**Exhibit 10.12**

 

|  | Document  A191TM - 1996 Part 2 |
|--|--------------------------------|

 

***Standard Form of AgreementBetween Owner and Design/Builder***

*Part 2Agreement*

 

TABLE OF ARTICLES

 

PART 2 AGREEMENT

 
| 1.  | GENERAL PROVISIONS                            |   |
|-----|-----------------------------------------------|--------|
| 2.  | OWNER                                         |   |
| 3.  | DESIGN/BUILDER                                |   |
| 4.  | TIME                                          |   |
| 5.  | PAYMENTS                                      |   |
| 6   | PROTECTION OF PERSONS AND PROPERTY            |   |
| 7.  | INSURANCE AND BONDS                           |   |
| 8.  | CHANGES IN THE WORK                           |   |
| 9.  | CORRECTION OF WORK                            |   |
| 10. | DISPUTE RESOLUTION-MEDIATION AND  ARBITRATION |   |
| 11. | MISCELLANEOUS PROVISIONS                      |   |
| 12. | TERMINATION OF THE AGREEMENT                  |   |
| 13. | BASIS OF COMPENSATION                         |   |
| 14. | OTHER CONDITIONS AND SERVICES                 |   |

 

AGREEMENT made as of the Firstday of September in the year of 2004

*(In words,indicate day month and year.)*

 

BETWEEN the Owner

*(Name andaddress)*

 

Seneca Territory GamingCorporation

 

 

and the Design/Builder:

*(Name andaddress)*

 

Klewin Gaming & Hospitality,Inc.

40 Connecticut Avenue

Norwich, CT 06360

 

For the following Project:

*(Include Projectname, location and a summary description.)*

 

Seneca Allegany Casino ParkingGarage/Hotel

Salamanca, NY

 

The architectural servicesdescribed in Article 3 will be provided by the following person or entity whois lawfully licensed to practice architecture:

 

ADDITIONS AND DELETIONS: Theauthor of this document has added information needed for its completion. Theauthor may also have revised the text of the original AIA standard form. An *Additions and Deletions Report* that notes added informationas well as revisions to the standard form text is available from the author andshould be reviewed. A vertical line in the left margin of this documentindicates where the author has added necessary information and where the authorhas added to or deleted from the original AIA text.

 

This document has importantlegal consequences. Consultation with an attorney is encouraged with respect toits completion or modification.

 

AIA Document A191 TM- 1996 Part 2. Copyright © 1985, 1996 by The American Institute of Architects.All rights reserved. WARNING: This AIA® Document is protected by U.S. CopyrightLaw and International Treaties. Unauthorized reproduction or distribution ofthis AIA® Document, or any portion of it, may result in severe civil andcriminal penalties, and will be prosecuted to the maximum extent possible underthe law. This document was produced by AIA software at 12:19:22 on 10/12/2004under Order No.1000126358_1 which expires on 6/29/2005, and is not for resale.
| User Notes: |   | (44572571) |
|-------------|--------|------------|

 

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| **Name and address**                      | ** ** | **Registration  Number** | ** ** | **Relationship  to Design/Builder** |
|-------------------------------------------|------------|--------------------------|------------|-------------------------------------|
| Jeter Cook  & Jepson Architects, Inc. |       | N/A                      |       | Architect                           |
| 450 Church  Street                        |       |                     |       |                                |
| Hartford, CT  06103                       |       |                     |       |                                |

 

Normal structural, mechanicaland electrical engineering services will be provided contractually through the Architectexcept as indicated below:

 
| **Name, address and discipline** | ** ** | **Registration  Number** | ** ** | **Relationship  to Design/Builder** |
|----------------------------------|------------|--------------------------|------------|-------------------------------------|
| TBD                              |       |                     |       |                                |

 

The Owner and theDesign/Builder agree as set forth below.

 

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TERMS AND CONDITIONS – PART 2 AGREEMENT

 

ARTICLE 1 GENERAL PROVISIONS

§ 1.1 BASIC DEFINITIONS

§ 1.1.1 The Contract Documentsconsist of this Part 2 Agreement, this Part 2 Agreement, the Design/Builder’sProposal attached as Exhibit A and the Design/Builder’s Budget Estimate,attached as Exhibit B the Construction Documents approved by the Owner inaccordance with Section 3.2.3 and Modifications issued after execution of this Part2 Agreement. A Modification is a Change Order or a written amendment to thisPart 2 Agreement signed by both parties, or a Construction Change Directiveissued by the Owner in accordance with Section 8.3.

 

§ 1.1.2 The term “Work” meansthe design and construction and services provided by the Design/Builder to fulfillthe Design/Builder’s obligations.

 

§ 1.2 EXECUTION, CORRELATIONAND INTENT

§ 1.2.1 It is the intent of theOwner and Design/Builder that the Contract Documents include all itemsnecessary for proper execution and completion of the Work. The ContractDocuments are complementary, and what is required by one shall be as binding asif required by all; performance by the Design/Builder shall be required only tothe extent consistent with and reasonably inferable from the Contract Documentsas being necessary to produce the intended results. Words that have well knowntechnical or construction industry meanings are used in the Contract Documentsin accordance with such recognized meanings.

 

§ 1.2.2 If the Design/Builderbelieves or is advised by the Architect or by another design professionalretained to provide services on the Project that implementation of anyinstruction received from the Owner would cause a violation of any applicablelaw, the Design/Builder shall notify the Owner in writing. Neither theDesign/Builder nor the Architect shall be obligated to perform any act whicheither believes will violate any applicable law.

 

§ 1.2.3 Nothing contained inthis Part 2 Agreement shall create a contractual relationship between the Ownerand any person or entity other than the Design/Builder.

 

§ 1.3 OWNERSHIP AND USE OFDOCUMENTS

§ 1.3.1 Subject to Owner’scomplete payment of all monies as provided in this Agreement, drawings,specifications, and other documents and electronic data furnished by theArchitect (“Architect Work Product”) shall become the property of the Owner.Drawings, specifications, and other documents and electronic data are furnishedfor use solely with respect to this Part 2 Agreement. The Owner shall be permittedto retain copies, including reproducible copies, of the drawings,specifications, and other documents and electronic data furnished by theDesign/Builder for information and reference in connection with the Project exceptas provided in Sections 1.3.2 and 1.3.3.

 

§ 1.3.2. Drawings,specifications and other documents and electronic data furnished by theDesign/Builder shall not be used by the Owner or other on other projects, foradditions to this Project or for completion of this Project by others, exceptby agreement in writing and with appropriate compensation to theDesign/Builder, unless the Design/Builder is adjudged to be in default underthis Part 2 Agreement or under any other subsequently executed agreement.

 

§ 1.3.3 If the Design/Builderdefaults in the Design/Builder’s obligations to the Owner, the Architect’s WorkProduct shall be conveyed to the Owner for the completion of the Project,conditioned upon the Owner’s execution of an agreement to cure theDesign/Builder’s default in payment to the Architect for services previouslyperformed and to indemnify the Architect and Design/Builder with regard toclaims arising from such reuse without the Architect’s and Design/Builder’sprofessional involvement.

 

§ 1.3.4 Submission ordistribution of the Design/Builder’s documents to meet official regulatoryrequirements or for similar purposes in connection with the Project is not tobe construed as publication in derogation of the rights reserved in Section1.3.1.

