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Exhibit 10.1

 

CONSTRUCTION MANAGEMENT AGREEMENT

 

This Construction Management Agreement is made and entered into effective as of July 14, 2005, by and between Seneca Construction Management Corporation (“ Construction Manager ”) and Seneca Territory Gaming Corporation (“ Owner ”).

 

WHEREAS, the parties desire to enter into this agreement in order to set forth the terms, conditions and procedures under which the Casino Hotel (hereinafter defined) will be constructed;

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereby stipulate and agree as follows:

 

ARTICLE I.
DEFINITIONS

 

1.1            Specific Definitions .  The following capitalized terms shall have the meanings ascribed to them in this Section 1.1 .

 

Affiliate ” means, with respect to any relevant Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, the relevant Person. For purposes of this definition, the term “control” (including its derivatives and similar terms) means owning, directly or indirectly, more than 25% of the voting interest in the relevant Person.

 

Agreement ” means this Construction Management Agreement (including any exhibits, supplements and other attachments), as amended, restated, supplemented or otherwise modified from time to time.

 

Bonus ” is defined in Section 5.6 .

 

Business Day ” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the Seneca Nation of Indians, the United States or the State of New York shall not be regarded as a Business Day.

 

Casino Hotel ” means the Allegany 220 room hotel and casino with approximately 2,000 slot machines, restaurants, night club(s), bar(s), health club and spa, pool(s), retail space, associated back-of-house support spaces and related site work, to be constructed in Salamanca, New York as further described in Schedule 1.

 

Change of Law ” means the enactment, adoption, promulgation, issuance, modification, revision, change, repeal or cancellation after the date of this Agreement of or to any Law, that prevents Construction Manager from performing its obligations under this Agreement.

 

Change Order ” is defined in Section 8.4 .

 

Completion ” is defined in Section 9.3 .

 

Completion Certificate ” shall have the meaning ascribed to it in Section 9.3 .

 



 

Completion Date ” is defined in Section 9.3 .

 

Construction Manager ” is defined in the Preamble .

 

Construction Manager Estimate ” is defined in Section 8.3 .

 

Contract Price ” is defined in Section 5.2 .

 

Contractor ” means any Person, other than Construction Manager, performing all or any portion of the Work, or performing any other services, or providing goods, equipment, materials, supplies, or labor services related to the Work, including contractors, subcontractors (and every tier of subcontractors), vendors, suppliers, agents and representatives of Construction Manager, whether hired by Construction Manager or by another Person hired by Construction Manager.

 

Costs ” means all verifiable, direct, out-of-pocket costs incurred by Construction Manager in performing the Work, but shall not include any costs or expenses (i) for general or overhead expenses of Construction Manager or (ii) that would not have been incurred absent the bad faith, gross negligence, or willful misconduct of Construction Manager or any Contactor.

 

Damages ” is defined in Section 13.1(a) .

 

Data ” is defined in Section 3.4 .

 

Day ” means a period of twenty-four (24) consecutive hours beginning at 7:00 a.m., Central Time, or at such other hour as Construction Manager and Owner mutually agree.

 

Defect ” means any equipment, materials, tools, supplies, installation or other work performed or provided by, or within the responsibility of Construction Manager or any Contractors which (i) fails to conform to the Scope of Work or is of improper or inferior workmanship; (ii) could reasonably be expected to adversely effect the design or operation of the Casino Hotel; or (iii) otherwise fails to meet the warranties set forth in Section 10.2 .

 

Delay Liquidated Damages ” is defined in Section 6.2(a) .

 

Event of Default ” or “ Default ” means the occurrence of any of the following events, circumstances or conditions: (i) the failure by either Party to perform or comply with any material agreement, covenant, obligation or other provision contained in this Agreement when such failure has not been remedied (after delivery of written notice thereof) within ten (10) Days; (ii) the entry of either Party into voluntary or involuntary bankruptcy, receivership or similar protective proceedings; or (iii) the inaccuracy or breach of any material representation or warranty contained in Article X .

 

Force Majeure ” is defined in Section 12.1 .

 

Governmental Authority ” means applicable tribal, national, state and local governments and all agencies, authorities, departments, instrumentalities, courts, corporations or the other subdivisions of each having or claiming a regulatory interest in or jurisdiction over the Casino Hotel, the Work or the Parties

 

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Guaranteed Completion Date ” is defined in Section 6.1 .

