Document:

Exhibit 10.11

 

	
  

  	
  Document
  A191TM - 1996 Part 2

  

 

Standard Form of Agreement
Between Owner and Design/Builder

Part 2
Agreement

 

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 First
day of September in the year of 2004

(In words,
indicate day month and year.)

 

BETWEEN the Owner

(Name and
address)

 

Seneca Territory Gaming
Corporation

 

 

and the Design/Builder:

(Name and
address)

 

Klewin Gaming & Hospitality,
Inc.

40 Connecticut Avenue

Norwich, CT 06360

 

For the following Project:

(Include Project
name, location and a summary description.)

 

Seneca Allegany Casino Parking
Garage

Salamanca, NY

 

The architectural services
described in Article 3 will be provided by the following person or entity who
is lawfully licensed to practice architecture:

 

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

 

This document has important
legal consequences. Consultation with an attorney is encouraged with respect to
its 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. Copyright
Law and International Treaties. Unauthorized reproduction or distribution of
this AIA® Document, or any portion of it, may result in severe civil and
criminal penalties, and will be prosecuted to the maximum extent possible under
the law. This document was produced by AIA software at 12:19:22 on 10/12/2004
under Order No.1000126358_1 which expires on 6/29/2005, and is not for resale.

	
  User Notes:

  	
   

  	
  (44572571)

  

 

1

 

	
  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, mechanical
and electrical engineering services will be provided contractually through the Architect
except as indicated below:

 

	
  Name, address and discipline

  	
   

  	
  Registration
  Number

  	
   

  	
  Relationship
  to Design/Builder

  
	
  TBD

  	
   

  	
   

  	
   

  	
   

  

 

The Owner and the
Design/Builder agree as set forth below.

 

2

 

TERMS AND CONDITIONS – PART 2 AGREEMENT

 

ARTICLE 1 GENERAL PROVISIONS

§ 1.1 BASIC DEFINITIONS

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

 

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

 

§ 1.2 EXECUTION, CORRELATION
AND INTENT

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

 

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

 

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

 

§ 1.3 OWNERSHIP AND USE OF
DOCUMENTS

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

 

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

 

§ 1.3.3 If the Design/Builder
defaults in the Design/Builder’s obligations to the Owner, the Architect’s Work
Product shall be conveyed to the Owner for the completion of the Project,
conditioned upon the Owner’s execution of an agreement to cure the
Design/Builder’s default in payment to the Architect for services previously
performed and to indemnify the Architect and Design/Builder with regard to
claims arising from such reuse without the Architect’s and Design/Builder’s
professional involvement.

 

§ 1.3.4 Submission or
distribution of the Design/Builder’s documents to meet official regulatory
requirements or for similar purposes in connection with the Project is not to
be construed as publication in derogation of the rights reserved in Section
1.3.1.

 

ARTICLE 2 OWNER

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

 

3

 

consents to enforcement of
arbitral awards in the United States District Court for the Western District
Court of New York. Owner hereby waives any requirement of exhaustion of tribal
remedies, and agrees it will not present any affirmative defense in any dispute
based on alleged failure to exhaust such remedies. Owner’s waiver of immunity
from suit is irrevocable and specifically limited to an action to compel
arbitration pursuant to Article 10 of this Agreement and specific enforcement
thereof.

 

§ 2.2 The Owner has designated
G. Michael Brown as the representative authorized to act on the Owner’s behalf
with respect to the Project. The Owner or such authorized representative shall
render decisions in a timely manner and in accordance with the schedule
accepted by the Owner, including its review of documents submitted by the
Design/Builder, which shall be completed within seventy two (72) hours of
receipt by Owner. The Owner may obtain independent review of the Contract
Documents by a separate architect, engineer, contractor or cost estimator under
contract to or employed by the Owner. Such independent review shall be
undertaken at the Owner’s expense in a timely manner and shall not delay the
orderly progress of the Work.

 

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

 

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

 

§ 2.5 The Owner shall furnish
services of land surveyors, geotechnical engineers and other consultants for
subsoil, air and water conditions, when such services are deemed necessary by
the Design/Builder to properly carry out the design services required by this
Part 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: structural or mechanical
systems; chemical, air and water pollution; hazardous materials or other
environmental and subsurface conditions. The Owner shall disclose all
information known to the Owner regarding the presence of pollutants at the
Project’s site.

 

§ 2.7 The Owner shall furnish
all legal, accounting and insurance counseling services as may be necessary at
any time for the Project, including such auditing services as the Owner may
require 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 are
within the Owner’s control shall be furnished at the Owner’s expense, and the
Design/Builder shall be entitled to rely upon the accuracy and completeness
thereof, except to the extent the Owner advises the Design/Builder to the
contrary in writing in which case the Design/Builder shall not be bound by or
responsible to comply herewith.

 

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

 

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

 

§ 2.11 The Owner shall, at the
request of the Design/Builder, prior to execution of this Part 2 Agreement and
promptly upon request thereafter, furnish to the Design/Builder reasonable
evidence that financial arrangements have been made to fulfill the Owner’s
obligations under the Contract.

 

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

 

§ 2.13 The Design/Builder will
be afforded continuous and unrestricted access to the Project site during the
course of design and construction. The Owner shall provide sufficient space for
a field office and storage of materials and equipment by the Design/Builder at
the Project site. The Design/Builder will not be restricted on its work hours
unless by mutual agreement.

 

4

 

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

 

ARTICLE 3  DESIGN/BUILDER

§ 3.1 SERVICES AND
RESPONSIBILITIES

§ 3.1.1 The Design/Builder is
not a design professional licensed to provide professional services in
accordance with applicable licensing statutes. Design services required by this
Part 2 Agreement shall be performed by qualified architects and other design
professionals. The contractual obligations of such professional persons or entities
are undertaken and performed in the interest of the Design/Builder.
Design/Builder may replace the designated Architect upon giving reasonable
notice and explanation to Owner, and obtaining the prior approval by Owner of
such dismissal and of the replacement Architect, which approval will not
unreasonably be withheld.

 

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

 

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

 

§ 3.2 BASIC SERVICES

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

 

§ 3.2.2 The Design/Builder
shall designate a representative authorized to act on the Design/Builder’s
behalf with respect to the Project.

 

§ 3.2.3 The Design/Builder
shall submit Construction Documents for review and approval by the Owner’s representative
designated pursuant to Paragraph 2.2. Construction Documents may include
drawings, specifications, and other documents and electronic data setting forth
in detail the requirements for construction of the Work, and shall:

 

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

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

.3        include documents
customarily required for regulatory agency approvals.

 

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

 

§ 3.2.5 Unless otherwise
provided in the Contract Documents, the Design/Builder shall provide or cause
to 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 execution
and completion of the Work, whether temporary or permanent and whether or not
incorporated or to be incorporated in the Work.

 

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

 

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

 

§ 3.2.8 The Design/Builder
shall be responsible for correcting Work which does not conform to the Contract
Documents.

 

§ 3.2.9 The Design/Builder
warrants to the Owner that materials and equipment furnished under the Contract
will be of good quality and new unless otherwise required or permitted by the
Contract 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 not
properly approved by the Owner, shall be corrected in accordance with Article
9.

 

5

 

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

 

§ 3.2.11 The Design/Builder
shall 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/Builder
shall pay royalties and license fees patented for designs, processes or
products. The Design/Builder shall defend suits or claims for infringement of
patent rights and shall hold the 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 is required by the Owner.
However, if the Design/Builder has reason to believe the use of a required
design, process or product is an infringement of a patent, the Design/Builder
shall be responsible for such loss unless such information is promptly
furnished to the Owner.

 

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

 

§ 3.2.14 The Design/Builder
shall notify the Owner when the Design/Builder believes that the Work or an
agreed upon portion thereof is substantially completed. If the Owner concurs,
the Design/Builder shall issue a Certificate of Substantial Completion which
shall establish the Date of Substantial Completion, shall state the
responsibility of each party for security, maintenance, heat, utilities, damage
to the Work and insurance, shall include a list of items to be completed or
corrected and shall fix the time within which the Design/Builder shall complete
items listed therein. Disputes between the Owner and Design/Builder regarding
the Certificate of Substantial Completion shall be resolved in accordance with
provisions of Article 10.

