansion Project
Substantial Completion” means the stage in the progress of the Expansion Project
Work when (a) the Expansion Project is sufficiently complete in accordance with
the Contract Documents and all applicable Laws to enable Owner to fully occupy
and utilize the same for all of its intended purposes and can be open to the
general public; (b) all Expansion Project systems included in the Expansion
Project Work for such portion of the Expansion Project (including, but not
limited to, all life safety systems) are operational and functioning as designed
and scheduled; (c) all instruction of Owner’s personnel in the operation of the
Expansion Project systems included in such Expansion Project Work has been
completed; (d) all final finishes within the Contract applicable to such
Expansion Project Work are in place; and (e) such Expansion Project Work is
otherwise satisfactory to Owner in accordance with the Contract Documents. In
general, the only remaining Work relating to such portion of the Original
Project or Expansion Project (as applicable) shall be minor in nature, so that
Owner could occupy the building(s) comprising such portion of the Original
Project or Expansion Project (as applicable) and fully utilize such building(s)
on that date, and all elements are fully functional and operable as provided in
the Contract, and the Original Project Final Completion or Expansion Project
Final Completion (as applicable) of such Work by Contractor would not materially
interfere with, disrupt or hamper Owner’s use, occupancy or enjoyment of the
Original Project or Expansion Project (as applicable) to the extent completed,
including the intended normal business operations of such portions of the
Original Project or Expansion Project (as applicable), or detract from the
aesthetic appearance of such portions of the Original Project or Expansion
Project (as applicable). Notwithstanding the foregoing, neither the Original
Project Substantial Completion nor the Expansion Project Substantial Completion
shall unreasonably prevent or delay the

 

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performance of Owner’s Pre-Opening Work. Contractor shall request an inspection
for purposes of the Original Project Substantial Completion and Expansion
Project Substantial Completion in writing when the Contractor considers that
such portion of the Original Project or Expansion Project (as applicable) is
substantially complete in accordance with all requirements in the Contract
Documents.

 

12.1.2 Procedures For Substantial Completion. Procedures to be utilized to
determine Original Project Substantial Completion and Expansion Project
Substantial Completion shall be as follows:

 

12.1.2.1 Either party may initiate procedures for Original Project Substantial
Completion or Expansion Project Substantial Completion, but Owner shall not be
required to make a determination and accept partial Original Project Substantial
Completion or Expansion Project Substantial Completion unless Owner accepts
physical possession of such portion of the Original Project or Expansion Project
(as applicable) for purposes of opening for business to the public (and upon
such opening for business to the public, the Original Project Work or Expansion
Project Work with respect to such portion of the Project shall be deemed to have
achieved Original Project Substantial Completion or Expansion Project
Substantial Completion (as applicable) unless Original Project Substantial
Completion or Expansion Project Substantial Completion (as applicable)was
determined to have occurred earlier pursuant to the provisions of this
Section 12.1.2). The use or occupancy of a portion of the Project by Owner,
Owner’s Consultants, Owner’s Contractors or Owner’s other engineers or
inspectors to inspect and/or correct defective workmanship pursuant to Article
10 of this Agreement or install FF&E or other work shall not be considered as
use or occupancy for purposes of opening for business to the public.

 

12.1.2.2 Unless waived by Owner in writing, neither Original Project Substantial
Completion nor Expansion Project Substantial Completion of any Work shall occur
earlier than the date of all designated or required governmental certificates of
occupancy and other permits, inspections and certifications related to the
occupancy or safety (as distinguished from gaming and other licenses required
for the operation of the business to be conducted therein, which shall remain
the sole responsibility of Owner to obtain) of the portion of the Project
relating to such Original Project Work or Expansion Project Work have been
achieved and issued to Owner by the relevant governmental authority, and posted
for the portion of the Original Project or Expansion Project (as applicable)
relating to such Work, by the relevant governmental authority (provided that a
temporary certificate of occupancy (“TCO”) rather than a permanent certificate
of occupancy may have been achieved and issued to Owner, and posted, so long as
the obtaining of a temporary, rather than a permanent, certificate of occupancy
does not prevent any aspect of the portion of the Original Project or Expansion
Project relating to such Work from being open to the general public).

 

12.1.2.3 If Owner or Owner’s Lenders disagree that either Original Project
Substantial Completion or Expansion Project Substantial Completion has been

 

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achieved, Owner shall provide the Contractor with an advisory opinion of the
items which should be completed or corrected for purposes of Original Project
Substantial Completion or Expansion Project Substantial Completion (as
applicable). Owner’s failure to advise Contractor of any items specified in the
Contract Documents shall not alter the Contractor’s responsibility to complete
all Work necessary for Original Project Substantial Completion or Expansion
Project Substantial Completion (as applicable) in accordance with the Contract
Documents.

 

12.1.2.4 Upon receipt of Owner’s advisory opinion, Contractor shall complete
and/or correct all listed items. Contractor shall then submit its request to
Owner for another inspection to determine Original Project Substantial
Completion or Expansion Project Substantial Completion (as applicable). Such
subsequent inspection or re-inspections to determine if the Work is acceptable
for purposes of Original Project Substantial Completion or Expansion Project
Substantial Completion (as applicable) shall be made jointly by Owner and
Contractor.

 

12.1.2.5 By no later than three (3) business days after the respective issuance
of an Original Project Certificate of Substantial Completion and an Expansion
Project Certificate of Substantial Completion by Owner, the parties shall
develop a final punch list which must be completed prior to the Original Project
Final Completion and Expansion Project Final Completion (as applicable). Such
final punch list shall identify any incomplete or missing items (including, but
not limited to, the clean up items described in Section 7.15.2) which Owner
elected in its discretion to waive for purposes of Original Project Substantial
Completion or Expansion Project Substantial Completion (the items on such list
with respect to the Original Project being, collectively, the “Original Project
Punch List Items” and with respect to the Expansion Project being, collectively,
the “Expansion Project Punch List Items”).

 

12.1.2.6 Immediately prior to the issuance of an Original Project Certificate of
Substantial Completion or an Expansion Project Certificate of Substantial
Completion (as applicable), Owner and Contractor shall jointly inspect and
document the condition of the Original Project Work or Expansion Project Work,
respectively, at the time of Owner’s initial possession to determine and record
its condition. Such inspection and acceptance by Owner shall not, however, alter
the Contractor’s responsibility to complete all Work necessary for Original
Project Final Completion and Expansion Project Final Completion in accordance
with the Contract Documents, including items discovered by Owner after Original
Project Substantial Completion or Expansion Project Substantial Completion.

 

12.1.2.7 Owner shall have the final decision as to whether or not Contractor has
achieved Original Project Substantial Completion or Expansion Project
Substantial Completion of any portion of the Original Project Work or Expansion
Project Work, respectively. When Owner determines that Original Project
Substantial Completion has been achieved and a TCO has been obtained therefor,
Owner shall prepare and issue an

 

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“Original Project Certificate of Substantial Completion,” which shall certify
the date of the Original Project Substantial Completion. When Owner determines
that Expansion Project Substantial Completion has been achieved and a TCO has
been obtained therefor, Owner shall prepare and issue a “Expansion Project
Certificate of Substantial Completion,” which shall certify the date of the
Expansion Project Substantial Completion. Upon the issuance of such Original
Project Certificate of Substantial Completion or Expansion Project Certificate
of Substantial Completion (as applicable) or the opening to the general public
of any portion of the Project, the care of and the risk of loss with respect to
the portion of the Work for which Original Project Substantial Completion or
Expansion Project Substantial Completion has been certified or which has been
opened to the general public shall pass to Owner.

 

12.1.3 Limitations. Notwithstanding any provisions in the Contract Documents
which may indicate otherwise, Owner’s acceptance of partial Original Project
Substantial Completion or partial Expansion Project Substantial Completion and
the possession, use and occupancy of any portion of the Project prior to
Original Project Substantial Completion or Expansion Project Substantial
Completion of the Original Project Work or Expansion Project Work in their
respective entirety, shall not in any manner constitute a waiver by Owner of any
of the provisions or requirements of the Contract Documents, including, but not
limited to, Contractor’s warranty obligations set forth in Article 10 of this
Agreement and Contractor’s obligations to achieve the Contract Time set forth in
Article 4 of this Agreement; provided, however, that Original Project
Substantial Completion or Expansion Project Substantial Completion shall be
deemed to have occurred with respect to the portion of the Work that is the
subject of an Original Project Certificate of Substantial Completion or
Expansion Project Certificate of Substantial Completion issued by Owner.

 

12.2 Final Completion Procedures and Requirements

 

12.2.1 Contractor’s Notice of Final Completion. “Original Project Final
Completion” means that stage in the progress of the Original Project Work when
Owner and Owner’s Lenders determine that the Original Project Work has been
properly completed and equipped by Contractor in accordance with the Contract
Documents, including (a) completion of all Original Project Punch List Items),
(b) the submittal to Owner of all documentation as described in the Contract
Documents, (c) completion in compliance with all applicable Laws, and (d) all
obligations of Contractor under the Contract Documents (except for those
obligations which are intended to be satisfied after Original Project Final
Completion) are fully satisfied, and the Original Project Work is otherwise
satisfactory to Owner and Owner’s Lenders. “Expansion Project Final Completion”
means that stage in the progress of the Expansion Project Work when Owner and
Owner’s Lenders determine that the Expansion Project Work has been properly
completed and equipped by Contractor in accordance with the Contract Documents,
including (a) completion of all Expansion Project Punch List Items), (b) the
submittal to Owner of all documentation as described in the Contract Documents,
(c) completion in compliance with all applicable Laws, and (d) all obligations
of Contractor under the Contract Documents (except for those obligations which

 

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are intended to be satisfied after Expansion Project Final Completion) are fully
satisfied, and the Expansion Project Work is otherwise satisfactory to Owner and
Owner’s Lenders. When Contractor considers that the Original Project Work or
Expansion Project Work is finally complete, Contractor shall so notify Owner in
writing requesting an Original Project Certificate of Final Completion or
Expansion Project Certificate of Final Completion, respectively. Such notice
shall be accompanied by, and it shall be a condition to Original Project Final
Completion or Expansion Project Certificate of Final Completion (as applicable)
that Contractor deliver to Owner, the following:

 

12.2.1.1 All final occupancy certificates obtained from any government or
statutory authority and all other required approvals and acceptances as
necessary or required for the full use and occupancy of all aspects of the
Original Project or Expansion Project (as applicable) and not previously
provided to Owner (except for gaming and other business licenses required for
the operation of the business to be conducted in the Project, which remain the
sole responsibility of Owner);

 

12.2.1.2 All written guarantees and warranties under the Contract for Contractor
and Subcontractors and Vendors, all required operation and maintenance manuals
for major equipment required under the Contract all in form and substance
satisfactory to Owner; and assignment documentation assigning to Owner in form
and substance satisfactory to Owner any remaining warranties and guarantees
pertaining to the Original Project Work or Expansion Project Work and not
previously provided and assigned to Owner, and Contractor agrees to assist Owner
in the prosecution and enforcement of all such assigned warranties and
guarantees as provided in Article 10.

 

12.2.1.3 A certificate that Contractor shall maintain insurance in the amounts
and for the time periods required by this Agreement and a certificate of the
insurer evidencing that insurance required by the Contract Documents to remain
in force after Original Project Final Payment or Expansion Project Final Payment
(as applicable) is currently in effect and will not be cancelled or allowed to
expire until at least 60 days’ prior written notice has been given to Owner.

 

12.2.1.4 All operating, maintenance, servicing and cleaning manuals and
instructions, spare parts, maintenance stocks and spare materials provided by
Subcontractors and Vendors required by the Contract Documents for beneficial use
of the Original Project Work or Expansion Project Work (as applicable) for its
intended purpose, and if requested by Owner adequate verbal instructions in the
operation of mechanical, electrical, plumbing and other systems.

 

12.2.1.5 A complete and accurate set of as-built Drawings pursuant to
Section 7.14 of this Agreement, which clearly delineate any changes made to the
latest approved Drawings and Specifications.

 

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12.2.1.6 Such documents and other items so that Owner will receive and Owner
does receive a release and complete refund without deduction or offset of any
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 in connection
with the construction of the Original Project or Expansion Project (as
applicable).

 

12.2.1.7 An updated survey of the Site showing the Work “as built.”

 

12.2.1.8 Master, submaster and special keys with keying schedule.

 

12.2.2 Owner’s Inspection For Final Completion. Upon receipt of Contractor’s
request for an Original Project Certificate of Final Completion or Expansion
Project Certificate of Final Completion (as applicable) and all submittals that
comply with Section 12.2.1 above, Owner shall promptly make appropriate
evaluations and inspections as follows:

 

12.2.2.1 If Owner considers that the Original Project Work or Expansion Project
Work (as applicable) is fully completed in accordance with the Contract
Documents, Owner shall promptly so advise Contractor.

 

12.2.2.2 In the event that Owner or Owner’s Lenders does not agree that Original
Project Final Completion or Expansion Project Final Completion (as applicable)
has been achieved, Owner shall promptly so advise the Contractor in writing of
the remaining items to be completed for purposes of Original Project Final
Completion or Expansion Project Final Completion (as applicable).

 

12.2.2.3 After Contractor satisfies all remaining items necessary for Original
Project Final Completion or Expansion Project Final Completion (as applicable),
Contractor may submit a further written notice to Owner stating that the
Original Project Work or Expansion Project Work (as applicable) is ready for
re-inspection. All re-inspections to determine if the Original Project Work or
Expansion Project Work (as applicable) is acceptable for purposes of Original
Project Final Completion or Expansion Project Final Completion (as applicable)
shall be jointly made by Owner and Contractor.

 

12.2.2.4 Owner shall have the final decision as to whether or not Contractor has
achieved Original Project Final Completion or Expansion Project Final Completion
(as applicable) of the Original Project Work or Expansion Project Work,
respectively. When Owner agrees that the Original Project Work or Expansion
Project Work (as applicable) is finally complete, which agreement Owner agrees
not to unreasonably withhold or delay, Owner shall prepare and issue (i) in the
case of the Original Project, an “Original Project Certificate of Final
Completion,” which shall set forth the date of Original Project Final Completion
or (ii) in the case of the Expansion Project, an “Expansion Project Certificate
of Final Completion,” which shall set forth the date of Expansion Project Final
Completion.

 

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ARTICLE XIII.

CONCEALED CONDITIONS AND UNCOVERING OF WORK

 

13.1 Concealed Conditions

 

13.1.1 Owner represents that it has no actual knowledge of any concealed
conditions at, upon or within the Site which are of an unusual nature, differ
materially from those ordinarily encountered and generally recognized as
inherent in the Work, and which would cause a material delay in the critical
path portion of the Work

 

13.1.2 Contractor acknowledges and agrees that it shall not be entitled to an
increase in the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable) or extension of the Contract Time due
to any concealed conditions at, upon or within the Site regardless of their
origin, cause or nature, including whether or not such conditions are identified
in the Contract Documents or could not have been discovered by Contractor prior
to the Effective Date through the exercise of due diligence.

 

13.1.3 Owner agrees that the limitation set forth in Section 13.1.2 shall apply
only to concealed conditions at, upon or within the Site. If, in the course of
executing any portion of the Work required pursuant to this Agreement to be
performed immediately adjacent to the Site, Contractor encounters any concealed
condition in the ground immediately adjacent to the Site which is not identified
in the Contract Documents or could not have been discovered by Contractor prior
to the Effective Date through the exercise of due diligence, then such concealed
condition shall be eligible for consideration as a Change for purposes of
Article 18, and Contractor shall be entitled to submit a Change Proposal to
Owner in connection therewith.

