Construction Agreement

EXHIBIT 10.14


AGREEMENT
BETWEEN THE OWNER AND THE CONSTRUCTION MANAGER


AGREEMENT MADE AS OF THE 9TH DAY OF MAY IN THE YEAR OF 2005


BETWEEN the Owner: Gaylord National, LLC (Name and address) One Gaylord Drive
Nashville, TN 37214


and the Construction Manager: Perini Building Company and
Turner Construction Company
doing business under the name and style
Perini/Tompkins Joint Venture,
c/o Perini Building Company
73 Mt. Wayte Avenue
Framingham, MA


The Project is: Gaylord National Resort
Oxon Hill, Maryland


The Architect is: Gensler Architecture, Design & Planning, P.C
2020 K Street, N.W.
Suite 200
Washington, DC 20006


The Owner and the Construction Manager agree as set forth below.


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ARTICLE 1
THE CONTRACT DOCUMENTS


1.1 The Contract Documents consist of: (i) this Agreement, (ii) the General Conditions for the Gaylord National Resort Project [the "General Conditions"], (iii) the requirements of the National Harbor Local and Minority Business Utilization and Local Resident Participation Agreement attached hereto as Exhibit C and all procedures adopted pursuant thereto which are applicable to the construction of the Project [the "MBE/LBE Agreement"] pursuant to which Construction Manager and all Subcontractors and Sub-subcontractors will seek to contract with and report activities with minority and local business enterprises and workers, (iv) the prevailing wage rate law attached hereto as Exhibit F, and all rules, regulations, orders and prevailing building construction wage rate schedules from time to time adopted thereunder by the Prince George's County, Maryland Wage Determination Board, pursuant to which Construction Manager and all Subcontractors and Sub subcontractors will pay workers performing the Work on the convention center [the "Prevailing Wage Requirements"], (v) the terms and conditions of all permits and approvals which may be issued to authorize or regulate the construction of the Work, (vi) all Schedules, Drawings, Specifications, addenda issued by the Architect and Owner's Consultants prior to execution of the GMP Amendment (or, if there is more than one GMP Amendment, the final GMP Amendment), and (vii) other documents listed in, and all exhibits to, this Agreement and modifications issued after execution of this Agreement, including all Separate GMP Amendments and GMP Amendments executed by the Owner and Construction Manager. The Contract Documents form the contractual agreement (the "Contract") between Owner and Construction Manager, and are as fully a part of the Contract as if attached hereto or repeated herein. The Contract represents the entire and integrated agreement between the Owner and Construction Manager and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents in existence as of the date of execution of this Agreement, other than modifications, Separate GMP Amendments, GMP Amendments and Exhibits to be agreed upon after execution of this Agreement, appears in Article 15. In the event of any conflict, inconsistency or ambiguity between or among any of the Contract Documents, the Contract Documents shall take precedence as set forth in Paragraph 3.C of the General Conditions.


ARTICLE 2
THE WORK


2.1 The Work required under this Contract generally consists of the construction of the Gaylord National Resort and Convention Center which includes a 1500 room hotel, spa, swimming pool, restaurants, a convention center generally described (without limiting Construction Manager's obligation) in Exhibit K to this Agreement, surface and structured parking and various other structures and spaces, all as more fully detailed in the drawings and other documents listed in Article 15 hereof and/or in any applicable Separate GMP Amendments and/or GMP Amendments executed by the Owner and Construction Manager. As used in the Contract Documents, the terms "Work" or "work" shall mean, and the Construction Manager shall be required to furnish and perform, all labor, supervision, construction, materials, equipment, special facilities and "built-ins", construction documentation, construction management services, fixtures, tools, supplies, taxes, permits (including mechanical, electrical, plumbing, fire protection and occupancy permits) and all other property and services necessary to timely and fully perform all work or services set forth in or reasonably inferable from all Contract Documents in a good and workmanlike manner and in accordance with the Contract Documents and all labor, services, equipment and materials necessary to produce fully connected, complete and operational systems and finishes consistent with the requirements of the Contract Documents.


