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Bergkvist, Bergkvist & Carter
(562) 435-1426


AGREEMENT


FOR


GUARANTEED MAXIMUM PRICE
CONSTRUCTION SERVICES


BETWEEN


WYNN LAS VEGAS, LLC
("Owner")


AND


MARNELL CORRAO ASSOCIATES, INC.
("Contractor")


FOR


LE RÊVE

TABLE OF CONTENTS

 
  
  
   Page
ARTICLE I.            DEFINITIONS   1
  1.1 Architect.   1
  1.2 Change, Change Order, Change Proposal and Construction Change Directive.   1
  1.3 Claim   1
  1.4 Contract   1
  1.5 Contract Documents   1
  1.6 Contract Time   2
  1.7 Cost of the Work   2
  1.8 Drawings   2
  1.9 Final Completion   2
  1.10 Guaranteed Date of Substantial Completion   2
  1.11 Guaranteed Maximum Price   2
  1.12 Major Permits.   2
  1.13 Modification   3
  1.14 Owner's Lenders   3
  1.15 Principal Interior Designer.   3
  1.16 Specifications.   3
  1.17 Subcontractor.   3
  1.18 Substantial Completion   3
  1.19 Substitution   3
  1.20 Vendor.   3
  1.21 Work   3
ARTICLE II.            INTENT, INTERPRETATION AND CORRELATION   4
  2.1 Intent of the Contract Documents   4
  2.2 Order of Precedence.   4
  2.3 Contractor's Compliance with Contract Documents.   4
ARTICLE III.            GUARANTEED MAXIMUM PRICE   5
  3.1 Guaranteed Maximum Price   5
  3.2 Cost of the Work   9
  3.3 Non-Allowable Cost of the Work   12
  3.4 Contractor's Responsibility For Taxes.   14
  3.5 Discounts, Rebates and Refunds.   14
  3.6 No Duplication.   14
ARTICLE IV.            CONTRACT TIME AND INTERIM MILESTONE DATES   14
  4.1 Definitions.   14
  4.2 Time of the Essence.   15
  4.3 Completion Guarantees   15
  4.4 Liquidated Damages.   15
  4.5 Early Completion.   16
  4.6 Guaranty of Completion and Performance, and Financial Information   16
ARTICLE V.            PAYMENTS TO CONTRACTOR   19
  5.1 Schedule of Values   19
  5.2 Applications For Progress Payments.   19
  5.3 Time of Payments   21
  5.4 Owner's Right To Withhold   22
  5.5 Joint Payee Checks.   24
  5.6 Retention   24

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  5.7 Substantial Completion Payment   25
  5.8 Final Payment   25
  5.9 Disputed Payments.   26
  5.10 Ownership of Materials.   26
  5.11 Deposits and Payments.   26
  5.12 Waiver.   27
  5.13 Materials Off-Site.   27
ARTICLE VI.            OWNER'S RESPONSIBILITIES   28
  6.1 Information and Services   28
  6.2 Limitations   28
  6.3 Project Representative   28
  6.4 Approval of Major Purchases   28
  6.5 Site Access   29
  6.6 Payments   29
  6.7 Proof of Funding   29
  6.8 Good Faith   29
  6.9 Timely Delivery of Drawings.   29
ARTICLE VII.            CONTRACTOR'S RESPONSIBILITIES   29
  7.1 Contractor's Specific Representations   29
  7.2 General Description   31
  7.3 Preconstruction Services   33
  7.4 Systems and Procedures   35
  7.5 Schedule Meetings and Records   35
  7.6 Contractor's Operations   36
  7.7 Site Discipline   36
  7.8 Site Security   37
  7.9 Coordination With Others   37
  7.10 Product and Design Substitutions   39
  7.11 Tests and Inspections   39
  7.12 Access to Stored Material   40
  7.13 Shop Drawings, Product Data and Samples   40
  7.14 Project Record Documents and As-Built Requirements   41
  7.15 Site Clean Up   41
  7.16 Construction Facilities and Temporary Controls   42
  7.17 Cutting and Patching of Work   43
  7.18 Performance and Payment Bond Requirements   43
  7.19 Liens.   44
  7.20 Royalties and Patents   44
  7.21 Training   44
  7.22 Construction Photographs   44
  7.23 Statement of Unpaid Claims   45
ARTICLE VIII.            ARCHITECT   45
  8.1 Architect's Administration of the Contract   45
ARTICLE IX.            SUBCONTRACTORS AND VENDORS   45
  9.1 Subcontractors and Vendors   45
  9.2 Consent To Use Proposed Subcontractors and Vendors.   45
  9.3 Form of Subcontracts and Purchase Orders   46
  9.4 Subcontractors and Vendors Designated By Owner   46
  9.5 Payments to Subcontractors from the Contractor   46
  9.6 Subcontractor and Vendor Replacements   47