 

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

 

§ 3.3 ADDITIONAL SERVICES

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

 

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

 

§ 3.3.3 Providing consultation
concerning replacement of Work damaged by fire or other cause during
construction, and furnishing services required in connection with the
replacement of such Work.

 

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

 

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

 

§ 3.3.6 Preparing a set of reproducible
record documents or electronic data showing significant changes in the Work
made during construction.

 

§ 3.3.7 Providing assistance in
the utilization of equipment or systems such as preparation of operation and
maintenance manuals, training personnel for operation and maintenance, and
consultation during operation.

 

6

 

ARTICLE 4 TIME

§ 4.1 Unless otherwise
indicated, the Owner and the Design/Builder shall perform their respective
obligations as expeditiously as is consistent with reasonable skill and care
and the orderly progress of the Project.

 

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

 

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

 

§ 4.4 Based on the
Design/Builder's Proposal, an estimated construction duration is set forth in
paragraph 14.1 ("Target Completion Date"). The Target Completion Date
represents the Design/Builder's best current estimate of the time envisioned
for design and construction of the Project. However, the Design/Builder shall
use best efforts to meet the Target Completion Date, but does not guarantee the
accuracy of the Target Completion Date and reserves the right to adjust to
accommodate unforeseen circumstances beyond its control.

 

§ 4.5 If the Design/Builder is delayed
at 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 changes
ordered in the Work, or by labor disputes, fire, unusual delay in
deliveries,  adverse weather conditions
not reasonably anticipatable, unavoidable casualties or other causes beyond the
Design/Builder’s control, or by delay authorized by the Owner pending
arbitration, or by other causes which the Owner and Design/Builder agree may
justify delay, then the Contract Time shall be reasonably extended by Change
Order and Design/Builder shall be entitled to reimbursement of reasonable costs
actually incurred as a result of such delay without mark-up.

 

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

 

ARTICLE 5 PAYMENTS

§ 5.1 PROGRESS PAYMENTS

§ 5.1.1 The Design/Builder
shall deliver to the Owner itemized Applications for Payment in such detail as
shall 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 for
Payment, the Owner shall make payment to the Design/Builder.

 

§ 5.1.2.1  To secure Design/Builder’s performance of its
obligations 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 in
its first Application of Payment submitted following the date that the facility
is first available to the public. Remaining Retainage amounts shall be released
in accordance with Paragraph 5.1.8.

 

§ 5.1.3 The Application for
Payment shall constitute a representation by the Design/Builder to the Owner
that the design and construction have progressed to the point indicated, the
quality of the Work covered by the application is in accordance with the
Contract Documents, and the Design/Builder is entitled to payment in the amount
requested.

 

§ 5.1.4 Upon receipt of payment
from the Owner, the Design/Builder shall promptly pay the Architect, other
design professionals and each contractor the amount to which each is entitled
in accordance with the terms of their respective contracts.

 

7

 

§ 5.1.5 The Owner shall have no
obligation under this Part 2 Agreement to pay or to be responsible in any way
for payment to the Architect, another design professional or a contractor
performing portions of the Work.

 

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

 

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

 

§ 5.2 FINAL PAYMENTS

§ 5.2.1 Neither final payment
nor amounts retained, if any, shall become due until the Design/Builder submits
to 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’s
property might be responsible or encumbered (less amounts withheld by the
Owner) have been paid or otherwise satisfied; (2) a certificate evidencing that
insurance required by the Contract Documents to remain in force after final
payment is currently in effect and will not be canceled or allowed to expire until
at least 30 days prior written notice has been given to the Owner; (3) a
written statement that the Design/Builder knows of no substantial reason that
the insurance will not be renewable to cover the period required by the
Contract Documents; (4) consent of surety, if any, to final payment; and (5) if
required by the Owner, 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, to the extent and in
such form as may be designated by the Owner. If a contractor or other person or
entity entitled to assert a lien against the Owner’s property refuses to
furnish a release or waiver required by the Owner, the Design/Builder may
furnish a bond satisfactory to the Owner to indemnify the Owner against such
lien.  If such lien remains unsatisfied
after payments are made, the Design/Builder shall indemnify the Owner for all
loss and cost, including reasonable attorneys’ fees incurred as a result of such
lien; except to the extent that any such lien, security interest, or
encumbrance results from a negligent act or omission, fault, or breach of this
Agreement by the Owner.

 

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

 

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

 

(Paragraphs
deleted)

 

§ 5.2.4 Acceptance of final
payment shall constitute a waiver of all claims by the Design/Builder except
those previously made in writing and identified by the Design/Builder as
unsettled at the time of final Application for Payment.

 

§ 5.3 INTEREST PAYMENTS

§ 5.3.1 Payments due the
Design/Builder under this Part 2 Agreement which are not paid when due shall
bear interest from the date due at the rate specified in Article 13, or in the
absence of a specified rate, at the legal rate prevailing where the Project is
located.

 

ARTICLE 6 PROTECTION OF
PERSONS AND PROPERTY

§ 6.1 The Design/Builder shall
be responsible for initiating, maintaining and providing supervision of all
safety precautions and programs in connection with the performance of this Part
2 Agreement.

 

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

 

8

 

the Work and materials and
equipment 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’s
contractors; and (3) other property at or adjacent thereto, such as trees,
shrubs, lawns, walks, pavements, roadways, structures and utilities not designated
for removal relocation or replacement in the course of construction.

 

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

 

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

 

ARTICLE 7 INSURANCE AND BONDS

§ 7.1 DESIGN/BUILDER’S
LIABILITY INSURANCE

§ 7.1.1 The Design/Builder shall
purchase from and maintain, in a company or companies lawfully authorized to do
business in the jurisdiction in which the Project is located, such insurance as
set forth on Exhibit C in satisfaction of it insurance obligations under the
Agreement. The Design/Builder acknowledges the Owner Controlled Insurance
Program and shall participate in same.

 

(Paragraph
deleted)

 

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

 

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

 

§ 7.2 OWNER’S LIABILITY
INSURANCE

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

 

§ 7.3 PROPERTY INSURANCE

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

 

§ 7.3.2 Property insurance
shall be on an all-risk policy form and shall insure against the perils of fire
and extended coverage and physical loss or damage including, without
duplication of coverage, theft, vandalism, malicious mischief, collapse,
falsework, temporary buildings and debris removal including demolition
occasioned by enforcement of any applicable legal requirements, and shall cover
reasonable compensation for the services and expenses of the Design/Builder’s
Architect and other professionals required as a result of such insured loss.
This insurance shall cover all materials intended to be incorporated into the
Work, whether stored on-site or off-site, or in transit to the site. The Owner
shall be solely responsible for the payment of any deductibles as a Cost of
Work.

 

9

 

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

 

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

 

§ 7.3.5 Partial occupancy or
use prior to Substantial Completion shall not commence until the insurance
company or companies providing property insurance have consented to such
partial occupancy or use by endorsement or otherwise. The Owner shall take
reasonable steps to obtain consent of the insurance company or companies and
shall not, without mutual written consent, take any action with respect to
partial occupancy or use that would cause cancellation, lapse or reduction of
coverage.

 

(Paragraphs
deleted)

 

§ 7.4 LOSS OF USE OF INSURANCE

 

§ 7.4.1 The Owner, at the
Owner’s option, may purchase and maintain such insurance as will insure the
Owner 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 the
Design/Builder for loss of use of the Owner’s property, including consequential
losses due to fire or other hazards, however caused.

 

ARTICLE 8 CHANGES IN THE WORK

§ 8.1 CHANGES

§ 8.1.1 Changes in the Work may
be accomplished after execution of this Part 2 Agreement, without invalidating
this Part 2 Agreement, by Change Order, Construction Change Directive, or order
for a minor change in the Work, subject to the limitations stated in the
Contract Documents.