2.1.1 In determining what is reasonably inferable from the Contract Documents, all such documents shall be construed together, and shall not be read by separate trade areas or design divisions. The later description of the Work in further detail by the Architect or the Owner, through the issuance of written specifications, directions or clarifications, the issuance of further and more detailed drawings or otherwise, shall not entitle the Construction Manager to any compensation in addition to the Guaranteed Maximum Price (or any Separate GMP, as applicable), or to any extension of the Completion Date(s) or Milestone Dates, unless and only to the extent that such later description constitutes a "Material Change" in the Work,


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which is defined as any one of the following: (1) a Change Order or Change Directive issued by the Owner pursuant to Article 17 of the General Conditions that requires work of a substantially different nature, character, scope or quality (other than refinement) than that set forth in and/or reasonably inferable from the Contract Documents identified herein and in the applicable Separate GMP Amendment and/or GMP Amendment executed by the Owner and Construction Manager; or (2) a Change Order or Change Directive issued by the Owner pursuant to Article 17 of the General Conditions that requires work expressly excluded from the Guaranteed Maximum Price (or any Separate GMP, as applicable) in the applicable Separate GMP Amendment or GMP Amendment executed by the Owner and Construction Manager; or (3) an acceleration of the Schedule or election by Owner to pay costs incurred to mitigate an Excused Delay as provided in Paragraph 16(B) of the General Conditions; or (4) (i) an emergency threatening life or property at the Site; or (ii) Differing Site Conditions described in Paragraph 4(E) of the General Conditions; or (iii) later change of Law or Factory Mutual Standard described in Paragraph 6(B) of the General Conditions; in each case, that requires the Construction Manager to take actions not otherwise included in the scope of the Work.


2.1.2 The Construction Manager hereby acknowledges and agrees that it shall not be entitled to any increase in the Guaranteed Maximum Price (or any Separate GMP, as applicable) or any extension of the Completion Date(s) or Milestone Dates as a result of any Material Change, or both, unless: (1) there is an actual, substantiated increase in the Cost of the Work or actual delay in the Substantial Completion of the Work beyond the Completion Date(s) or Milestone Dates, or both, which results from such Material Change and is compensable under the Agreement; (2) the Construction Manager makes a claim for an increase in the Guaranteed Maximum Price (or any Separate GMP, as applicable) and/or extension of the Completion Date(s) or Milestone Dates with respect to such Material Change within the time and in the manner required by the terms of the Contract; and (3) either (a) the Owner authorizes the Construction Manager to proceed with such Work and agrees to increase the GMP (or Separate GMP, as applicable) or to extend the Completion Date(s) or Milestone Dates, or both, in advance and thereafter executes a fully executed Change Order; or (b) the Construction Manager is awarded an increase in the Guaranteed Maximum Price (or any Separate GMP, as applicable) or extension in the Completion Date(s) or Milestone Dates, or both, pursuant to a claim made in the time and manner required by the Contract and litigation thereafter commenced pursuant to the Contract; or (c) in the event of an emergency threatening life or property at the Site the Construction Manager shall be entitled to any reasonable amounts expended to address the emergency.


2.1.3 In the event that a Material Change does occur in the Work (which is not resolved through a Change Order executed by the Owner and Construction Manager), and provided that the Construction Manager makes a claim for an increase in Guaranteed Maximum Price (or any Separate GMP, as applicable) or extension of the Completion Date(s) or Milestone Dates, or both, as a result of such Material Change within the time and in the manner required by the Contract, the Construction Manager shall be entitled, as its sole and complete remedy, to an increase in compensation calculated pursuant to Paragraphs 36(C) of the General Conditions, together with an extension of the Completion Date(s) or Milestone Dates measured by the actual number of days, or portions thereof, if any, that Substantial Completion of the Work is actually delayed as a direct result of the Material Changes (provided, however, that if the required extension is not granted, the Construction Manager shall be entitled to the remedies set forth in Paragraph 16(A) of the General Conditions).


ARTICLE 3
RELATIONSHIP OF THE PARTIES


3.1 The Construction Manager accepts the relationship of trust and confidence established by the Contract and covenants with the Owner to cooperate with the Owner, Architect and Owner's Consultants and utilize the Construction Manager's skill, efforts and judgment (consistent with the representations made in Paragraph 5(E) of the General Conditions) in furthering the interests of the Owner; to furnish efficient business administration and supervision; to make reasonable efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in an expeditious and economical manner consistent with the interests of the Owner and as required by the Contract Documents. The Owner agrees to furnish information and render decisions in the manner and time required by the Contract Documents and to


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make payments to the Construction Manager in accordance with the requirements of the Contract Documents.