 

ARTICLE 2 OWNER

§ 2.1 Owner grants a waiver ofits sovereign immunity for suit exclusively to Design/Builder for the purposeof enforcing this Agreement or permitting or compelling arbitration and otherremedies as provided herein. This waiver is solely for the benefit of theaforesaid parties and for no other person or entity. For this limited purpose,Owner

 

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consents to enforcement ofarbitral awards in the United States District Court for the Western DistrictCourt of New York. Owner hereby waives any requirement of exhaustion of tribalremedies, and agrees it will not present any affirmative defense in any disputebased on alleged failure to exhaust such remedies. Owner’s waiver of immunityfrom suit is irrevocable and specifically limited to an action to compelarbitration pursuant to Article 10 of this Agreement and specific enforcementthereof.

 

§ 2.2 The Owner has designatedG. Michael Brown as the representative authorized to act on the Owner’s behalfwith respect to the Project. The Owner or such authorized representative shallrender decisions in a timely manner and in accordance with the scheduleaccepted by the Owner, including its review of documents submitted by theDesign/Builder, which shall be completed within seventy two (72) hours ofreceipt by Owner. The Owner may obtain independent review of the ContractDocuments by a separate architect, engineer, contractor or cost estimator undercontract to or employed by the Owner. Such independent review shall beundertaken at the Owner’s expense in a timely manner and shall not delay theorderly progress of the Work.

 

§ 2.3 The Owner may appoint anon-site project representative to observe the Work and to have such otherresponsibilities as the Owner and Design/Builder agree in writing.

 

§ 2.4 The Owner shall cooperatewith the Design/Builder in securing building and other permits, licenses and inspections.

 

§ 2.5 The Owner shall furnishservices of land surveyors, geotechnical engineers and other consultants forsubsoil, air and water conditions, when such services are deemed necessary bythe Design/Builder to properly carry out the design services required by thisPart 2 Agreement.

 

§ 2.6 The Owner shall disclose,to the extent known to the Owner, the results and reports of prior tests,inspections or investigations conducted for the Project involving: structuralor mechanical systems; chemical, air and water pollution; hazardous materialsor other environmental and subsurface conditions. The Owner shall disclose allinformation known to the Owner regarding the presence of pollutants at theProject’s site.

 

§ 2.7 The Owner shall furnishall legal, accounting and insurance counseling services as may be necessary atany time for the Project, including such auditing services as the Owner mayrequire to verify the Design/Builder’s Application for Payment.

 

§ 2.8 Those services,information, surveys and reports required by Sections 2.4 through 2.6 which arewithin the Owner’s control shall be furnished at the Owner’s expense, and theDesign/Builder shall be entitled to rely upon the accuracy and completenessthereof, except to the extent the Owner advises the Design/Builder to thecontrary in writing in which case the Design/Builder shall not be bound by orresponsible to comply herewith.

 

§ 2.9 If the Owner requires theDesign/Builder to maintain any special insurance coverage, policy, amendment,or rider, the Owner shall pay the additional cost thereof, except as otherwisestipulated in this Part 2 Agreement.

 

§ 2.10 If the Owner observes orotherwise becomes aware of a fault or defect in the Work or nonconformity withthe Design/Builder’s Proposal or the Construction Documents, the Owner shallgive prompt written notice thereof to the Design/Builder.

 

§ 2.11 The Owner shall, at therequest of the Design/Builder, prior to execution of this Part 2 Agreement andpromptly upon request thereafter, furnish to the Design/Builder reasonableevidence that financial arrangements have been made to fulfill the Owner’sobligations under the Contract.

 

§ 2.12 The Owner shallcommunicate with persons or entities employed or retained by the Design/Builderthrough the Design/Builder, unless otherwise directed by the Design/Builder.

 

§ 2.13 The Design/Builder willbe afforded continuous and unrestricted access to the Project site during thecourse of design and construction. The Owner shall provide sufficient space fora field office and storage of materials and equipment by the Design/Builder atthe Project site. The Design/Builder will not be restricted on its work hoursunless by mutual agreement.

 

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§2.14 The Owner shall secureand pay for all necessary approvals, license, permits, certificates, documentsor rights from any and all necessary government entities, bureaus, or agenciesand private parties which may be required for the Project.

 

ARTICLE 3  DESIGN/BUILDER

§ 3.1 SERVICES ANDRESPONSIBILITIES

§ 3.1.1 The Design/Builder isnot a design professional licensed to provide professional services inaccordance with applicable licensing statutes. Design services required by thisPart 2 Agreement shall be performed by qualified architects and other designprofessionals. The contractual obligations of such professional persons or entitiesare undertaken and performed in the interest of the Design/Builder.Design/Builder may replace the designated Architect upon giving reasonablenotice and explanation to Owner, and obtaining the prior approval by Owner ofsuch dismissal and of the replacement Architect, which approval will notunreasonably be withheld.

 

§ 3.1.2 The agreements betweenthe Design/Builder and the persons or entities identified in this Part 2Agreement, and any subsequent modifications, shall be in writing. Theseagreements, including financial arrangements with respect to this Project shallbe promptly and fully disclosed to the Owner upon request.

 

§ 3.1.3 The Design/Buildershall be responsible to the Owner for acts and omissions of the Design/Builder’semployees, subcontractors and their agents and employees, and other persons,including the Architect and other design professionals, performing any portionof the Design/Builder’s obligations under this Part 2 Agreement.

 

§ 3.2 BASIC SERVICES

§ 3.2.1 The Design/Builder'sBasic Services are described below and in Article 14.

 

§ 3.2.2 The Design/Buildershall designate a representative authorized to act on the Design/Builder’sbehalf with respect to the Project.

 

§ 3.2.3 The Design/Buildershall submit Construction Documents for review and approval by the Owner’srepresentative designated pursuant to Paragraph 2.2. Construction Documents mayinclude drawings, specifications, and other documents and electronic datasetting forth in detail the requirements for construction of the Work, andshall:

 

.1        be consistent with theintent of the Design/Builder’s Proposal;

.2        provide information forthe use of those in the building trades; and

.3        include documentscustomarily required for regulatory agency approvals.

 

§ 3.2.4 The Design/Builder,with the assistance of the Owner, shall file documents required to obtainnecessary approvals of governmental authorities having jurisdiction over theProject.

 

§ 3.2.5 Unless otherwiseprovided in the Contract Documents, the Design/Builder shall provide or causeto be provided and shall pay for design services, labor, materials, equipment,tools, construction equipment and machinery, water, heat, utilities,transportation and other facilities and services necessary for proper executionand completion of the Work, whether temporary or permanent and whether or notincorporated or to be incorporated in the Work.

 

§ 3.2.6 The Design/Buildershall be responsible for all construction means, methods, techniques, sequencesand procedures and for coordinating all portions of the Work under this Part 2Agreement.

 

§ 3.2.7 The Design/Buildershall keep the Owner informed of the progress and quality of the Work.

 

§ 3.2.8 The Design/Buildershall be responsible for correcting Work which does not conform to the ContractDocuments.

 

§ 3.2.9 The Design/Builderwarrants to the Owner that materials and equipment furnished under the Contractwill be of good quality and new unless otherwise required or permitted by theContract Documents, that the construction will be free from faults and defects,and that the construction will conform with the requirements of paragraph 1.2.1.Construction not conforming to these requirements, including substitutions notproperly approved by the Owner, shall be corrected in accordance with Article9.

 

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§ 3.2.10 The Design/Buildershall pay all sales, consumer, use and similar taxes which had been legallyenacted as of the date of this Part 2 Agreement, and shall be reimbursed by theOwner as Cost of the Work.

 

§ 3.2.11 The Design/Buildershall comply with and give notices required by laws, ordinances, rules,regulations and lawful orders of public authorities relating to the Project.