 

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

 

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

 

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

 

§ 8.2 CHANGE ORDERS

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

.1                                       a
change in the Work;

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

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

 

10

 

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

 

§ 8.3 CONSTRUCTION CHANGE
DIRECTIVES

§ 8.3.1 A Construction Change
Directive is a written order prepared and signed by the Owner, directing a
change in the Work prior to agreement on adjustment, if any, in the Contract
Sum or Target Completion Date, or both.

 

§ 8.3.2 Except as otherwise
agreed by the Owner and the Design/Builder, the adjustment to the Contract Sum
shall be determined on the basis of reasonable expenditures and savings of
those performing the Work attributable to the change, including the
expenditures for design services and revisions to the Contract Documents. In
case of an increase in the Contract Sum, the cost shall include a
Design/Builder’s fee of four percent (4%) of such increased costs. In such
case, the Design/Builder shall keep and present an itemized accounting together
with appropriate supporting data for inclusion in a Change Order. Unless
otherwise provided in the Contract Documents, costs for these purposes shall be
limited to the following:

 

.1                                       costs
of labor, including social security, old age and unemployment insurance, fringe
benefits required by agreement or custom, and workers’ compensation insurance;

.2                                       costs
of materials, supplies and equipment, including cost of transportation, whether
incorporated or consumed;

.3                                       rental
costs of machinery and equipment exclusive of hand tools, whether rented from
the Design/Builder or others;

.4                                       costs
of premiums for all bonds and insurance permit fees, and sales, use or similar
taxes;

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

 

§ 8.3.3 Pending final
determination of cost to the Owner, amounts not in dispute may be included in
Applications for Payment. The amount of credit to be allowed by the
Design/Builder to the Owner for deletion or change which results in a net
decrease in the Contract Sum will be actual net cost. When both additions and
credits covering related Work or substitutions are involved in a change, the
allowance for overhead and profit shall be figured on the basis of the net
increase, if any, with respect to that change.

 

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

 

§ 8.4 MINOR CHANGES IN THE WORK

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

 

§ 8.5 CONCEALED CONDITIONS

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

 

§ 8.6 REGULATORY CHANGES

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

 

11

 

ARTICLE 9 CORRECTION OF WORK

§ 9.1 The Design/Builder shall
promptly correct Work known by the Design/Builder to be defective or failing to
conform to the requirements of Subparagraph 1.2.1, whether observed before or
after Substantial Completion and whether or not fabricated, installed or
completed.

 

§ 9.2 If, within one (1) year
after the date of Substantial Completion of the Work or, after the date for
commencement of warranties established in a written agreement between the Owner
and the Design/Builder, or by terms of an applicable special warranty required
by the Contract Documents, any of the Work is found to be not substantially in
accordance with the requirements of Subparagraph 1.2.1, the Design/Builder
shall correct it promptly after receipt of a written notice from the Owner to
do so unless the Owner has previously given the Design/Builder a written
acceptance of such condition. Warranty coverage expressly excludes damages or
defects caused by abuse, modifications, improper or insufficient maintenance,
improper operations by the Owner, and normal wear and tear. All other
warranties, expressed or implied, including the warrant of merchantability and
the warranty of fitness for a particular purpose, are expressly disclaimed. The
Design/Builder shall assign to the Owner all warranties and guarantees obtained
from the subcontractors, vendors, and suppliers and shall render reasonable
assistance to the Owner when requested to enforce such warranties and
guarantees, but will not be legally responsible to the Owner for such
third-party warranty obligations.

 

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

 

(Paragraph
deleted)

 

§ 9.5 If the Design/Builder
defaults or neglects to carry out the Work in accordance with this Agreement
and fails within seven (7) days after receipt of written notice from the Owner
to commence and continue correction of such default or neglect with diligence
and promptness, the Owner may give a second written notice to the
Design/Builder and, seven (7) days following receipt by the Design/Builder of
that second written notice and without prejudice to other remedies the Owner
may have, correct such deficiencies. In such case an appropriate Change Order
shall be issued deducting from payments then or thereafter due the
Design/Builder, the costs of correcting such deficiencies. If the payments then
or thereafter due the Design/Builder are not sufficient to cover the amount of
the deduction, the Design/Builder shall pay the difference to the Owner. Such
action by the Owner shall be subject to dispute resolution procedures as
provided in Article 10.

 

ARTICLE 10 DISPUTE
RESOLUTION – MEDIATION AND ARBITRATION

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

 

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

 

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

 

12

 

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

 

§ 10.5 The award rendered by
the arbitrator or arbitrators shall be final, and judgment may be entered upon
it in accordance with applicable law in the United States District Court for
Western District of New York.

 

ARTICLE 11 MISCELLANEOUS
PROVISIONS

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

 

§ 11.2 SUBCONTRACTS

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

 

§ 11.3 WORK BY OWNER OR OWNER’S
CONTRACTORS

§ 11.3.1 The Owner reserves the
right to perform construction or operations related to the Project with the
Owner’s own forces, and to award separate contracts in connection with other
portions of the Project or other construction or operations on the site under
conditions of insurance and waiver of subrogation identical to the provisions
of this Part 2 Agreement. If the Design/Builder claims that delay or additional
cost is involved because of such action by the Owner, the Design/Builder shall
assert such claims as provided in Section 11.4.

 

§ 11.3.2 The Design/Builder
shall afford the Owner’s separate contractors reasonable opportunity for
introduction and storage of their materials and equipment and performance of
their activities.

 

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

 

§ 11.4 CLAIMS FOR DAMAGES

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

 

§ 11.5 INDEMNIFICATION

§ 11.5.1 To the fullest extent
permitted by law, the Design/Builder shall indemnify and hold harmless the
Owner, and its employees from and against claims, damages, losses and expenses,
including but not limited to reasonable attorneys’ fees, arising out of or
resulting from performance of the Work, provided that such claim, damage, loss
or expense is attributable to bodily injury, sickness, disease or death, or to
injury to or destruction of tangible property (other than the Work itself), but
only to the extent caused directly by negligent acts or omissions of the
Design/Builder, anyone directly or indirectly employed by the Design/Builder or
anyone 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 the
scope of the indemnification obligation with counsel of Design/Builder’s
choosing, subject to the right of Owner to defend itself to the extent its
interests may differ from those of Design/Builder. Such obligation shall not

 

13

 

be construed to negate, abridge, or reduce
other rights or obligations of indemnity which would otherwise exist as to a party
or person described in this Section 11.5.

 

§ 11.5.2 In claims against any person or
entity indemnified under this Section 11.5 by an employee of the
Design/Builder, anyone directly or indirectly employed by the Design/Builder or
anyone for whose acts the Design/Builder may be liable, the indemnification
obligation under this Section 11.5 shall not be limited by a limitation on
amount or type of damages, compensation or benefits payable by or for the
Design/Builder under workers’ compensation acts, disability benefit acts or
other employee benefit acts.

 

§ 11.6 SUCCESSORS AND ASSIGNS

§ 11.6.1 The Owner and Design/Builder,
respectively, bind themselves, their partners, successors, assigns and legal
representatives to the other party to this Part 2 Agreement and to the
partners, successors and assigns of such other party with respect to all
covenants of this Part 2 Agreement. Neither the Owner nor the Design/Builder
shall assign this Part 2 Agreement without the written consent of the other.
The Owner may assign this Part 2 Agreement to any institutional lender
providing construction financing, and the Design/Builder agrees to execute all
consents reasonably required to facilitate such an assignment. If either party
makes such an assignment, that party shall nevertheless remain legally
responsible for all obligations under this Part 2 Agreement, unless otherwise
agreed by the other party.

 

§ 11.7 TERMINATION OF PROFESSIONAL DESIGN
SERVICES

§ 11.7.1 Prior to termination of the services
of the Architect or any other design professional designated in this Part 2
Agreement the Design/Builder shall identify to the Owner in writing another
architect or other design professional with respect to whom the Owner has no
reasonable objection, who will provide the services originally to have been
provided by the Architect or other design professional whose services are being
terminated.