 

Guaranteed Maximum Price ” is defined in Section 5.2 .

 

Hazardous Materials ” shall mean any hazardous materials, hazardous wastes, hazardous constituents, hazardous or toxic substances, petroleum products (including crude oil or any fraction thereof), defined or regulated as such under any environmental Law.

 

Invoice ” is defined in Section 5.3(a) .

 

Laws ” means the laws, rules, regulations, decrees and orders of the United States of America, the Indian Nation and all other governmental bodies having relevant jurisdiction, whether such now exist or hereafter come into effect.

 

Loss ” or “ Losses ” means any actions, claims, settlements, judgments, demands, liens, losses, damages, fines, penalties, interest, costs, expenses (including, without limitation, expenses attributable to the defense of any actions or claims), attorneys’ fees and liabilities related to the construction of the Casino Hotel ; provided, however, that as between the Parties, the term Loss shall not include damages which one Party has waived or released its right to seek from the other Party pursuant to Article XIII .

 

Notice to Proceed ” is defined in Article IV .

 

Notice to Proceed Date ” is defined in Article IV .

 

Owner ” is defined in the Preamble .

 

Owner Directive ” is defined in Section 8.5 .

 

Owner Indemnified Party ” is defined in Section 13.2(a) .

 

Party ” and “ Parties ” means, each of Owner and Construction Manager, individually or collectively, as the context may require.

 

Performance Security ” is defined in Article VII .

 

Person ” means any individual or entity, including, without limitation, any corporation, limited liability company, joint venture, joint stock company, general or limited partnership, trust, agency, association, organization, government authority (including any agency or administrative group thereof) or other entity.

 

Progress Report ” is defined in Section 5.3(e) .

 

Property ” means the areas designated by Owner for performance of the Work

 

Repair ” (which shall also mean “ Repairing ”) is defined in Section 10.2(a) .

 

Retainage ” is defined in Section 5.5 .

 

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Scope of Work ” is set forth on Schedule 1 (as may be amended pursuant to the terms of this Agreement).

 

Stated Rate ” means an annual rate of interest (compounded monthly) equal to the lesser of (i) the sum of the one year LIBOR rate quoted in the Wall Street Journal (or, in its absence, a similar publication) on the first Day of the applicable month plus one percent (1%).

 

Warranty Period ” is defined in Section 10.4 .

 

Work ” is defined in Section 2.2 .

 

ARTICLE II.
CONSTRUCTION MANAGEMENT SERVICES

 

2.1            Appointment as Construction Manager . Subject to the terms and conditions of this Agreement, Owner hereby appoints Construction Manager to act hereunder as an independent contractor to manage the construction of the Casino Hotel, and Construction Manager hereby accepts such appointment and agrees to act pursuant to the provisions of this Agreement. Construction Manager is an independent contractor and agrees to maintain such status and relationship.  Neither Construction Manager nor any Manager Indemnified Party shall be deemed to be the agents, representatives or employees of Owner.  Nothing herein is intended to, or shall be deemed to, create a partnership, joint venture, agency or other relationship creating fiduciary or quasi fiduciary duties or similar duties and obligations or otherwise subject the Parties to joint and several or vicarious liability or to impose any duty, obligation or liability that would arise therefrom with respect to either or both of the Parties.

 

2.2            Work to be Performed . This Agreement is a turnkey contract and Construction Manager’s obligation is to provide Owner with the Casino Hotel complete and in full operating condition, completed in every detail according to the Scope of Work within the time and schedules designated herein and for the purposes designated herein by Owner, and to do and furnish everything necessary in connection therewith, all on a total, fixed price basis as set forth herein.  Without limiting the generality of the foregoing, Construction Manager shall perform the Work set forth on Schedule 1 (the “ Work ”).

 

2.3            Use of Contractors .

 

(a)            Schedule 2 sets forth certain items of the Work, and with respect to each such item of Work, the Person(s) approved by Construction Manager and Owner to perform such Work.  Schedule 2 may not be modified without the prior written consent of Owner, such consent not to be unreasonably withheld.  Construction Manager is prohibited from subcontracting or assigning any of the Work, except as approved by Owner and set forth on Schedule 2 .  Upon Owner’s request, Construction Manager shall cause a qualified representative of any Contractor to meet with Owner.