 

§ 3.2.12 The Design/Buildershall pay royalties and license fees patented for designs, processes orproducts. The Design/Builder shall defend suits or claims for infringement ofpatent rights and shall hold the Owner harmless from loss on account thereof, butshall not be responsible for such defense or loss when a particular design,process or product of a particular manufacturer is required by the Owner.However, if the Design/Builder has reason to believe the use of a requireddesign, process or product is an infringement of a patent, the Design/Buildershall be responsible for such loss unless such information is promptlyfurnished to the Owner.

 

§ 3.2.13 The Design/Buildershall keep the premises and surrounding area free from accumulation of wastematerials or rubbish caused by operations under this Part 2 Agreement. At thecompletion of the Work, the Design/Builder shall remove from the site wastematerials, rubbish, the Design/Builder’s tools, construction equipment,machinery, and surplus materials.

 

§ 3.2.14 The Design/Buildershall notify the Owner when the Design/Builder believes that the Work or anagreed upon portion thereof is substantially completed. If the Owner concurs,the Design/Builder shall issue a Certificate of Substantial Completion whichshall establish the Date of Substantial Completion, shall state theresponsibility of each party for security, maintenance, heat, utilities, damageto the Work and insurance, shall include a list of items to be completed orcorrected and shall fix the time within which the Design/Builder shall completeitems listed therein. Disputes between the Owner and Design/Builder regardingthe Certificate of Substantial Completion shall be resolved in accordance withprovisions of Article 10.

 

§ 3.2.15 The Design/Buildershall maintain at the site for the Owner one record copy of the drawings,specifications, product data, samples, shop drawings, Change Orders and othermodifications, in good order and regularly updated to record the completedconstruction. These shall be delivered to the Owner upon completion ofconstruction and prior to final payment.

 

§ 3.3 ADDITIONAL SERVICES

§ 3.3.1 The services describedin this Section 3.3 are not included in Basic Services unless so identified inArticle 14, and they shall be paid for by the Owner as provided in this Part 2Agreement, in addition to the compensation for Basic Services. The servicesdescribed in this Section 3.3 shall be provided only if authorized or confirmedin writing by the Owner.

 

§ 3.3.2 Making revisions indrawings, specifications, and other documents or electronic data when suchrevisions are required by the enactment or revision of codes, laws orregulations subsequent to the preparation of such documents or electronic data.

 

§ 3.3.3 Providing consultationconcerning replacement of Work damaged by fire or other cause duringconstruction, and furnishing services required in connection with thereplacement of such Work.

 

§ 3.3.4 Providing services inconnection with a public hearing, arbitration proceeding or legal proceeding,except where the Design/Builder is a party thereto.

 

§ 3.3.5 Providing coordinationof construction performed by the Owner’s own forces or separate contractorsemployed by the Owner, and coordination of services required in connection withconstruction performed and equipment supplied by the Owner.

 

§ 3.3.6 Preparing a set ofreproducible record documents or electronic data showing significant changes inthe Work made during construction.

 

§ 3.3.7 Providing assistance inthe utilization of equipment or systems such as preparation of operation andmaintenance manuals, training personnel for operation and maintenance, andconsultation during operation.

 

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ARTICLE 4 TIME

§ 4.1 Unless otherwiseindicated, the Owner and the Design/Builder shall perform their respectiveobligations as expeditiously as is consistent with reasonable skill and careand the orderly progress of the Project.

 

§ 4.2 The Work to be performedunder this Part 2 Agreement shall commence upon receipt of a notice to proceedunless otherwise agreed and, subject to authorized Modifications,Design/Builder shall use its best effort so that Substantial Completion shallbe achieved on or before the date established in Article 14.  However, the parties agree that theDesign/Builder shall have no liability for not achieving Substantial Completionof the Project by the date set forth in Paragraph 14.1 if best efforts havebeen made by the Design/Builder.

 

§ 4.3 Substantial Completion isthe stage in the progress of the Work when the Work or designated portionthereof is sufficiently complete so the Owner can occupy or utilize the Workfor its intended use.

 

§ 4.4 Based on theDesign/Builder's Proposal, an estimated construction duration is set forth inparagraph 14.1 ("Target Completion Date"). The Target Completion Daterepresents the Design/Builder's best current estimate of the time envisionedfor design and construction of the Project. However, the Design/Builder shalluse best efforts to meet the Target Completion Date, but does not guarantee theaccuracy of the Target Completion Date and reserves the right to adjust toaccommodate unforeseen circumstances beyond its control.

 

§ 4.5 If the Design/Builder is delayedat any time in the progress of the Work by an act or neglect of the Owner,Owner’s employees, or separate contractors employed by the Owner, or by changesordered in the Work, or by labor disputes, fire, unusual delay indeliveries,  adverse weather conditionsnot reasonably anticipatable, unavoidable casualties or other causes beyond theDesign/Builder’s control, or by delay authorized by the Owner pendingarbitration, or by other causes which the Owner and Design/Builder agree mayjustify delay, then the Contract Time shall be reasonably extended by ChangeOrder and Design/Builder shall be entitled to reimbursement of reasonable costsactually incurred as a result of such delay without mark-up.

 

§4.6 Owner may at any time orfrom time to time, and for any reason, suspend the Work or any portion thereofby giving written notice to Design/Builder. Such suspension shall continue ofthe period specified in Owner’s notice; however, any suspension of greater thanthirty (30) days shall afford the Design/Builder the option to terminate theAgreement and hold the Owner liable as provided in Subparagraph 12.2.1. Any suspensionof the Work by Owner shall entitle Design/Builder to a reasonable extension ofthe Target Completion Date and to reimbursement of reasonable costs actuallyincurred directly as a result of such extension, without mark-up.

 

ARTICLE 5 PAYMENTS

§ 5.1 PROGRESS PAYMENTS

§ 5.1.1 The Design/Buildershall deliver to the Owner itemized Applications for Payment in such detail asshall permit Owner to verify the accuracy of the requested payment.

 

§ 5.1.2 Within fifteen (15)days of the Owner’s receipt of a properly submitted and correct Application forPayment, the Owner shall make payment to the Design/Builder.

 

§ 5.1.2.1  To secure Design/Builder’s performance of itsobligations hereunder, ten percent (10%) of the hard construction costs(Divisions 2-16 of Exhibit B) as set forth in any Application for Payment(excluding the Design/Builder’s Fee, General Conditions and any soft costs)shall be retained from each payment due Design/Builder by Owner (“Retainage”).Design/Builder shall be entitled to payment of one-half of Retainage amounts inits first Application of Payment submitted following the date that the facilityis first available to the public. Remaining Retainage amounts shall be releasedin accordance with Paragraph 5.1.8.

 

§ 5.1.3 The Application forPayment shall constitute a representation by the Design/Builder to the Ownerthat the design and construction have progressed to the point indicated, thequality of the Work covered by the application is in accordance with theContract Documents, and the Design/Builder is entitled to payment in the amountrequested.

 

§ 5.1.4 Upon receipt of paymentfrom the Owner, the Design/Builder shall promptly pay the Architect, otherdesign professionals and each contractor the amount to which each is entitledin accordance with the terms of their respective contracts.

 

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§ 5.1.5 The Owner shall have noobligation under this Part 2 Agreement to pay or to be responsible in any wayfor payment to the Architect, another design professional or a contractorperforming portions of the Work.