ARTICLE 4
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION


4.1 The date of commencement shall be the date fixed in the Owner's notice to proceed or specified in the Separate GMP Amendment or GMP Amendment executed by the Owner and Construction Manager. The Construction Manager shall promptly commence the Work to be performed under the Contract Documents on the date of commencement. The Construction Manager shall thereafter continuously and diligently perform, forward and prosecute such Work to completion on the Completion Date(s) and Milestone Dates, as defined in Section 4.2, subject only to Excused Delays as defined by the terms of this Contract.


4.2 The Construction Manager shall achieve Substantial Completion of the entire Work not later than December 28, 2007 (the "Completion Date"), subject only to Excused Delays as defined in this Contract. In addition to the Completion Date for the entire Work, the Construction Manager shall achieve Substantial Completion of the convention center on or before September 28, 2007 and certain other milestone dates for completion of key portions of the Work that are specified in Exhibit H to this Agreement or specified in any of the GMP Amendments or, as to additional work added by Change Order or Change Directive, in such Change Order or Change Directive, as the case may be ("Milestone Dates"). All Completion Dates and Milestone Dates shall be incorporated by Construction Manager into the schedules prepared pursuant to this Agreement and Article 14 of the General Conditions.


4.3 Timely completion of the Work, and each portion thereof having a Completion Date or Milestone Date, is of the essence in this Contract. In particular, the Construction Manager acknowledges and recognizes that the Work involves the construction of a hotel, convention center, structured and surface parking, swimming pool, spa, restaurant and accessory facilities and that the Owner must have beneficial occupancy and use of all of the Work within the time established for Substantial Completion and each of the Milestone Dates, subject only to Excused Delays as defined in Section 4.4 below, and that the Owner has entered into, or will hereafter enter into, binding agreements for furnishing of the interior of the building, training employees, leasing rooms, retail areas and convention space based upon the Construction Manager's representation that it can achieve Substantial Completion of the Work and each of the Milestone Dates within the times established herein. The Construction Manager acknowledges and understands that the Owner will incur substantial losses and damages if the Owner is not able to have access to specified portions of the Project by each of the Milestone Dates and have use and occupy the Work for its intended purpose as of the date established herein for Substantial Completion. Among other things, the Construction Manager acknowledges that the Owner, if it is unable to have access to and use and occupy the Work for its intended use by such date(s), will incur additional financing costs, may be required to pay additional fees to the Architect, and other consultants retained by the Owner, and will suffer actual economic loss in the form of increased costs of installation of furnishings, fixtures and equipment, lost rental incomes, rebates, lost event revenue, and related sales income. Accordingly, the Construction Manager agrees that, if the Construction Manager fails to achieve Substantial Completion of the convention center on or before September 28, 2007 or Substantial Completion of all of the Work by December 28, 2007, except and only as they may be extended due to Excused Delays pursuant to this Contract, the Construction Manager shall pay the Owner liquidated damages of (i) $15,000 (Fifteen Thousand Dollars) per day, for each calendar day, or portion thereof, beyond September 28, 2007 that the convention center is not Substantially Complete, plus (ii) $15,000 (Fifteen Thousand Dollars) per day, for each calendar day, or portion thereof, beyond December 28, 2007 that the entire Work is not Substantially Complete; plus (iii) $8,000 (Eight Thousand Dollars) per day, for each calendar day, or portion thereof beyond any of the Milestone Dates that are highlighted in red on Exhibit H, that the Work and access required for such Milestone Date is delayed, except and only to the extent that, in either or both such cases, the reason for such failure is an Excused Delay as defined herein. Liquidated Damages shall be computed separately for each violation and shall not overlap. By way of example, if Construction Manager violates two highlighted Milestone Dates, it would be liable for liquidated damages in the amount of $20,000 (Twenty Thousand Dollars) per day. The