 

13.2 Covering of Work

 

13.2.1 Contractor shall enable Owner to inspect all portions of the Work before
they are covered.

 

13.2.2 If a portion of the Work is covered without providing Owner with adequate
advance notice, or contrary to the request or direction of Owner or the
provisions of the Contract Documents, Contractor shall, if required in writing
by Owner, uncover the Work for observation. Such Work shall be replaced at
Contractor’s expense without change in the Contract Time.

 

13.2.3 If a portion of the Work has been properly covered in accordance with the
Contract Documents and after sufficient advance notice to Owner, Owner may
subsequently request to see such Work and it shall be uncovered by Contractor.
If such Work is in accordance with the Contract Documents, the Original
Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price (as
applicable) shall be increased by appropriate Construction Change Directive for
the costs of uncovering and replacement. If

 

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such Work is not in accordance with the Contract Documents, Contractor shall be
responsible therefor and shall not be entitled to an increase in the Original
Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price (as
applicable).

 

ARTICLE XIV.

INDEMNIFICATION

 

14.1 Indemnity. To the fullest extent permitted by law, Contractor hereby
indemnifies and agrees to protect, defend, and hold each of Owner; Wynn Resorts
(Macau), Ltd.; Wynn Resorts (Macau) Holdings, Ltd.; Wynn Resorts International,
Ltd.; Wynn Group Asia, Inc.; Wynn Resorts, Limited; Wong Chi Seng; S.H.W. & Co.;
SKKG Limited; L’ARC de Triomphe Limited; Classic Wave Limited; Kwan Yan Chi; Li
Tai Foon; Kwan Yan Ming; Wynn Design and Development LLC; Owner’s Lenders; and
the respective subsidiaries, affiliates, parent companies and the respective
members, officers, directors, managers, employees, agents, shareholders,
successors and assigns, heirs, administrators, and personal representatives of
each of the foregoing (collectively, “Owner Indemnitees”) harmless from and
against any and all claims, liabilities, obligations, losses, suits, actions,
legal proceedings, damages, costs, expenses, awards, or judgments, including,
without limitation, reasonable attorneys’ fees and costs (whether or not suit is
filed) (collectively “Actions”), any Owner Indemnitees(s) may suffer or incur or
be threatened with and whether based upon statutory, contractual, tort or other
theory, that: (i) are imposed by Law; or (ii) arise 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 and including all costs for
repair or replacement of work, materials, supplies or equipment (whether on or
off Site or in transit), 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, (c) violation of or failure to comply with or abide by
any Laws, 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,
mechanic’s liens or similar claims relating to any labor, services, materials,
goods or equipment whether provided by Contractor, Subcontractor or any Vendor
and relating to the Work, or (f) any breach or alleged breach of Contractor’s
warranties, representations, obligations, covenants or agreements set forth in
the Contract; and (iii) relate to or arise out of or result from, directly or
indirectly, (x) the performance of the Work, or (y) from any act or omission of
Contractor, any Subcontractor or Vendor, anyone directly or indirectly employed
by any of them, or anyone for whose acts any of them are liable or responsible
at law or under the Contract Documents. Contractor shall be obligated to
indemnify the Owner Indemnitees against the Actions as described in the
preceding sentence, regardless of whether or not any such Action is caused by an
Owner Indemnitees (subject to Section 14.4 below). Owner shall notify Contractor
promptly upon receiving notice of any Actions. Owner and Contractor acknowledge
and agree that, notwithstanding anything to the contrary contained

 

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in this Section 14.1, the liability of Contractor for Recovery Plan liabilities,
as provided in Section 4.2, and Liquidated Damages, as provided in Section 4.4,
shall be the Owner’s sole remedy for any delay in the execution of the Work; it
being further agreed, however, that other than with respect to Owner’s right to
claim damages for any delay in the execution of the Work, the foregoing
statement shall not in any way limit any liability of Contractor pursuant to
this Section 14.1 for any other act or omission, or for any other breach or
default of Contractor, Subcontractor or any Vendor under any of the Contract
Documents.

 

14.2 Defense Costs. Subject to the limitations set forth in Section 14.3
immediately below, the indemnification provisions of Section 14.1 above,
including defense costs, shall include all attorneys’ fees, investigation costs,
expert witnesses, court costs, and other costs and expenses incurred by the
Owner Indemnitees to the extent their interests appear.

 

14.3 Hazardous Materials. Contractor and its Subcontractors and Vendors shall
have no responsibility for the discovery, presence, handling, removal or
disposal of pre-existing hazardous materials discovered on the Site, including
asbestos, asbestos products, poly-chlorinated biphenyl (PCB) or other substances
classified as hazardous by the Environmental Protection Agency of the U.S.
Government or any other federal, state or local government agency and also Macau
laws, except to the extent addressed or covered in the Contract Documents or
otherwise made known to or reasonably foreseeable by Contractor. If Contractor
discovers the presence of any hazardous materials at the Site not otherwise
called out in the Contract Documents or otherwise made known to or reasonably
foreseeable by Contractor, Contractor shall promptly report the presence and
precise location of any such materials to Owner and immediately stop Work in the
affected area unless requested otherwise by Owner.

 

14.4 Other Limitations. Subject to the provisions of this Section 14.4, the
obligations in Section 14.1 above shall apply to and include those Actions
arising from the negligent, tortious, intentional or other acts of any Owner
Indemnitees, and such indemnification obligations are primary to any insurance
in the names of the Owner Indemnitees. In the event of contributory negligence
or tortious or intentional act of any Owner Indemnitees, the Contractor shall
only be liable for payment of such Actions in direct proportion to the
indemnifying party’s percentage of fault, if any, as determined by a court of
competent jurisdiction, or as may be mutually agreed upon by Owner and
Contractor. The indemnification obligations in this Article 14 shall not be
construed to negate, abridge, or reduce other rights or obligations of
Contractor or Owner, including, but not limited to, any obligation of indemnity
which would otherwise exist at law or otherwise in favor of an Owner
Indemnitees. If any Action occurs or is threatened, the Contractor shall defend
the Owner Indemnitees with counsel reasonably acceptable to such Owner
Indemnitees, at the Contractor’s expense, unless an Owner Indemnitees elects to
defend itself, in which case the Contractor shall pay for such Owner’
Indemnitees reasonable defense costs, including, but not limited to, all
attorneys’ fees, investigation costs, expert witnesses, court costs, and other
costs and expenses incurred by such Owner Indemnitees. Contractor shall not have
the right

 

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to settle any Action without Owner’s prior written consent in each instance. The
indemnification obligation of Contractor (or any Subcontractor) under this
Article 14 or otherwise under the Contract Documents, 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 (except the Contractor shall be entitled to an offset
against its indemnity obligation to the extent of any insurance proceeds
actually received by the Owner Indemnitee, without condition or reservation,
relating to any Action for which the Owner Indemnitee seeks to be indemnified
pursuant to an indemnity in this Agreement), or any limitation on the amount or
type of damages, compensation or benefits payable by or for Contractor or any
Subcontractor or Owner or other person or entity under workmen’s compensation
acts, disability benefit acts or other employee benefit acts. Provided, however,
any other limitations on the liability of Contractor specifically set forth in
this Agreement shall apply to and limit Contractor’s indemnity obligations in
this Article 14 as and to the extent provided therein.

 

14.5 Survival of Indemnification Provisions. The Contractor’s indemnity
obligations set forth in this Article 14 shall apply irrespective of whether or
not any Subcontractors or Vendors obtain or fail to obtain insurance coverages
as required herein, shall apply during the performance of any Work, and shall
survive any termination of this Contract or the Original Project Final
Completion or Expansion Project Final Completion of the Original Project Work or
Expansion Project Work, respectively.

 

14.6 Risk. Except to the extent expressly provided for in the Contract
Documents, all Work (i) covered by the Contract Documents, (ii) done at the
Site, (iii) in preparing or delivering materials or equipment, or (iv) in
providing services for the Project, or any or all of them, shall be at the sole
risk of Contractor.

 

14.7 Limit on Consequential Damages. Other than Contractor’s liability for (a)
Recovery Plan Liabilities (as provided in Sections 4.2, 11.8 and 11.8.6), and
(b) Liquidated Damages (as provided in Section 4.4.1), Contractor shall have no
liability to Owner under this Contract for consequential, indirect or special
damages, including, but not limited to, loss of profit, loss of revenues, loss
of any contract or loss of use of all or any portion of the Work (collectively,
“Consequential Damages”). For the avoidance of doubt, Owner and Contractor agree
that for purposes of the limitation expressed in this Section 14.7, any
liabilities of Contractor pursuant to any of its indemnity obligations set forth
in Sections 7.2, 7.27.1, 8.2.8, 10.6, 11.11.2, 16.2, 14.1, 24.7, 26.1.2(g) and
27.1.6 are not, and in no event shall be deemed to be, Consequential Damages.
Nothing in this Section 14.7 shall limit the types or amounts of any damages
other than Consequential Damages that may be available to Owner under this
Agreement or at law or in equity.

 

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ARTICLE XV.

INSURANCE

 

15.1 Types of Insurance.

 

15.1.1 Contractor, at its sole cost and expense, shall maintain at all times
during the term of this Agreement, Employees Compensation, Constructional Plant
and Equipment Insurance for Contractor owned items, Motor Vehicle Liability
Insurance, Marine Cargo Insurance and any other insurances as required by
applicable Laws.

 

15.1.2 Contractor, at its sole cost and expense, shall maintain at all times
during the term of this Agreement and for a minimum of six (6) years following
the later of Original Project Final Completion of the entire Original Project
Work or Expansion Project Final Completion of the entire Expansion Project Work,
a Professional Indemnity Insurance policy with a limit of indemnity of not less
than Twenty Million Unites States Dollars (US$20,000,000) per occurrence and in
the aggregate. The limit of indemnity shall be dedicated to liabilities arising
from the Contract alone and shall not be available for claims arising from work
undertaken by Contractor other than pursuant to the Contract.

 

15.1.3 All policies maintained by Contractor pursuant to this Article 15 shall
name Owner and the Owner Indemnitees as joint insureds.

 

15.1.4 The Contractor shall ensure that the Subcontractors on the Project who
are employed by the Contractor (or by any of the parties constituting the
Contractor hereunder) also shall carry the insurance specified in Section 15.1.1
above. Such policies shall contain a waiver of recourse against the Owner
Indemnitees.

 

15.1.5 Owner shall maintain a Builder’s Risk Insurance policy until the later of
Original Project Substantial Completion of the Original Project or Expansion
Project Substantial Completion of the Expansion Project, followed by 12 months’
Original Project Defects Liability Period or Expansion Project Defects Liability
Period (as applicable) coverage. Any uninsured losses shall be paid for by the
responsible Contractor or Subcontractor. The Builder’s Risk Insurance provided
by Owner shall not cover loss of, or damage to, any tools, implements,
equipment, formwork, machinery, cranes, consumables, office trailers, tool
sheds, temporary structures other than temporary works or anything else which is
not intended to become a permanent part of the finished Project. In the event of
delays by the Contractor or its Subcontractors and Vendors causing delays to the
Original Project Substantial Completion of the Original Project or the Expansion
Project Substantial Completion of the Expansion Project, any additional premium
incurred by the Owner for extending the Builder’s Risks policy shall be
recoverable from the Contractor.

 

15.1.6 Owner, at its cost and expense, shall maintain until the later of the
termination of the Original Project Defects Liability Period or the Expansion
Project Defects Liability Period, Third Party Liability (“TPL”) Insurance. TPL
coverage shall include, but not be limited to, personal injury, broad form
property damage, and explosion, collapse and underground coverage. Coverage
under the TPL insurance policy described in this Section 15.1.6 shall be
provided with a combined single limit of not less than US$10,000,000 for bodily
injury or death to any number of persons and property damage, in any one
occurrence. The TPL insurance policy shall name the Owner Indemnitees,
Contractor and

 

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all Subcontractors and Vendors as joint insureds. Such insurance shall be
primary to any other insurance available to the joint insureds and it shall
apply separately to each insured against whom a claim is made or a suit is
brought subject to the single limit. In the event of delays by the Contractor or
its Subcontractors and Vendors causing delays to the Original Project Final
Completion of the Original Project or the Expansion Project Final Completion of
the Expansion Project, any additional premium incurred by the Owner for
extending the TPL policy shall be recoverable from the Contractor.

 

15.1.7 The Builder’s Risk and TPL Insurance shall be on terms to be approved
solely by Owner. Owner shall provide to Contractor a certificate of insurance
reflecting such coverage, and Contractor shall be deemed to have satisfied
itself and shall cause the Subcontractors to satisfy themselves with regard to
the extent of coverage provided.

 

15.1.8 The Contractor and/or Subcontractor shall promptly furnish to Owner and
Owner’s Lenders (and in any case prior to the Original Project Date of
Commencement) policies of insurance (and any updates or amendments, as
applicable, to such policies) described in this Article 15, issued by the
carriers, which shall provide that such policies may not be cancelled except for
non-payment of premiums in which event the issuing company shall give at least
thirty (30) days prior written notice or intent of cancellation. In respect of
renewal insurance policies, the Contractor and/or Subcontractor shall deliver to
the Owner and the Owner’s Lenders, certificates of insurance (or duplicate
originals of the policies) as evidence of the renewal of such insurances at
least thirty (30) days before the expiration of any such policy. If certificates
of insurance are provided the Contractor will ensure that policies of insurance
are provided to Owner and Owner’s Lenders within 30 days of inception of the
insurance.

 

15.1.9 In the event of any failure of the Contractor or a Subcontractor to
comply with any of the insurance requirements set forth in this Section 15.1, or
in the event of any failure by Owner to comply with any of the insurance
requirements set forth in this Section 15.1 relating to TPL or Builder’s Risk
insurance, the other party shall have the right to immediately purchase and
maintain the required insurance at the non-complying party’s expense (and in the
case of any insurance that was required to have been procured and paid for by
Owner, the Original Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price, as designated by Owner shall be increased accordingly) for and in
the name of such non-complying party, and the non-complying party furnish all
necessary information to the other party to enable the other party to purchase
and maintain such insurance. Compliance by the Contractor or by the Owner on
behalf of the Contractor with the insurance requirements of this Agreement shall
not relieve the Contractor from any liability under any provision of this
Agreement, including, but not limited to, under the indemnification contained in
Article 14. Said rights shall be cumulative and shall be in addition to any and
all other rights and remedies herein or otherwise provided to the Owner by
applicable Laws.

 

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15.1.10 Set forth on Exhibit O attached hereto is a summary of the insurance
policies to be obtained by the Owner pursuant to this Section 15.1, the minimum
coverages and maximum deductibles required with respect thereto.

 

15.2 Evidence of Coverage

 

15.2.1 Carriers Acceptable To Owner. All policies required of Contractor and
Subcontractors pursuant to this Contract shall be maintained with insurance
carriers that are acceptable to Owner and licensed to do business in Macau and
rated A- or above by Standard and Poor’s Corporation or rated A or above by AM
Best; provided, however, that notwithstanding the foregoing (i) the Professional
Indemnity Insurance policy shall be maintained with an insurance carrier rated
BBB+ or above by Standard and Poor’s Corporation or rated B or above by AM Best
and (ii) the Employees Compensation insurance policy shall be maintained with an
insurance carrier rated BBB or above by Standard and Poor’s Corporation or rated
B- or above by AM Best.