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  9.7 Communications With Subcontractors and Vendors   47
  9.8 Assignment   47
ARTICLE X.            WARRANTY OBLIGATIONS   47
  10.1 Contractor's Warranty   47
  10.2 Contractor's Warranty Period   48
  10.3 Compliance With Contract Documents   48
  10.4 Warranty Costs   48
  10.5 Timeliness of Corrective Services   48
  10.6 Warranty Survival   49
  10.7 Owner's Right To Correct   49
  10.8 Owner's Right to Supplement Work of Contractor   49
  10.9 Acceptance of Non-Conforming Work   49
  10.10 Warranty Exclusions   49
  10.11 Written Guaranty   49
ARTICLE XI.            SCHEDULING, DELAYS AND ACCELERATION   50
  11.1 Owner's Right to Modify   50
  11.2 Project Schedule   50
  11.3 Schedule Updates   50
  11.4 Force Majeure Delay   50
  11.5 Owner Delay   51
  11.6 Extensions of Time and Guaranteed Maximum Price Increases for Delay.   51
  11.7 Limitations   52
  11.8 Recovery Plans   53
  11.9 Accelerations for Owner's Convenience   54
  11.10 Schedule Coordination   54
  11.11 Flow-Down Provisions   54
  11.12 Partial Occupancy Or Use   55
  11.13 Other   55
ARTICLE XII.            SUBSTANTIAL AND FINAL COMPLETION   55
  12.1 Substantial Completion Procedures and Requirements   55
  12.2 Final Completion Procedures and Requirements   57
ARTICLE XIII.            CONCEALED CONDITIONS AND UNCOVERING OF WORK   59
  13.1 Concealed Conditions   59
  13.2 Covering of Work   59
ARTICLE XIV.            INDEMNIFICATION   60
  14.1 Indemnity   60
  14.2 Defense Costs   61
  14.3 Hazardous Materials   61
  14.4 Other Limitations   61
  14.5 Survival of Indemnification Provisions   62
  14.6 Risk   62
ARTICLE XV.            INSURANCE   62
  15.1 Owner Controlled Insurance Program   62
  15.2 Evidence of Coverage   63
  15.3 Deductibles   63
  15.4 Cooperation by the Parties   63
  15.5 Duration   63
ARTICLE XVI.            SAFETY AND COMPLIANCE   63
  16.1 Contractor's Site Safety Responsibilities   63
  16.2 Compliance   64

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ARTICLE XVII.            TERMINATION OR SUSPENSION OF THE CONTRACT   65
  17.1 Material Default By Contractor   65
  17.2 Termination For Convenience   68
  17.3 Suspensions By Owner   68
  17.4 Limitations   69
  17.5 Other Rights and Remedies   69
  17.6 Contractor's Remedies   70
ARTICLE XVIII.            CHANGE IN THE WORK   71
  18.1 Change   71
  18.2 Change Order   71
  18.3 Change Proposal Request   71
  18.4 Construction Change Directive   72
  18.5 Determination of Increases in Guaranteed Maximum Price   72
  18.6 Simultaneous Submittal Requirements   73
  18.7 Continued Performance   73
  18.8 Effect of Change Orders   73
  18.9 Verbal Instructions and Minor Changes in the Work   74
  18.10 Waiver and Release of Contractor's Rights   74
ARTICLE XIX.            RECORD KEEPING AND AUDIT RIGHTS   74
  19.1 Required Accounting Records.   74
  19.2 Purpose and Extent of Record Access   75
  19.3 Record Keeping Formats   75
  19.4 Certifications.   75
  19.5 Flow Down Provisions   75
  19.6 Remedies   75
  19.7 Record Retention.   76
ARTICLE XX.            CLAIMS   76
  20.1 Definition   76
  20.2 Notice   76
  20.3 Pending Resolution   76
  20.4 Final Settlement of Claims   76
  20.5 Unresolved Claims   76
ARTICLE XXI.            OWNER'S LENDERS   77
  21.1 Owner's Lenders   77
  21.2 Assignment and Default   77
  21.3 Owner's Lenders Election.   77
  21.4 Payment and Work Continuation   77
  21.5 Payments.   78
  21.6 Audit Rights.   78
  21.7 Access.   78
  21.8 Material Changes.   78
  21.9 General Cooperation.   78
ARTICLE XXII.            DISPUTE RESOLUTION AND GOVERNING LAW   78
  22.1 Judicial Determination   78
  22.2 Governing Law   79
  22.3 Non-Waiver   79
  22.4 Severability   79
ARTICLE XXIII.            PROPRIETARY INFORMATION AND USE OF OWNER'S NAME   79
  23.1 Proprietary Information   79
  23.2 Advertising and Use of Owner's Name   79

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  23.3 Use of Drawings   79
ARTICLE XXIV.            MISCELLANEOUS PROVISIONS   79
  24.1 Assignment.   79
  24.2 Subordination   80
  24.3 No Third-Party Beneficiaries.   80
  24.4 Enforceability.   80
  24.5 Headings.   80
  24.6 Counterparts.   80
  24.7 Legal Fees.   81
  24.8 Waiver.   81
  24.9 Intent of the Parties   81
  24.10 Survival.   81
  24.11 Independent Contractor.   81
  24.12 Privileged Business.   82
  24.13 Entire Agreement   82
ARTICLE XXV.            NOTICES   82
  25.1 Notice Procedures   82
  25.2 Notices To Owner   82
  25.3 Notices To Contractor   83
  25.4 Change of Address.   83

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AGREEMENT FOR GUARANTEED MAXIMUM PRICE CONSTRUCTION SERVICES
LE RÊVE

        This Agreement for Guaranteed Maximum Price Construction Services ("Agreement"), effective as of June 4, 2002 (the "Effective Date") is entered into between WYNN LAS VEGAS LLC, a Nevada limited liability company ("Owner"), and MARNELL CORRAO ASSOCIATES, INC., a Nevada Corporation ("Contractor"), with regard to the following.

RECITALS

        A.    Owner owns the real property commonly known as 3131 Las Vegas Boulevard South, Las Vegas, Nevada and more particularly described on Exhibit A attached hereto and incorporated herein by the reference ("Site").

        B.    Owner desires to construct on the Site a first class luxury resort and casino, including high-rise hotel space and low rise space comprised of casino and gaming areas, restaurants, retail, convention and meeting areas, an "Aqua Theatre" showroom, and exterior features, and all on-Site and off-Site improvements and infrastructure related thereto, all in full accordance with the Contract Documents, including the Drawings and Specifications, and including the Work (as defined below) (the "Project"). Contractor's Work is only a portion of the Project. The Project also includes services and materials to be provided by Owner and other separate contractors and consultants.

        C.    Contractor and Owner acknowledge that the Drawings and Specifications are not complete, and Contractor and Owner agree to work together to complete the Drawings and Specifications as provided in this Agreement, including consistent with the Guaranteed Maximum Price Premises and Assumptions and Project Schedule.