 

§ 11.8 EXTENT OF AGREEMENT

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

 

ARTICLE
12 TERMINATION OF THE AGREEMENT

§ 12.1 TERMINATION BY THE OWNER

§ 12.1.1 This Part 2 Agreement may be
terminated by the Owner upon 14 days’ written notice to the Design/Builder in
the event that the Project is abandoned. If such termination occurs, the Owner
shall pay the Design/Builder for Work completed and for proven loss sustained
upon materials, equipment, tools, and construction equipment and machinery,
including reasonable profit and applicable damages. Such proven loss shall
include all expenses and costs arising out of the termination including, but
not limited to, cancellation charges, restocking fees, and expenses of a
similar nature, including business impact costs.

 

§ 12.1.2 If the Design/Builder defaults or
persistently fails or neglects to carry out the Work in accordance with the
Contract Documents or fails to perform the provisions of this Part 2 Agreement,
the Owner may give written notice that the Owner intends to terminate this Part
2 Agreement. If the Design/Builder fails to correct the defaults, failure or
neglect within seven (7) days after being given notice, the Owner may then give
a second written notice and, after an additional seven (7) days, the Owner may
without prejudice to any other remedy terminate the employment of the
Design/Builder and take possession of the site and of all materials, equipment,
tools and construction equipment and machinery thereon owned by the
Design/Builder and finish the Work by whatever method the Owner may deem
expedient.

 

§ 12.2 TERMINATION BY THE DESIGN/BUILDER

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

 

14

 

ARTICLE 13 BASIS OF COMPENSATION

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

 

§ 13.1 COMPENSATION

§ 13.1.1 For the
Design/Builder’s performance of the Work, as described in Section 3.2 and
including 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 as
follows:

 

The Contract Sum shall consist
of the Cost of Work which includes the elements set forth on Exhibit B and a
Fee of four percent (4%) thereon. The Design/Builder’s initial Budget Estimate
is attached as Exhibit B and shall constitute a preliminary Project budget
subject to revision as the Project progresses. The parties acknowledge that
this initial Budget Estimate does not constitute a guaranteed cost of the
Project, but merely represents Design/Builder’s current reasonable estimate of
the cost of the Project.

 

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

 

N/A

 

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

 

§ 13.1.4 Owner and
Design/Builder agree that the Total Budget Estimate of $136,542,624.00 set
forth in Exhibit B is a reasonable, good faith estimate of the cost to design
and build the Project based on the scope of Work detailed in this Agreement.
Design/Builder hereby guarantees that it will complete the Work for a Contract
Sum (the “Guaranteed Maximum Contract Sum”), to be established pursuant to
Subparagraph 13.1.6 below, that shall not exceed $136,542,624.00. In exchange
for such guarantee, Owner agrees that Design/Builder may make changes to the
scope of Work set forth in Exhibit A that are reasonably necessary to achieve a
Guaranteed Maximum Contract Sum that does not exceed $136,542,624.00; provided,
however, that any such changes shall be subject to Owner’s representatives approval
pursuant to Subparagraph 3.2.3, and Owner’s agreement to such changes shall in
no way diminish Design/Builder’s warranty obligations under this Agreement.

 

§ 13.1.5 At the point when
Construction Documents have progressed to the point where Design/Builder reasonably
determines that its subcontractor are able to provide to Design/Builder with
lump sum prices for their various scopes of work, and have been approved by
Owner pursuant to Subparagraph 3.2.3, Design/Builder shall obtain 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 its
subcontractors, Design/Builder shall provide, subject to Owner’s reasonable
approval and to the provisions of Subparagraph 13.1.4, a Guaranteed Maximum
Contract 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
documented by a written instrument signed by Owner and Design/Builder.

 

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

 

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

 

15

 

§13.1.9 The Guaranteed Maximum
Contract Sum shall be increased by the amount of any increase in the actual
Contract Sum that results from a Change Order or Construction Change Directive
pursuant to Article 8, and by the amount of any reasonable costs actually
incurred by Design/Builder and for which Design/Builder may be entitled to
reimbursement pursuant to Paragraphs 4.5 and 4.6. Each such increase shall be
documented by a written instrument noting the amount of the increase and the
amount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.10 The Guaranteed Maximum
Contract Sum shall be decreased by the amount of any decreases to the actual
Contract Sum that result from a Change Order or Construction Change Directive
pursuant to Article 8 that reduces the scope of the Work. Each such decrease
shall be documented by a written instrument noting the amount of the decrease
and the amount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.11 The allowance amounts
included in the Guaranteed Maximum Contract Sum developed by Design/Builder in
accordance with Paragraph 13.1.6 above shall include all costs for loading and
unloading, taxes, labor, installation, costs, overhead, profit and other
expenses contemplated for the stated allowance. Whenever costs actually
incurred are more or less than the allowance amount, the Guaranteed Maximum
Contract Sum shall be adjusted accordingly, and the amount of the adjustment
and the amount of the revised Guaranteed Maximum Contract Sum shall be
documented by a written instrument.

 

§ 13.2 REIMBURSABLE EXPENSES

§ 13.2.1 Reimbursable Expenses
are in addition to the compensation for Basic and Additional Services, and
include actual expenditures made by the Design/Builder and the Design/Builder’s
employees and contractors in the interest of the Project, as follows:

 

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

 

§ 13.3 INTEREST PAYMENT

§ 13.3.1 The rate of interest
for advanced or borrowed funds or delayed payments shall be at the rate of one
percent (1%) per month.

 

ARTICLE 14 OTHER CONDITIONS
AND SERVICES

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

 

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

 

N/A

 

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

 

N/A

 

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

 

§ 14.5 Pursuant to the Seneca
Nation of Indians Tribal Rights Ordinance, Section 4.a, the Design/Builder and
its subcontractors shall give preference in subcontracting to entities
certified by the Seneca Nation of Indians Tribal Employment Rights Commission
as

fifty-one percent (51%) or more Indian-owned and controlled, and shall give
preference to members of the Seneca Nation of Indians in hiring, training and
other aspects of employment purposes

 

16

 

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

 

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

 

§14.7 The Design/Builder shall
maintain at the Project Site full and detailed books of accounts showing all
costs incurred in the performance of the Project.  The Owner or its authorized representative
shall have the right to copy and audit all such books of accounts and records
pertaining to the performance of the Work. 
All such books and records shall be preserved by the Design/Builder for
a period of three (3) years in its offices in Norwich, Connecticut.  All drawings and documents prepared by the
Architect shall become the property of the Owner subject to the terms of this
Agreement.

 

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

 

§14.9 In the event the
Design/Builder encounters any Hazardous Material, the Design/Builder shall
immediately stop Work in the affected area and report the condition to the
Owner.  The Design/Builder shall not be
required to perform Work without its consent relating to the Hazardous Material
not 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 onto
the site by Design/Builder or any of its subcontractors, and encountered by the
Design/Builder in the performance of the Work. 
The Owner shall indemnify, hold harmless and defend the Design/Builder
from and against any and all claims, damages, demands, losses, expenses,
penalties or fines (including attorneys’ fees) in any way occurring incidental
to or arising out of the encountering of any Hazardous Material by
Design/Builder or its contractors other than Hazardous Material brought onto
the site by Design/Builder or any of its subcontractors.  This indemnification obligation shall survive
completion of the Work or termination of this Agreement.  For purposes of this Agreement, “Hazardous
Material” shall mean any hazardous or toxic substance, contaminant or pollution
which is or may become regulated under any federal, state, county or local
statute, law, ordinance, code, rule or regulation.

 

 

This Agreement entered into as
of 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

  	
   

  

 

17

 

Certification of Document’s
Authenticity

AIA®
Document D401TM – 2003

 

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

 

 

	
  /s/ Keith Kabeary

  	
   

  
	
  (Signed)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Sr. VP

  	
   

  
	
  (Title)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  10/13/04

  	
   

  
	
  (Dated)

  	
   

  

 

1Exhibit 10.12

 

	
  

  	
  Document
  A191TM - 1996 Part 2

  

 

Standard Form of Agreement
Between Owner and Design/Builder

Part 2
Agreement

 

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 First
day of September in the year of 2004

(In words,
indicate day month and year.)

