Design/build Agreement

DESIGN-BUILD AGREEMENT


BY AND BETWEEN


ISLE OF CAPRI BLACK HAWK L.L.C., AS OWNER


AND


HASELDEN CONSTRUCTION, INC., AS CONTRACTOR


TABLE OF CONTENTS


RECITALS..................................................................... 1 ARTICLE 1: CONTRACTOR'S SERVICES............................................ 1
1.1 GENERAL DESCRIPTION OF THE WORK............................. 1
1.2 INTENT OF AGREEMENT......................................... 2
1.3 PRIORITY OF DOCUMENTS....................................... 2
1.4 GENERAL REQUIREMENTS........................................ 2
1.4.1 Performance of the Work.......................... 2
1.4.2 Professional Standards........................... 2
1.4.3 Licensing and Other Qualifications............... 2
1.4.4 Sufficient Personnel............................. 3
1.4.5 Contractor's Key Personnel....................... 3
1.5 NATURE OF DESIGN-BUILD AGREEMENT............................ 3
1.5.1 Design and Engineering Generally................. 3
1.5.2 Previous Design Work............................. 3
1.6 DESIGN AND ENGINEERING WORK................................. 4
1.6.1 Schematic Design Documents....................... 4
1.6.2 Design Development Documents..................... 4
1.6.3 Construction Documents........................... 4
1.6.4 Consistency...................................... 5
1.6.5 Approval......................................... 5
1.6.6 Replacement...................................... 5
1.6.7 Design Schedule.................................. 5
1.6.8 Compliance with Laws............................. 5
1.7 CHANGES IN THE WORK......................................... 5
1.7.1 Changes.......................................... 5
1.7.2 Contract Adjustments............................. 6
1.7.3 No Contractor Changes............................ 6
1.7.4 Change Orders.................................... 6
1.7.5 Construction Change Directive.................... 6
1.7.6 Necessity for Prior Written Authorization........ 8
1.7.7 Disputes Reflecting Changes in the Work.......... 8
1.7.8 Compliance with Construction Documents........... 8
1.7.9 Effect of Changes in the Work on Surety Bonds.... 8
1.7.10 Authorized Change Order Signatory................ 9
1.7.11 Restriction on Time Extension.................... 9
1.8 CONTRACTOR'S REPRESENTATIONS
1.9 "AS-BUILT" DRAWINGS......................................... 9
1.9.1 Maintenance of Drawings at the Site.............. 9
1.9.2 Mylar Drawings and "As-Built" Survey............. 9
1.10 FINANCING CONTINGENCY...................................... 9
1.11 NOTEHOLDERS' INTEREST IN THE WORK..........................10


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1.12 HOTEL ALTERNATE............................................10 ARTICLE 2: CONSTRUCTION OF THE WORK; SUBSTANTIAL COMPLETION; EXCUSABLE EVENTS; WORKMANSHIP; COMPLIANCE WITH LAWS............................................11
2.1 SCHEDULES AND SUBMITTALS....................................11
2.1.1 The Schedule......................................11
2.1.2 Submission of Shop Drawings, Details, Samples.....11
and Data
2.1.3 Submission of other Necessary Materials...........11
2.1.4 Material Purchasing Schedule......................11
2.1.5 Information as to Progress of Work................12
2.1.6 Revisions to Schedule Due to Owner's Suspension
of Work...........................................12
2.2 TIME AND PROSECUTION OF WORK................................12
2.2.1 Time of the Essence...............................12
2.2.2 Notice to Proceed.................................12
2.2.3 Substantial Completion of Casino..................13
2.2.4 Substantial Completion of Hotel...................13
2.2.5 Owner's Right to Direct Overtime and Multiple.....13
Shifts
2.2.6 Owner's Right to Request Expedite.................13
2.2.7 Owner's Right to Require Additional Labor.........13
2.3 SUBSTANTIAL COMPLETION OF WORK..............................14
2.3.1 Definition of Substantial Completion..............14
2.3.2 Further Conditions on Substantial Completion......14
2.4 DELAYED/EARLY COMPLETION....................................15
2.4.1 Liquidated Damages................................15
2.4.2 Early Completion Incentive........................15
2.5 EXCUSABLE EVENTS............................................16
2.5.1 Adjustments in Schedule Because of................16
Excusable Event
2.5.2 Adjustments in Guaranteed Maximum Price
Because of Excusable Event......................17
2.5.3 Excusable Events Defined..........................18
2.5.4 Rights Limited....................................18
2.5.5 Contractor's Acknowledgment of Extreme Weather
Conditions......................................18
2.6 WORKMANSHIP AND PERFORMANCE OF WORK.........................19
2.6.1 Site Conditions...................................19
2.6.2 Local Conditions..................................19
2.6.3 Contractor's Responsibility for Proper Layout.....20
2.6.4 Contractor's Workmanship Standard.................20
2.6.5 Contractor's Work in Areas Prepared by Others.....20
2.6.6 Owner's Inspection Rights.........................20
2.6.7 Storage on Site...................................20
2.6.8 Owner's Access to the Work........................21