        D.    Owner desires to engage Contractor to construct, and supervise the construction of, that portion of the Project comprising the Work as more fully described in this Agreement, and Contractor desires to accept such engagement, upon the terms and conditions contained in this Agreement.


AGREEMENT

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

ARTICLE I.
DEFINITIONS

        1.1      Architect.    The "Architect" for the Project is Butler/Ashworth Architects, Ltd., LLC. or any other architect designated by Owner to Contractor in writing; provided, however, solely with regard to the Aqua Theatre, the term Architect shall mean A.A. Marnell II, Chtd. pursuant to that certain Professional Design Services Agreement dated as October 5, 2001.

        1.2      Change, Change Order, Change Proposal and Construction Change Directive.    The terms Change, Change Order, Change Proposal and Construction Change Directive are defined in Article 18 of this Agreement.

        1.3      Claim.    The term Claim is defined in Section 20.1 of this Agreement.

        1.4      Contract.    Collectively the Contract Documents described in Section 1.5 below form the entire contract for implementation of the Work and are collectively referred to as the "Contract".

        1.5      Contract Documents.    "Contract Documents" shall consist of the documents listed in this Section 1.5 which are hereby incorporated herein by this reference:

            1.5.1    This Agreement (including all Exhibits hereto);

            1.5.2    The Drawings (as defined in Section 1.8 below);


            1.5.3    The Specifications (as defined in Section 1.16 below);

            1.5.4    The Project Schedule (as defined in Section 11.2 of this Agreement and attached hereto as Exhibit B);

            1.5.5    The list of those personnel assigned by Contractor as Contractor's Personnel, attached hereto as Exhibit C;

            1.5.6    All contracts and purchase orders of Contractor with Subcontractors and/or Vendors with attachments thereto;

            1.5.7    The list of Contractor's Owned Equipment to be rented to Owner pursuant to Section 3.2.6 of this Agreement, attached hereto as Exhibit D;

            1.5.8    The Schedule of Values (as defined in Section 5.1 of this Agreement);

            1.5.9    Guaranteed Maximum Price Premises and Assumptions, as defined in Section 3.1.8.1 of this Agreement;

            1.5.10    Technical Studies and Reports (as defined in Section 7.2 of this Agreement); and

            1.5.11    All supplements, addenda, modifications and amendments to any of the foregoing Sections 1.5.1 through and including 1.5.10, from time to time approved by Owner in writing, including, without limitation, any Change Orders (as defined in Section 18.2 of this Agreement) and Construction Change Directives (as defined in Article 18 of this Agreement), and such other documents expressly referred to in the foregoing documents as being a part of the Contract Documents. The Contract Documents do not include other documents such as bidding requirements (advertisement or invitation to bid, Instructions to Bidders, sample forms, and Contractor's bid or portion of addenda relating to bidding requirements, except to the extent included as part of a subcontract approved in accordance with this Agreement and not inconsistent with this Agreement).

        1.6      Contract Time.    The "Contract Time" is the period of time for the Contractor to achieve Substantial Completion of the Work in its entirety as further described in Section 4.1 of this Agreement.

        1.7      Cost of the Work.    Cost of the Work shall have the meaning set forth in Section 3.2 of this Agreement.

        1.8      Drawings.    "Drawings" are the graphic and pictorial portions of the Contract Documents, wherever located and whenever issued, which are approved for use during construction and show the design, location and dimensions of the Work and Project including plans, elevations, sections, diagrams and other details; provided, however, Owner and Contractor acknowledge that as of the Effective Date the Drawings are not complete. The Drawings include those listed on Exhibit E attached hereto and incorporated herein by this reference.

        1.9      Final Completion.    Final Completion shall have the meaning set forth in Section 12.2 of this Agreement.

        1.10     Guaranteed Date of Substantial Completion.    The term Guaranteed Date of Substantial Completion is defined in Section 4.1 of this Agreement.

        1.11     Guaranteed Maximum Price.    The term Guaranteed Maximum Price shall have the meaning set forth in Section 3.1 of this Agreement.

        1.12     Major Permits.    Major Permits are the architectural, grading and structural permits, including plan check fees and transportation taxes directly relating thereto, for the major building components of the Project. Major Permits shall not include individual permits relating to individual

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Subcontractor's respective portions of the Work, other than those identified in this Section 1.12, unless otherwise agreed upon by Owner and Contractor (provided, however, Owner shall pay for the plan check fees and transportation taxes relating to the mechanical, electrical and plumbing permits for the Project).

        1.13     Modification.    The Contract Documents may be amended only by a "Modification" which is defined to mean any of the following:

            1.13.1    A written amendment to the Contract identified as such and signed by both parties;

            1.13.2    A Change Order as defined in Article 18 of this Agreement;

            1.13.3    A Construction Change Directive as defined in Article 18 of this Agreement; or

            1.13.4    A Minor Change as defined in Section 18.9 of this Agreement.

        1.14     Owner's Lenders.    The term Owner's Lenders is defined in Article 21 of this Agreement.

        1.15     Principal Interior Designer.    The "Principal Interior Designer" for the Project is Wynn Design and Development, LLC. For purposes of Contractor's Work, the Architect shall be responsible for coordinating the activities of the Principal Interior Designer.

        1.16     Specifications.    "Specifications" are that portion of the Contract Documents, wherever located and whenever issued, which are approved by Owner for use during construction and set forth the minimum written requirements for materials, equipment, construction systems, standards and workmanship for the Work; provided, however, Owner and Contractor acknowledge that as of the Effective Date the Specifications are not complete.

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

        1.18     Substantial Completion.    "Substantial Completion" shall have the meaning set forth in Section 12.1 of this Agreement.

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

        1.20     Vendor.    "Vendor" means any person or entity (including employees, agents and representatives thereof) which has a purchase order or other agreement to provide materials, supplies, equipment and/or related services for the Work and/or provide installation services at the Site for the Work, through a contract, purchase order or other arrangement with Contractor or any Subcontractor at any tier, and includes any party any of them are responsible or liable for at law or under the Contract Documents.