 

§ 5.1.6 The Design/Builderwarrants that title to all construction covered by an Application for Paymentwill pass to the Owner no later than the time of payment. The Design/Builderfurther warrants that upon submittal of an Application for Payment allconstruction for which payments have been received from the Owner shall be freeand clear of liens, claims, security interests or encumbrances in favor of theDesign/Builder or any other person or entity performing construction at thesite or furnishing materials or equipment relating to the construction to theextent the Owner has made payments in accordance with this Agreement.

 

§ 5.1.7 At the time ofSubstantial Completion, the Owner shall pay the Design/Builder the retainage,if any, less the reasonable cost to correct or complete incorrect or incompleteWork. Final payment of such withheld sum shall be made upon correction orcompletion of such Work.

 

§ 5.2 FINAL PAYMENTS

§ 5.2.1 Neither final paymentnor amounts retained, if any, shall become due until the Design/Builder submitsto the Owner (1) an affidavit that payrolls, bills for materials and equipment,and other indebtedness connected with the Work for which the Owner or Owner’sproperty might be responsible or encumbered (less amounts withheld by theOwner) have been paid or otherwise satisfied; (2) a certificate evidencing thatinsurance required by the Contract Documents to remain in force after finalpayment is currently in effect and will not be canceled or allowed to expire untilat least 30 days prior written notice has been given to the Owner; (3) awritten statement that the Design/Builder knows of no substantial reason thatthe insurance will not be renewable to cover the period required by theContract Documents; (4) consent of surety, if any, to final payment; and (5) ifrequired by the Owner, other data establishing payment or satisfaction ofobligations, such as receipts, releases and waivers of liens, claims, securityinterests or encumbrances arising out of the Contract, to the extent and insuch form as may be designated by the Owner. If a contractor or other person orentity entitled to assert a lien against the Owner’s property refuses tofurnish a release or waiver required by the Owner, the Design/Builder mayfurnish a bond satisfactory to the Owner to indemnify the Owner against suchlien.  If such lien remains unsatisfiedafter payments are made, the Design/Builder shall indemnify the Owner for allloss and cost, including reasonable attorneys’ fees incurred as a result of suchlien; except to the extent that any such lien, security interest, orencumbrance results from a negligent act or omission, fault, or breach of thisAgreement by the Owner.

 

§ 5.2.2 When the Work has beensubstantially completed and the contract fully performed, the Design/Buildershall submit a final application for payment to the Owner, who shall make finalpayment within 30 days of Substantial Completion.

 

§ 5.2.3 Subject toDesign/Builder’s obligations under Section 5.2.1 and Article 9, the making offinal payment shall constitute a waiver of claims by the Owner.

 

*(Paragraphsdeleted)*

 

§ 5.2.4 Acceptance of finalpayment shall constitute a waiver of all claims by the Design/Builder exceptthose previously made in writing and identified by the Design/Builder asunsettled at the time of final Application for Payment.

 

§ 5.3 INTEREST PAYMENTS

§ 5.3.1 Payments due theDesign/Builder under this Part 2 Agreement which are not paid when due shallbear interest from the date due at the rate specified in Article 13, or in theabsence of a specified rate, at the legal rate prevailing where the Project islocated.

 

ARTICLE 6 PROTECTION OFPERSONS AND PROPERTY

§ 6.1 The Design/Builder shallbe responsible for initiating, maintaining and providing supervision of allsafety precautions and programs in connection with the performance of this Part2 Agreement.

 

§ 6.2 The Design/Builder shalltake reasonable precautions for the safety of, and shall provide reasonableprotection to prevent damage, injury or loss to: (1) employees on the Work andother persons who may be affected thereby; (2)

 

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the Work and materials andequipment to be incorporated therein, whether in storage on or off the site,under care, custody, or control of the Design/Builder or the Design/Builder’scontractors; and (3) other property at or adjacent thereto, such as trees,shrubs, lawns, walks, pavements, roadways, structures and utilities notdesignated for removal relocation or replacement in the course of construction.

 

§ 6.3 The Design/Builder shallgive notices and comply with applicable laws, ordinances, rules, regulationsand lawful orders of public authorities bearing on the safety of persons orproperty or their protection from damage, injury or loss.

 

§ 6.4 The Design/Builder shallpromptly remedy damage and loss (other than damage or loss insured underproperty insurance provided or required by the Contract Documents) to propertyat the site to the extent caused solely by the Design/Builder, a contractor ofthe Design/Builder or anyone directly or indirectly employed by any of them, orby anyone for whose acts they may be liable. Design/Builder’s obligation underthis paragraph shall expire as of the date of the Owner’s occupancy of any suchportion of the Work.

 

ARTICLE 7 INSURANCE AND BONDS

§ 7.1 DESIGN/BUILDER’SLIABILITY INSURANCE

§ 7.1.1 The Design/Builder shallpurchase from and maintain, in a company or companies lawfully authorized to dobusiness in the jurisdiction in which the Project is located, such insurance asset forth on Exhibit C in satisfaction of it insurance obligations under theAgreement. The Design/Builder acknowledges the Owner Controlled InsuranceProgram and shall participate in same.

 

*(Paragraphdeleted)*

 

§ 7.1.2 The insurance requiredby Section 7.1.1 shall be written for not less than limits of liabilityspecified in this Part 2 Agreement or required by law, whichever coverage isgreater. Coverages, whether written on an occurrence or claims-made basis,shall be maintained without interruption from date of commencement of the Workuntil date of final payment and termination of any coverage required to bemaintained after final payment.

 

§ 7.1.3 Certificates ofInsurance in accordance with this Agreement shall be delivered to the Ownerimmediately after execution of this Part 2 Agreement. The foregoing insurancecoverages are required to remain in force after final payment.  Information concerning reduction of coverageshall be furnished by the Owner with reasonable promptness in accordance withthe Design/Builder’s information and belief.

 

§ 7.2 OWNER’S LIABILITYINSURANCE

§ 7.2.1 The Owner shall beresponsible for purchasing and maintaining the Owner’s usual liabilityinsurance. Optionally, the Owner may purchase and maintain other insurance forself-protection against claims which may arise from operations under this Part2 Agreement. The Design/Builder shall not be responsible for purchasing andmaintaining this optional Owner’s liability insurance unless specificallyrequired by the Contract Documents.

 

§ 7.3 PROPERTY INSURANCE

§ 7.3.1 The Owner shallpurchase and maintain, in a company or companies authorized to do business inthe jurisdiction in which the principal improvements are to be located,property insurance upon the Work to the full insurable value thereof on areplacement cost basis without optional deductibles. Such property insuranceshall be maintained, until final payment has been made or until no person orentity other than the Owner has an insurable interest in the property. Thisinsurance shall include interests of the Owner, the Design/Builder, and theirrespective contractors and subcontractors in the Work as additional insureds.

 

§ 7.3.2 Property insuranceshall be on an all-risk policy form and shall insure against the perils of fireand extended coverage and physical loss or damage including, withoutduplication of coverage, theft, vandalism, malicious mischief, collapse,falsework, temporary buildings and debris removal including demolitionoccasioned by enforcement of any applicable legal requirements, and shall coverreasonable compensation for the services and expenses of the Design/Builder’sArchitect and other professionals required as a result of such insured loss.This insurance shall cover all materials intended to be incorporated into theWork, whether stored on-site or off-site, or in transit to the site. The Ownershall be solely responsible for the payment of any deductibles as a Cost ofWork.

 

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§ 7.3.3 If the Design/Builderrequests in writing that insurance for risks other than those described hereinor for other special hazards, the Owner shall, if possible, obtain such insurance.