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2.6.9 Rejected Workmanship and Material During Construction.............. 21
2.6.10 Removal or Tearing Out Work to Inspect............................. 21
2.6.11 Responsibility..................................................... 21
2.6.12 Control............................................................ 21
2.7 COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS................................... 22
2.7.1 Taxes.............................................................. 22
2.7.2 Legal Requirements................................................. 22
2.7.3 Permits and Licenses............................................... 22
2.7.4 Building Inspections............................................... 22
2.7.5 Corrections of Legal Violations.................................... 22
2.7.6 Ownership of Design Documents...................................... 22
2.7.7 Patents and Other Proprietary Rights............................... 23
2.8 CONTRACTOR'S SUBCONTRACTORS..................................................... 23
2.8.1 Bidding Process.................................................... 23
2.8.2 Identification of Subcontractors................................... 24
2.8.3 Rejection by Owner of Subcontractors............................... 24
2.8.4 Liquidated Damages In Subcontracts................................. 25
2.9 LABOR........................................................................... 25
2.9.1 Contractor's Duty to Staff the Work................................ 25
2.9.2 Owner's Approval of Labor Force.................................... 25
2.9.3 Notice of Occurrence With Respect to Employees..................... 25
2.10 MAINTENANCE OF THE SITE AND PROTECTION OF PERSONS AND PROPERTY.................. 25
2.10.1 Safety............................................................. 26
2.10.2 Safety of Persons and Property..................................... 26
2.10.3 Placement of Signs................................................. 27
2.10.4 Orderly Maintenance of Site........................................ 27
2.10.5 Liability for Work in Place and on the Site........................ 27
2.10.6 No Unreasonable Interference with Owner's Operations............... 27
2.10.7 Protection of and No Interference with Adjoining Properties........ 28
2.11 USE OF OWNER'S FACILITIES....................................................... 28
2.11.1 Prohibition of Use Without Consent................................. 28
2.11.2 Indemnification Against Loss....................................... 28 ARTICLE 3: REPRESENTATIVES OF OWNER AND CONTRACTOR................................................ 28
3.1 DESIGNATION OF OWNER'S AGENT AND CONTRACTOR'S AGENT............................... 28
3.2 RIGHTS OF OWNER'S AGENT........................................................... 29 ARTICLE 4: OWNER'S RIGHT TO OUTSIDE INSPECTION..................................................... 29
4.1 RIGHT TO DESIGNATE................................................................ 29
4.2 LIMITATION OF OWNER'S LIABILITY................................................... 30