        1.21     Work.    "Work" means the totality of the obligations imposed upon Contractor by the Contract Documents, including, without limitation, the supply and performance by Contractor, directly and through Subcontractors and Vendors, of all things necessary and/or reasonably inferable from the Contract Documents as being required or necessary to fully complete the tasks and improvements described in Exhibit F attached hereto as Contractor's Work, in accordance with the requirements of the Contract Documents, including, but not limited to, all labor, services, materials, equipment, tools, machinery and fabrication. The term "Work" does not include the exclusions or Owner's separate work as identified on Exhibit F attached hereto.

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ARTICLE II.
INTENT, INTERPRETATION AND CORRELATION

        2.1      Intent of the Contract Documents.    The intent of the Contract Documents is for the Contractor to perform and supply, and Owner hereby engages Contractor to and Contractor hereby agrees to perform and supply, the Work, including all necessary scheduling, procurement, supervision, construction, and construction management services and supply all necessary labor, materials, equipment and related work and services, including all things reasonably inferable from the Contract Documents as being necessary to fully complete the Work and obtain the intended results described in Exhibit F attached hereto, in accordance with the requirements of the Contract Documents, including, but not limited to the requirements of the Project Schedule and the Guaranteed Maximum Price requirements set forth in Article 3 below. The enumeration of particular items in the Specifications and/or Drawings and/or other Contract Documents shall not be construed to exclude other items. The Contract Documents are complementary, and what is required by or reasonably inferable from any one of the Contract Documents (including either a Drawing or Specification) as being necessary to produce the intended results shall be binding and required as a part of the Work as if required by all Contract Documents.

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

            2.2.1    This Agreement;

            2.2.2    The Drawings;

            2.2.3    Specifications; and

            2.2.4    Other Contract Documents incorporated by reference.

        2.3      Contractor's Compliance with Contract Documents.

            2.3.1    Contractor hereby agrees and accepts that Contractor has a duty to refer all questions with respect to any doubts or concerns over the intent or appropriate interpretation of the Contract Documents to Owner for Owner's decision. Contractor agrees, accepts and assumes that Owner's decision will require implementation of the most stringent requirements among any conflicting provisions of the Contract Documents as being part of the Work. Contractor agrees to be bound by all decisions by Owner to implement the most stringent of any conflicting requirements within the Contract Documents. Any failure by Contractor to seek such clarifications shall in no way limit Owner's ability to require implementation, including replacement of installed Work at a later date at Contractor's sole expense, to achieve compliance with the more stringent requirements.

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

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

            2.3.4    Contractor shall be responsible for dividing the Work among the appropriate Subcontractors and Vendors. No claim will be entertained by Owner based upon the organization

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    or arrangement of the Specifications and/or the Drawings into areas, sections, subsections or trade disciplines.

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

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

            2.3.7    Technical words, abbreviations and acronyms in the Contract Documents shall be used and interpreted in accordance with customary usage in the construction industry.

            2.3.8    Whenever consent, permission or approval is required from any party pursuant to the provisions of the Contract Documents, such consent, permission or approval shall, unless expressly provided otherwise in this Agreement, be given or obtained, as applicable, in writing.

ARTICLE III.
GUARANTEED MAXIMUM PRICE

        3.1      Guaranteed Maximum Price.    Subject to additions and deductions which may be made only in accordance with the Contract Documents, Contractor represents, warrants and guarantees to Owner that the total maximum cost to be paid by Owner for Contractor's complete performance under the Contract Documents, including, without limitation, Final Completion of all Work, all services of Contractor under the Contract, and all fees, compensation and reimbursements to Contractor, shall not exceed the total amount of Nine Hundred One Million Eight Hundred Eighty Three Thousand Seven Hundred Ten Dollars ($901,883,710.00) ("Guaranteed Maximum Price"). Costs which would cause the Guaranteed Maximum Price (as may be adjusted pursuant to the Contract Documents) to be exceeded shall be paid by the Contractor without reimbursement by Owner.

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

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

              3.1.1.2    a fixed fee to Contractor in the amount of $30,000,000.00 ("Contractor's Fee").

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

            3.1.2    Cost Overruns.    Subject to additions or deductions which may be made in accordance with the Contract Documents, Contractor shall be solely liable and responsible for and shall pay any and all costs, fees and other expenditures in excess of the Guaranteed Maximum Price for and/or relating to the Work, without entitlement to reimbursement from Owner. Contractor is not entitled to any fee, payment, compensation or reimbursement under this Agreement or relating to the Work or Project other than as expressly provided in this Article 3.

            3.1.3    Proof of Funds.    If at any time or from time to time Owner reasonably believes that based on the progress of the Work and Cost of the Work that at any point the Work cannot be completed for the Guaranteed Maximum Price, Owner shall have the right to require Contractor to provide Owner with satisfactory evidence of funds available to Contractor to pay any anticipated overage. Prior to Owner exercising any rights under this Section, Owner shall first provide written notice to Contractor requesting satisfactory evidence of available funds and shall include in the

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    request a) the reasons for Owner's belief that the Work cannot be completed for the Guaranteed Maximum Price and b) the method and manner by which Owner calculates the anticipated overage. Contractor shall, within ten days following receipt of this written notice from Owner, provide Owner with either i) evidence reasonably satisfactory to Owner that the Work can be completed within the Guaranteed Maximum Price and the basis upon which Contractor believes this to be accurate or ii) satisfactory evidence of funds available to make up any anticipated overage. If Owner, after reviewing the evidence submitted by Contractor pursuant to paragraph i) herein, still reasonably believes that the Work cannot be completed for the Guaranteed Maximum Price, then Owner shall have the right to notify Contractor in writing of Owner's determination thereof and Contractor shall, within five days of receipt of Owner's written notice of this determination, provide Owner with satisfactory evidence of funds available to pay any anticipated overage as described in Owner's initial request for proof of funds. Contractor's failure to timely provide such satisfactory evidence to Owner of available funds shall constitute a default under this Agreement.