 

BETWEEN the Owner

(Name and
address)

 

Seneca Territory Gaming
Corporation

 

 

and the Design/Builder:

(Name and
address)

 

Klewin Gaming & Hospitality,
Inc.

40 Connecticut Avenue

Norwich, CT 06360

 

For the following Project:

(Include Project
name, location and a summary description.)

 

Seneca Allegany Casino Parking
Garage/Hotel

Salamanca, NY

 

The architectural services
described in Article 3 will be provided by the following person or entity who
is lawfully licensed to practice architecture:

 

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

 

This document has important
legal consequences. Consultation with an attorney is encouraged with respect to
its 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. Copyright
Law and International Treaties. Unauthorized reproduction or distribution of
this AIA® Document, or any portion of it, may result in severe civil and
criminal penalties, and will be prosecuted to the maximum extent possible under
the law. This document was produced by AIA software at 12:19:22 on 10/12/2004
under Order No.1000126358_1 which expires on 6/29/2005, and is not for resale.

	
  User Notes:

  	
   

  	
  (44572571)

  

 

1

 

	
  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, mechanical
and electrical engineering services will be provided contractually through the Architect
except as indicated below:

 

	
  Name, address and discipline

  	
   

  	
  Registration
  Number

  	
   

  	
  Relationship
  to Design/Builder

  
	
  TBD

  	
   

  	
   

  	
   

  	
   

  

 

The Owner and the
Design/Builder agree as set forth below.

 

2

 

TERMS AND CONDITIONS – PART 2 AGREEMENT

 

ARTICLE 1 GENERAL PROVISIONS

§ 1.1 BASIC DEFINITIONS

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

 

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

 

§ 1.2 EXECUTION, CORRELATION
AND INTENT

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

 

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

 

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

 

§ 1.3 OWNERSHIP AND USE OF
DOCUMENTS

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

 

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

 

§ 1.3.3 If the Design/Builder
defaults in the Design/Builder’s obligations to the Owner, the Architect’s Work
Product shall be conveyed to the Owner for the completion of the Project,
conditioned upon the Owner’s execution of an agreement to cure the
Design/Builder’s default in payment to the Architect for services previously
performed and to indemnify the Architect and Design/Builder with regard to
claims arising from such reuse without the Architect’s and Design/Builder’s
professional involvement.

 

§ 1.3.4 Submission or
distribution of the Design/Builder’s documents to meet official regulatory
requirements or for similar purposes in connection with the Project is not to
be construed as publication in derogation of the rights reserved in Section
1.3.1.

 

ARTICLE 2 OWNER

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

 

3

 

consents to enforcement of
arbitral awards in the United States District Court for the Western District
Court of New York. Owner hereby waives any requirement of exhaustion of tribal
remedies, and agrees it will not present any affirmative defense in any dispute
based on alleged failure to exhaust such remedies. Owner’s waiver of immunity
from suit is irrevocable and specifically limited to an action to compel
arbitration pursuant to Article 10 of this Agreement and specific enforcement
thereof.

 

§ 2.2 The Owner has designated
G. Michael Brown as the representative authorized to act on the Owner’s behalf
with respect to the Project. The Owner or such authorized representative shall
render decisions in a timely manner and in accordance with the schedule
accepted by the Owner, including its review of documents submitted by the
Design/Builder, which shall be completed within seventy two (72) hours of
receipt by Owner. The Owner may obtain independent review of the Contract
Documents by a separate architect, engineer, contractor or cost estimator under
contract to or employed by the Owner. Such independent review shall be
undertaken at the Owner’s expense in a timely manner and shall not delay the
orderly progress of the Work.

 

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

 

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

 

§ 2.5 The Owner shall furnish
services of land surveyors, geotechnical engineers and other consultants for
subsoil, air and water conditions, when such services are deemed necessary by
the Design/Builder to properly carry out the design services required by this
Part 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: structural
or mechanical systems; chemical, air and water pollution; hazardous materials
or other environmental and subsurface conditions. The Owner shall disclose all
information known to the Owner regarding the presence of pollutants at the
Project’s site.

 

§ 2.7 The Owner shall furnish
all legal, accounting and insurance counseling services as may be necessary at
any time for the Project, including such auditing services as the Owner may
require 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 are
within the Owner’s control shall be furnished at the Owner’s expense, and the
Design/Builder shall be entitled to rely upon the accuracy and completeness
thereof, except to the extent the Owner advises the Design/Builder to the
contrary in writing in which case the Design/Builder shall not be bound by or
responsible to comply herewith.

 

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

 

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

 

§ 2.11 The Owner shall, at the
request of the Design/Builder, prior to execution of this Part 2 Agreement and
promptly upon request thereafter, furnish to the Design/Builder reasonable
evidence that financial arrangements have been made to fulfill the Owner’s
obligations under the Contract.

 

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

 

§ 2.13 The Design/Builder will
be afforded continuous and unrestricted access to the Project site during the
course of design and construction. The Owner shall provide sufficient space for
a field office and storage of materials and equipment by the Design/Builder at
the Project site. The Design/Builder will not be restricted on its work hours
unless by mutual agreement.

 

4

 

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

 

ARTICLE 3  DESIGN/BUILDER

§ 3.1 SERVICES AND
RESPONSIBILITIES

§ 3.1.1 The Design/Builder is
not a design professional licensed to provide professional services in
accordance with applicable licensing statutes. Design services required by this
Part 2 Agreement shall be performed by qualified architects and other design
professionals. The contractual obligations of such professional persons or entities
are undertaken and performed in the interest of the Design/Builder.
Design/Builder may replace the designated Architect upon giving reasonable
notice and explanation to Owner, and obtaining the prior approval by Owner of
such dismissal and of the replacement Architect, which approval will not
unreasonably be withheld.

 

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

 

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

 

§ 3.2 BASIC SERVICES

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

 

§ 3.2.2 The Design/Builder
shall designate a representative authorized to act on the Design/Builder’s
behalf with respect to the Project.

 

§ 3.2.3 The Design/Builder
shall submit Construction Documents for review and approval by the Owner’s
representative designated pursuant to Paragraph 2.2. Construction Documents may
include drawings, specifications, and other documents and electronic data
setting forth in detail the requirements for construction of the Work, and
shall:

 

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

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

.3        include documents
customarily required for regulatory agency approvals.

 

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

 

§ 3.2.5 Unless otherwise
provided in the Contract Documents, the Design/Builder shall provide or cause
to 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 execution
and completion of the Work, whether temporary or permanent and whether or not
incorporated or to be incorporated in the Work.

 

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

 

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

 

§ 3.2.8 The Design/Builder
shall be responsible for correcting Work which does not conform to the Contract
Documents.

 

§ 3.2.9 The Design/Builder
warrants to the Owner that materials and equipment furnished under the Contract
will be of good quality and new unless otherwise required or permitted by the
Contract 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 not
properly approved by the Owner, shall be corrected in accordance with Article
9.

 

5

 

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

 

§ 3.2.11 The Design/Builder
shall 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/Builder
shall pay royalties and license fees patented for designs, processes or
products. The Design/Builder shall defend suits or claims for infringement of
patent rights and shall hold the 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 is required by the Owner.
However, if the Design/Builder has reason to believe the use of a required
design, process or product is an infringement of a patent, the Design/Builder
shall be responsible for such loss unless such information is promptly
furnished to the Owner.

 

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

 

§ 3.2.14 The Design/Builder
shall notify the Owner when the Design/Builder believes that the Work or an
agreed upon portion thereof is substantially completed. If the Owner concurs,
the Design/Builder shall issue a Certificate of Substantial Completion which
shall establish the Date of Substantial Completion, shall state the
responsibility of each party for security, maintenance, heat, utilities, damage
to the Work and insurance, shall include a list of items to be completed or
corrected and shall fix the time within which the Design/Builder shall complete
items listed therein. Disputes between the Owner and Design/Builder regarding
the Certificate of Substantial Completion shall be resolved in accordance with
provisions of Article 10.