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ARTICLE 5: OWNER'S RIGHT OF ENTRY AND OCCUPANCY FOLLOWING SUBSTANTIAL COMPLETION...................... 30
5.1 RIGHT TO ENTER........................................................................ 30
5.2 NO INTERFERENCE WITH CONTRACTOR'S REMAINING WORK...................................... 30
5.3 OWNER APPROVALS....................................................................... 30
5.4 OWNER INFORMATION..................................................................... 31 ARTICLE 6: PUNCH LISTS AND FINAL COMPLETION........................................................... 31
6.1 PREPARATION OF PUNCH LIST........................................................... 31
6.2 FINAL COMPLETION.................................................................... 32 ARTICLE 7: CONTRACTOR'S WARRANTY OF CONSTRUCTION...................................................... 32
7.1 WARRANTY............................................................................ 32
7.1.1 Warranty with Respect to Professional Services.......................... 32
7.1.2 Warranty with Respect to Construction Work.............................. 32
7.1.3 Warranty With Respect to Materials and Equipment........................ 32
7.1.4 Period of Warranty...................................................... 32
7.2 EXTENT OF WARRANTY.................................................................... 32
7.3 NON-APPLICABILITY OF WARRANTY......................................................... 33
7.4 SURVIVAL OF WARRANTY.................................................................. 33
7.5 ASSIGNMENT OF WARRANTIES.............................................................. 33
7.6 MANUALS AND TRAINING.................................................................. 33 ARTICLE 8: CONTRACT SUM............................................................................... 34
8.1 TOTAL COMPENSATION.................................................................... 34
8.1.1 Cost of the Work......................................................... 34
8.1.2 Contractor's Fee......................................................... 34
8.2 CONTRACTOR'S GUARANTEED MAXIMUM PRICE................................................. 34
8.2.1 Guaranteed Maximum Price................................................ 34
8.2.2 Owner Furnished FF&E Excluded........................................... 34
8.3 EXCESS AND SAVINGS.................................................................... 35
8.3.1 Excess Cost Above Guaranteed Maximum Price.............................. 35
8.3.2 Savings Below Guaranteed Maximum Price.................................. 35
8.4 COST OF THE WORK...................................................................... 35
8.4.1 Salaries or Wages....................................................... 35
8.4.2 Overtime Payments....................................................... 36
8.4.3 Contractor Self-Perform Trade Work...................................... 36
8.4.4 Cost of Employee Benefits............................................... 36
8.4.5 Travel and Subsistence Expenses......................................... 36
8.4.6 Cost of Material and Supplies........................................... 36
8.4.7 Design Fees............................................................. 36
8.4.8 Subcontractor's Payments................................................ 36
8.4.9 Cost of Tools, Equipment and Facilities................................. 37
8.4.10 Cost of Major Construction Equipment.................................... 37
8.4.11 Insurance Premiums...................................................... 37
8.4.12 Taxes................................................................... 37


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8.4.13 Fees, Royalties and Deposits................................................ 37
8.4.14 Uninsurable Losses.......................................................... 37
8.4.15 Communication Expenses...................................................... 37
8.4.16 General Conditions.......................................................... 37
8.4.17 Clean-up.................................................................... 38
8.4.18 Emergency................................................................... 38
8.4.19 Other Agreement Cost........................................................ 38
8.4.20 Pre-Approved Cost........................................................... 38
8.5 CREDITS TO COST OF THE WORK............................................................ 38
8.5.1 Proceeds of Sale............................................................ 38
8.5.2 Discounts and Refunds....................................................... 38
8.5.3 Material Retained by Contractor............................................. 38
8.5.4 Deposits.................................................................... 38
8.5.5 Proceeds of Sale of Excess Equipment........................................ 38
8.5.6 Proceeds of Existing Property and Furniture................................. 38
8.5.7 COST NOT TO BE REIMBURSED............................................................ 39
8.5.8 Office Personnel Expenses................................................... 39
8.5.9 Office Expenses............................................................. 39
8.5.10 Capital Expenses............................................................ 39
8.5.11 Unpermitted Rental Cost..................................................... 39
8.5.12 Overhead and General Expenses............................................... 39
8.5.13 Warranty and Corrective Work................................................ 39
8.5.14 Preconstruction............................................................. 39
8.5.15 Unincluded Items............................................................ 39
8.5.16 Excluded Items.............................................................. 39
8.5.17 Guaranteed Maximum Price Excess............................................. 39
8.6 AUDIT.................................................................................. 39
8.6.1 Right to Conduct Audit...................................................... 39
8.6.2 Imposition of Requirement on Subcontractors................................. 40 ARTICLE 9: PAYMENT OF COMPENSATION.................................................................... 40
9.1 APPLICATIONS FOR PROGRESS PAYMENTS.................................................... 40
9.1.1 Time of Submission.......................................................... 40
9.1.2 Contents of Application for Payment and Attachments......................... 40
9.1.3 Failure to Submit Proper or Timely Application for Payment.................. 42
9.2 CONTRACTOR'S ARCHITECT CERTIFICATE.................................................... 42
9.3 DEDUCTIONS............................................................................ 42
9.4 WITHHOLDING........................................................................... 42
9.4.1 Right to Withhold........................................................... 42
9.4.2 Conditions for Release of Withheld Amounts.................................. 43
9.5 RETAINAGE............................................................................. 44
9.5.1 Achievement of Final Completion............................................. 44
9.5.2 Final Inspection............................................................ 44
9.5.3 Certificate of Occupancy.................................................... 44