 

15.2.2 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 Site or elsewhere until such time as they provide
acceptable evidence of compliance with the requirements of this Article 15. Any
additional costs or delays caused by or arising out of any failures to comply
with this Article 15, including the failure to furnish acceptable policies of
insurance (and any updates or amendments, as applicable, to such policies) prior
to date of the Original Project Date of Commencement, shall be solely the
responsibility of Contractor and its Subcontractors.

 

15.3 Deductibles. The payment of all deductibles, self-insured retention or
similar self-insurance mechanisms as set forth on Exhibit O attached hereto
shall be the responsibility of the party responsible for the occurrence of the
loss or damage. If such party is Contractor, the payment of such amount by
Contractor shall be considered a Cost of the Work except to the extent that
payment in a given instance would be considered a Non-Allowable Cost of the Work
under any of the provisions of Section 3.3; and if such party is a Subcontractor
or Vendor, such Subcontractor or Vendor shall bear such cost and the same shall
not be a Cost of the Work.

 

15.4 Cooperation by the Parties. Owner and Contractor shall fully cooperate with
each other in connection with the collection of any insurance monies that are
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.

 

15.5 Duration. All Employees Compensation, Employer’s Liability, Construction
Plant and Equipment, Professional Indemnity and Motor Vehicle Liability
insurances required by this Contract shall be kept in force without interruption
until the later of the Original Project Final Completion of the Original Project
Work or the Expansion Project Final Completion of the Expansion Project Work in
accordance with Section 12.2 above.

 

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ARTICLE XVI.

SAFETY AND COMPLIANCE

 

16.1 Contractor’s Site Safety Responsibilities. 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 against loss of production time and prevent injury to, any of its
employees, Subcontractors, Vendors, or their respective employees or any other
persons who may be affected thereby, and all other persons at the Site or
adjacent or nearby to the Site. Contractor shall prepare a site safety plan and
submit such plan to Owner for review and comment prior to the commencement of
Work. Such plan shall identify the location of the fire safety system, alarm
system, fire-fighting apparatus and exit routes. Safety gear shall be provided
for representatives of Owner, Owner’s Lenders and Owner’s Consultants and all
others while on Site. Contractor shall designate a person responsible for job
safety. This person shall possess a “CITA green card” or the equivalent, shall
be thoroughly familiar with Contractor’s safety manual and shall require
compliance of all applicable provisions of such manual. Contractor shall keep a
copy of such manual on the Site. Contractor shall familiarize all Subcontractors
and Vendors on safety measures.

 

16.1.1 Contractor shall, and shall require Subcontractors and Vendors to, take
all precautionary measures as required by applicable Laws to prevent and correct
fire causing conditions, and shall conduct all operations with due regard for
the avoidance of fire hazards. Contractor shall exercise the greatest care to
prevent fires. The following minimum precautions shall be taken by Contractor
and Contractor shall require each Subcontractor and Vendor to take the following
actions with regard to the Work:

 

16.1.1.1 Flammable liquids shall be stored in closed, approved, covered metal
containers, and as approved by the fire wardens. All paint and oily rags shall
be stored in approved containers and removed daily.

 

16.1.1.2 Each gasoline or diesel powered vehicle shall carry a fire extinguisher
of adequate size and type to extinguish a fire emanating from either the vehicle
or its load.

 

16.1.1.3 Contractor shall maintain a system of prompt detection and correction
of unsafe practices and conditions, and shall furnish and maintain all necessary
first aid equipment in a special location on the Site. Contractor shall
investigate all accidents promptly to determine cause and to take necessary
corrective action, and shall file required reports.

 

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16.1.1.4 No exit, corridor, or stairwell shall be used for storage of materials
of any type.

 

16.1.1.5 All exits, corridors and stairwells must be accessible and free of
materials of any type except as necessary for the Work. Minimum exit widths as
required by Laws shall be maintained at all times.

 

16.1.1.6 Hard hat and construction areas shall be identified and posted. All
workmen and personnel in these areas shall wear a hard hat.

 

16.1.1.7 All electrical equipment and tools shall be of an adequate size to
accomplish the task at hand and shall be properly grounded.

 

16.1.1.8 Face, eye and respiratory protection shall be available and used when
the situation requires.

 

16.1.1.9 The Contractor shall provide and maintain suitable protections and
enclosures around shafts, stairs and other openings in floors.

 

The foregoing requirements are not intended to be exclusive or exhaustive, and
Owner shall not have any liability in any way relating to any of the foregoing
or the absence of other requirements from the foregoing. Contractor shall be
solely responsible to Owner for providing the Site a safe place to work for all
persons. Contractor shall allow Site access and provide all reasonably requested
assistance to any loss control or risk engineering surveyor engaged by Owner or
Owner’s insurers. Contractor shall also put into effect all reasonable survey
recommendations made for the prevention of loss, damage or personal injury.

 

16.2 Compliance. In addition to the requirements of Section 16.1 above,
Contractor shall give all notices, file all reports and obtain all permits which
are applicable to the Contractor’s operations or performance of the Work. Upon
request, Contractor shall furnish Owner and Owner’s Lenders with copies of all
such notices, statements, reports, certificates or permits evidencing
compliance. Contractor shall also keep Owner informed of any changes in Laws
which may affect Contractor’s performance of the Work or Owner’s use thereof.
Contractor shall indemnify, defend and save harmless Owner and the other Owner
Indemnitees from and against any and all claims, losses, liabilities, fines or
penalties in any manner arising out of Contractor’s failure to comply with this
Article 16.

 

ARTICLE XVII.

TERMINATION OR SUSPENSION OF THE CONTRACT

 

17.1 Material Default By Contractor. Owner may, provided such default is not
corrected within the applicable period described in Section 17.1.1 below, and
without prejudice to any other rights or remedies of Owner, terminate this
Contract in its entirety, or may elect to terminate any portion of the
Contractor’s Work (including either the Original

 

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Project Work or Expansion Project Work or any portions thereof), for default if
the Contractor fails to perform or breaches any of its material obligations
under the Contract Documents, including, but not limited to, a failure to
perform the Work in a diligent, expeditious, workmanlike and careful manner
strictly in accordance with the Contract. Upon any such termination, Owner may
take possession of the applicable portion of the Site and of all materials,
tools, equipment and machinery of Contractor thereon that Owner has paid or will
pay for, and may finish the applicable portion of the Work terminated by
whatever method Owner may in good faith deem desirable and/or expedient,
including, but not limited to, by retaining one or more other contractors to
complete the Work (or Owner may elect not to finish the applicable portion of
the Work).

 

17.1.1 Notice Of Default. The Contractor shall promptly correct any default to
Owner’s satisfaction within seven (7) calendar days following receipt of written
notice of default from Owner. If correction within said seven (7) days is not
possible, Contractor shall commence and diligently continue effective action to
correct such default to Owner’s satisfaction, but not later than thirty
(30) days following receipt of Owner’s notice (except for such longer period as
may otherwise be reasonably approved in writing by Owner and Owner’s Lenders).
In the event that the Contractor fails to take and diligently pursue effective
corrective actions, Owner may hold in abeyance further payments to Contractor to
the extent provided in this Agreement and/or terminate the Contract by written
notice specifying the date of termination and without prejudice to any other
remedy Owner may have.

 

17.1.2 Non-Curable Defaults. Notwithstanding the other provisions of
Section 17.1, Owner may also elect to declare Contractor in material default and
may terminate Contractor immediately upon written notice (unless a longer period
is otherwise expressly provided in this Agreement with regard to the matters in
Sections 17.1.2.1 through 17.1.2.4 below, it being agreed that the cure periods
in Section 17.1.1 above do not apply to Sections 17.1.2.1 through 17.1.2.4)
and/or take such other action as Owner may be allowed, in the event of any of
the following:

 

17.1.2.1 The commencement of an action or petition by or against Leighton,
China/Macau, China/HK or any Guarantor under applicable bankruptcy laws; or any
general assignment by Leighton, China/Macau, China/HK or any Guarantor for the
benefit of its creditors; or the appointment of a receiver, trustee or manager
to take charge of the assets of Leighton, China/Macau, China/HK or any
Guarantor; or any of Leighton, China/Macau, China/HK or any Guarantor becomes
insolvent, goes into liquidation, has a receiving or administrative order made
against it or compounds with its creditors; or if any act is done or event
occurs which (under any applicable Law) has a similar effect to any of the acts
or events outlined herein;

 

17.1.2.2 The exercising of any mechanics’ or materialmens’ lien rights on
Owner’s property, the Site, the Project and/or the Work by a Subcontractor,
Vendor, laborer, materialman, or supplier or any other party providing services
or material

 

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engaged by, on behalf of, or acting under the direction of Contractor or any
Subcontractor or Vendor in connection with the Work, unless that Owner’s
property, the Site, the Project and/or the Work, as applicable, is released from
such lien(s) or, at Owner’s option, satisfied by bond or other security, in an
amount and with a bonding company reasonably satisfactory to Owner and Owner’s
Lenders within the time periods set forth in and pursuant to Section 7.19.2
hereof;

 

17.1.2.3 Failure of Contractor for five successive days or an aggregate of seven
days in any thirty (30) day period (other than Sundays or national holidays), to
have an adequate number of laborers or Subcontractors at the Site who are
actively and productively working on the Project, unless a Permissible Delay
exists for such absence, unless within five (5) days after written notice from
Owner Contractor has and thereafter maintains an adequate number of laborers and
Subcontractors on Site actively and productively working on the Project; or

 

17.1.2.4 Failure of Contractor after five (5) days following request from
Owner’s Lenders to provide Owner and Owner’s Lenders with the evidence required
under Section 3.1.5 of this Agreement.

 

17.1.3 Stop Work Orders. In the event of any material breach or default of this
Contract by Contractor, and in lieu of declaring termination for default, Owner
may elect to stop, delay, reduce or interrupt any operations of Contractor or
any affected Subcontractors or Vendors until such default or failure is remedied
to Owner’s satisfaction. No part of the time lost due to stop work orders or
delay, reduction or interruption by Owner arising out of such material breaches
shall be made the subject of a claim for extension of time or for increased
costs or damages by Contractor. No increase or upward adjustment shall be made
in either the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price, or the Original Project Contractor’s Fee or Expansion
Project Contractor’s Fee for, and in no event shall Owner be liable for, or
Contractor or any Subcontractor or any other party performing any Work on the
Site be entitled to, any lost opportunity, lost profit or consequential damages
claimed or alleged by Contractor, any Subcontractor or any other party
performing any Work on the Site and relating to any such stoppage, reduction,
suspension, delay or interruption. The issuance of a stop work order or delay,
reduction or interruption by Owner shall not prejudice Owner’s right to
subsequently terminate for default.

 

17.1.4 Owner’s Rights Upon Termination For Default. If all or a portion of the
Contractor’s Work is terminated pursuant to this Section 17.1, Contractor shall
not be entitled to receive any payment until after the later of the Original
Project Final Completion or Expansion Project Final Completion by others (except
for that portion of the Work not terminated in the case of termination of only a
portion of Contractor’s Work) and after Owner has assessed its additional costs
and damages arising out of such termination, including, but not limited to,
Owner’s additional costs for completing all or the relevant

 

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portion of the Work. Upon such termination, Contractor shall immediately
undertake all necessary steps to mitigate against Owner’s damages, and shall:

 

17.1.4.1 Cease operations and vacate the Site to the extent specified in the
notice of default;

 

17.1.4.2 Place no further orders and enter into no further subcontracts or
purchase orders for materials, labor, services or facilities that relate to the
terminated Work;

 

17.1.4.3 Upon Owner’s request, terminate all subcontracts and purchase orders
which relate to the terminated Work;

 

17.1.4.4 Upon request and as directed by Owner, assign (and/or Owner may accept
the assignments made in this Agreement, as the case may be) all of Contractor’s
right, title and interest to all subcontracts, purchase orders, rental
agreements, materials, supplies and equipment relating to the portion of the
Work terminated using forms satisfactory to Owner, and otherwise assist Owner in
the orderly and expeditious transfer of such rights;

 

17.1.4.5 Turn over to Owner the originals of the Original Project Schedule and
Expansion Project Schedule and all Schedule Updates including all computer data
bases in electronic format; all Drawings, Specifications and other construction
documents; all as-built drawings, calculations and such other Work-related
documents relating to the portion of the Work terminated (provided that
Contractor may retain copies of the foregoing as necessary to permit Contractor
to complete any portion of the Work not terminated) and all items and things for
whose cost Contractor requests or has requested reimbursement or payment;

 

17.1.4.6 Proceed to complete the performance of all Work not terminated;

 

17.1.4.7 Take such actions that may be necessary, or that Owner may direct, for
the protection and preservation of the terminated Work;

 

17.1.4.8 Advise Owner of all outstanding subcontracts, rental agreements and
purchase orders which Contractor has with others pertaining to the terminated
Work and furnish Owner copies thereof;

 

17.1.4.9 Remove all of its property from the portion of the Site and Owner’s
premises relating to the terminated Work. Any property not so removed may be
removed by Owner at Contractor’s expense; and

 

17.1.4.10 Allow Owner (a) to take possession of all materials of any kind that
have been or will be paid for, that are to be incorporated into the portion of
the

 

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Work terminated, or to which Owner has any ownership rights or interest, and
(b) to finish the portion of the Work terminated and provide the materials
therefor or contract with others to do so by whatever method Owner deems
expedient, and execute and do all such assurances, acts and things as Owner may
consider expedient to facilitate Owner’s taking of possession of the Site
relating to the portion of the Work terminated and materials, equipment,
machinery and tools thereon, and give all notices, orders and directions which
Owner may think expedient for the purposes hereof.

 

17.1.5 Payment to Contractor

 

17.1.5.1 If Owner terminates the Contract for Contractor’s breach or default,
Contractor shall thereafter only be entitled to reimbursement (subject to
Section 17.1.5.3 hereof) only of such amount (if any), by which:

 

(a) the (i) Cost of the Work actually and properly completed by Contractor in
accordance with the Contract Documents up to the date of such termination (and
not cancelable or refundable), plus (ii) the pro rata portion of the Original
Project Contractor’s Fee or Expansion Project Contractor’s Fee thereon (subject
to satisfaction of the conditions applicable to progress and the Original
Project Final Payment or Expansion Project Final Payment contained in the
Contract Documents as the case may be), but the foregoing amounts shall not
exceed the portion of the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (including the Original Project Contractor’s
Fee or Expansion Project Contractor’s Fee , respectively) fairly allocable to
the Work so completed, exceeds

 

(b) 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, but not limited to, the cost of any additional
consultants’ services, or managerial and administrative services required
thereby, any additional costs incurred in retaining another contractor or other
subcontractors, any additional financing, interest or fees and other costs that
Owner must pay 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, attorneys’ fees and expenses, and any other damages, costs,
and expenses Owner may incur in completing the Work 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 components of the Project that are not part of the Work) is greater
than what such actual cost (including the actual cost of 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 (Contractor

 

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hereby acknowledging that Owner has the right to so elect without Owner waiving
Contractor’s liability for damages arising out of the breach by Contractor that
led to its termination), all damages suffered by Owner arising out of
Contractor’s breach of this Agreement; provided that the amount specified in
this clause (b) shall be reduced by any amounts received by Owner under the
On-Demand Bond referred to in Section 7.18.