            3.1.4    Inferable Work.    Contractor agrees that the scope of the Guaranteed Maximum Price includes Work not expressly indicated on the Contract Documents, but which is reasonably inferable from the Contract Documents, or consistent therewith, and such Work shall be performed by Contractor without any increase in the Guaranteed Maximum Price.

            3.1.5    Owner Contingency.    The Guaranteed Maximum Price includes an Owner contingency in the amount of $7,565,200.00 ("Owner Contingency"). To allocate a portion of the Owner Contingency to a portion of the Work for any purpose, Contractor shall submit a Change Proposal (as defined in Section 18.3.1 of this Agreement) to Owner setting forth in reasonable detail why the allocation is required. Contractor and Owner will then follow the procedure described in Article 18 of this Agreement. Each allocation of the Owner Contingency by Contractor and approved by Owner shall be reflected on the respective Application for Progress Payment for the period during which Contractor makes such approved allocation. Any portion of the Owner Contingency remaining unallocated at Final Completion shall be a credit against and reduce the Guaranteed Maximum Price.

            3.1.6    Construction Contingency.    The Guaranteed Maximum Price includes a construction contingency in the amount of $44,987,078.00 ("Construction Contingency"). Subject to the terms of the Contract Documents, Contractor shall be entitled to allocate from and apply against the Construction Contingency Costs of the Work for the following, and no other, purposes relating to the Work: (a) implementation of any Recovery Plan, (b) cost overruns, (c) Minor Changes in the Work, (d) warranty costs prior to Final Completion, (e) those circumstances where the actual cost of an item exceeds the amount allocated to such item in the Guaranteed Maximum Price (pursuant to Section 3.1.8.2 or 3.1.8.3 of this Agreement), (f) any purpose expressly authorized in this Agreement, and (g) concealed conditions; provided, however, that Contractor may not apply, use or allocate from the Construction Contingency any amounts for any of the foregoing purposes that are the result of, relate to or arise from any material breach or material failure to perform by, Contractor, any Subcontractor or Vendor (except as necessary to replace any Subcontractor or Vendor because of the bankruptcy or failure to perform of such Subcontractor or Vendor), or any party for which any of them are liable or responsible at law or under the Contract Documents or for any Non-Allowable Costs of the Work. Each allocation of the Construction Contingency by Contractor shall be reflected (with a narrative explanation) on the respective Application for Progress Payment for the period during which Contractor makes such allocation and application. Any portion of the Construction Contingency remaining unallocated at Final Completion shall be a credit against and reduce the Guaranteed Maximum Price.

            3.1.7    Allowances.    The Guaranteed Maximum Price includes specific "Allowance Amounts" for certain items as shown on the Schedule of Values and budgeted in the Guaranteed Maximum

6


    Price ("Allowance Items"). The only Allowance Items shall be those specifically identified as such in the Schedule of Values and in the Guaranteed Maximum Price. The Allowance Amounts represent all Costs of the Work of the Allowance Items, including, without limitation, costs of materials, labor, handling, transportation, loading and unloading and installation, as determined by Contractor.

            3.1.8    Fast Track Drawings and Specifications.    As described in Section 7.3 of this Agreement, the Drawings and Specifications for the Work and Project are not complete. As Drawings and Specifications are completed for a particular portion of the Work (including Allowance Items), Contractor shall to the extent practical propose and obtain bids from a minimum of three Subcontractors and/or Vendors for that portion of the Work and, in accordance with Section 9.2 hereof, assist Owner in selecting one of the Subcontractor or Vendor bids for that Work.

              3.1.8.1    If the amount of the bid selected by Owner exceeds the amount budgeted in the Guaranteed Maximum Price for that item or portion of the Work, including the Allowance Amount as to an Allowance Item, and the increase in cost is due to the failure of the Drawings and Specifications to substantially conform to the "Guaranteed Maximum Price Premises and Assumptions" as set forth on Exhibit G attached hereto, Owner shall, subject to Section 3.1.8.3 below, either (a) rework the Drawings and Specifications with Architect and Contractor to cause the Work depicted therein to fall within the budgeted amount allocated in the Guaranteed Maximum Price (or within the Allowance Amount as to an Allowance Item), or (b) if the cost difference is less than $50,000.00 (subject to an aggregate maximum total of $500,000.00), Owner shall be entitled to allocate and apply a portion of the Construction Contingency to such increased cost, or (c) increase the Guaranteed Maximum Price by an amount equal to that portion of the difference between the amount of the selected bid over the amount budgeted for such item or portion of the Work in the Guaranteed Maximum Price (or over the Allowance Amount as to an Allowance Item) that is attributable to the failure of the Drawings and Specifications to substantially conform to the Guaranteed Maximum Price Premises and Assumptions, or (d) apply a portion of the Owner Contingency to cover such increased cost of the selected bid that is attributable to the failure of the Drawings and Specifications to substantially conform to the Guaranteed Maximum Price Premises and Assumptions.

              3.1.8.2    If the amount of the bid recommended by Contractor exceeds the amount allocated or budgeted in the Guaranteed Maximum Price for that item or portion of the Work, and the Drawings and Specifications substantially conform to the Guaranteed Maximum Price Premises and Assumptions, then:

        (a)
        if the portion of the Work is not an Allowance Item, Contractor shall perform such Work and such increase in costs shall be solely Contractor's responsibility and Contractor shall not be entitled to, and will not seek, any increase in the Guaranteed Maximum Price (though Contractor shall be entitled to allocate a portion of the Construction Contingency to cover such cost increase if Contractor elects to the extent permitted in accordance with Section 3.1.6 hereof; provided however, if no funds remain in the Construction Contingency, Contractor shall still be responsible for the increased cost of the Work); or

        (b)
        If the portion of the Work is an Allowance Item, Contractor shall not be responsible for such excess cost of that Allowance Item over the Allowance Amount (subject to Section 3.1.8.3 hereof), even if the Drawings and Specifications are in substantial conformance with the Guaranteed Maximum Price Premises and Assumptions, and in

7

          such case as to such increased costs Owner will make an election under clauses (a), (b), (c) or (d) of Section 3.1.8.1 above.