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9.5.4 Remaining Obligations...........................................44
9.5.5 No Further Retainage Withheld...................................44
9.6 PAYMENT OF CONTRACTOR'S FEE................................................44
9.7 PAYMENT OF PROGRESS PAYMENTS...............................................45
9.8 FINAL PAYMENT..............................................................45
9.9 PAYMENT NOT ACCEPTANCE.....................................................45
9.10 RELEASE OF CLAIMS..........................................................45
9.11 CONTRACTOR'S LIABILITY FOR EXCESS OVER GUARANTEED
MAXIMUM PRICE..............................................................46
9.12 CONTINGENT ASSIGNMENT OF SUBCONTRACTS......................................46
9.12.1 Assignment of Contractor's Interest in Subcontracts
and Suppliers Contracts......................................46
9.13 INTEREST RATE..............................................................46 ARTICLE 10: INDEMNIFICATION...............................................................46
10.1 Indemnity..................................................................46
10.2 No Limitation..............................................................47
10.3 Liens......................................................................47
10.4 Lost Profits...............................................................47 ARTICLE 11: INSURANCE.....................................................................47
11.1 CONTRACTOR'S INSURANCE.....................................................47
11.1.1 Contractor's Insurance Certificates..............................47
11.1.2 Contractor's Liability Insurance.................................48
11.2 SCHEDULE OF INSURANCE COVERAGE.............................................48
11.2.1 Worker's Compensation Insurance..................................48
11.2.2 Commercial General Liability Insurance...........................48
11.2.3 Comprehensive Automobile Liability Insurance.....................49
11.2.4 Umbrella Liability Insurance.....................................49
11.3 OWNER'S BUILDER'S RISK INSURANCE...........................................49
11.3.1 Builder's Risk Policy............................................49
11.3.2 Deductible.......................................................50
11.3.3 Property of Others...............................................50
11.3.4 Builder's Risk Limits of Liability...............................50
11.3.5 Builder's Risk Deductibles.......................................50
11.3.6 Owner's Use of Project...........................................50
11.4 PROJECT ERRORS AND OMISSIONS INSURANCE.....................................50
11.5 NO COVERAGE CHANGES........................................................51
11.6 LIMITED WAIVERS OF SUBROGATION.............................................51
11.6.1 Owner's Limited Waiver of Subrogation............................51
11.6.2 Contractor's Limited Waiver of Subrogation.......................51
11.6.3 Conditions on Waivers of Subrogation.............................52 ARTICLE 12: DEFAULT.......................................................................52
12.1 Termination by Owner for Cause.............................................52
12.2 Termination by Contractor for Cause........................................53
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ARTICLE 13: TERMINATION BY OWNER WITHOUT CAUSE..........................................................................54 ARTICLE 14: INDEPENDENT CONTRACTOR......................................................................................54 ARTICLE 15: PAYMENT AND PERFORMANCE BOND................................................................................54
15.1 Payment and Performance Bonds.........................................................................54 ARTICLE 16: DISPUTES....................................................................................................54
16.1 Dispute Resolution....................................................................................54 ARTICLE 17: HAZARDOUS SUBSTANCES........................................................................................55
17.1 Hazardous Substances..................................................................................55 ARTICLE 18: MISCELLANEOUS PROVISIONS....................................................................................56
18.1 GOVERNING LAW.........................................................................................56
18.2 ASSIGNMENT AND SUCCESSORS.............................................................................56
18.2.1 No Assignment by Contractor...............................................................56
18.2.2 Assignment By Owner.......................................................................56
18.2.3 Agreement Binding on Successors and Assigns...............................................56
18.3 NOTICES...............................................................................................57
18.4 CUMULATIVE RIGHTS AND REMEDIES........................................................................57
18.5 WAIVER................................................................................................57
18.6 CAPTIONS OR HEADINGS..................................................................................58
18.7 COMPLIANCE WITH NOTEHOLDERS' REQUIREMENTS.............................................................58
18.8 CALENDAR DAYS.........................................................................................58
18.9 PARTIES TO ACT REASONABLY.............................................................................58
18.10 SEVERABILITY OF PROVISIONS............................................................................58
18.11 ENTIRE AGREEMENT......................................................................................59
18.12 NO THIRD PARTY BENEFICIARIES..........................................................................59
18.13 AUTHORITY TO EXECUTE..................................................................................59
18.14 INCORPORATION BY REFERENCE............................................................................59 EXHIBIT..................................................................................................................60
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DESIGN-BUILD AGREEMENT


THIS DESIGN-BUILD AGREEMENT (hereinafter referred to as the "Agreement") is made and entered into this 22nd day of July, 1997 by and between HASELDEN CONSTRUCTION, INC., a Colorado corporation ("Contractor"), and ISLE OF CAPRI BLACK HAWK L.L.C., a Colorado limited liability company ("Owner"). Capitalized terms used herein shall have the meanings ascribed to such terms in Exhibit A attached hereto.


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