 

17.1.5.2 If the amount referred to in Section 17.1.5.1.(b) hereinabove exceeds
the amount referred to in Section 17.1.5.1.(a) hereinabove, Contractor shall pay
the difference to Owner immediately upon Owner’s request, subject to the
provisions of Section 14.7.

 

17.1.5.3 Any reimbursements or payments made to Contractor under this
Section 17.1.5 are conditioned on (a) Contractor previously having delivered to
Owner possession and unfettered access to the Work and Site and all materials,
equipment, tools and the like (undamaged and in good condition) which Owner has
paid or will pay for, (b) all the applicable items listed in, and performance of
all the applicable obligations described in Section 12.2.1 of this Agreement
have been satisfied, and (c) Contractor complies with such other obligations
under the Contract Documents accruing prior to termination or that by their
nature survive the termination of this Agreement as Owner or Owner’s Lenders
reasonably requires.

 

17.2 Termination For Convenience. The parties’ rights and remedies in the event
of termination of the Contract by Owner for convenience shall be as follows:

 

17.2.1 Notice of Termination For Convenience. Owner may cancel this Contract in
its entirety (and not in part) and take possession of the Site and all
materials, tools, equipment and machinery thereon in which Owner has an
ownership interest or other vested interest, and finish or not finish the Work
by whatever method Owner may desire, at any time upon written notice to
Contractor solely for Owner’s convenience and without regard to any fault or
failure to perform by Contractor or any other party. Upon receipt of such notice
of termination, Contractor shall immediately and in accordance with instructions
from Owner proceed as follows:

 

17.2.1.1 Cease operations and vacate the Site;

 

17.2.1.2 Advise Owner of all outstanding subcontracts, rental agreements and
purchase orders which Contractor has with others pertaining to the Work and
furnish Owner copies thereof;

 

17.2.1.3 Place no further orders and enter into no further subcontracts or
purchase orders for materials, labor, services or facilities that relate to the
Work;

 

17.2.1.4 Upon Owner’s request, terminate all subcontracts and orders that relate
to the Work;

 

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17.2.1.5 Upon request and as directed by Owner, assign (and/or Owner may accept
the assignments made in this Agreement, as the case may be) all of Contractor’s
right, title and interest to all subcontracts, purchase orders, rental
agreements, materials, supplies and equipment relating to the Work using forms
satisfactory to Owner, and otherwise assist Owner in the orderly and expeditious
transfer of such rights;

 

17.2.1.6 Turn over to Owner the originals of the Original Project Schedule and
Expansion Project Schedule and all Schedule Updates including all computer data
bases in electronic format; all Drawings, Specifications and other construction
documents; all as-built drawings, calculations and such other Work-related
documents and all items and things for whose cost Contractor requests or has
requested reimbursement or payment;

 

17.2.1.7 Take such actions that may be necessary, or that Owner may reasonably
direct, for the protection and preservation of the Work;

 

17.2.1.8 Remove all of its property from the Site and Owner’s premises. Any
property not so removed may be removed by Owner at Contractor’s expense; and

 

17.2.1.9 Allow Owner (a) to take possession of all materials, equipment,
machinery and tools of any kind that have been or will be paid for, that are to
be incorporated into the Work, or to which Owner has any ownership rights or
interest, and (b) to finish the Work and provide the materials therefor or
contract with others to do so by whatever method Owner deems expedient, and
execute and do all such assurances, acts and things as Owner may consider
expedient to facilitate Owner’s taking of possession of the Site and materials,
equipment, machinery and tools thereon, and give all notices, orders and
directions which Owner may think expedient for the purposes hereof.

 

17.2.2 Payment Upon Termination For Convenience. In the event of termination for
convenience, Contractor shall be paid as follows: Owner’s sole obligation and
liability to Contractor shall be (i) to reimburse Contractor (and Contractor’s
exclusive remedy shall be to receive reimbursement) for (A) the Cost of the Work
properly incurred (and not cancelable or refundable) by Contractor up to the
date of termination, including, but not limited to, the cost of tools,
equipment, machinery or materials ordered for the Work which have been delivered
to Contractor, or for which Contractor is liable to accept delivery (it being
agreed that such tools, equipment, machinery and materials shall become the
property and the responsibility of Owner when paid for by Owner), and Contractor
shall place the same at Owner’s disposal, and including further, and
(B) Contractor’s reasonable demobilization costs, (ii) to pay to Contractor that
pro-rata portion of the Original Project Contractor’s Fee or Expansion Project
Contractor’s Fee applicable to such completed Work (and subject to satisfaction
of the conditions applicable to payments to Contractor set forth in the Contract
Documents, including for progress payments, and Original Project Final Payment
or Expansion Project Final Payment as applicable), but not in excess of the
portion

 

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of the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price equitably allocable to such Work based on the percentage such
properly performed and completed Work by Contractor bears to the total Original
Project Work or Expansion Project Work included within the Original Project
Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price,
respectively, less all payments previously made to Contractor under the Contract
and any amounts owed by Contractor to Owner under the Contract. Contractor shall
not be entitled to receive payment hereunder for any so-called lost profit or
opportunity costs.

 

17.3 Suspensions By Owner

 

17.3.1 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 by giving
Contractor written notice specifying which portion of the Work is to be
suspended and the effective date of such suspension. Such suspension, delay or
interruption shall continue until Owner terminates such suspension, delay or
interruption by written notice to Contractor; provided that if a suspension,
delay or interruption of the entire Project (or such a substantial portion
thereof that the suspension, delay or interruption with respect thereto would
have a material adverse effect on the ability of Contractor to meet either the
Original Project Guaranteed Date of Substantial Completion or the Expansion
Project Guaranteed Date of Substantial Completion) shall continue for ninety
(90) consecutive days or one hundred eighty (180) days in the aggregate,
Contractor shall have the right to terminate this Contract upon giving Owner
fourteen (14) business days’ written notice thereof and such termination shall
be treated as a termination with cause for purposes of Section 17.6.2. No such
suspension, delay, interruption or reduction 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.

 

17.3.2 Payment Upon Suspension For Convenience. In the event of suspension,
delay, reduction or interruption for convenience by Owner, Owner shall pay
Contractor and the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) shall be increased by such
amounts (subject to the payment and related requirements of the Contract
Documents) as follows:

 

17.3.2.1 Additional Costs of the Work, if any, which are properly, necessarily
and reasonably incurred by Contractor, Subcontractors and Vendors as a direct
result of such suspension, delay or interruption, including, but not limited to,
for the purpose of safeguarding all material, equipment, supplies and
Contractor’s Work in progress, but the Original Project Guaranteed Maximum Price
or Expansion Project Guaranteed Maximum Price (as applicable) shall be increased
only if and to the extent such delay, suspension or interruption exceeds a
period of thirty (30) days in the aggregate if the entire Project is

 

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suspended (or if a substantial portion of the Project is suspended such that it
causes a delay in the opening date of the Original Project Casino, Expansion
Project Casino, the Hotel, Theatre and Entry Feature) following commencement of
the Work; and

 

17.3.2.2 By any increase in Contractor’s Fee determined in accordance with
Section 18.5.2.

 

17.3.2.3 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 is responsible.

 

17.4 Limitations. Except to the extent provided in Section 17.2.2 or 17.3.2
hereof, as applicable, in the event of any termination of the Contract or
suspension, delay, reduction or interruption of the Work by Owner pursuant to
Section 17.1, 17.2 or 17.3, Owner shall have no liability to Contractor or any
Subcontractor or Vendor, and neither Contractor nor any Subcontractor or Vendor
will make and they hereby waive any claim for (a) compensation, expenses,
additional fees or anticipated profits for unperformed Work, (b) delays,
acceleration or disruption, (c) lost business or other opportunities,
(d) special, indirect or consequential damages or losses or loss of use,
(e) impaired bonding capacity, (f) unabsorbed, unrealized or other overheads, or
(g) general conditions costs. In no event shall there be any increase in the
Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price (except as expressly provided in Section 17.3.2 above), or
Original Project Contractor’s Fee or Expansion Project Contractor’s Fee, as a
result of any of the foregoing Owner elections under Sections 17.1, 17.2 or 17.3
above or due to any other delays. All amounts payable by Owner shall be subject
to Owner’s right of audit and offset.

 

17.5 Other Rights and Remedies. Other rights and remedies available to Owner in
the event of a default or material breach by Contractor which is not timely
cured in accordance with Section 17.1.1 hereof, shall include, but not be
limited to, the following, and all such rights and remedies of Owner in this
Article 17 shall be non-exclusive, and shall be in addition to all other rights
and remedies available to Owner under the Contract, at law or otherwise:

 

17.5.1 A waiver by Owner of a default by Contractor shall not be considered to
be a waiver of any subsequent default by Contractor, nor be deemed to amend or
modify the terms of this Contract.

 

17.5.2 In the event of termination for cause, disputes as to whether a material
breach of contract occurred within the provisions of the Contract Documents
shall be subject to resolution pursuant to Article 22 of this Agreement. If
Owner terminates this Contract in whole or in part for default and a court of
competent jurisdiction later determines that such termination was improper or
wrongful, then that portion of the improper or wrongful termination shall
automatically convert into a termination for Owner’s convenience pursuant to
Section 17.2 of this Agreement.

 

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17.5.3 Owner shall have the right and is authorized to cure such defaults and
offset against and deduct from amounts otherwise payable to Contractor any such
costs, damages, reasonable attorneys’ fees and any other expenses suffered by
Owner and arising out of such default including any cure or attempted cure by
Owner, and all consultants and professionals additional services.

 

17.5.4 Any termination pursuant to this Article 17 shall be without prejudice to
any other right or remedy of Owner pursuant to the terms of the Contract
Documents or at law or in equity.

 

17.6 Contractor’s Remedies

 

17.6.1 If payment from Owner for an Application for Progress Payment (exclusive
of amounts properly retained or withheld under the Contract), approved by Owner
and Owner’s Lenders in accordance with Sections 5.2 and 5.3 of this Agreement,
has not been received by Contractor within thirty (30) days of the date payment
is due pursuant to Section 5.3 of this Agreement, interest shall thereafter
commence to accrue (from the original due date of payment pursuant to
Section 5.3 hereof) on such delinquent amounts at then existing prime rate of
Bank of China (Hong Kong) plus one percent (1%), until paid, and Contractor may
upon written notice to Owner cease Work until such payment has been received, in
which case the Original Project Guaranteed Date of Substantial Completion or
Expansion Project Guaranteed Date of Substantial Completion (as applicable) will
be extended in accordance with Section 11.6 hereof. 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 fourteen (14) days
after the expiration of the thirty (30) day period hereinabove (or the next draw
cycle under Owner’s financing for the Project) and written notice by Contractor
that the same are past due, Contractor may terminate this Agreement upon an
additional five (5) business days’ written notice to Owner.

 

17.6.2 If Contractor terminates this Agreement with cause in accordance with
this Agreement and such termination is accepted by Owner or challenged by Owner
but upheld by an arbitral tribunal, Contractor shall be entitled, as its
exclusive remedy (but in addition to Contractor’s rights under Section 22.3
hereof), to the recovery of (a) the amounts (if any) to which Contractor would
have been entitled had Owner, pursuant to Section 17.2 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, overhead, or similar amounts) in the event of any
termination, including but not limited to under this Section 17.6.

 

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ARTICLE XVIII.

CHANGE IN THE WORK

 

18.1 Change. A “Change” in the Work means an increase, decrease, variation,
modification or change in the scope of Contractor’s Work from that indicated in
the Contract Documents, or modification to the Original Project Schedule or
Expansion Project Schedule. Suspension and termination for convenience shall be
governed by Article 17 of this Agreement and shall not be considered a Change
except to the extent provided therein. A Change can only be implemented by a
Change Order or by Construction Change Directive. 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 Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price or extension of the Contract Time. Changes in the Work shall be
performed under applicable provisions of the Contract Documents, and Contractor
shall proceed promptly, unless otherwise provided in the Change Order or
Construction Change Directive.

 

18.2 Change Order. A “Change Order” is a written instrument prepared by
Contractor and signed by Owner and Contractor, stating their agreement upon all
of the following:

 

(a) a Change in the Work including a full description of such Change;

 

(b) the amount of the adjustment, if any, in the Original Project Guaranteed
Maximum Price or Expansion Project Guaranteed Maximum Price (as applicable);
and/or

 

(c) the extent of the adjustment, if any, in the Contract Time.

 

Methods used in determining adjustments to the Original Project Guaranteed
Maximum Price or Expansion Project Guaranteed Maximum Price, or Original Project
Contractor’s Fee or Expansion Project Contractor’s Fee, may include those listed
in Section 18.4.3 hereof.

 

18.3 Change Proposal Request. At any time and from time to time prior to
Original Project Final Completion of the Original Project Work or Expansion
Project Final Completion of the Expansion Project 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 (“Change Proposal Request”). A Change Proposal Request
shall set out, in reasonable detail, the Changes in the Work requested by Owner.
Contractor shall issue a Change Proposal within ten (10) days (or sooner, if
possible) following its receipt of a Change Proposal Request or such longer
period as is reasonably necessary if such ten (10) day period cannot be
reasonably complied with. Contractor shall also issue a Change Proposal:
(i) when Contractor reasonably believes that a Change in the Work is necessary
or desirable; or (ii) when a Change in the Work is made necessary by Laws. If
Contractor refuses or fails to

 

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timely provide a Change Proposal, 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, including but not limited to: (i) the amount of
increase or decrease in the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable), or (ii) the length
of extension or advancement, if any, of the Contract Time, Owner: (a) may issue
a Construction Change Directive pursuant to Section 18.4 hereof, (b) may require
Contractor to obtain when possible at least three bids from qualified
subcontractors to perform such Change in the Work, and Owner may select the
subcontractor from said bidders to perform such Change in the Work, or (c) may
engage other contractors, subcontractors and/or laborers to perform such Change
in the Work, and Contractor shall cooperate fully with any such persons, and any
such hiring by Owner shall not affect this Agreement in any manner (other than
to provide for a reduction in the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price (as applicable), equal to the value
of such Work (but not less than the amount budgeted therefor in the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price)
not being performed by Contractor, and in the Original Project Contractor’s Fee
or Expansion Project Contractor’s Fee applicable thereto, subject to
Section 18.5.2) and shall not be deemed to be a constructive termination.

 

18.3.1 “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 Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
(including pursuant to Section 18.4.3 below) due to such Change, and (iii) the
extent of adjustment, if any, in the Contract Time due to such Change. A Change
Proposal is only a proposal unless and until signed and accepted by Owner as a
Change Order.

 

18.4 Construction Change Directive

 

18.4.1 “Construction Change Directive” means a written order initiated, prepared
and signed by Owner and given to Contractor directing a Change in the Work or an
allocation of the Original Project Owner Contingency or Expansion Project Owner
Contingency (as applicable) and stating a proposed basis for adjustments, if
any, in the Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable)or Contract Time, or any of them or any
combination of them.

 

18.4.2 Owner may, by Construction Change Directive, without invalidating or
breaching the Contract, order a Change in the Work or apply a portion of the
Original Project Owner Contingency or Expansion Project Owner Contingency (as
applicable). Upon receipt of a Construction Change Directive, Contractor shall
promptly proceed with the Change in the Work involved (including implementing
any reductions or accelerations in the Work) and, within ten (10) days of
receipt of the related Construction Change Directive, 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

 

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Construction Change Directive for determining the proper adjustment, if any, in
the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price or Contract Time. Contractor agrees to immediately, when directed
in writing by Owner, perform the Change in Work diligently and without delay.