 

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

 

§ 3.3 ADDITIONAL SERVICES

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

 

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

 

§ 3.3.3 Providing consultation
concerning replacement of Work damaged by fire or other cause during
construction, and furnishing services required in connection with the
replacement of such Work.

 

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

 

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

 

§ 3.3.6 Preparing a set of
reproducible record documents or electronic data showing significant changes in
the Work made during construction.

 

§ 3.3.7 Providing assistance in
the utilization of equipment or systems such as preparation of operation and
maintenance manuals, training personnel for operation and maintenance, and
consultation during operation.

 

6

 

ARTICLE 4 TIME

§ 4.1 Unless otherwise
indicated, the Owner and the Design/Builder shall perform their respective
obligations as expeditiously as is consistent with reasonable skill and care
and the orderly progress of the Project.

 

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

 

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

 

§ 4.4 Based on the
Design/Builder's Proposal, an estimated construction duration is set forth in
paragraph 14.1 ("Target Completion Date"). The Target Completion Date
represents the Design/Builder's best current estimate of the time envisioned
for design and construction of the Project. However, the Design/Builder shall
use best efforts to meet the Target Completion Date, but does not guarantee the
accuracy of the Target Completion Date and reserves the right to adjust to
accommodate unforeseen circumstances beyond its control.

 

§ 4.5 If the Design/Builder is delayed
at 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 changes
ordered in the Work, or by labor disputes, fire, unusual delay in
deliveries,  adverse weather conditions
not reasonably anticipatable, unavoidable casualties or other causes beyond the
Design/Builder’s control, or by delay authorized by the Owner pending
arbitration, or by other causes which the Owner and Design/Builder agree may
justify delay, then the Contract Time shall be reasonably extended by Change
Order and Design/Builder shall be entitled to reimbursement of reasonable costs
actually incurred as a result of such delay without mark-up.

 

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

 

ARTICLE 5 PAYMENTS

§ 5.1 PROGRESS PAYMENTS

§ 5.1.1 The Design/Builder
shall deliver to the Owner itemized Applications for Payment in such detail as
shall 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 for
Payment, the Owner shall make payment to the Design/Builder.

 

§ 5.1.2.1  To secure Design/Builder’s performance of its
obligations 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 in
its first Application of Payment submitted following the date that the facility
is first available to the public. Remaining Retainage amounts shall be released
in accordance with Paragraph 5.1.8.

 

§ 5.1.3 The Application for
Payment shall constitute a representation by the Design/Builder to the Owner
that the design and construction have progressed to the point indicated, the
quality of the Work covered by the application is in accordance with the
Contract Documents, and the Design/Builder is entitled to payment in the amount
requested.

 

§ 5.1.4 Upon receipt of payment
from the Owner, the Design/Builder shall promptly pay the Architect, other
design professionals and each contractor the amount to which each is entitled
in accordance with the terms of their respective contracts.

 

7

 

§ 5.1.5 The Owner shall have no
obligation under this Part 2 Agreement to pay or to be responsible in any way
for payment to the Architect, another design professional or a contractor
performing portions of the Work.

 

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

 

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

 

§ 5.2 FINAL PAYMENTS

§ 5.2.1 Neither final payment
nor amounts retained, if any, shall become due until the Design/Builder submits
to 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’s
property might be responsible or encumbered (less amounts withheld by the
Owner) have been paid or otherwise satisfied; (2) a certificate evidencing that
insurance required by the Contract Documents to remain in force after final
payment is currently in effect and will not be canceled or allowed to expire until
at least 30 days prior written notice has been given to the Owner; (3) a
written statement that the Design/Builder knows of no substantial reason that
the insurance will not be renewable to cover the period required by the
Contract Documents; (4) consent of surety, if any, to final payment; and (5) if
required by the Owner, 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, to the extent and in
such form as may be designated by the Owner. If a contractor or other person or
entity entitled to assert a lien against the Owner’s property refuses to
furnish a release or waiver required by the Owner, the Design/Builder may
furnish a bond satisfactory to the Owner to indemnify the Owner against such
lien.  If such lien remains unsatisfied
after payments are made, the Design/Builder shall indemnify the Owner for all
loss and cost, including reasonable attorneys’ fees incurred as a result of such
lien; except to the extent that any such lien, security interest, or
encumbrance results from a negligent act or omission, fault, or breach of this
Agreement by the Owner.

 

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

 

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

 

(Paragraphs
deleted)

 

§ 5.2.4 Acceptance of final
payment shall constitute a waiver of all claims by the Design/Builder except
those previously made in writing and identified by the Design/Builder as
unsettled at the time of final Application for Payment.

 

§ 5.3 INTEREST PAYMENTS

§ 5.3.1 Payments due the
Design/Builder under this Part 2 Agreement which are not paid when due shall
bear interest from the date due at the rate specified in Article 13, or in the
absence of a specified rate, at the legal rate prevailing where the Project is
located.

 

ARTICLE 6 PROTECTION OF
PERSONS AND PROPERTY

§ 6.1 The Design/Builder shall
be responsible for initiating, maintaining and providing supervision of all
safety precautions and programs in connection with the performance of this Part
2 Agreement.

 

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

 

8

 

the Work and materials and
equipment 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’s
contractors; and (3) other property at or adjacent thereto, such as trees,
shrubs, lawns, walks, pavements, roadways, structures and utilities not
designated for removal relocation or replacement in the course of construction.

 

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

 

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

 

ARTICLE 7 INSURANCE AND BONDS

§ 7.1 DESIGN/BUILDER’S
LIABILITY INSURANCE

§ 7.1.1 The Design/Builder shall
purchase from and maintain, in a company or companies lawfully authorized to do
business in the jurisdiction in which the Project is located, such insurance as
set forth on Exhibit C in satisfaction of it insurance obligations under the
Agreement. The Design/Builder acknowledges the Owner Controlled Insurance
Program and shall participate in same.

 

(Paragraph
deleted)

 

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

 

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

 

§ 7.2 OWNER’S LIABILITY
INSURANCE

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

 

§ 7.3 PROPERTY INSURANCE

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

 

§ 7.3.2 Property insurance
shall be on an all-risk policy form and shall insure against the perils of fire
and extended coverage and physical loss or damage including, without
duplication of coverage, theft, vandalism, malicious mischief, collapse,
falsework, temporary buildings and debris removal including demolition
occasioned by enforcement of any applicable legal requirements, and shall cover
reasonable compensation for the services and expenses of the Design/Builder’s
Architect and other professionals required as a result of such insured loss.
This insurance shall cover all materials intended to be incorporated into the
Work, whether stored on-site or off-site, or in transit to the site. The Owner
shall be solely responsible for the payment of any deductibles as a Cost of
Work.

 

9

 

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

 

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

 

§ 7.3.5 Partial occupancy or
use prior to Substantial Completion shall not commence until the insurance
company or companies providing property insurance have consented to such
partial occupancy or use by endorsement or otherwise. The Owner shall take
reasonable steps to obtain consent of the insurance company or companies and
shall not, without mutual written consent, take any action with respect to
partial occupancy or use that would cause cancellation, lapse or reduction of
coverage.

 

(Paragraphs
deleted)

 

§ 7.4 LOSS OF USE OF INSURANCE

 

§ 7.4.1 The Owner, at the
Owner’s option, may purchase and maintain such insurance as will insure the
Owner 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 the
Design/Builder for loss of use of the Owner’s property, including consequential
losses due to fire or other hazards, however caused.

 

ARTICLE 8 CHANGES IN THE WORK

§ 8.1 CHANGES

§ 8.1.1 Changes in the Work may
be accomplished after execution of this Part 2 Agreement, without invalidating
this Part 2 Agreement, by Change Order, Construction Change Directive, or order
for a minor change in the Work, subject to the limitations stated in the
Contract Documents.