 

§ 7.3.4 The Owner and theDesign/Builder waive all rights against each other and the Architect and otherdesign professionals, contractors, subcontractors, agents and employees, eachof the other, for damages caused by fire or other perils to the extent coveredby property insurance obtained pursuant to this Section 7.3, except such rightsas they may have to proceeds of such insurance. The Owner or Design/Builder, asappropriate, shall require from contractors and subcontractors by appropriateagreements, written where legally required for validity, similar waivers eachin favor of other parties enumerated in this Section 7.3. The policies shallprovide such waivers of subrogation by endorsement or otherwise. A waiver ofsubrogation shall be effective as to a person or entity even though that personor entity would otherwise have a duty of indemnification, contractual orotherwise, did not pay the insurance premium directly or indirectly, andwhether or not the person or entity had an insurable interest in the propertydamaged.

 

§ 7.3.5 Partial occupancy oruse prior to Substantial Completion shall not commence until the insurancecompany or companies providing property insurance have consented to suchpartial occupancy or use by endorsement or otherwise. The Owner shall takereasonable steps to obtain consent of the insurance company or companies andshall not, without mutual written consent, take any action with respect topartial occupancy or use that would cause cancellation, lapse or reduction ofcoverage.

 

*(Paragraphsdeleted)*

 

§ 7.4 LOSS OF USE OF INSURANCE

 

§ 7.4.1 The Owner, at theOwner’s option, may purchase and maintain such insurance as will insure theOwner against loss of use of the Owner’s property due to fire or other hazards,however caused. The Owner waives all rights of action against theDesign/Builder for loss of use of the Owner’s property, including consequentiallosses due to fire or other hazards, however caused.

 

ARTICLE 8 CHANGES IN THE WORK

§ 8.1 CHANGES

§ 8.1.1 Changes in the Work maybe accomplished after execution of this Part 2 Agreement, without invalidatingthis Part 2 Agreement, by Change Order, Construction Change Directive, or orderfor a minor change in the Work, subject to the limitations stated in theContract Documents.

 

§ 8.1.2 A Change Order shall bebased upon agreement between the Owner and the Design/Builder; a ConstructionChange Directive may be issued by the Owner without the agreement of theDesign/Builder; an order for a minor change in the Work may be issued by theDesign/Builder alone.

 

§ 8.1.3 Changes in the Workshall be performed under applicable provisions of the Contract Documents, andthe Design/Builder shall proceed promptly, unless otherwise provided in theChange Order, Construction Change Directive, or order for a minor change in theWork.

 

§ 8.1.4 If unit prices arestated in the Contract Documents or subsequently agreed upon, and if quantitiesoriginally contemplated are so changed in a proposed Change Order orConstruction Change Directive that application of such unit prices toquantities of Work proposed will cause substantial inequity to the Owner or theDesign/Builder, the applicable unit prices shall be equitably adjusted.

 

§ 8.2 CHANGE ORDERS

§ 8.2.1 A Change Order is awritten instrument prepared by the Design/Builder and signed by the Owner andthe Design/Builder, stating their agreement upon all of the following:

.1                                       achange in the Work;

.2                                       theamount of the adjustment, if any, in the Contract Sum; and

.3                                       theextent of the adjustment, if any, in the Target Completion Date.

 

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§ 8.2.2 If the Owner requests aproposal for a change in the Work form the Design/Builder and subsequentlyelects not to proceed with the change, a Change Order shall be issued toreimburse the Design/Builder for any costs incurred for estimating services,design services or preparation of proposed revisions to the Contract Documents.

 

§ 8.3 CONSTRUCTION CHANGEDIRECTIVES

§ 8.3.1 A Construction ChangeDirective is a written order prepared and signed by the Owner, directing achange in the Work prior to agreement on adjustment, if any, in the ContractSum or Target Completion Date, or both.

 

§ 8.3.2 Except as otherwiseagreed by the Owner and the Design/Builder, the adjustment to the Contract Sumshall be determined on the basis of reasonable expenditures and savings ofthose performing the Work attributable to the change, including theexpenditures for design services and revisions to the Contract Documents. Incase of an increase in the Contract Sum, the cost shall include aDesign/Builder’s fee of four percent (4%) of such increased costs. In suchcase, the Design/Builder shall keep and present an itemized accounting togetherwith appropriate supporting data for inclusion in a Change Order. Unlessotherwise provided in the Contract Documents, costs for these purposes shall belimited to the following:

 

.1                                       costsof labor, including social security, old age and unemployment insurance, fringebenefits required by agreement or custom, and workers’ compensation insurance;

.2                                       costsof materials, supplies and equipment, including cost of transportation, whetherincorporated or consumed;

.3                                       rentalcosts of machinery and equipment exclusive of hand tools, whether rented fromthe Design/Builder or others;

.4                                       costsof premiums for all bonds and insurance permit fees, and sales, use or similartaxes;

.5                                       additionalcosts of supervision and field office personnel directly attributable to thechange; and fees paid to the Architect, engineers and other professionals.

 

§ 8.3.3 Pending finaldetermination of cost to the Owner, amounts not in dispute may be included inApplications for Payment. The amount of credit to be allowed by theDesign/Builder to the Owner for deletion or change which results in a netdecrease in the Contract Sum will be actual net cost. When both additions andcredits covering related Work or substitutions are involved in a change, theallowance for overhead and profit shall be figured on the basis of the netincrease, if any, with respect to that change.

 

§ 8.3.4 When the Owner and theDesign/Builder agree upon the adjustments in the Contract Sum and TargetCompletion Date, such agreement shall be effective immediately and shall berecorded by preparation and execution of an appropriate Change Order.

 

§ 8.4 MINOR CHANGES IN THE WORK

§ 8.4.1 The Design/Buildershall have authority to make minor changes in the Construction Documents andconstruction consistent with the intent of the Contract Documents when suchminor changes do not involve adjustment in the Contract Sum or extension of theTarget Completion Date. The Design/Builder shall promptly inform the Owner, inwriting, of minor changes in the Construction Documents and construction.

 

§ 8.5 CONCEALED CONDITIONS

§ 8.5.1 If conditions areencountered at the site which are (1) subsurface or otherwise concealedphysical conditions unknown to Design/Builder as of the date of this Agreement,or (2) unknown physical conditions of an unusual nature which differ materiallyfrom those ordinarily found to exist and generally recognized as inherent inconstruction activities of the character provided for in the ContractDocuments, then notice by the observing party shall be given to the other partypromptly before conditions are disturbed and in no event later than 10 daysafter first observance of the conditions. The Contract Sum and TargetCompletion Date shall be equitably adjusted for such concealed or unknownconditions by Change Order upon claim by either party made within 10 Days afterthe claimant becomes aware of the conditions.

 

§ 8.6 REGULATORY CHANGES

§ 8.6.1 The Design/Buildershall be compensated for changes in the construction necessitated by theenactment or revisions of codes, laws or regulations subsequent to the submissionof the Design/Builder’s Proposal.

 

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ARTICLE 9 CORRECTION OF WORK

§ 9.1 The Design/Builder shallpromptly correct Work known by the Design/Builder to be defective or failing toconform to the requirements of Subparagraph 1.2.1, whether observed before orafter Substantial Completion and whether or not fabricated, installed orcompleted.