 

18.4.3 If the Construction Change Directive provides for an adjustment to either
the Original Project Guaranteed Maximum Price or Expansion Project Guaranteed
Maximum Price, the adjustment may be based on one of the following methods:

 

(a) mutual acceptance of a lump sum properly itemized and supported by
sufficient substantiating data to permit evaluation;

 

(b) unit prices stated in the Contract Documents or subsequently agreed upon; or

 

(c) cost to be determined in a manner agreed upon by the parties and a mutually
acceptable fixed or percentage fee, which cost shall be based upon a proposal by
the appropriate party. Any proposals from Subcontractors shall not include any
amounts for overhead and profit in excess of an aggregate of ten percent
(10%) of the cost of such Subcontractor’s Work, unless approved by Owner.

 

18.4.4 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 Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price or Contract Time. 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 Original Project Guaranteed Maximum Price or Expansion Project
Guaranteed Maximum Price (as applicable) or Contract Time within ten (10) days
after the receipt of the Construction Change Directive to Contractor, then the
Construction Change Directive shall be deemed approved and shall become a Change
Order, and Contractor shall have no right to any adjustment to the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
or Contract Time in excess of the adjustments, if any, provided in the
Construction Change Directive.

 

18.4.5 If Contractor disagrees with the method or adjustment in the Guaranteed
Maximum Price or the Contract Time within the ten (10) calendar day time period
provided in Section 18.4.4 above, and the parties are unable within a reasonable
period of time to reach an agreement, the matter shall be resolved under Article
22 of this Agreement.

 

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18.5 Determination of Increases or Decreases in Guaranteed Maximum Price

 

18.5.1 Any change in the Original Project Guaranteed Maximum Price or Expansion
Project Guaranteed Maximum Price (as applicable) as a result of net Changes in
the Work (including a Construction Change Directive), shall be calculated based
upon estimates of: (a) the aggregate additional amounts (if any) to be paid (or
which would have been paid if the subject Work had not been eliminated) by
Contractor to its Subcontractors and Vendors for the applicable Change in the
Work, without mark-up or other add-on by Contractor, and (b) the increase or
decrease (if any) in the Cost of the Work to be incurred (or which would have
been incurred if the subject Work had not been eliminated) by Contractor with
respect to the applicable Change in the Work to the extent (if any) such Change
were to be performed (or which would have been performed if the subject Work had
not been eliminated) by Contractor directly. Any and all amounts or items
excluded from the determination of the Cost of the Work, including all
Non-Allowable Costs of the Work, shall also be excluded from the determination
of the cost of any Change in the Work.

 

18.5.2 Whether or not Contractor is entitled to an increase in the Original
Project Guaranteed Maximum Price or Expansion Project Guaranteed Maximum Price
or modification of the Contract Time pursuant to the Contract as a result of any
Changes in the Work, in no event shall Contractor be entitled to, and Contractor
hereby waives any claim to, an increase in the Original Project Contractor’s Fee
or Expansion Project Contractor’s Fee, due to any and all such Changes.

 

(a) Notwithstanding the first paragraph of Section 18.5.2, (a) if the aggregate
net amount of all Changes (as reflected by Change Orders) and other adjustments
in the Original Agreement Guaranteed Maximum Price pursuant to this Agreement
increases the Original Agreement Guaranteed Maximum Price by more than
US$12,755,000 (which is five percent (5%) of the Original Agreement Guaranteed
Maximum Price of US$255,500,000), then, subject to the terms of the Contract
Documents, Contractor’s Fee shall be increased by an amount equal to five
percent (5%) of the amount by which (x) the aggregate net amount of all such
Changes and other adjustments in the Original Agreement Guaranteed Maximum Price
pursuant to this Agreement exceeds (y) US$12,755,000; and (b) if the aggregate
net amount of all Changes (as reflected by Change Orders) and other adjustments
in the Original Agreement Guaranteed Maximum Price pursuant to this Agreement
reduces the Original Agreement Guaranteed Maximum Price by more than
US$12,755,000, then, subject to the terms of the Contract Documents,
Contractor’s Fee shall be equitably adjusted, taking into account the
circumstances underlying such Changes. Contractor has fully considered the
impact of the foregoing limitation and acknowledgement, and accepts all
consequences relating thereto.

 

(b) Notwithstanding the first paragraph of Section 18.5.2, (a) if the aggregate
net amount of all Changes (as reflected by Change Orders) and other adjustments
in the Expansion Project Guaranteed Maximum Price

 

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pursuant to this Agreement increases the Expansion Project Guaranteed Maximum
Price by more than Seven Million Eight Hundred Thirty-Seven Thousand Nine
Hundred Sixty-Six United States Dollars (US$7,837,966) (which is five percent
(5%) (rounded) of the initial Expansion Project Guaranteed Maximum Price of
US$156,759,326 set forth in Section 3.1 of the Original Agreement), then,
subject to the terms of the Contract Documents, Contractor’s Fee shall be
increased by an amount equal to five percent (5%) of the amount by which (x) the
aggregate net amount of all such Changes and other adjustments in the Expansion
Project Guaranteed Maximum Price pursuant to this Agreement exceeds (y) Seven
Million Eight Hundred Thirty-Seven Thousand Nine Hundred Sixty-Six United States
Dollars (US$7,837,966); (b) if the aggregate net amount of all Changes (as
reflected by Change Orders) and other adjustments in the Expansion Project
Guaranteed Maximum Price pursuant to this Agreement reduces the Guaranteed
Maximum Price by more than Seven Million Eight Hundred Thirty-Seven Thousand
Nine Hundred Sixty-Six United States Dollars (US$7,837,966), then, subject to
the terms of the Contract Documents, Contractor’s Fee shall be equitably
adjusted, taking into account the circumstances underlying such Changes.
Contractor has fully considered the impact of the foregoing limitation and
acknowledgement, and accepts all consequences relating thereto.

 

18.6 Simultaneous Submittal Requirements. In the event that Contractor considers
that any Change Proposal Request or Construction Change Directive may involve
Changes to the Original Project Guaranteed Maximum Price, Expansion Project
Guaranteed Maximum Price and/or the Contract Time, it shall be the Contractor’s
fundamental duty and an essential requirement of this Contract to make
simultaneous submittals of all documents necessary to establish both such
Changes in accordance with this Article 18, and to contemporaneously prove
entitlement to both such Changes, and without any reservation of rights for
future consideration. Without limitation of Contractor’s rights under Article
22, if Contractor is unable to or does not so prove both such entitlements
pursuant to and contemporaneously with such submittals, then Contractor shall be
deemed to have waived any further right to make a claim for the portion of the
adjustment not provable at such time.

 

18.7 Continued Performance. Notwithstanding the status of any proposed, pending
or disputed Change (including any Construction Change Directive) pursuant to
this Article 18 or any Claim pursuant to Article 20 below, or any dispute, and
so long as Owner continues to timely make payment to Contractor of amounts
properly due to Contractor under and subject to the terms of the Contract
Documents and not in dispute, Contractor shall not be entitled to and will not
suspend any services under the Contract Documents, but will continue to be bound
by the terms and conditions of the Contract Documents and will continue to
perform all services thereunder and proceed diligently with the performance of
its Work in accordance with the terms hereof, including completing any Work
described in any Construction Change Directive, unless Owner directs in writing
otherwise.

 

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18.8 Effect of Change Orders

 

18.8.1 Execution of a formal Change Order shall be the sole procedure for
settlement of any and all issues concerning the Original Project Guaranteed
Maximum Price, Expansion Project Guaranteed Maximum Price and/or Contract Time,
including any settlement based on a Claim pursuant to Article 20 hereof or
pursuant to Article 22 hereof; provided that a decision by the arbitrators in a
proceeding instituted under Article 22 shall be deemed a Change Order for
purposes of this Section 18.8.1.

 

18.8.2 No Change shall be deemed as settled unless and until the parties sign a
formal Change Order which fully and finally settles all pending issues
pertaining to increases or decreases in the Original Project Guaranteed Maximum
Price, Expansion Project Guaranteed Maximum Price and/or the Contract Time and
without any reservation of rights for future consideration. In that regard, the
parties hereby agree that a signed Change Order shall be inclusive of any and
all direct, indirect, consequential costs, damages or losses based upon any
theory of recovery, including, but not limited to: actual damages; all
time-related costs; total costs; modified total costs; Eichleay formula or other
equitable adjustment theories; full compensation for general conditions;
extended site supervision and administration; all field, site, branch and/or
home office overheads; all general and administrative costs; and any other
similar direct, indirect and/or time-related costs howsoever derived or
formulated.

 

18.8.3 Any statement added by the Contractor to the face of an otherwise valid
Change Order, or contained in any transmittal or separate correspondence wherein
the Contractor attempts to reserve rights to seek any further increases in the
Contractor’s Fee, Original Project Guaranteed Maximum Price, Expansion Project
Guaranteed Maximum Price and/or Contract Time shall be null and void.

 

18.8.4 Any increase in the Original Project Guaranteed Maximum Price or
Expansion Project Guaranteed Maximum Price, or extension in the Contract Time,
shall be reduced and offset by any and all reductions or Changes in the Work
which would result in reduced Costs of the Work and/or advancement of the
Contract Time, as the case may be (i.e., changes in the Work shall be netted
out).

 

18.9 Verbal Instructions and Minor Changes in the Work. Contractor shall not be
entitled to rely upon, and shall not implement any Change based only on, Owner’s
verbal instruction, except in emergency situations and when necessary to prevent
the imminent threat of personal injuries or damage to the Work or Owner’s
existing property, or for minor Changes within Contractor’s scope of Work which
are not material and do not involve an adjustment in the Guaranteed Maximum
Price or an extension of the Contract Time (“Minor Changes”). Such Minor Changes
may be effected by written or verbal order at Owner’s election at any time. If
the Contractor does not agree that such order constitutes a Minor Change,
Contractor shall submit a Change Proposal pursuant to Section 18.3 above;

 

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provided, however, Contractor shall still promptly perform the Work specified in
the instruction or order from Owner.

 

18.10 Waiver and Release of Contractor’s Rights. Contractor hereby confirms its
willingness and ability to comply with the requirements of this Article 18.
Contractor’s failure to first comply with the requirements of this Article 18,
including the timely notice requirements, shall constitute a waiver and release
by Contractor of any and all rights to pursue a Claim.

 

ARTICLE XIX.

RECORD KEEPING AND AUDIT RIGHTS

 

19.1 Required Accounting Records. To facilitate audits by Owner or Owner’s
Lenders, including, but not limited to, for any purpose related to Change
Orders, Changes or Change Proposals, Contractor shall at all times implement and
maintain (and require all Subcontractors providing labor and/or materials on a
cost-plus basis pursuant to a subcontract having a contract price of
HK$1,500,000 or more, as well as all Subcontractors as may otherwise be
specified by Owner (collectively, the “Auditable Subcontractors”) to implement
and maintain) such cost control systems and daily record keeping procedures as
may be necessary to attain proper fiscal management and detailed financial
records for all costs related to the Work and as are otherwise reasonably
satisfactory to Owner and Owner’s Lenders. All cost and pricing data shall
include, without limitation, the identification of any markups, vendor
quotations and pricing methodologies. Records to be maintained by the Contractor
and Auditable Subcontractors for purposes of the Contract, including for
purposes of all audits conducted pursuant to this Article 19 shall include, but
not be limited to the following: (a) payroll records and payroll burden costs on
actual wages and salaries (payroll taxes, insurance, benefits, etc.); (b) all
correspondence, minutes of meetings, daily logs including schedule status
reports, memoranda and other similar data; (c) items such as bids, proposals,
estimating work sheets, quotes, cost recaps, tabulations, receipts, submittals,
tax returns (except solely income tax returns), general ledger entries, canceled
checks and computer data relating to the Work and this Contract, and (d) all
other data relating to or arising out of the Work and any other similar
supporting documentation reasonably required by Owner or Owner’s Lenders. It is
further agreed that records subject to audit include Project-related records
maintained by parent companies, affiliates, subsidiaries or other related
parties. Contractor’s failure to cooperate or to provide access as described in
this Article 19 shall be a breach of this Contract.

 

19.2 Purpose and Extent of Record Access. Owner and Owner’s Lenders, and their
respective authorized representatives, shall have the right to fully and
completely audit, copy, investigate and review, and shall be afforded useful
access to all of the records described in Section 19.1 above at all reasonable
times (both during performance of the Work and after Original Project Final
Completion and Expansion Project Final Completion)

 

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for purposes of inspection, audit, review and copying to the full extent as
Owner or Owner’s Lenders may require relating to the Work or the Contract. All
such Contractor’s records and records of all Auditable Subcontractors shall also
be made available to Owner for purposes related to compliance with Owner’s
business ethics policies. Upon request, Contractor shall also fully cooperate in
arranging interviews with Contractor’s employees and shall require all Auditable
Subcontractors to likewise fully cooperate pursuant to this Article 19.

 

19.3 Record Keeping Formats. Contractor may elect to maintain part of the
records described in Section 19.1 above in an electronic format. Contractor
agrees that, if any Project-related information is maintained in an electronic
format, such information will be made available to Owner and Owner’s Lenders in
a readily useable format within three (3) business days after a written request
by Owner.

 

19.4 Certifications. Upon request, Contractor shall be required to certify that,
to the best of its knowledge and belief, all data subject to audit pursuant to
this Article 19 is accurate, complete and current. Such certifications shall be
made by Contractor to Owner and Owner’s Lenders in the case of this Contract,
and by Auditable Subcontractors to Contractor in the case of subcontracts and
purchase orders.

 

19.5 Flow-Down Provisions. Contractor shall require all Auditable Subcontractors
to comply with the provisions of this Article 19, by insertion of this “Right to
Audit” clause (Sections 19.1 through 19.7 inclusive) into each respective
related subcontract and purchase order of all tiers relating to the Work. Owner
shall have the right (but not obligation) to act as Contractor’s authorized
representative for the purpose of conducting audits in accordance with this
Article 19 of all accounting and Project-related records in the possession of
all Auditable Subcontractors. It is specifically understood, however, that Owner
has no contractual relationship with any Subcontractor or Vendor of any tier.
Likewise, it shall remain the Contractor’s financial and contractual
responsibility to resolve all such issues with its Subcontractors or Vendors. No
such audit or activity by Owner or Owner’s Lenders shall release Contractor or
any Subcontractor from, or waive, any of Contractor’s or any Subcontractor’s
obligations under the Contract Documents. Notwithstanding the provisions of this
Article 19, Owner’s and Owner’s Lenders’ right to audit as to Subcontractors
with subcontracts on a lump sum basis shall be limited solely to those instances
where there is an allegation of fraud or similar misconduct involving such
Subcontractor.

 

19.6 Remedies. Certification of information pursuant to Section 19.4 above, and
subsequent approval by Owner of invoices, billings and Change Orders, shall not
preclude a post-approval adjustment, including based upon a later Contract
compliance or pricing audit. Specifically, Owner shall have the right to reduce
any payments to Contractor or any Auditable Subcontractor by any amounts
attributable to incorrect or otherwise defective cost data. Contractor’s
submission shall be considered defective when the cost or pricing data, as
certified in accordance with provisions of Section 19.4, above, is not accurate,
complete or current. If an audit inspection or examination, conducted in
accordance with this Article 19,

 

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discloses overcharges by Contractor (or any Auditable Subcontractor) of any
nature in excess of US$50,000 (including interest as provided in Section 17.6.1)
hereof, Contractor shall reimburse or cause such Auditable Subcontractor to
reimburse, Owner for the total actual cost of Owner’s audit associated with such
overcharge, including but not limited to the actual costs of outside auditors
and/or the use of Owner’s internal auditor at internal billing rates.