 

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

 

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

 

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

 

§ 8.2 CHANGE ORDERS

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

.1                                       a
change in the Work;

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

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

 

10

 

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

 

§ 8.3 CONSTRUCTION CHANGE
DIRECTIVES

§ 8.3.1 A Construction Change
Directive is a written order prepared and signed by the Owner, directing a
change in the Work prior to agreement on adjustment, if any, in the Contract
Sum or Target Completion Date, or both.

 

§ 8.3.2 Except as otherwise
agreed by the Owner and the Design/Builder, the adjustment to the Contract Sum
shall be determined on the basis of reasonable expenditures and savings of
those performing the Work attributable to the change, including the
expenditures for design services and revisions to the Contract Documents. In
case of an increase in the Contract Sum, the cost shall include a
Design/Builder’s fee of four percent (4%) of such increased costs. In such
case, the Design/Builder shall keep and present an itemized accounting together
with appropriate supporting data for inclusion in a Change Order. Unless
otherwise provided in the Contract Documents, costs for these purposes shall be
limited to the following:

 

.1                                       costs
of labor, including social security, old age and unemployment insurance, fringe
benefits required by agreement or custom, and workers’ compensation insurance;

.2                                       costs
of materials, supplies and equipment, including cost of transportation, whether
incorporated or consumed;

.3                                       rental
costs of machinery and equipment exclusive of hand tools, whether rented from
the Design/Builder or others;

.4                                       costs
of premiums for all bonds and insurance permit fees, and sales, use or similar
taxes;

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

 

§ 8.3.3 Pending final
determination of cost to the Owner, amounts not in dispute may be included in
Applications for Payment. The amount of credit to be allowed by the
Design/Builder to the Owner for deletion or change which results in a net
decrease in the Contract Sum will be actual net cost. When both additions and
credits covering related Work or substitutions are involved in a change, the
allowance for overhead and profit shall be figured on the basis of the net
increase, if any, with respect to that change.

 

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

 

§ 8.4 MINOR CHANGES IN THE WORK

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

 

§ 8.5 CONCEALED CONDITIONS

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

 

§ 8.6 REGULATORY CHANGES

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

 

11

 

ARTICLE 9 CORRECTION OF WORK

§ 9.1 The Design/Builder shall
promptly correct Work known by the Design/Builder to be defective or failing to
conform to the requirements of Subparagraph 1.2.1, whether observed before or
after Substantial Completion and whether or not fabricated, installed or
completed.

 

§ 9.2 If, within one (1) year
after the date of Substantial Completion of the Work or, after the date for
commencement of warranties established in a written agreement between the Owner
and the Design/Builder, or by terms of an applicable special warranty required
by the Contract Documents, any of the Work is found to be not substantially in
accordance with the requirements of Subparagraph 1.2.1, the Design/Builder
shall correct it promptly after receipt of a written notice from the Owner to
do so unless the Owner has previously given the Design/Builder a written
acceptance of such condition. Warranty coverage expressly excludes damages or
defects caused by abuse, modifications, improper or insufficient maintenance,
improper operations by the Owner, and normal wear and tear. All other
warranties, expressed or implied, including the warrant of merchantability and
the warranty of fitness for a particular purpose, are expressly disclaimed. The
Design/Builder shall assign to the Owner all warranties and guarantees obtained
from the subcontractors, vendors, and suppliers and shall render reasonable
assistance to the Owner when requested to enforce such warranties and
guarantees, but will not be legally responsible to the Owner for such
third-party warranty obligations.

 

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

 

(Paragraph
deleted)

 

§ 9.5 If the Design/Builder
defaults or neglects to carry out the Work in accordance with this Agreement
and fails within seven (7) days after receipt of written notice from the Owner
to commence and continue correction of such default or neglect with diligence
and promptness, the Owner may give a second written notice to the
Design/Builder and, seven (7) days following receipt by the Design/Builder of
that second written notice and without prejudice to other remedies the Owner
may have, correct such deficiencies. In such case an appropriate Change Order
shall be issued deducting from payments then or thereafter due the
Design/Builder, the costs of correcting such deficiencies. If the payments then
or thereafter due the Design/Builder are not sufficient to cover the amount of
the deduction, the Design/Builder shall pay the difference to the Owner. Such
action by the Owner shall be subject to dispute resolution procedures as
provided in Article 10.

 

ARTICLE 10 DISPUTE
RESOLUTION – MEDIATION AND ARBITRATION

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

 

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

 

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

 

12

 

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

 

§ 10.5 The award rendered by
the arbitrator or arbitrators shall be final, and judgment may be entered upon
it in accordance with applicable law in the United States District Court for
Western District of New York.

 

ARTICLE 11 MISCELLANEOUS
PROVISIONS

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

 

§ 11.2 SUBCONTRACTS

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

 

§ 11.3 WORK BY OWNER OR OWNER’S
CONTRACTORS

§ 11.3.1 The Owner reserves the
right to perform construction or operations related to the Project with the
Owner’s own forces, and to award separate contracts in connection with other
portions of the Project or other construction or operations on the site under
conditions of insurance and waiver of subrogation identical to the provisions
of this Part 2 Agreement. If the Design/Builder claims that delay or additional
cost is involved because of such action by the Owner, the Design/Builder shall
assert such claims as provided in Section 11.4.

 

§ 11.3.2 The Design/Builder
shall afford the Owner’s separate contractors reasonable opportunity for
introduction and storage of their materials and equipment and performance of
their activities.

 

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

 

§ 11.4 CLAIMS FOR DAMAGES

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

 

§ 11.5 INDEMNIFICATION

§ 11.5.1 To the fullest extent
permitted by law, the Design/Builder shall indemnify and hold harmless the
Owner, and its employees from and against claims, damages, losses and expenses,
including but not limited to reasonable attorneys’ fees, arising out of or
resulting from performance of the Work, provided that such claim, damage, loss
or expense is attributable to bodily injury, sickness, disease or death, or to
injury to or destruction of tangible property (other than the Work itself), but
only to the extent caused directly by negligent acts or omissions of the
Design/Builder, anyone directly or indirectly employed by the Design/Builder or
anyone 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 the
scope of the indemnification obligation with counsel of Design/Builder’s
choosing, subject to the right of Owner to defend itself to the extent its
interests may differ from those of Design/Builder. Such obligation shall not

 

13

 

be construed to negate, abridge, or reduce
other rights or obligations of indemnity which would otherwise exist as to a
party or person described in this Section 11.5.

 

§ 11.5.2 In claims against any person or
entity indemnified under this Section 11.5 by an employee of the
Design/Builder, anyone directly or indirectly employed by the Design/Builder or
anyone for whose acts the Design/Builder may be liable, the indemnification
obligation under this Section 11.5 shall not be limited by a limitation on
amount or type of damages, compensation or benefits payable by or for the
Design/Builder under workers’ compensation acts, disability benefit acts or
other employee benefit acts.

 

§ 11.6 SUCCESSORS AND ASSIGNS

§ 11.6.1 The Owner and Design/Builder,
respectively, bind themselves, their partners, successors, assigns and legal
representatives to the other party to this Part 2 Agreement and to the
partners, successors and assigns of such other party with respect to all
covenants of this Part 2 Agreement. Neither the Owner nor the Design/Builder
shall assign this Part 2 Agreement without the written consent of the other.
The Owner may assign this Part 2 Agreement to any institutional lender
providing construction financing, and the Design/Builder agrees to execute all
consents reasonably required to facilitate such an assignment. If either party
makes such an assignment, that party shall nevertheless remain legally
responsible for all obligations under this Part 2 Agreement, unless otherwise
agreed by the other party.

 

§ 11.7 TERMINATION OF PROFESSIONAL DESIGN
SERVICES

§ 11.7.1 Prior to termination of the services
of the Architect or any other design professional designated in this Part 2
Agreement the Design/Builder shall identify to the Owner in writing another
architect or other design professional with respect to whom the Owner has no
reasonable objection, who will provide the services originally to have been
provided by the Architect or other design professional whose services are being
terminated.