 

(b)            Approval by Owner of any Contractor shall not relieve Construction Manager of any of its obligations under this Agreement and Construction Manager shall, at all times, be responsible for all of the Work, including all Work set forth on Schedule 2 .  All Work performed by a Contractor shall be pursuant to an appropriate written

 

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agreement between Contractor and Construction Manager.  All such Contractor contracts entered into by Construction Manager for any portion of the Work shall:

 

(i)             conform to and require Contractor to perform in accordance with the requirements, terms and conditions of this Agreement,

 

(ii)            be assignable to Owners upon Owner’s written request,

 

(iii)           preserve and protect the rights of Owner under this Agreement and with respect to the Work to be performed,

 

(iv)           require Contractor to provide and maintain adequate insurance consistent its obligations related to this Agreement and the Work to be performed, and

 

(v)            obligate Contractor to execute a waiver and release with respect to any lien rights for each payment received by the such Contractor for the Work.

 

ARTICLE III.
GENERAL OBLIGATIONS OF CONSTRUCTION MANAGER

 

3.1            Standard of Performance . Construction Manager shall perform the Work and carry out its other obligations hereunder, and shall require all of its employees, Contractors, agents, materialmen and vendors furnishing labor, materials or services in any way relating to this Agreement or affecting the Casino Hotel to carry out their respective responsibilities in accordance with (a) the terms of this Agreement, (b) safe, sound, efficient, workmanlike, economically prudent, and environmentally sound practices, and (c) all Laws, permits and licenses applicable to the Casino Hotel and the construction thereof.

 

3.2            Construction Manager’s Employees, Consultants and Contractors . Construction Manager shall pay all expenses in connection with employing, retaining and supervising other Persons necessary or appropriate for the performance of the Work, including compensation, salaries, wages, overhead and administrative expenses incurred by Construction Manager, and as applicable, FICA and Medicare taxes, workers’ compensation insurance, retirement and insurance benefits and other such expenses.  All services performed or materials supplied by any Affiliate of Construction Manager shall be performed or supplied at terms and rates that are reasonably competitive with the terms and rates known to Construction Manager to be prevailing in the industry at the time for the area of operations.

 

3.3            Payments Pursuant to Agreements . Construction Manager shall promptly pay all undisputed amounts due and payable to (a) all Contractors in accordance with the terms of applicable Contractor contract and (b) any other third Party providing goods or services in connection with the Work.

 

3.4            Ownership and Custody of and Access to Data . Notwithstanding anything in this Agreement to the contrary, Owner shall be the sole and exclusive owner of all reports, filings, agreements, instruments and other documents (collectively, “ Data ”), whether prepared by

 

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Construction Manager, Owner or any other Person, including a Contractor, related to the Work and any such Data shall be made available to Owner at Construction Manager’s office during reasonable business hours on provision of reasonable notice. Within a reasonable period of time after delivery of the Completion Certificate, or immediately upon the termination of this Agreement, Construction Manager shall deliver originals of all Data to Owner.

 

3.5            Inspection and Rejection by Owner . Owner, and its designated representatives, shall have the right to inspect all Work including, without limitation, testing, inspection, repairs, construction, installation, removal of equipment, meetings or other communications with any Person, or similar activities undertaken by Construction Manager in connection with this Agreement.  Owner shall have the right to reject, or to direct Construction Manager to reject, at any time, any such portion of the Work, including any design, engineering, materials, equipment, installation, tools or supplies, which in Owner’s reasonable judgment does not conform to this Agreement, including the Work Scope, or which contains Defects. Upon such rejection, Construction Manager shall promptly remedy any condition identified by Owner as giving rise to such rejection.

 

3.6            Disclosure to Owner .  Construction Manager shall promptly notify Owner of any event, circumstance or condition known to Construction Manager constituting or which reasonably could be expected to constitute a material breach, violation of any Law, or default of any other obligation of Owner of which Construction Manager has knowledge. Construction Manager shall promptly notify Owner of any significant circumstance, event, occurrence or condition (whether then existing or, in Construction Manager’s opinion, expected to exist in the near future), including issues related to the acquisition (including eminent domain proceedings) of rights of way and similar matters.

 

3.7            Risk of Loss . Until the earlier of the Completion Date and the termination of this Agreement, Construction Manager assumes risk of loss and full responsibility for the cost of replacing or repairing the damage to the Casino Hotel and all materials, equipment, spare parts, supplies and maintenance equipment (including temporary materials, equipment and supplies) which are purchased by Construction Manager or Owner for permane


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