 

19.7 Record Retention. Contractor shall preserve and make available to Owner and
Owner’s Lenders at Contractor’s principal office in Hong Kong, all such records
and other data covered by this Article 19, for a minimum period of three
(3) years after the later of Original Project Final Payment and Expansion
Project Final Payment is made or for such longer period as may be required by
any Laws.

 

ARTICLE XX.

CLAIMS

 

20.1 Definition. A “Claim” is a demand or assertion by one of the parties
seeking, as a matter of right, adjustment or interpretation of Contract terms,
payment of money, extension of time or other relief with respect to the terms of
the Contract. The term “Claim” also includes other disputes and matters in
question between Owner and Contractor arising out of or relating to the
Contract. Claims must be made by written notice. The responsibility to
substantiate Claims shall rest with the party making the Claim.

 

20.2 Notice. Claims not made by Contractor within fourteen (14) days after
occurrence of the event giving rise to such Claim shall be barred. Claims must
be made by written notice. An additional Claim made after the initial Claim has
been implemented by Change Order will not be considered unless (a) based upon
different facts from those giving rise to the initial Claim, and (b) submitted
in a timely manner.

 

20.3 Pending Resolution. Notwithstanding any other provision of this Contract or
the other Contract Documents to the contrary, while any dispute, action or
proceeding exists between Contractor and Owner, so long as Owner continues to
pay all undisputed amounts hereunder (or is otherwise excused from making
payment of undisputed amounts pursuant to the terms of this Agreement),
Contractor shall continue to perform the Work diligently and observe its other
obligations in accordance with this Contract so as to complete the Work on or
before the Original Project Guaranteed Date of Substantial Completion or
Expansion Project Guaranteed Date of Substantial Completion (as applicable),
which agreement of Contractor shall be specifically enforceable. 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
pursuant to (but only to the extent of) a final judgment resolving any such
dispute, action or proceeding. Contractor recognizes and acknowledges that the
provisions of this Section 20.3 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

 

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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.

 

20.4 Final Settlement of Claims. No Claim involving resolution of issues
pertaining to the Original Project Guaranteed Maximum Price, Expansion Original
Project Guaranteed Maximum Price and/or Contract Time shall be deemed final
until both parties sign a final and unconditional Change Order, or an arbitral
tribunal duly convened hereunder makes a binding determination as described in
Section 20.5 and Article 22 below. With respect to non-judicial settlements,
final and unconditional Change Orders signed by both parties shall be a
condition precedent to Owner’s duty to make payments or adjust the Original
Project Guaranteed Maximum Price, Expansion Original Project Guaranteed Maximum
Price or Contract Time.

 

20.5 Unresolved Claims. Any Claims or disputes arising out of this Contract
which are not resolved by the parties within sixty (60) days, may be pursued in
accordance with Article 22 hereof. Contractor shall identify in Contractor’s
Applications for Progress Payment and Application For Final Payment any such
Claims which remain unresolved.

 

ARTICLE XXI.

OWNER’S LENDERS

 

21.1 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 Original
Project Guaranteed Maximum Price and Expansion Original Project Guaranteed
Maximum Price, 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.

 

21.2 Assignment and Default. Owner shall have the right to assign the Contract
to any one or more of Owner’s Lenders. If an event of default by Owner has
occurred under any loan documents relating to Owner’s Lenders, Contractor agrees
that Owner’s Lenders may at anytime thereafter upon written notice to Contractor
(“Lender’s Notification”), require Contractor to continue to perform Work under
the Contract, and in such Lender’s Notification, Owner’s Lenders may elect
either to (a) not assume any of Owner’s rights or obligations under the
Contract, or (b) assume Owner’s rights and obligations arising under the
Contract from and after the date of Lender’s Notification. Upon receipt of
Lender’s

 

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Notification, and notwithstanding any event of default by Owner under any such
loan documents and whether Owner’s Lenders elect clause (a) or (b), Contractor
shall thereafter continue to properly perform the Work and its obligations under
the Contract in accordance with the terms of the Contract, so long as
(i) Contractor continues to be paid, by either Owner or Owner’s Lenders in
accordance with the terms of this Agreement, for all Work not in dispute and
properly performed in accordance with the terms of the Contract from and after
the date of Lender’s Notification, and (ii) the other obligations of Owner under
the Contract Documents which are necessary to be performed in order for
Contractor to be able to continue to properly perform the Work continue to be
performed and satisfied by Owner, Owner’s Lenders or otherwise.

 

21.3 Owner’s Lenders Election. Notwithstanding any provision of the Contract
which may give Contractor the right to terminate the Contract or suspend or
discontinue performance thereunder, Contractor agrees not to terminate the
Contract or suspend or discontinue performance thereunder without first
providing Owner and Owner’s Lenders with thirty (30) days prior written notice,
and during such thirty (30) days Owner’s Lenders may elect whether to (a) allow
Contractor to terminate the Contract, not cure any defaults of Owner and not
assume any of Owner’s obligations under the Contract, or (b) assume Owner’s
obligations arising under the Contract from and after the date of Owner’s
Lenders’ election, and require Contractor to continue Contractor’s performance
under the Contract. If Owner’s Lenders shall timely elect to proceed under
clause (b) herein, Contractor agrees not to terminate the Contract or suspend or
discontinue its performance thereunder, and to continue to properly perform all
Work and obligations under the Contract in accordance with the terms of the
Contract and accept payment and/or performance from Owner or Owner’s Lenders, so
long as Contractor continues to be paid in accordance with the terms of this
Agreement for all amounts due in accordance with the terms of the Contract after
Owner’s Lenders’ election as specified above. The thirty (30) day period
provided above shall run concurrently with the thirty (30) day period provided
under Section 17.6.1 if Contractor shall give such thirty (30) day notices under
this Section 21.3 and under Section 17.6.1 concurrently. Promptly upon request
by either Owner or Owner’s Lenders, Contractor shall enter into an agreement
with Owner and Owner’s Lenders incorporating the terms of this Section 21.3 and
Section 21.2, along with such other matters reasonably requested by Owner’s
Lenders.

 

21.4 Payment and Work Continuation. Notwithstanding any other provision of the
Contract or otherwise, including anything in this Article 21, and unless Owner’s
Lenders elect to assume the Contract, Owner’s Lenders shall have no obligation
to reimburse or pay Contractor for (a) any Work which has been the subject of a
prior advance of loan funds by Owner’s Lenders to Owner and paid to Contractor,
and/or (b) any Work which is the subject of a dispute by Owner’s Lenders as to
its proper quality, scope or compliance with the Contract. Owner’s Lenders shall
have the benefit of all claims, defenses to payment and setoffs available to
Owner under the Contract as to amounts that Contractor contends are due for Work
under the Contract. Notwithstanding any terms of the Contract to the contrary,
Contractor will diligently continue to perform the Work and its obligations
under

 

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the Contract notwithstanding any dispute arising with Owner, Owner’s Lenders or
any other person or entity, so long as (i) Contractor continues to be paid in
accordance with the terms of this Agreement for amounts due in accordance with
the terms of the Contract, and (ii) the other obligations of Owner under the
Contract Documents which are necessary to be performed in order for Contractor
to be able to continue to properly perform the Work continue to be performed and
satisfied by Owner, Owner’s Lenders or otherwise. Except to the extent expressly
provided in Section 21.3 hereof, nothing in this Contract, or otherwise, shall
cause or impose any obligation on Owner’s Lenders to fund any amounts, including
any loan advance, to Contractor. Owner’s Lenders may enforce the obligations of
the Contract with the same force and effect as if enforced by Owner, and may
(but need not) perform the obligations of Owner (unless Owner’s Lenders elect to
perform such obligations pursuant to this Article 21), and Contractor will
accept any such performance in lieu of performance by Owner in satisfaction of
Owner’s obligations hereunder. Subject to the foregoing limitations on
assignment and delegations, all of the terms and provisions of the Contract
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.

 

21.5 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.

 

21.6 Audit Rights. Owner’s Lenders shall have and be entitled to all of the same
audit and inspection rights, as Owner has under Article 19 of this Agreement.

 

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

 

21.8 Material Changes. Contractor and Owner acknowledge and agree that certain
Changes, including increases in the Original Project Guaranteed Maximum Price
and Expansion Original Project Guaranteed Maximum Price and extensions of the
Contract Time, and allocation of the Owner Contingency, may be subject to the
approval of Owner’s Lenders and agrees that no such Changes shall become
effective without such approval.

 

21.9 General Cooperation. Contractor agrees to cooperate fully with all such
Owner’s Lenders and 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 Contract Time, or material Change in
the Drawings or 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

 

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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 Documents as Owner’s Lenders may reasonably request so long as
such amendments do not materially or substantially alter Contractor’s rights,
duties or obligations under the Contract Documents, (f) enter into a consent to
assignment in favor of Owner’s Lenders consenting to the collateral assignment
of the Contract to Owner’s Lenders and such other matters as are customary in
financings of major projects such as the Project and as Owner’s Lenders may
reasonably request , (g) provide subcontract related documents to Owner or
Owner’s Lenders upon request and (g) otherwise facilitate Owner’s Lenders review
of the construction of the Project.

 

21.9.1 Without limiting the provisions of Section 21.9, each Contractor shall
deliver (1) a certificate to the Owner and the Owner’s Lenders attaching true
and complete copies of (x) written resolutions approving the execution, delivery
and performance of this Agreement and the terms and conditions thereof and
authorizing a named person or persons to execute the Agreement and any other
documents to be delivered pursuant to this Agreement and (y) such Contractor’s
governing/constitutive documents (including, but not limited to its articles,
bylaws and shareholders agreements, as applicable) and (2) an opinion reasonably
satisfactory to Owner’s Lenders with respect to this Agreement. Each of the
documents referenced in (1) and (2) above shall be delivered by the applicable
party within 10 days of execution of this Agreement.

 

21.9.2 Contractor shall cause Guarantors to deliver (1) a certificate to the
Owner and the Owner’s Lenders attaching true and complete copies of (x) written
resolutions approving the execution, delivery and performance of the Guarantee
and the terms and conditions thereof and authorizing a named person or persons
to execute the Guarantee and any other documents to be delivered pursuant to its
terms and (y) such Guarantor’s governing/constitutive documents (including, but
not limited to its articles, bylaws and shareholders agreements, as applicable)
and (2) an opinion reasonably satisfactory to Owner’s Lenders with respect to
the Guarantee. Each of the documents referenced in (1) and (2) above shall be
delivered by the applicable party concurrently no later than the consummation of
Owner’s refinancing of the Project (currently scheduled to be on or about
August 15, 2005).

 

ARTICLE XXII.

DISPUTE RESOLUTION AND GOVERNING LAW

 

22.1 Arbitration. Any dispute, controversy or claim arising out of or relating
to the Contract, or the breach, termination or validity thereof (including any
tortious or statutory claim) (any of the foregoing being a “Dispute”) shall,
upon the written request (“Request”) of either party hereto, be resolved through
good faith negotiation between upper-level management of the parties.
Notwithstanding the foregoing, if the parties are unable to resolve a Dispute
through negotiation within thirty (30) days after receipt by the receiving party
of the Request (the expiration of such thirty-day period being the “Dispute

 

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Date”), then the Dispute shall be finally settled by arbitration in accordance
with the Rules of Arbitration of the International Chamber of Commerce (“ICC”)
then in effect (the “ICC Rules”), except as modified herein. The place of
arbitration shall be, and the award shall be rendered in, Hong Kong, and the
language of the arbitration proceedings and of the award shall be English. There
shall be three (3) arbitrators. Each arbitrator shall (a) have a good background
in common law practice, (b) be experienced in a construction project of the size
and nature of the Project, and (c) in no event be (i) involved in any way with
any other casino or gaming project in Macau, (ii) related or involved in any way
with any of the parties to this Agreement, (iii) an owner’s representative or
contractor, or (iv) a national of the country where Contractor’s parent or
Owner’s parent were formed or maintain their respective principal place of
business. Leighton, China/HK and China/Macau shall jointly nominate one
arbitrator and Owner shall nominate one arbitrator, in each case in accordance
with the relevant provisions of the ICC Rules. The two arbitrators so nominated
shall (following their confirmation by the ICC Court) nominate the third
arbitrator, who shall serve as chair of the tribunal, within 30 days of the
confirmation of nomination of the second arbitrator. If either Owner or
Contractor fails to timely nominate an arbitrator, then at the request of the
other party, or if the two arbitrators appointed by the parties fail to appoint
the third arbitrator, then at the request of either party, any arbitrator not so
nominated shall be appointed by the ICC Court of Arbitration in accordance with
the ICC Rules. The arbitration hearing shall be held as soon as practicable
after the appointment of the arbitrators but in any case within six (6) months
after signing, or finalization of, the Terms of Reference (as defined in the ICC
Rules). Consistent with the expedited nature of arbitration, each party will
provide the other with copies of documents upon which it intends to rely in
support of or in opposition to any claim or defense. The parties shall be
entitled to the production of all documents relevant to the dispute; and on the
request of any party, the arbitrators shall order a party to produce all such
relevant documents. Any arbitral award shall be final and binding upon the
parties, and shall be the sole and exclusive remedy between the parties
regarding any claims, counterclaims, issues, or accountings presented to the
arbitral tribunal. To the fullest extent allowed by law, each party hereby
waives any right to appeal such award. Judgment upon any award may be entered in
any court having jurisdiction. By agreeing to arbitration, the parties do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration
proceedings and the enforcement of any award. Nevertheless, without prejudice to
such interim or provisional remedies as may be available under the jurisdiction
of a national court, the arbitral tribunal shall itself have full authority to
grant interim or provisional remedies, including authority to order the parties
to request that a court modify or vacate any interim or provisional remedy
issued by a such court, and to award damages for the failure of any party to
respect the arbitral tribunal’s orders to that effect. The arbitral tribunal
shall not, under any circumstances, assume the powers of an amiable compositeur
or decide ex aequo et bono, but shall reach its decision in accordance with the
terms of the Contract and applicable Laws. This agreement to arbitrate shall be
binding upon the successors, assigns and any trustee or receiver of each party.
The existence of any claim, dispute or legal proceeding shall not relieve
Contractor from its obligation to properly perform its Work as set forth in the
Contract Documents.

 

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22.2 Consolidation of Disputes. In order to facilitate the comprehensive
resolution of related disputes, all disputes between Owner and Contractor that
arise under or in connection with the Contract or any other agreements entered
into by these parties (including all Disputes, as defined in this Agreement)
that are being arbitrated under this Article 22 may be brought in a single
arbitration under this Article 22. Accordingly, upon the request of any party to
an arbitration proceeding constituted under this Article 22, the arbitral
tribunal shall consolidate such arbitration proceeding with, or order the
hearing of such proceeding together with, any other arbitration proceeding
relating to such disputes or Disputes, provided that the arbitral tribunal shall
first determine that (i) there are issues of fact or law common to the
proceedings so that a consolidated proceeding would be more efficient than
separate proceedings, and (ii) no party would be unduly prejudiced as a result
of such consolidation through undue delay or otherwise. Where different
tribunals have been or are in the process of being appointed in relation to such
proceedings, the decision as to whether the proceedings are to be consolidated
or heard at the same time shall be made by the arbitral tribunal which was first
in time to be fully appointed in respect of those proceedings. If consolidation
is so ordered, the parties to each of the proceedings that is the subject of the
order will be treated as having consented to the consolidated proceedings and
the disputes or Disputes in question being finally decided by the arbitral
tribunal which ordered the consolidation. The entities comprising Contractor
hereunder shall be treated as one party for all purposes of this Article 22.