              3.1.8.3    Notwithstanding the provisions of Sections 3.1.8.1 and 3.1.8.2 above, if Contractor failed to comply with its obligations under Section 7.3 of this Agreement, including to timely notify Owner in writing in accordance with Section 7.3.5 of this Agreement that the Drawings, Specifications or designs for such item or portion of the Work (including any Allowance Item), failed to substantially conform to the Guaranteed Maximum Price Premises and Assumptions, or that redesign or value engineering was necessary to bring the cost within or below the amounts allocated in the Guaranteed Maximum Price for such item or portion of the Work, Owner shall not be required to make any election under clause (a), (b), (c) or (d) of Section 3.1.8.1 above or under Section 3.1.8.2 above, and Contractor shall perform and be responsible for the increased cost of such Work (though Contractor may utilize a portion of the Construction Contingency to cover such increased costs; provided, however, if no funds remain in the Construction Contingency, Contractor shall still be responsible for the increased costs of such Work) and be estopped from seeking, and Contractor agrees not to seek and shall not be entitled to, any increase in the Guaranteed Maximum Price with regard thereto.

              3.1.8.4    If the amount of the bid selected by Owner plus the additional and customary cost to complete the bid Work (if such additional and customary amount is so required as mutually determined between Owner and Contractor) is less than the amount allocated or budgeted in the Guaranteed Maximum Price for that item or portion of the Work, then:

        (a)
        if the portion of the Work is not an Allowance Item, the difference between those amounts shall be allocated to and included within the Construction Contingency; provided, however, if allocating such amounts to the Construction Contingency would cause the amount of the Construction Contingency to exceed $44,987,078.00, then any such excess over the foregoing $44,987,078.00 shall be allocated to the Owner's Contingency; or

        (b)
        if the portion of the Work is an Allowance Item, then such savings and difference shall be allocated to the Owner's Contingency.

              3.1.8.5    Notwithstanding the provisions of this Section 3.1.8, if Owner elects to have a party other than Contractor, or one of Contractor's Subcontractors, perform the Work related to an Allowance Item or other portion of the Work, or otherwise eliminates or reduces the scope of an Allowance Item or other portion of the Work, the Guaranteed Maximum Price shall be reduced by both (a) the Allowance Amount for any such Allowance Item or the budgeted amount in the Guaranteed Maximum Price for such item, and (b) a portion of the Contractor's Fee in an amount equal to three percent (3%) of the amount by which the aggregate amount of reductions specified in the preceding clause (a) exceed $30,000,000.00, and there shall not be any corresponding increase in the Guaranteed Maximum Price for the cost of such Allowance Item or other portion of the Work not performed by Contractor.

              3.1.8.6    (a) Interiors Allocation values set forth in Attachment 2 of Exhibit F to the Agreement, were established by Contractor and Owner utilizing historical cost information from representative projects. The Contractor Interiors Allocation values combined with the Owner (WDD) Interiors Allocation values, as set forth in Attachment 2 of Exhibit F to the Agreement, provide for the total budgeted value for the interiors of each respective area. It is recognized that these values may require adjustments upon receipt of the final design documents and that a final re-allocation may need to occur for each of the respective areas. Such re-allocations shall not cause the combined Interiors Allocations to exceed the total amount for same identified in Exhibit F to the Agreement. In no event shall any re-allocations of the Interior Allocation values pursuant to this Section or otherwise result in an increase to

8


      the total amount of the Interior Allocation values as set forth in column D & E of Attachment 2 of Exhibit F to the Agreement.

              (b) To the extent any mutually agreed upon re-allocation of the Interior Allocation values between Owner and Contractor with regard to a respective interior area, increases the value allocated to Contractor over the value set forth for Contractor on Attachment 2 to Exhibit F to the Agreement, then Owner shall either (i) cause the Guaranteed Maximum Price to correspondingly be increased by an amount equal to the increase in such value allocated to Contractor, or (ii) rework the Drawings and Specifications to cause the respective interior Work to fall within the value originally allocated to Contractor (such that no re-allocation occurs), or (iii) apply a portion of the Owner Contingency to cover such increase in values allocated to Contractor.

              (c)    To the extent any mutually agreed upon re-allocation of the Interiors Allocation values between Owner and Contractor with regard to a respective interior area, reduces the value allocated to Contractor from the value set forth for Contractor on Attachment 2 to Exhibit F to the Agreement, then the Guaranteed Maximum Price shall correspondingly be reduced by an amount equal to the reduction in such value allocated to Contractor.

        3.2      Cost of the Work.    "Cost of the Work" means those elements of costs described in this Section 3.2 up to the Guaranteed Maximum Price (subject to change only as provided in this Agreement) which are chargeable to Owner and payable to Contractor when reasonably, actually and necessarily incurred by the Contractor during proper performance of the Work, without mark-up or add on of any kind by or at the request of Contractor. Such costs shall be actual costs paid by Contractor less all discounts, rebates and salvages taken by Contractor. All amounts paid or payable as Costs of the Work shall be subject to verification by audit pursuant to Article 19 of this Agreement. Contractor covenants and agrees to use its best efforts to achieve the lowest price or cost reasonably available and consistent with the Contract Documents, for all Cost of the Work items. Costs of the Work shall be strictly limited to and include only the following items:

            3.2.1    Contractor's Salaried Employees. Direct cost of amounts actually paid by Contractor for the salaries paid to Contractor's employees (excluding craft labor) while and only to the extent they are performing Work at the Site ("Personnel"), except to the extent approved otherwise by Owner, and at the rates set forth on Exhibit C attached hereto, including Contractor's actual costs of statutory payroll taxes and customary employee benefits to the extent stated in this Subsection 3.2.1, pro-rated for the time they are performing Work at the Site. Contractor shall submit to Owner all documentation necessary to support the referenced rate and benefits. Contractor's costs for bonuses, stock options, profit sharing arrangements and similar incentive programs shall be Non-Allowable Costs of the Work (except for amounts paid by Contractor into 401K plans for its designated Personnel, which amounts shall not exceed 4% of the respective employee's gross salary) and thus included within the Contractor's Fee. Contractor's rates shall exclude any elements of overhead or profit. Any changes to such chargeable personnel listed in Exhibit C attached hereto, during the course of the Work must be approved in advance and in writing by Owner. The Contractor shall submit a rate schedule for each of its personnel listed in Exhibit C attached hereto, for Owner's audit and approval, including any increases other than increases solely for annual standard cost of living adjustments and merit raises in Contractor's normal and customary practice, but not to exceed five percent (5%) annually, unless approved otherwise by Owner. Costs included in such proposed rates shall, however, be strictly limited to actual payroll costs including actual labor burden, and excluding any element for overhead or profit. Items covered by or included within the labor burden shall not be separately or otherwise included in Costs of the Work or billed to Owner.

9

            3.2.2    Contractor's Site Craft Labor. Direct cost of amounts actually paid for Contractor's craft labor, including actual labor burden. Contractor shall submit hourly rates for both regular time and premium time hours for Owner's review and approval. In no event shall such rates exceed either those hourly rates specified in collective bargaining agreements applicable to such labor, including stated increases, or the amount actually paid by Contractor for such craft labor, unless approved in writing in advance by Owner.

            3.2.3    Subcontractor and Vendor Costs. Direct cost of amounts actually paid by Contractor to its Subcontractors and Vendors for Work performed pursuant to subcontracts and purchase orders which have been reviewed and approved in advance and in writing by Owner (except to the extent Owner's prior written consent is not required pursuant to Section 9.3 of this Agreement).

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

            3.2.5    Materials and Equipment Consumed at the Site. Direct cost of amounts actually paid by Contractor for all materials, equipment, supplies and small tools which are provided by Contractor at the Site and fully consumed at the Site during performance of the Work, including the direct costs of transportation and temporary storage on-site or pursuant to Section 5.13 hereof. Contractor shall promptly disclose to Owner all relevant details regarding any such materials, equipment and other items if any of the foregoing is being provided for purchase by Contractor or any company which is a subsidiary or otherwise affiliated with Contractor or its parent company. Said costs shall be at lowest rates reasonably available and consistent with the Contract Documents and invoiced at actual prices, including any available trade and quantity discounts. Contractor covenants and agrees to use its best efforts to achieve the lowest cost or price reasonably available and consistent with the Contract Documents. Any salvage value for any excess items paid for by Owner, to be determined prior to Owner's final payment upon Completion, shall reduce the Cost of the Work and be a credit to Owner.

            3.2.6    Rental Equipment. Direct cost of amounts actually paid by Contractor for rental charges for all necessary construction machinery and equipment utilized at the Site, exclusive of small tools, but limited to the direct costs of transportation, delivery, installation, dismantling, removal, maintenance, and insurance. Contractor shall use its best efforts to achieve the lowest cost or price reasonably available and consistent with the Contract Documents. Contractor shall promptly disclose to Owner all relevant details if any such construction machinery or equipment is being provided, either for purchase or rental, by Contractor or any company which is a subsidiary or otherwise affiliated with Contractor or its parent company. The rental rates for any machinery and equipment owned by Contractor or an affiliated entity shall be agreed upon by Owner and Contractor in advance, and those rates are incorporated into the rate schedule which is attached to this Agreement as Exhibit D. Notwithstanding anything to the contrary in Exhibit D, the aggregate amount of rental costs charged for any individual piece of Contractor or affiliate-owned machinery or equipment shall be limited to 80% of its actual acquisition cost.

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            3.2.7    Site Office Costs. Direct cost of amounts actually paid by Contractor for Site office facilities and Site office general expenses, telephone services, long distance telephone calls, photocopying, postage, reasonable and customary petty cash expenses not to exceed $250.00 monthly, facsimile transmissions, office supplies, custom printing required by the Contract Documents, express and air courier mail delivery services, Site office equipment such as computers, telephones, copiers, facsimile machines, typewriters and similar items used in connection with the Work. Contractor shall use its best efforts to achieve the lowest cost or price reasonably available and consistent with the Contract Documents, provided, however, such costs shall be expressly limited to such of the foregoing items not otherwise made available or provided by Owner to Contractor at the Site. Contractor shall promptly advise Owner of any such Site office equipment which is charged to the Work and provide Owner with all purchase and rental agreements pertaining thereto for Owner's approval. Contractor shall promptly disclose to Owner all relevant details if any such Site office equipment is being provided, either for purchase or rental, by Contractor or any company which is a subsidiary or otherwise affiliated with the Contractor or its parent company. Such equipment shall be deemed Contractor owned equipment and a Cost of the Work only in accordance with Contractor's Equipment List attached hereto as Exhibit D. Any salvage value received by Contractor or any Subcontractor for any excess items paid for by Owner, to be determined as part of Final Completion, shall be a credit for Owner's account.

            3.2.8    Sales and Use Taxes. Direct cost of amounts actually paid by Contractor for sales and use taxes for materials and equipment incorporated or consumed into the Work, plus on rental equipment used in the Work, that are imposed by governmental authorities and paid by the Contractor.

            3.2.9    Bond Premiums. Direct cost of amounts actually paid by Contractor for premiums solely attributable to the Work for Contractor's Performance and Payment Bonds to the extent required by Owner, and direct amounts paid for Subcontractor bond premiums.