 

§ 9.2 If, within one (1) yearafter the date of Substantial Completion of the Work or, after the date forcommencement of warranties established in a written agreement between the Ownerand the Design/Builder, or by terms of an applicable special warranty requiredby the Contract Documents, any of the Work is found to be not substantially inaccordance with the requirements of Subparagraph 1.2.1, the Design/Buildershall correct it promptly after receipt of a written notice from the Owner todo so unless the Owner has previously given the Design/Builder a writtenacceptance of such condition. Warranty coverage expressly excludes damages ordefects caused by abuse, modifications, improper or insufficient maintenance,improper operations by the Owner, and normal wear and tear. All otherwarranties, expressed or implied, including the warrant of merchantability andthe warranty of fitness for a particular purpose, are expressly disclaimed. TheDesign/Builder shall assign to the Owner all warranties and guarantees obtainedfrom the subcontractors, vendors, and suppliers and shall render reasonableassistance to the Owner when requested to enforce such warranties andguarantees, but will not be legally responsible to the Owner for suchthird-party warranty obligations.

 

§ 9.3 If the Design/Builderfails to correct nonconforming Work as required or fails to carry out Work in accordancewith Subparagraph 1.2.1, the Owner, by written order signed personally or by anagent specifically so empowered by the Owner in writing may order theDesign/Builder to stop the Work, or any portion thereof, until the cause forsuch order has been eliminated; however, the Owner’s right to stop the Workshall not give rise to a duty on the part of the Owner to exercise the rightfor benefit of the Design/Builder or other persons or entities.

 

*(Paragraphdeleted)*

 

§ 9.5 If the Design/Builderdefaults or neglects to carry out the Work in accordance with this Agreementand fails within seven (7) days after receipt of written notice from the Ownerto commence and continue correction of such default or neglect with diligenceand promptness, the Owner may give a second written notice to theDesign/Builder and, seven (7) days following receipt by the Design/Builder ofthat second written notice and without prejudice to other remedies the Ownermay have, correct such deficiencies. In such case an appropriate Change Ordershall be issued deducting from payments then or thereafter due theDesign/Builder, the costs of correcting such deficiencies. If the payments thenor thereafter due the Design/Builder are not sufficient to cover the amount ofthe deduction, the Design/Builder shall pay the difference to the Owner. Suchaction by the Owner shall be subject to dispute resolution procedures asprovided in Article 10.

 

ARTICLE 10 DISPUTERESOLUTION – MEDIATION AND ARBITRATION

§ 10.1 Claims, disputes orother matters in question between the parties to this Part 2 Agreement arisingout of or relating to this Part 2 Agreement or breach thereof shall be subjectto and decided by mediation or arbitration. Such mediation or arbitration shallbe conducted in accordance with the Construction Industry Mediation orArbitration Rules of the American Arbitration Association currently in effect.

 

§ 10.2 In addition to and priorto arbitration, the parties shall endeavor to settle disputes by mediation.Demand for mediation shall be filed in writing with the other party to thisPart 2 Agreement and with the American Arbitration Association. A demand formediation shall be made within a reasonable time after the claim, dispute orother matter in question has arisen. In no event shall the demand for mediationbe made after the date when institution of legal or equitable proceedings basedon such claim, dispute or other matter in question would be barred by theapplicable statutes of repose or limitations.

 

§ 10.3 Demand for arbitrationshall be filed in writing with the other party to this Part 2 Agreement andwith the American Arbitration Association. The arbitration shall be heard by apanel of three (3) arbitrators and all arbitration fees and costs shall beequally borne by each party. The location of the arbitration shall be insuitable facilities near the Project site. A demand for arbitration shall bemade within a reasonable time after the claim, dispute or other matter inquestion has arisen. In no event shall the demand for arbitration be made afterthe date when institution of legal or equitable proceedings based on suchclaim, dispute or other matter in question would be barred by the applicablestatutes of repose or limitations.

 

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§ 10.4 An arbitration pursuantto this Article may be joined with an arbitration involving common issues oflaw or fact between the Design/Builder and any person or entity with whom theDesign/Builder has a contractual obligation to arbitrate disputes. No otherarbitration arising out of or relating to this Part 2 Agreement shall include,by consolidation, joinder or in any other manner, an additional person orentity not a party to this Part 2 Agreement or not a party to an agreement withthe Design/Builder, except by written consent containing a specific referenceto this Part 2 Agreement signed by the Owner, the Design/Builder and any otherperson or entities sought to be joined. Consent to arbitration involving anadditional person or entity shall not constitute consent to arbitration of anyclaim, dispute or other matter in question not described in the written consentor with a person or entity not named or described therein. The foregoingagreement to arbitrate and other agreements to arbitrate with an additionalperson or entity duly consented to by the parties to this Part 2 Agreementshall be specifically enforceable in accordance with applicable law in anycourt having jurisdiction thereof.

 

§ 10.5 The award rendered bythe arbitrator or arbitrators shall be final, and judgment may be entered uponit in accordance with applicable law in the United States District Court forWestern District of New York.

 

ARTICLE 11 MISCELLANEOUSPROVISIONS

§ 11.1 Unless otherwiseprovided, this Part 2 Agreement shall be governed by the law of the place wherethe Project is located.

 

§ 11.2 SUBCONTRACTS

**§ 11.2.1The Design/Builder as soon as practicable after execution of this Part 2Agreement, shall furnish to the Owner in writing the names of the persons orentities the Design/Builder will engage as contractors for the Project.However, the Design/Builder reserves the right to substitute or replace anysuch contractor at its discretion. The Design/Builder will use its best effortsto employ Native American contractors.**

 

§ 11.3 WORK BY OWNER OR OWNER’SCONTRACTORS

§ 11.3.1 The Owner reserves theright to perform construction or operations related to the Project with theOwner’s own forces, and to award separate contracts in connection with otherportions of the Project or other construction or operations on the site underconditions of insurance and waiver of subrogation identical to the provisionsof this Part 2 Agreement. If the Design/Builder claims that delay or additionalcost is involved because of such action by the Owner, the Design/Builder shallassert such claims as provided in Section 11.4.

 

§ 11.3.2 The Design/Buildershall afford the Owner’s separate contractors reasonable opportunity forintroduction and storage of their materials and equipment and performance oftheir activities.

 

§ 11.3.3 Costs caused by delaysor by improperly timed activities or defective construction shall be borne bythe party responsible therefor.

 

§ 11.4 CLAIMS FOR DAMAGES

§ 11.4.1 If either party tothis Part 2 Agreement suffers injury or damage to person or property because ofan act or omission of the other party of any of the other party’s employees oragents, or of others for whose acts such party is legally liable, writtennotice of such injury or damage, whether or not insured, shall be given to theother party within a reasonable time not exceeding 21 days after firstobservance. The notice shall provide sufficient detail to enable the otherparty to investigate the matter. If a claim of additional cost or time relatedto this claim is to be asserted, it shall be filed in writing.

 

§ 11.5 INDEMNIFICATION

§ 11.5.1 To the fullest extentpermitted by law, the Design/Builder shall indemnify and hold harmless theOwner, and its employees from and against claims, damages, losses and expenses,including but not limited to reasonable attorneys’ fees, arising out of orresulting from performance of the Work, provided that such claim, damage, lossor expense is attributable to bodily injury, sickness, disease or death, or toinjury to or destruction of tangible property (other than the Work itself), butonly to the extent caused directly by negligent acts or omissions of theDesign/Builder, anyone directly or indirectly employed by the Design/Builder oranyone for whose acts the Design/Builder may be liable. At its option,Design/Builder can take over the defense of any claim against Owner within thescope of the indemnification obligation with counsel of Design/Builder’schoosing, subject to the right of Owner to defend itself to the extent itsinterests may differ from those of Design/Builder. Such obligation shall not

 

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be construed to negate, abridge, or reduceother rights or obligations of indemnity which would otherwise exist as to aparty or person described in this Section 11.5.