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Construction Manager agrees that the exact amount of the Owner's losses due to the Construction Manager's delay in performance are not readily ascertainable, that the Construction Manager has generally reviewed with the Owner the nature and extent of the actual damages that the Owner will incur should the Construction Manager fail to perform its obligations as set forth in the Contract with respect to the timely completion of the Work, and therefore that the amounts established herein as liquidated damages constitute agreed and reasonable damages and not a penalty. At its option, the Owner may deduct any such damages from the amounts due the Construction Manager under the terms of the Contract. The Owner's exercise of its option under the Contract to use, install furniture, fixtures and equipment in specified portions of the Project by the Milestone Dates, and occupy all or any portion of the Work prior to Substantial Completion shall not toll, waive or diminish in any way the damages for which the Construction Manager is responsible under this Section, except that if such occupancy further delays Substantial Completion of the Work, through no fault of the Construction Manager or its Subcontractors, the Construction Manager shall not be responsible for liquidated damages for failure to meet the Completion Dates or Milestone Dates during the period of such additional delay. The Construction Manager and the Owner agree that, unless Owner elects to terminate this Agreement for such default, the recovery of liquidated damages established herein is the exclusive remedy available to the Owner for the recovery of damages and interest from the Construction Manager for the Construction Manager's failure to complete the Work on or before the Completion Date(s) and the highlighted Milestone Dates, subject to extension as a result of Excused Delays, and that the total amount of liquidated damages payable to the Owner by Construction Manager shall not exceed an amount equal to fifty percent (50%) of Construction Manager's Fee. Such liquidated damages however, do not apply to, nor shall they affect, waive or diminish in any way, any other damages for which the Construction Manager may be responsible or any other remedy as a result of any negligence or breach of contract, including without limitation the violation of Completion Dates or Milestone Dates, if Owner elects to terminate this Agreement rather than await performance by Construction Manager. Specifically in the event of unexcused delay, Owner may elect either: (i) to await performance for the Construction Manager and collect liquidated damages as above specified; or (ii) to terminate this Agreement and pursue unliquidated damages and other remedies as provided in the General Conditions.


4.4 As used in the Contract Documents, an "Excused Delay" shall mean any delay to the completion of the Work (or any acceleration of the schedule for the performance of the Work) that is attributable to causes beyond the reasonable control of and could not reasonably have been mitigated or avoided by the Construction Manager or its Subcontractors or Suppliers at any tier without additional cost to the Construction Manager or its Subcontractors or Suppliers. Excused Delays shall include delays caused by : (i) the act or neglect of the Owner (including the failure to render required decisions or approvals with reasonable promptness, or to obtain permits for the Work as required by the terms of this Contract) or its separate contractors and their respective employees and agents, or (ii) Material Changes in the Work, or (iii) fire, unusual and unavoidable delay in deliveries or unavoidable casualties, and (iv) as to completion of any subsequent Work on the same critical path, the period, if any, between May 28, 2005 and the earlier of the dates when the Owner obtains the foundations permit or authorizes commencement of the foundations of the Project, and (v) as to completion of any subsequent Work on the same critical path, the period, if any, between July 11, 2005 and the earlier of the dates when the Owner obtains a superstructure permit or authorizes commencement of the superstructure of the Project, and (vi) as to the completion of any subsequent Work on the same critical path, the period, if any, between September 19, 2005, and the earlier of the dates when the Owner obtains a core, shell and frame permit or authorizes commencement of the core, shell and frame of the Project. Excused Delays of the type described in categories (i), (ii) (provided the Material Change is of the type described in subsections (1),(2), or (3) of the definition of Material Change in Section 2.1.1), (iv), (v) and (vi) of the preceding sentence are referred to in the General Conditions as "Owner Caused Excused Delay." No delay to the Work will be considered an Excused Delay, however, unless the delay affects the critical path for the performance of the Work and actually delays Substantial Completion of the entire Work (or the designated portion thereof identified in the applicable Separate GMP Amendment). Delays of only certain trades will not be considered an Excused Delay unless they in turn actually delay the Substantial Completion of the entire Work (or the designated portion thereof identified in the applicable Separate GMP Amendment). Delay in bringing permanent utilities to the Site shall be Excused Delay only as to those items of the Work specified in the GMP Amendment for the remainder of the Work (i.e. the Work other than the foundations and structure) to be


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incapable of performance prior to the time that permanent utilities are brought to the Site and not as to any other Work. In the event of an Excused Delay, the Construction Manager shall be entitled only to the remedies set forth in Paragraph 16 of the General Conditions.


4.5 As used herein, the "Date of Substantial Completion" shall mean the date upon which all of the following shall have occurred as conditions precedent to "Substantial Completion": (1) the Work or applicable portion thereof has been completed in accordance with the Contract Documents and is sufficiently complete to enable the Owner to occupy and use the Work or the applicable portion thereof for the use for which it is intended; (2) all required approvals and permits for occupancy, use and completion of the Work or the applicable portion thereof shall have been issued by appropriate governmental authorities for the Work (except such certificates, permits, approvals or consents that cannot be procured due to reasons beyond the reasonable control of the Construction Manager or its Subcontractors or Suppliers at any tier, in which event this condition shall not apply to such extent); (3) the Architect has certified that the Work is complete as required by subsection (1) above; (4) all mechanical and support systems that are part of the Work are functioning as required by the Contract Documents; and (5) the Construction Manager and Owner shall have each reduced to writing the items ("Punch List" items) remaining to be completed for Final Completion of the Work (in this regard, the Owner agrees that it shall reduce its Punch List to writing within five (5) working days after receiving notice from the Construction Manager that it believes the Work is Substantially Complete) accompanied by Construction Manager's Punch List of Work remaining to be completed to achieve final completion.