            3.2.10    Course of Constructions Repairs. Actual and reasonable costs incurred and paid by Contractor in repairing minor damage to trade Work caused as a normal by-product during the course of construction and not attributable to the fault of Contractor, any Subcontractor or Vendor or covered by insurance.

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

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

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

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

              3.2.13.2    Direct costs actually paid to respond to an emergency affecting the safety of persons and property, and not the result of any act or omission of Contractor or any Subcontractor or Vendor or any party for whom any of the foregoing are responsible or liable at law or under the Contract Documents;

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

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

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              3.2.13.5    Except for the Major Permits which shall be Owner's responsibility to pay for, direct costs actually paid for building permit fees, including plan check fees, which are required by governmental authorities to be taken out in Owner's name for construction and completion of the Work, including temporary and final Certificates of Occupancy.

              3.2.13.6    Direct costs actually paid by Contractor's Personnel reasonably incurred by such Personnel while traveling in the performance of the Work.

              3.2.13.7    Losses and expenses not compensated by insurance and incurred by Contractor directly relating to the performance of the Work and not relating to or arising from the failure of Contractor or any Subcontractor or Vendor or any party any of the foregoing are liable or responsible for under the Contract Documents or at law, to comply with the Contract Documents or the negligence of any of the foregoing persons.

              3.2.13.8    The cost of insurance premiums for the specific insurance coverages listed on Exhibit R carried by Contractor and Subcontractors relating to the Work and costs of insurance pursuant to Section 15.1.1 hereof, if applicable.

        3.3      Non-Allowable Cost of the Work.    "Non-Allowable Cost of the Work" mean the direct and/or indirect costs described in this Section 3.3 and all similar costs and all other costs not included within Costs of the Work, which are paid or incurred by Contractor during performance of the Work. All such Non-Allowable Costs of the Work are included in Contractor's Fee set forth in Subsection 3.1.1 above, regardless of whether they exceed the amount of such Contractor's Fee. Contractor shall not be entitled to receive any additional reimbursement for Non-Allowable Costs of the Work, including without limitation, any of the types of cost items described as follows:

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

            3.3.2    Costs in excess of the Guaranteed Maximum Price;

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

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

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

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

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            3.3.7    All direct and indirect costs of any nature relating to work arising during the Warranty Period defined in Section 10.2 of this Agreement, for correction, removal, replacement or disposal of any non-conforming Work, materials or equipment to the extent defined in Article 10 of this Agreement;

            3.3.8    All costs incurred by Contractor for bonuses, stock options, profits sharing arrangements and similar incentive programs (other than as provided in Section 3.2.1 with regard to 401K plans);

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

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

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

            3.3.12    All costs of business and/or operating permits, licenses, fees and taxes, required by any local, state or federal governmental authorities or labor agreements to enable the Contractor, its Subcontractors or Vendors of any tier to be qualified to do business and/or perform trade activities and/or any Work pursuant to the Contract Documents;

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

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

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

            3.3.16    Costs incurred by Contractor relating to the preparation, response to or defense of any Claim for which Contractor or any Subcontractor or Vendor are liable or responsible at law or under the Contract Documents;

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

            3.3.18    Any Costs of the Work reimbursed by insurance to Contractor or any Subcontractor or Vendor;

            3.3.19    The costs of any insurance premiums associated with the Owner's requirement that Contractor and Subcontractors carry insurance coverage beyond that provided by the OCIP (as defined in Article 15 of this Agreement), and the cost of any other insurance maintained by Contractor or any Subcontractor whether or not required by the Contract Documents (except that insurance described in Section 3.2.13.8 hereof); and

13


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

        3.4      Contractor's Responsibility For Taxes.    Other than direct cost of amounts actually paid by Contractor for sales and use taxes directly relating to materials and equipment incorporated or consumed into the Work and/or directly relating to rental equipment used in the Work that are imposed by governmental authorities and paid by the Contractor, it is expressly understood that no other taxes or duties (other than customs duties on equipment and material brought into the United States expressly and solely for incorporation or consumption in the Work and imposed by governmental authorities and paid by Contractor) of any nature whatsoever are considered Costs of the Work and that Contractor will not be separately reimbursed for, but Contractor shall be responsible for and shall timely pay, any other such taxes or duties whatsoever, including, but not limited to, federal, state and local taxes, duties, excise taxes, personal property taxes on construction equipment and other property owned or leased by Contractor, taxes on net income of Contractor, filing fees on taxes, business taxes, and similar taxes applicable to or arising directly or indirectly out of performance of the Work or Contractor's property, business or operations.

        3.5      Discounts, Rebates and Refunds.    All cash discounts (so long as Owner has made payment to Contractor to the extent advance or timely payment is necessary to obtain such cash discount), trade discounts, rebates and refunds obtained by Contractor during the course of the Work, and all amounts received from sales of surplus materials and equipment, shall accrue to Owner. Contractor shall take all necessary steps to obtain, secure and pass on such credits to Owner and all such discounts, rebates and refunds shall be fully reflected in Contractor's monthly Applications for Progress Payment submitted pursuant to Article 5 of this Agreement. Title to all materials, tools, and equipment paid for by Owner shall be vested in Owner. At the completion of the Work and when no longer required, such tools, equipment and materials as remain shall belong to Owner and be, as Owner may direct (a) sold at the direction of Owner and all sums and allowances realized credited against the Cost of the Work for all purposes under this Agreement or (b) delivered to Owner, all as Owner shall direct.

        3.6      No Duplication.    Notwithstanding the breakdown or categorization of any costs in this Article 3 or elsewhere in the Contract Documents, there shall be no duplication of payment in the event any particular items for which payment is requested can be characterized as falling into more than one of the types of compensable or reimbursable categories.

ARTICLE IV.
CONTRACT TIME AND INTERIM MILESTONE DATES

        4.1      Definitions.

            4.1.1    The term "day" means any calendar day including public holidays.

            4.1.2    The "Notice to Proceed" means the written notice from Owner to Contractor providing Contractor with a "Date of Commencement" for th