 

22.3 Legal Fees. The non-prevailing party (in accordance with the determination
of the arbitral tribunal) in any proceeding instituted pursuant to this Article
22 shall promptly pay to the prevailing party all costs, disbursements and
reasonable attorneys’ fees incurred by the prevailing party in connection with
such proceeding; provided that if the arbitral tribunal shall award costs
otherwise, the parties shall comply with such decision and allocation.

 

22.4 Continued Performance. In the event of a Dispute under this Agreement or
any other Contract Document, the parties shall not be excused from and shall
continue to perform their respective obligations thereunder; provided, however,
that if a Dispute relates to the payment of an amount by Owner under this
Agreement, Owner shall be entitled to withhold the payment of such disputed
amount pending resolution of the Dispute. In the event the arbitral tribunal
shall have determined that any amounts so withheld by Owner shall have been
wrongfully withheld in violation of this Agreement, Contractor shall be entitled
to interest at the then existing prime rate of Bank of China (Hong Kong) plus
one percent (1%) from the date when such amounts should have been paid by Owner
through the date when such amounts are finally received by Contractor.

 

22.5 Governing Law. The Contract Documents shall be governed by, and construed
in accordance with, the laws of England (including, without limitation, the laws
specifying the nature and scope of the warranties to be provided by Contractor
hereunder).

 

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22.6 Non-Waiver. In resolving disputes arising out of this Contract, it is
expressly agreed that no action or failure to act by Owner, Contractor or any
agent, representative, employee or officer of either of them (including Owner’s
Representative and Contractor’s Representative) shall constitute a waiver of any
right or duty afforded to either party in the Contract Documents. It is likewise
expressly agreed that any action or failure to act by either party shall not
constitute approval of or acquiescence in any breach of this Contract, except as
are specifically agreed to in writing by the parties’ corporate officers.

 

ARTICLE XXIII.

PROPRIETARY INFORMATION AND USE OF OWNER’S NAME

 

23.1 Proprietary Information. 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,
Owner’s Consultants or Owner’s 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.

 

23.2 Advertising and Use of Owner’s Name. 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 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 Article 23, 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.

 

23.3 Use of Drawings. All plans, Drawings, Specifications and other documents
furnished to Contractor, including, but not limited to, 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.

 

ARTICLE XXIV.

MISCELLANEOUS PROVISIONS

 

24.1 Assignment. Because of the special experience Contractor has represented it
has and unique nature of the services to be rendered by Contractor under the
Contract Documents, Contractor shall not assign or transfer its interest in the
Contract or delegate its obligations thereunder, or subcontract the entire Work
either as a whole or in the aggregate, without the prior written consent of
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Contractor without such consent shall be null and void. Owner may at any time
and from time to time, upon notice to but without consent of Contractor, assign
or transfer the Contract or delegate its obligations to an affiliate or
subsidiary of Owner, or to an entity which acquires all or substantially all of
Owner’s interest in the Project or all or substantially all of the assets or
member interests of Owner, and/or change its name from time to time. So long as
Owner’s assignee or transferee assumes in writing Owner’s obligations and
liabilities under the Contract, and Owner represents in writing at the time of
assignment or transfer that the assignee or transferee has at least the same
financial status as Owner does at the time of the assignment or transfer, Owner
shall thereafter be released from its obligations and liabilities under the
Contract.

 

24.2 Subordination. Notwithstanding any other provision of the Contract
Documents, 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 any of the other may have under
applicable law 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 Site 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 Site prior to any Lender Liens being
imposed upon or recorded against the Site or any of Owner’s assets and before
expiration of the time fixed under applicable law for exercising mechanics’ and
materialmen’s lien rights, and hereby renounces, to the fullest extent allowed
by law, any preferential rights that Contractor and its Subcontractors and
Vendors, and any other person performing any services or providing any materials
relating to the Work, would otherwise have with respect to its lien rights or
otherwise. Contractor shall, and Contractor shall require every Subcontractor
and Vendor at every tier, and any other person performing services or providing
materials 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, written
acknowledgments and restatements of the provisions of this Section 24.2 and the
subordination and renunciation described herein.

 

24.3 No Third-Party Beneficiaries. This Contract shall be binding upon and inure
solely to the benefit of the parties hereto and their successors and permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person or entity the right to enforce any term of it or any legal
or equitable right, benefit or remedy of any nature whatsoever under or by
virtue of the Contracts (Rights of Third Parties) Act 1999; provided, however,
that (a) each of the Owner’s Lenders shall be a third party beneficiary of the
rights, benefits or remedies of Owner, and (b) each Owner Indemnitee shall be a
third party beneficiary of the rights, benefits or remedies of Owner.

 

24.4 Enforceability. In the event that any provision in the Contract Documents
or any portion thereof is determined to be invalid, unenforceable or void, the
remainder of the Contract Documents shall be fully binding with the same force
and effect as though the invalid, unenforceable or void provision had been
omitted.

 

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24.5 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.

 

24.6 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.

 

24.7 Subcontractors. Contractor shall (a) procure the observance, (b) be
responsible for enforcing and shall be liable for any non-compliance, and
(c) shall indemnify Owner and the Owner Indemnitees against non-compliance, of
the provisions of this Agreement by each Subcontractor and Vendor such that
Owner has the same benefits and rights specified in this Agreement in respect of
any subcontracted Work.

 

24.8 Waiver. 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.

 

24.9 Sovereign Immunity. Each of Leighton, China/HK and China/Macau agrees that
to the extent that it may in any jurisdiction claim for itself or its assets or
revenues immunity from suit, execution, attachment (whether in aid of execution,
before judgment or otherwise) or other legal process and to the extent that in
any jurisdiction there may be attributed to itself or its assets or revenues
such immunity (whether or not claimed), it will not claim and irrevocably waives
such immunity to the full extent permitted by the laws of such jurisdiction.

 

24.10 Survival. The provisions of this Agreement, including Contractor’s
covenants, representations, guaranties, releases, warranties and indemnitees and
the benefit thereof, shall survive as valid and enforceable obligations
notwithstanding any termination, cancellation or expiration of the Contract,
acceptance of the Work, Original Project Final Completion of the Original Work
or Original Project, Expansion Project Final Completion of the Expansion Work or
Expansion Project or any combination of them. Establishment of the time periods
as described in Article 10 hereof relates only to the specific obligations of
Contractor to correct the Work, and has no relationship to the time within which
the obligation to comply with the Contract Documents is sought to be enforced,
nor to the time within which proceedings are commenced to establish Contractor’s
liability with respect to Contractor’s obligations other than specifically to
correct the Work.

 

24.11 Independent Contractor. While Contractor is required to perform the Work
in strict accordance with the Contract Documents, Contractor shall at all times
be an independent contractor and responsible for and have control over all
construction means, methods, techniques, sequences and procedures for
constructing, coordinating and

 

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scheduling all portions of the Work to achieve the requirements of the Contract
Documents. Nothing in the Contract Documents shall be deemed to imply or
represent or be construed to (a) make Contractor, its supervisors, employees,
its Subcontractors or Vendors of any tier the agents, representatives or
employees of Owner, or (b) create any partnership, joint venture, or other
association or relationship between Owner and Contractor or any Subcontractor,
nor shall anything contained in the Contract Documents be deemed to give any
third party any claim or right of action against Owner or Contractor which does
not otherwise exist without regard to the Contract Documents. Any approval,
review, inspection, supervision direction or instruction by Owner or any party
on behalf of Owner, including any of Owner’s Lenders, 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.

 

24.12 Privileged Business. Contractor acknowledges that Wynn Resorts, Limited
and its subsidiaries and other affiliated companies, including, but not limited
to, Owner, own and operate businesses that are subject to and exist because of
privileged licenses issued by governmental authorities. If requested, Contractor
shall, and Contractor shall require Subcontractors and Vendors to obtain any
qualification or clearance required by any regulatory authority having
jurisdiction over Owner, Wynn Resorts, Limited, or any subsidiary or affiliate
thereof, in each case within seven (7) days after Contractor becomes aware of
the requirement to obtain such qualification or clearance. If Owner, Wynn
Resorts, Limited, or any subsidiary or affiliate thereof is directed by any
governmental authority to cease doing business with Contractor or any
Subcontractor or Vendor, then such event shall be deemed a breach of the
Contract by Contractor and Owner shall have the right to terminate the Contract
and/or any subcontract or purchase order, among all other remedies available to
Owner. Contractor shall not be entitled to an increase in the Original Project
Guaranteed Maximum Price or Expansion Original Project Guaranteed Maximum Price
or an extension of the Contract Time in connection with the replacement of a
Subcontractor or Vendor on the Project as the result of the termination of its
subcontract or purchase order pursuant to this Section 24.12.

 

24.13 Entire Agreement. The Contract Documents set forth the full and complete
understanding of the parties as of the Effective Date of this Contract and
supersede any and all agreements, understandings and representations made or
dated prior thereto. Unless specifically enumerated or incorporated herein, the
Contract Documents do not include any other documents, any qualifications to the
Original Project Guaranteed Maximum Price or Expansion Original Project
Guaranteed Maximum Price or Contract Time contained in Contractor’s bid or any
correspondence or other proposals by either party dated prior to the Effective
Date. No modifications of the Contract shall be binding unless executed in
writing by the parties to this Agreement. Each and all of the Exhibits A through
and including O referenced in this Agreement are hereby expressly incorporated
herein by this reference.

 

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24.14 Rights and Remedies. Unless otherwise provided in this Contract, duties
and obligations imposed by the Contract and rights and remedies available
thereunder shall be in addition to and not in limitation of duties, obligations,
rights and remedies otherwise imposed or available at law or in equity.

 

24.15 Further Acts and Assurances. Each party shall promptly and duly execute
and deliver all such documents and assurances and take such further action as
may be necessary or appropriate or reasonably requested by the other party in
order to carry out more effectively the intent and purpose of this Contract and
to establish and protect the rights and remedies created or intended to be
created hereunder.

 

24.16 Expenses. Except as otherwise expressly provided herein, each party shall
pay its own costs and expenses (including the fees and expenses of its own
agents, representatives, advisers, counsel and accountants) necessary for the
negotiation, preparation, execution, delivery, performance of and compliance
with this Contract.

 

24.17 Press Releases. Contractor shall not, and shall require that the
Subcontractors and Vendors do not, issue any press release or make any other
public announcement relating to the transactions contemplated hereby or disclose
the existence or content of this Contract without the prior written consent of
the Owner. Notwithstanding the foregoing, the parties (and each employee,
representative, or other agent of the parties) may disclose to any and all
persons, without limitation of any kind, the tax treatment and any facts that
may be relevant to the tax structure of the transaction, provided, however, that
the foregoing provisions of this sentence shall not allow any party (or any
employee, representative, or other agent thereof) to disclose any other
information that is not relevant to understanding the tax treatment and tax
structure of the transaction (including the identity of any party and any
information that could lead another to determine the identity of any party), or
any other information to the extent that such disclosure could result in a
violation of any applicable securities Law.

 

24.18 Late Payments by Contractor. If Contractor shall fail to make any payment
to Owner within five (5) days after the due date thereof, interest shall
thereafter commence to accrue (from the original due date of payment under the
applicable provision in this Agreement or as required pursuant to any
proceedings instituted under Article 22) on such delinquent amount at then
existing prime rate of Bank of China (Hong Kong) plus one percent (1%), until
paid.

 

24.19 Construction of Agreement. Each party hereto acknowledges and agrees that
(a) it has been afforded full opportunity to review and negotiate the terms and
provisions of this Agreement, (b) it was represented by counsel in connection
therewith, and (c) this Agreement shall be construed without the aid of any
principle requiring construction against the party drafting or causing this
Agreement to be drafted.

 

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24.20 Business Days. References in this Agreement to “business days” shall mean
days, other than a Saturday or Sunday, on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits)
in Hong Kong.

 

ARTICLE XXV.

NOTICES

 

25.1 Notice Procedures. All notices, demands, requests, instructions and other
communications relating to the Contract Documents (collectively, “Notices”),
shall be in English, in writing and effective upon the earlier of actual receipt
by the parties at the addresses listed below or three (3) business days after
being sent, whether sent by email (followed by hard copy sent by regular mail or
by confirmed fax as provided herein), by facsimile transmission (with
confirmation of receipt), by registered or certified mail, or by messenger or
reputable overnight courier.

 

25.2 Notices To Owner. All Notices to Owner (except requests for information,
Shop Drawing submittals, instructions and similar notices) shall be sufficient
when sent in accordance with Section 25.1 above and addressed as follows:

 

Wynn Resorts (Macau) S.A.

c/o Wynn Resorts, Limited

Legal Department

3131 Las Vegas Boulevard South

Las Vegas, Nevada 89109

Facsimile No. (702) 770-1520

Telephone No. (702) 770-2111

 

Todd Nisbet, Executive Vice President Construction

Wynn Design and Development LLC

680 Pilot Road Suite I

Las Vegas, Nevada 89119

Facsimile No. (702) 770-5001

Telephone No. (702) 770-5100

 

And:

 

Gary Chin, Director of Construction

Wynn Design and Development LLC

180 Alemeda Dr. Carlos d’Assumpção

5th Floor, Tong Nam Ah Commercial Centre

Macau SAR

Facsimile No. (853) 757-635

Telephone No. (853) 795-5000

 

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Contractor shall concurrently with delivery to Owner provide to Owner’s Lenders
copies of all Notices (except requests for information, Shop Drawing submittals,
instructions and similar notices) at an address or addresses to be provided,
with copies to:

 

To be provided.

 

25.3 Notices To Contractor. All Notices to Contractor shall be sufficient when
sent as set forth in Section 25.1 above and addressed as follows:

 

Michael Harvey, Project Director

Leighton - China State Joint Venture

39th Floor, Sun Hung Kai Centre

30 Harbour Road

Hong Kong

Facsimile No. (852) 2528-9030

Telephone No. (852) 2823-1111

 

25.4 Change of Address. Either party may, from time to time, designate in
accordance with this Article 25 a different individual and/or address to which
Notices are to be delivered.

 

ARTICLE XXVI.