 

§ 11.5.2 In claims against any person orentity indemnified under this Section 11.5 by an employee of theDesign/Builder, anyone directly or indirectly employed by the Design/Builder oranyone for whose acts the Design/Builder may be liable, the indemnificationobligation under this Section 11.5 shall not be limited by a limitation onamount or type of damages, compensation or benefits payable by or for theDesign/Builder under workers’ compensation acts, disability benefit acts orother employee benefit acts.

 

§ 11.6 SUCCESSORS AND ASSIGNS

§ 11.6.1 The Owner and Design/Builder,respectively, bind themselves, their partners, successors, assigns and legalrepresentatives to the other party to this Part 2 Agreement and to thepartners, successors and assigns of such other party with respect to allcovenants of this Part 2 Agreement. Neither the Owner nor the Design/Buildershall assign this Part 2 Agreement without the written consent of the other.The Owner may assign this Part 2 Agreement to any institutional lenderproviding construction financing, and the Design/Builder agrees to execute allconsents reasonably required to facilitate such an assignment. If either partymakes such an assignment, that party shall nevertheless remain legallyresponsible for all obligations under this Part 2 Agreement, unless otherwiseagreed by the other party.

 

§ 11.7 TERMINATION OF PROFESSIONAL DESIGNSERVICES

§ 11.7.1 Prior to termination of the servicesof the Architect or any other design professional designated in this Part 2Agreement the Design/Builder shall identify to the Owner in writing anotherarchitect or other design professional with respect to whom the Owner has noreasonable objection, who will provide the services originally to have beenprovided by the Architect or other design professional whose services are beingterminated.

 

§ 11.8 EXTENT OF AGREEMENT

§ 11.8.1 This Part 2 Agreement represents theentire agreement between the Owner and the Design/Builder and supersedes pricenegotiations, representations or agreements, either written or oral. This Part2 Agreement may be amended only by written instrument and signed by both theOwner and the Design/Builder.

 

ARTICLE12 TERMINATION OF THE AGREEMENT

§ 12.1 TERMINATION BY THE OWNER

§ 12.1.1 This Part 2 Agreement may beterminated by the Owner upon 14 days’ written notice to the Design/Builder inthe event that the Project is abandoned. If such termination occurs, the Ownershall pay the Design/Builder for Work completed and for proven loss sustainedupon materials, equipment, tools, and construction equipment and machinery,including reasonable profit and applicable damages. Such proven loss shallinclude all expenses and costs arising out of the termination including, butnot limited to, cancellation charges, restocking fees, and expenses of asimilar nature, including business impact costs.

 

§ 12.1.2 If the Design/Builder defaults orpersistently fails or neglects to carry out the Work in accordance with the ContractDocuments or fails to perform the provisions of this Part 2 Agreement, theOwner may give written notice that the Owner intends to terminate this Part 2Agreement. If the Design/Builder fails to correct the defaults, failure orneglect within seven (7) days after being given notice, the Owner may then givea second written notice and, after an additional seven (7) days, the Owner maywithout prejudice to any other remedy terminate the employment of theDesign/Builder and take possession of the site and of all materials, equipment,tools and construction equipment and machinery thereon owned by theDesign/Builder and finish the Work by whatever method the Owner may deemexpedient.

 

§ 12.2 TERMINATION BY THE DESIGN/BUILDER

§ 12.2.1 If the Owner fails to make paymentwhen due, the Design/Builder may give written notice of the Design/Builder’sintention to terminate this Part 2 Agreement. If the Design/Builder fails toreceive payment within seven (7) days after receipt of such notice by theOwner, the Design/Builder may give a second written notice and, seven (7) daysafter receipt of such second written notice by the Owner, may terminate thisPart 2 Agreement and recover from the Owner payment for Work executed and forproven losses sustained upon materials, equipment, tools, and constructionequipment and machinery, including reasonable profit and applicable damages.

 

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ARTICLE 13 BASIS OF COMPENSATION

The Owner shall compensate theDesign/Builder in accordance with Article 5, Payments, and the other provisionsof this Part 2 Agreement as described below.

 

§ 13.1 COMPENSATION

§ 13.1.1 For theDesign/Builder’s performance of the Work, as described in Section 3.2 andincluding any other services listed in Article 14 as part of Basic Services,the Owner shall pay the Design/Builder in current funds the Contract Sum asfollows:

 

The Contract Sum shall consistof the Cost of Work which includes the elements set forth on Exhibit B and aFee of four percent (4%) thereon. The Design/Builder’s initial Budget Estimateis attached as Exhibit B and shall constitute a preliminary Project budgetsubject to revision as the Project progresses. The parties acknowledge thatthis initial Budget Estimate does not constitute a guaranteed cost of theProject, but merely represents Design/Builder’s current reasonable estimate ofthe cost of the Project.

 

§ 13.1.2 For AdditionalServices, as described in Section 3.3 and including any other services listedin Article 14 as Additional Services, compensation shall be as follows:

 

N/A

 

§ 13.1.3 The ConstructionContingency as set forth in Exhibit B shall be for the sole use and benefit ofthe Design/Builder to utilize at its discretion to cover unforeseen costs ofthe Work not properly under and within the Project Budget, includingDesign/Builder fees, General Conditions or the Cost of the Work. TheDesign/Builder shall make available to the Owner a monthly detailed accountingof the Construction Contingency.

 

§ 13.1.4 Owner and Design/Builderagree that the Total Budget Estimate of $136,542,624.00 set forth in Exhibit Bis a reasonable, good faith estimate of the cost to design and build theProject based on the scope of Work detailed in this Agreement. Design/Builderhereby guarantees that it will complete the Work for a Contract Sum (the“Guaranteed Maximum Contract Sum”), to be established pursuant to Subparagraph13.1.6 below, that shall not exceed $136,542,624.00. In exchange for suchguarantee, Owner agrees that Design/Builder may make changes to the scope ofWork set forth in Exhibit A that are reasonably necessary to achieve aGuaranteed Maximum Contract Sum that does not exceed $136,542,624.00; provided,however, that any such changes shall be subject to Owner’s representatives approvalpursuant to Subparagraph 3.2.3, and Owner’s agreement to such changes shall inno way diminish Design/Builder’s warranty obligations under this Agreement.

 

§ 13.1.5 At the point whenConstruction Documents have progressed to the point where Design/Builderreasonably determines that its subcontractor are able to provide toDesign/Builder with lump sum prices for their various scopes of work, and havebeen approved by Owner pursuant to Subparagraph 3.2.3, Design/Builder shallobtain lump sum contracts from all its subcontractors.

 

§ 13.1.6 Within thirty (30)days after Design/Builder has entered into lump sum contract with all itssubcontractors, Design/Builder shall provide, subject to Owner’s reasonableapproval and to the provisions of Subparagraph 13.1.4, a Guaranteed MaximumContract Sum shall include the total price of all Design/Builder’s fee,overhead and profit, contingency, general conditions, subcontractor bond costs,testing costs, insurance costs, architectural and MEP fees, and, Project fixtures,fittings and equipment. The Guaranteed Maximum Contract Sum shall be documentedby a written instrument signed by Owner and Design/Builder.

 

§ 13.1.7 Design/Builderguarantees to the Owner that the Contract Sum for the entire scope of Work, asdetailed in the Construction Documents on which the subcontractor’s lump sumcontracts are based, and as completed in full compliance with the ContractDocuments, shall not exceed the Guaranteed Maximum Contract Sum provided byDesign/Builder and accepted by Owner. All costs for completion of the Work thatare in excess of the Guaranteed Maximum Contract Sum shall be paid by theDesign/Builder without reimbursement by the Owner, except for excessesresulting from the causes set forth in Subparagraph 13.1.9 below.