4.5.1 At Substantial Completion of the Work, the Owner will withhold payment of 150% of the value of the incomplete work items and unsatisfactory work. The Construction Manager may receive progress payments for completed Punch List work as set forth in the General Conditions of the Contract. When the Construction Manager considers that the Work, or a portion thereof which the Owner agrees to accept separately, is Substantially Complete, the Construction Manager shall notify the Owner and the Construction Manager shall, along with such notice, deliver its comprehensive written Punch List of items to be completed or corrected, indicating a proposed value allocable to each such item. The Owner and Architect shall review the Punch List prepared by the Construction Manager, inspect the Work, and may add to such Punch List any other items of Work that Owner or Architect determine require correction or completion and may determine the value of incomplete items or unsatisfactory Work, which determination shall take precedence over that proposed by the Construction Manager if there should be any variance. The Construction Manager shall proceed promptly to complete and correct all items on the Punch List as supplemented by the Owner or Architect. Failure to include an item on such list does not alter the responsibility of the Construction Manager to complete all Work in accordance with the Contract Documents. If the Work will not be Substantially Complete until any such item is completed or corrected, the Construction Manager shall perform such completion or correction before the issuance of the Certificate of Substantial Completion, at which time the Construction Manager shall then submit a request for another inspection by the Owner to determine Substantial Completion. (If such item need not be completed in order for the Work to be Substantially Complete, a Certificate of Substantial Completion shall still be issued, and the item shall be completed or corrected thereafter, but in all events prior to the Final Completion and Final Payment).


4.5.2 When the Work or designated portion thereof is Substantially Complete, the Architect (or the Owner, if it so desires) will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion, shall establish the responsibilities of the Owner and Construction Manager for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix the time within which the Construction Manager shall finish all items on the list accompanying the Certificate. The Certificate of Substantial Completion shall be submitted to the Owner and Construction Manager for their written acceptance of responsibilities assigned to them in such Certificate.


4.5.3 The Construction Manager acknowledges and accepts that, during the period when the Construction Manager is completing its Punch List Work, the Owner may be occupying or preparing to occupy the Project, and that disputes may arise between the Owner and Construction Manager as to the


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responsibility for certain Punch List items or other corrective Work (i.e. the Construction Manager may claim that the Punch List item or corrective Work is required due to damage not caused by or the responsibility of the Construction Manager and its Subcontractors, such that the Construction Manager is not obligated to perform the Punch List item or other corrective Work at issue without additional compensation). However, the Construction Manager hereby expressly agrees to perform (and shall require its Subcontractors to perform) any and all Punch List items and/or other corrective Work directed or requested by the Owner, promptly upon notice of such direction or request and irrespective of any dispute as to the Construction Manager's responsibility for such Punch List item or corrective Work, subject only to the Construction Manager's right to make claim for additional compensation resulting therefrom pursuant to the terms of the Contract Documents. In the event a timely and proper claim is made by the Construction Manager for additional compensation as a result of any such Punch List item or corrective Work, the Construction Manager shall be entitled to additional compensation only to the extent the damage corrected by the Construction Manager (or its Subcontractor) was not caused by or the responsibility of the Construction Manager, its Subcontractors, their employees or anyone else for whom they may be liable. The Work identified in any Punch List shall be completed no later than the date or dates specified by the Architect or Owner pursuant to Section 4.5.2 of this Agreement or such other date or dates as agreed to by the Owner and Construction Manager. If the Construction Manager fails to complete any item on the Punch List by the specified date or dates, the Owner may, after providing the Construction Manager with seven (7) days' prior written notice, complete the work at issue and deduct the cost from sums then being withheld or if necessary recover such costs from the Construction Manager.


4.6 As used herein, the term Final Completion shall mean the full and proper completion of all of the Work, including but not limited to satisfactory operation of all equipment, completion and/or correction of all Punch List items in accordance with the Contract Documents, payment and release of all mechanics, materialmen and like liens, delivery of all test reports, warranties and guarantees and assignments thereof, equipment operation and maintenance manuals, delivery of all required as-built and record drawings and related documents, removal of all Const ...