REPRESENTATIONS AND WARRANTIES

 

26.1 Contractor’s Representations and Warranties. Each of Leighton, China/HK and
China/Macau jointly and severally represents and warrants to Owner that:

 

(a) it is a company duly organized, validly existing and is current on all
payments to maintain such existence under the laws of the jurisdiction of its
formation. It has all necessary power and authority to carry on its business as
presently conducted, to own or hold under lease its properties and to enter into
and perform its obligations under the agreements to which it is or is to be a
party. It is duly qualified or licensed to do business in Macau and in all
jurisdictions wherein the nature of its business and operations or the character
of the properties owned or leased by it makes such qualification or licensing
necessary and where the failure to be so qualified or licensed would impair its
ability to perform its obligations under the Agreement or would result in a
material liability to or would have a material adverse effect on its financial
condition, business, operations or prospects;

 

(b) it has all necessary power and authority to execute, deliver and perform its
obligations under the Agreement, and each of the execution, delivery and
performance by it of the Agreement has been duly authorized by

 

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all necessary action on its part, does not require any approval, except as has
been heretofore obtained, of its governing body or any consent of or approval
from any trustee, lessor or holder of any indebtedness or other obligation of
it, except for such as have been duly obtained, and does not contravene or
constitute a default under its organizational documents or, to the best of its
knowledge, any provision of applicable Law or any agreement, judgment,
injunction, order, decree or other instrument binding upon it, or subject the
Work, the Project or any component part thereof or the Site or any portion
thereof to any Lien other than as contemplated or permitted by the Agreement;
and it is in compliance with all applicable Laws and approvals (i) which govern
its ability to perform its obligations under the Agreement or (ii) the
noncompliance with which would have a material adverse effect on its ability to
perform its obligations under the Agreement;

 

(c) neither the execution and delivery by it of the Agreement, nor the
consummation by it of any of the transactions contemplated hereby, requires,
with respect to it, the consent or approval of, the giving of notice to, the
registration with, the recording or filing of any document with, or the taking
of any other action in respect of any government authority, except such as are
not yet required (as to which it has no reason to believe that the same will not
be readily obtainable in the ordinary course of business upon due application
therefor) or which have been duly obtained and are in full force and effect;

 

(d) it has duly and validly executed and delivered the Agreement and the
Agreement constitutes a legal, valid and binding obligation of it enforceable
against it in accordance with its terms;

 

(e) it has all the required skills and capacity necessary to perform or cause to
be performed the Work in a proper, timely and professional manner, utilizing
prudent project management and supervisory procedures, all in accordance with
the high standards required by the Agreement;

 

(f) it has knowledge of all of the legal requirements and business practices
that must be followed in performing the Work and the Work will be in conformity
with such requirements and practices and in compliance with all applicable Laws
and applicable government approvals. All engineering services to be provided as
part of the Work shall be provided by engineers qualified to perform such
services in the location where such services are performed. The Project can be
constructed under current building codes, zoning, land use and other applicable
Laws and government approvals affecting the development of the Site and the
performance of the Work and it can be constructed by Contractor for the Original
Project Guaranteed Maximum Price and Expansion Original Project Guaranteed
Maximum Price;

 

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(g) it is financially solvent, able to pay its debts as they mature, and
possesses sufficient working capital to complete its obligations under the
Agreement. It is able to furnish the plant, tools, materials, supplies,
equipment, labor and design services needed for the Work, is experienced in and
competent to perform the Work, both construction and design, contemplated by
this Agreement, and is qualified to do the Work;

 

(h) it owns or has the right to use all the patents, trademarks, service marks,
tradenames, copyrights, licenses, franchises, permits or rights with respect to
the foregoing necessary to perform the Work and to carry on its business as
presently conducted and presently planned to be conducted without conflict with
the rights of others. In addition, it holds, or the Work shall be performed
under the general supervision of an individual holding, any and all consents,
licenses, permits and other authorizations, both construction and design,
permits or special licenses required by law to perform the services under the
Agreement; and

 

(i) there is no action, suit or proceeding, at law or in equity, or official
investigation before or by any government authority, arbitral tribunal or other
body pending or, to the best of its knowledge, threatened against or affecting
it or any of its properties, rights or assets, which could reasonably be
expected to result in a material adverse effect on its ability to perform its
obligations under the Agreement or on the validity or enforceability of the
Agreement.

 

26.1.2 Contractor’s Covenants. Each of Leighton, China/HK and China/Macau
jointly and severally represents, warrants and covenants to Owner that:

 

(a) all equipment and materials incorporated in the Project shall be free and
clear of all liens and shall be new;

 

(b) the design and engineering of the Project shall be performed in accordance
with the Contract Documents and the best practices, methods and standards
followed by contractors constructing “five-star” first class Las Vegas-style
luxury resorts and casinos, i.e., employing the highest standards with respect
to the design, construction, operation and maintenance of facilities and
equipment of the type to be incorporated into the Work, and which practices,
methods and standards shall conform to the recommendations of the equipment
suppliers and manufacturers;

 

(c) the Work will be performed in accordance with the Contract Documents and the
best practices, methods and standards followed by contractors constructing
“five-star” first class Las Vegas-style luxury resorts and casinos, i.e.,
employing the highest standards with respect to the design,

 

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construction, operation and maintenance of facilities and equipment of the type
to be incorporated into the Work, and in a good and workmanlike manner and it
shall be free from defects;

 

(d) the Project shall be designed and constructed to conform and perform to the
specifications, drawings, and other descriptions contained in the Contract
Documents, including, but not limited to, the Original Project Guaranteed
Maximum Price Premises and Assumptions and Expansion Project Guaranteed Maximum
Price Premises and Assumptions;

 

(e) the Project shall be designed and constructed to comply with all applicable
Laws;

 

(f) installation of any and all material, supplies and equipment shall be in
strict accordance with manufacturers’ requirements; and

 

(g) it has not, and shall not in the future, and to the best of the knowledge of
Contractor, the Subcontractors and Vendors have not, and Contractor shall
procure that each Subcontractor and Vendor will not, take any action, directly
or indirectly, in connection with the preparation, negotiation, submission,
procurement, execution or performance of any agreement, instrument or other
document in any way relating to the Project or the Work that would constitute a
violation of any laws of Macau or the United States of America (including the
United States Foreign Corrupt Practices Act of 1977, as amended) regarding
business practices, bribery or corruption. Contractor shall indemnify, protect,
defend and hold Owner and the Owner Indemnitees harmless from and against any
and all Actions attributable to any breach of the terms and provisions of this
Section 26.1.2(g) by Contractor. The provisions of this Section 26.1.2(g) shall
survive the termination of this Agreement for whatever reason.

 

26.2 Owner’s Representations and Warranties. Owner represents and warrants to
Contractor that:

 

26.2.1 Owner is a company duly organized, validly existing and is current on all
payments to maintain such existence under the laws of Macau. Owner has all
necessary power and authority to carry on its business as presently conducted,
to own or hold under lease its properties and to enter into and perform its
obligations under the agreements to which it is or is to be a party. Owner is
duly qualified or licensed to do business in all jurisdictions wherein the
nature of its business and operations or the character of the properties owned
or leased by it makes such qualification or licensing necessary and where the
failure to be so qualified or licensed would impair its ability to perform its
obligations under the Agreement or would result in a material liability to or
would have a material adverse effect on its financial condition, business,
operations or prospects;

 

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26.2.2 Owner has all necessary power and authority to execute, deliver and
perform its obligations under the Agreement, and each of the execution, delivery
and performance by Owner of the Agreement has been duly authorized by all
necessary action on the part of Owner, does not require any approval, except as
has been heretofore obtained, of Owner’s governing body or any consent of or
approval from any trustee, lessor or holder of any indebtedness or other
obligation of Owner, except for such as have been duly obtained, and does not
contravene or constitute a default under its organizational documents or, to the
best knowledge of Owner, any provision of applicable Law or any agreement,
judgment, injunction, order, decree or other instrument binding upon Owner, or
subject the Work, the Project or any component part thereof or the Site or any
portion thereof to any Lien other than as contemplated or permitted by the
Agreement; and Owner is in compliance with all applicable Laws and government
approvals (i) which govern its ability to perform its obligations under the
Agreement or (ii) the noncompliance with which would have a material adverse
effect on its ability to perform its obligations under the Agreement;

 

26.2.3 Neither the execution and delivery by Owner of the Agreement, nor the
consummation by Owner of any of the transactions contemplated hereby, requires,
with respect to Owner, the consent or approval of, the giving of notice to, the
registration with, the recording or filing of any document with, or the taking
of any other action in respect of any government authority, except such as are
not yet required (as to which Owner has no reason to believe that the same will
not be readily obtainable in the ordinary course of business upon due
application therefore) or which have been duly obtained and are in full force
and effect;

 

26.2.4 Owner has duly and validly executed and delivered the Agreement and the
Agreement constitutes a legal, valid and binding obligation of Owner enforceable
against it in accordance with its terms; and

 

26.2.5 There is no action, suit or proceeding, at law or in equity, or official
investigation before or by any government authority, arbitral tribunal or other
body pending or, to the best knowledge of Owner, threatened against or affecting
Owner or any of its properties, rights or assets, which could reasonably be
expected to result in a material adverse effect on Owner ‘s ability to perform
its obligations under the Agreement or on the validity or enforceability of the
Agreement.

 

ARTICLE XXVII.

CONTRACTOR’S BUSINESS PRACTICES

 

27.1 Business Practices. Each of Leighton, China/HK and China/Macau represents,
warrants and covenants to Owner as follows:

 

27.1.1 it has not taken and shall not take, and its parent companies,
subsidiaries and affiliates and each of its and their respective officers,
directors, employees, agents, representatives, owners and shareholders
(collectively, the “Related Entities”) have

 

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not taken, and it shall cause its Related Entities not to take, any action,
directly or indirectly, in connection with the preparation, negotiation,
submission, procurement, execution or performance of any agreement, instrument
or other document in any way relating to the Project or the Work that would
constitute a violation of any applicable Laws of Macau or the United States of
America (including the United States Foreign Corrupt Practices Act of 1977, as
amended (the “FCPA”)) regarding business practices, bribery or corruption;

 

27.1.2 it has complied and shall comply with, and its Related Entities have
complied and it shall cause its Related Entities to comply with, any law or
regulation under the applicable Laws of Macau or the United States that is or
may be applicable to it (or any of its Related Entities) in the conduct of its
business (or the business of any of its Related Entities) relating to the
Project or the Work;

 

27.1.3 mindful of the principles of the FCPA, it has not made, authorized or
done anything in furtherance of, and shall not make, authorize or do anything in
furtherance of, and its Related Entities have not made, authorized or done
anything in furtherance of, and it shall cause its Related Entities not to make,
authorize or do anything in furtherance of, any payment, loan, gift of money or
anything of value, or promise or offer thereof, directly or indirectly, to or
for the use or benefit of:

 

(a) any official or employee of Macau or any other government, or of any
political subdivision, agency or instrumentality of any such governments, or to
any political party or candidate or official thereof (each an “Official”); or

 

(b) any other person or entity if it knows or has reason to suspect that any
part of such payment, loan, gift or thing of value will be directly or
indirectly given or paid by such other person or entity for the purpose of
(i) influencing an act or decision of an Official in his official capacity,
(ii) inducing an Official to do or omit to do an act in violation of the lawful
duty of such Official or (iii) inducing an Official to use his influence with
that government to affect or influence any act or decision;

 

27.1.4 it has not taken and shall not take, and its Related Entities have not
taken and it shall cause its Related Entities not to take, any action in
relation to the Project that would subject it (or its Related Entities) to
liability or penalty under any and all applicable Laws, and it shall not take,
and shall cause its Related Entities not to take, any action that would subject
Owner or Contractor (or their respective Related Entities) to liability or
penalty under any and all applicable Laws relating to the issuance of privileged
business licenses or that would result in the revocation of any privileged
business license held by Owner (or its Related Entities);

 

27.1.5 it has ensured and shall ensure, and its Related Entities have ensured
and it shall cause its Related Entities to ensure, that all invoices, financial
settlements,

 

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reports and billings in respect of the Work reflect properly the facts about all
activities and transactions the subject thereof; and

 

27.1.6 it has notified and shall notify Owner promptly upon the discovery of any
non-compliance with the foregoing.

 

Contractor agrees to indemnify Owner from and against all Actions that arise as
a result of Contractor’s breach of the foregoing provisions.

 

ARTICLE XXVIII.

GENERAL PROPRIETY

 

28.1 Alcoholic Beverages and Drugs. The Contractor shall not, otherwise than in
accordance with applicable Laws then in effect, import, sell, give, barter or
otherwise dispose of any alcoholic liquor, or drugs, or permit to suffer any
such importation, sale, gift, barter, or disposal by its agents , employees,
Subcontractors or Vendors.

 

28.2 Arms and Ammunition. The Contractor shall not import, sell, give, barter or
otherwise dispose of to any person or persons, any arms or ammunition of any
kind or suffer any such importation, sale, gift, barter, or disposal by its
agents, employees, Subcontractors or Vendors.

 

28.3 Riotous and Disorderly Conduct. The Contractor shall at all times take all
reasonable precautions to prevent any unlawful, riotous or disorderly conduct by
or among its employees, Subcontractors and Vendors and for the preservation of
peace and protection of persons and property in the neighborhood of the Site.

 

28.4 Epidemics. In the event of any outbreak of illness of a epidemic nature,
the Contractor shall comply with and carry out such regulations, orders and
requirements as may be made by the Government of Macau or the People’s Republic
of China, or the local medical or sanitary authorities for the purpose of
dealing with and overcoming the same.

 

[NO FURTHER TEXT ON THIS PAGE]

 

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IN WITNESS whereof this Agreement has been duly executed and delivered as a deed
the day and year first above written.

 

EXECUTED as a Deed on behalf of  

)

  /s/ Stephen Wynn

WYNN RESORTS (MACAU) S.A., a

 

)

   

company incorporated in the Macau

 

)

   

Special Administrative Region, by

 

)

   

Stephen A. Wynn, being a person who,

 

)

   

in accordance with the laws of that

 

)

   

territory, is acting under the authority of

 

)

   

the company in the presence of:

 

)

    Kim Sinatra        

Signature and name of witness

       

 

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SIGNED, SEALED and DELIVERED by Mr Joe

 

)

  /s/ Joe Dujmovic

Dujmovic as attorney for LEIGHTON

 

)

  By executing this deed the attorney states that the attorney has received no
notice of revocation of the power of attorney

CONTRACTORS (ASIA) LIMITED under power

 

)

 

of attorney dated 18 August 2005, in the presence of:

 

)

  /s/ Esther Palmer  

)

   

Name of Witness: Esther Palmer

       

Occupation of Witness: Legal Assistant

       

Address of Witness:

       

Mallesons Stephen Jaques

37th Floor, Two International Finance Centre

8 Finance Street, Central, Hong Kong

       

 

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)

  /s/ Zhao Yong THE COMMON SEAL of CHINA STATE  

)

    CONSTRUCTION ENGINEERING (HONG  

)

    KONG) LIMITED was hereunto affixed in the  

)

   

presence of:

 

)

               

)

                   

)

       

Name: Zhou Yong

           

  Director

 

)

       

 

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        )   /s/ Jianping Xu EXECUTED by Mr. Xu, Jianping   )   By executing this
deed the attorney in his capacity as auxiliar of, and with authority to   )  
warrants that the signatory is duly bind, CHINA CONSTRUCTION   )   authorized to
execute this deed on ENGINEERING (MACAU) COMPANY   )   behalf of CHINA
CONSTRUCTION LIMITED, a limited company incorporated in the   )   ENGINEERING
(MACAU) Macau Special Administrative Region,   )   COMPANY LIMITED pursuant to a
resolution by the General   )      Shareholders Meeting dated 6 September 2005  
)      in the presence of: /s/ Wang Hai          Name of Witness: Wang Hai      
   Occupation of Witness: Engineer         

Address of Witness:

Rua do Campo, No. 78

Edificio Comercial Zhang Kian

19 andar

Macau

        

 

164