 

§ 13.1.8 In the event that theactual cost of the Work, as determined upon full completion thereof, is lessthan the Guaranteed Maximum Contract Sum, 50% of such difference shall be paidby Owner to Design/Builder in addition to the actual Contract Sum.

 

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§13.1.9 The Guaranteed MaximumContract Sum shall be increased by the amount of any increase in the actualContract Sum that results from a Change Order or Construction Change Directivepursuant to Article 8, and by the amount of any reasonable costs actuallyincurred by Design/Builder and for which Design/Builder may be entitled toreimbursement pursuant to Paragraphs 4.5 and 4.6. Each such increase shall bedocumented by a written instrument noting the amount of the increase and theamount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.10 The Guaranteed MaximumContract Sum shall be decreased by the amount of any decreases to the actualContract Sum that result from a Change Order or Construction Change Directivepursuant to Article 8 that reduces the scope of the Work. Each such decreaseshall be documented by a written instrument noting the amount of the decreaseand the amount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.11 The allowance amountsincluded in the Guaranteed Maximum Contract Sum developed by Design/Builder inaccordance with Paragraph 13.1.6 above shall include all costs for loading andunloading, taxes, labor, installation, costs, overhead, profit and otherexpenses contemplated for the stated allowance. Whenever costs actuallyincurred are more or less than the allowance amount, the Guaranteed MaximumContract Sum shall be adjusted accordingly, and the amount of the adjustmentand the amount of the revised Guaranteed Maximum Contract Sum shall bedocumented by a written instrument.

 

§ 13.2 REIMBURSABLE EXPENSES

§ 13.2.1 Reimbursable Expensesare in addition to the compensation for Basic and Additional Services, andinclude actual expenditures made by the Design/Builder and the Design/Builder’semployees and contractors in the interest of the Project, as follows:

 

§ 13.2.2 FOR REIMBURSABLEEXPENSES, compensation shall be a multiple of (N/A) times the amounts expended.

 

§ 13.3 INTEREST PAYMENT

§ 13.3.1 The rate of interestfor advanced or borrowed funds or delayed payments shall be at the rate of onepercent (1%) per month.

 

ARTICLE 14 OTHER CONDITIONSAND SERVICES

§ 14.1 The Basic Services to beperformed shall be commenced on Design/Builder’s receipt of a Notice to Proceednot later than September 1, 2004 and, subject to authorized adjustments and todelays not caused by the Design/Builder, Design/Builder shall use its bestefforts to achieve Substantial Completion of by February 1, 2006 (“TargetCompletion Date”). However, this estimated completion date represents theDesign/Builder’s best current estimate of the time required for the design andconstruction of the Project. The Design/Builder does not guarantee the accuracyof this project completion date and reserves the right to adjust the TargetCompletion Date to accommodate unforeseen circumstances.

 

§ 14.2 The Basic Servicesbeyond those described in Article 3 are as follows:

 

N/A

 

§ 14.3 Additional Servicesbeyond those described in Article 3 are as follows:

 

N/A

 

§ 14.4 The Design/Builder’sProposal is attached as Exhibit A

 

§ 14.5 Pursuant to the SenecaNation of Indians Tribal Rights Ordinance, Section 4.a, the Design/Builder andits subcontractors shall give preference in subcontracting to entitiescertified by the Seneca Nation of Indians Tribal Employment Rights Commissionasfifty-one percent (51%) or more Indian-owned and controlled, and shall givepreference to members of the Seneca Nation of Indians in hiring, training andother aspects of employment purposes

 

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of the Work. Design/Buildershall require that all employers with which Design/Builder contracts for theperformance of the Work give the same preference.

 

§14.6 Design/Builder may enterinto a Memorandum of Agreement with the Southern Tier Building &Construction Trades Council (“Memorandum of Agreement”) for this phase ofdevelopment.  The Owner acknowledges thatit is in the best interests of Owner that Design/Builder comply with the termsof the Memorandum Agreement.

 

§14.7 The Design/Builder shallmaintain at the Project Site full and detailed books of accounts showing allcosts incurred in the performance of the Project.  The Owner or its authorized representativeshall have the right to copy and audit all such books of accounts and recordspertaining to the performance of the Work. All such books and records shall be preserved by the Design/Builder fora period of three (3) years in its offices in Norwich, Connecticut.  All drawings and documents prepared by theArchitect shall become the property of the Owner subject to the terms of thisAgreement.

 

§14.8 Neither party shall beliable to the other for any special, punitive, exemplary or consequential damagesof any nature whatsoever whether arising out of breach of contract,indemnification, tort, warranty or otherwise.

 

§14.9 In the event theDesign/Builder encounters any Hazardous Material, the Design/Builder shallimmediately stop Work in the affected area and report the condition to theOwner.  The Design/Builder shall not berequired to perform Work without its consent relating to the Hazardous Materialnot brought onto the site by Design/Builder or any of its subcontractors.  The Owner is solely liable for ownership,storage and disposal of any Hazardous Material, other than that brought ontothe site by Design/Builder or any of its subcontractors, and encountered by theDesign/Builder in the performance of the Work. The Owner shall indemnify, hold harmless and defend the Design/Builderfrom and against any and all claims, damages, demands, losses, expenses,penalties or fines (including attorneys’ fees) in any way occurring incidentalto or arising out of the encountering of any Hazardous Material byDesign/Builder or its contractors other than Hazardous Material brought ontothe site by Design/Builder or any of its subcontractors.  This indemnification obligation shall survivecompletion of the Work or termination of this Agreement.  For purposes of this Agreement, “HazardousMaterial” shall mean any hazardous or toxic substance, contaminant or pollutionwhich is or may become regulated under any federal, state, county or localstatute, law, ordinance, code, rule or regulation.

 

 

This Agreement entered into asof the day and year first written above.

 
| OWNER                               |     | DESIGN/BUILDER                      |     |
|-------------------------------------|----------|-------------------------------------|----------|
|                                |     |                                |     |
| /s/ G. Michael Brown                |     | /s/ Keith Kabeary                   |     |
| *(Signature)*                       | * * | *(Signature)*                       | * * |
| Seneca Territory Gaming Corporation |     | Klewin Gaming and Hospitality, Inc. |     |
| *(Printed name and title)*          | * * | *(Printed name and title)*          | * * |
|                                |     | Keith Kabeary Sr. VP                |     |

 

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***Certification of Document’sAuthenticity***

*AIA®Document D401TM – 2003*

 

I, Keith Kabeary, herebycertify, to the best of my knowledge, information and belief, that I createdthe attached final document simultaneously with its associated Additions andDeletions Report and this certification at 12:19:22 on 10/12/2004 under OrderNo. 1000126358_1 from AIA Contract Documents software and that in preparing theattached final document I made no changes to the original text of AIA®Document A191TM – 1996 Part 2 - Standard Form of Agreement Between Owner andDesign/Builder Part 2 Agreement, as published by the AIA in its software, otherthan those additions and deletions shown in the associated Additions andDeletions Report.

 

 
| /s/ Keith Kabeary |   |
|-------------------|--------|
| (Signed)          |   |
|              |   |
|              |   |
| Sr. VP            |   |
| (Title)           |   |
|              |   |
|              |   |
| 10/13/04          |   |
| (Dated)           |   |

 

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