 

§ 11.8 EXTENT OF AGREEMENT

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

 

ARTICLE
12 TERMINATION OF THE AGREEMENT

§ 12.1 TERMINATION BY THE OWNER

§ 12.1.1 This Part 2 Agreement may be
terminated by the Owner upon 14 days’ written notice to the Design/Builder in
the event that the Project is abandoned. If such termination occurs, the Owner
shall pay the Design/Builder for Work completed and for proven loss sustained
upon materials, equipment, tools, and construction equipment and machinery,
including reasonable profit and applicable damages. Such proven loss shall
include all expenses and costs arising out of the termination including, but
not limited to, cancellation charges, restocking fees, and expenses of a
similar nature, including business impact costs.

 

§ 12.1.2 If the Design/Builder defaults or
persistently fails or neglects to carry out the Work in accordance with the Contract
Documents or fails to perform the provisions of this Part 2 Agreement, the
Owner may give written notice that the Owner intends to terminate this Part 2
Agreement. If the Design/Builder fails to correct the defaults, failure or
neglect within seven (7) days after being given notice, the Owner may then give
a second written notice and, after an additional seven (7) days, the Owner may
without prejudice to any other remedy terminate the employment of the
Design/Builder and take possession of the site and of all materials, equipment,
tools and construction equipment and machinery thereon owned by the
Design/Builder and finish the Work by whatever method the Owner may deem
expedient.

 

§ 12.2 TERMINATION BY THE DESIGN/BUILDER

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

 

14

 

ARTICLE 13 BASIS OF COMPENSATION

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

 

§ 13.1 COMPENSATION

§ 13.1.1 For the
Design/Builder’s performance of the Work, as described in Section 3.2 and
including 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 as
follows:

 

The Contract Sum shall consist
of the Cost of Work which includes the elements set forth on Exhibit B and a
Fee of four percent (4%) thereon. The Design/Builder’s initial Budget Estimate
is attached as Exhibit B and shall constitute a preliminary Project budget
subject to revision as the Project progresses. The parties acknowledge that
this initial Budget Estimate does not constitute a guaranteed cost of the
Project, but merely represents Design/Builder’s current reasonable estimate of
the cost of the Project.

 

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

 

N/A

 

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

 

§ 13.1.4 Owner and Design/Builder
agree that the Total Budget Estimate of $136,542,624.00 set forth in Exhibit B
is a reasonable, good faith estimate of the cost to design and build the
Project based on the scope of Work detailed in this Agreement. Design/Builder
hereby guarantees that it will complete the Work for a Contract Sum (the
“Guaranteed Maximum Contract Sum”), to be established pursuant to Subparagraph
13.1.6 below, that shall not exceed $136,542,624.00. In exchange for such
guarantee, Owner agrees that Design/Builder may make changes to the scope of
Work set forth in Exhibit A that are reasonably necessary to achieve a
Guaranteed Maximum Contract Sum that does not exceed $136,542,624.00; provided,
however, that any such changes shall be subject to Owner’s representatives approval
pursuant to Subparagraph 3.2.3, and Owner’s agreement to such changes shall in
no way diminish Design/Builder’s warranty obligations under this Agreement.

 

§ 13.1.5 At the point when
Construction Documents have progressed to the point where Design/Builder
reasonably determines that its subcontractor are able to provide to
Design/Builder with lump sum prices for their various scopes of work, and have
been approved by Owner pursuant to Subparagraph 3.2.3, Design/Builder shall
obtain 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 its
subcontractors, Design/Builder shall provide, subject to Owner’s reasonable
approval and to the provisions of Subparagraph 13.1.4, a Guaranteed Maximum
Contract 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 documented
by a written instrument signed by Owner and Design/Builder.

 

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

 

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

 

15

 

§13.1.9 The Guaranteed Maximum
Contract Sum shall be increased by the amount of any increase in the actual
Contract Sum that results from a Change Order or Construction Change Directive
pursuant to Article 8, and by the amount of any reasonable costs actually
incurred by Design/Builder and for which Design/Builder may be entitled to
reimbursement pursuant to Paragraphs 4.5 and 4.6. Each such increase shall be
documented by a written instrument noting the amount of the increase and the
amount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.10 The Guaranteed Maximum
Contract Sum shall be decreased by the amount of any decreases to the actual
Contract Sum that result from a Change Order or Construction Change Directive
pursuant to Article 8 that reduces the scope of the Work. Each such decrease
shall be documented by a written instrument noting the amount of the decrease
and the amount of the revised Guaranteed Maximum Contract Sum.

 

§13.1.11 The allowance amounts
included in the Guaranteed Maximum Contract Sum developed by Design/Builder in
accordance with Paragraph 13.1.6 above shall include all costs for loading and
unloading, taxes, labor, installation, costs, overhead, profit and other
expenses contemplated for the stated allowance. Whenever costs actually
incurred are more or less than the allowance amount, the Guaranteed Maximum
Contract Sum shall be adjusted accordingly, and the amount of the adjustment
and the amount of the revised Guaranteed Maximum Contract Sum shall be
documented by a written instrument.

 

§ 13.2 REIMBURSABLE EXPENSES

§ 13.2.1 Reimbursable Expenses
are in addition to the compensation for Basic and Additional Services, and
include actual expenditures made by the Design/Builder and the Design/Builder’s
employees and contractors in the interest of the Project, as follows:

 

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

 

§ 13.3 INTEREST PAYMENT

§ 13.3.1 The rate of interest
for advanced or borrowed funds or delayed payments shall be at the rate of one
percent (1%) per month.

 

ARTICLE 14 OTHER CONDITIONS
AND SERVICES

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

 

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

 

N/A

 

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

 

N/A

 

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

 

§ 14.5 Pursuant to the Seneca
Nation of Indians Tribal Rights Ordinance, Section 4.a, the Design/Builder and
its subcontractors shall give preference in subcontracting to entities
certified by the Seneca Nation of Indians Tribal Employment Rights Commission
as

fifty-one percent (51%) or more Indian-owned and controlled, and shall give
preference to members of the Seneca Nation of Indians in hiring, training and
other aspects of employment purposes

 

16

 

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

 

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

 

§14.7 The Design/Builder shall
maintain at the Project Site full and detailed books of accounts showing all
costs incurred in the performance of the Project.  The Owner or its authorized representative
shall have the right to copy and audit all such books of accounts and records
pertaining to the performance of the Work. 
All such books and records shall be preserved by the Design/Builder for
a period of three (3) years in its offices in Norwich, Connecticut.  All drawings and documents prepared by the
Architect shall become the property of the Owner subject to the terms of this
Agreement.

 

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

 

§14.9 In the event the
Design/Builder encounters any Hazardous Material, the Design/Builder shall
immediately stop Work in the affected area and report the condition to the
Owner.  The Design/Builder shall not be
required to perform Work without its consent relating to the Hazardous Material
not 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 onto
the site by Design/Builder or any of its subcontractors, and encountered by the
Design/Builder in the performance of the Work. 
The Owner shall indemnify, hold harmless and defend the Design/Builder
from and against any and all claims, damages, demands, losses, expenses,
penalties or fines (including attorneys’ fees) in any way occurring incidental
to or arising out of the encountering of any Hazardous Material by
Design/Builder or its contractors other than Hazardous Material brought onto
the site by Design/Builder or any of its subcontractors.  This indemnification obligation shall survive
completion of the Work or termination of this Agreement.  For purposes of this Agreement, “Hazardous
Material” shall mean any hazardous or toxic substance, contaminant or pollution
which is or may become regulated under any federal, state, county or local
statute, law, ordinance, code, rule or regulation.

 

 

This Agreement entered into as
of 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

  	
   

  

 

17

 

Certification of Document’s
Authenticity

AIA®
Document D401TM – 2003

 

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

 

 

	
  /s/ Keith Kabeary

  	
   

  
	
  (Signed)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Sr. VP

  	
   

  
	
  (Title)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  10/13/04

  	
   

  
	
  (Dated)

  	
   

  

 

1

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