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Construction Management Agreement

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Date:
2007
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CONSTRUCTION MANAGEMENT AGREEMENT

FOR THE

CONSTRUCTION AND COMMISSIONING

OF

CITY OF DREAMS, MACAU

FOR

MELCO PBL (COD) DEVELOPMENTS LIMITED

Articles of Agreement

THIS AGREEMENT is made on the date specified in Annexure A to these Articles of Agreement

BETWEEN

 

(1) Melco PBL (COD) Developments Limited (formerly known as Melco Hotel and Resorts (Macau) Limited) a company incorporated under the laws of Macau whose registered office is at Avenida Xian Xing Hai, No. 105, Zhu Kuan Building, 19th floor, A-C e K-N, Macau (in these Articles of Agreement and in the several Annexures hereto called the ?Employer?); of the one part

 

(2) The Leighton China State John Holland Joint Venture comprising:

 

  (i) Leighton Contractors (Asia) Limited a company incorporated in Hong Kong whose registered office is at 39/F, Sun Hung Kai Centre, Hong Kong (?LC?); and

 

  (ii) China State Construction International Holdings Ltd a company incorporated in Hong Kong whose registered office is at 29/F, China Overseas Building, 139 Hennessy Road, Hong Kong (?CS?); and

 

  (iii) John Holland Pty Limited a company incorporated in Australia and having its principal place of business in Hong Kong at Level 28, Three Pacific Place, 1 Queens Road East, Hong Kong (?JH?);

(hereinafter LC, CS and JH are in these Articles of Agreement and in the several Annexures hereto jointly and severally collectively called the ?Contractor?) of the other part.

The Employer and Contractor are hereinafter individually referred to as a ?Party? and collectively referred to as the ?Parties?

WHEREAS

Employer?s Commitment and Objectives

 

A. The Employer is committed to establishing the Project known as the City of Dreams, as Macau?s pre-eminent entertainment and leisure destination. The City of Dreams Project will be a fully integrated, world-class resort, designed and built at the highest international standards. Quality and guest experience will ultimately be the distinguishing features that separate the City of Dreams Project from the competition.

Common Commitments

 

B. The Parties have agreed to combine their talent, ability and resources in the best interests of completing the City of Dreams Project in an efficient, cost effective and timely manner to produce a world class hotel and casino complex.

 

C. The management at the highest level of both Parties have further agreed to complete the Project in a non adversarial manner with each Party striving to attain the best result for the common goal as stated above by cooperation and by adopting the highest standards of professional acumen.

 

D. The Parties agree that the agreement between them is to be structured as a cost reimbursement contract on the basis of trust that the Parties will at all times respond to the requirements of the Project with the highest level of intent to uphold the principles and the objectives stated above. Each Party will treat with the other Party in an honest, fair and professional manner to achieve the stated goals.

 

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Contractor?s Commitment and Objectives

 

E. To work closely with the Employer in a spirit of partnership in pursuit of a common goal, being the timely and efficient delivery of a high quality entertainment and leisure complex known as the City of Dreams in Macau, in return for the Fee.

 

F. To provide a highly motivated and performance driven project team whilst maintaining a safe and healthy environment for all project staff and the workforce.

 

G. To establish a long term relationship with the Employer based on success and the achievement of the Parties, objectives and become the contractor of choice for future projects in the region.

 

H. The Contractor?s joint venture team will be fully integrated with Leighton Contractors (Asia) Ltd as the leader.

 

I. The Contractor commits to the establishment and participation in a Supervisory Board with the Employer and if requested by the Supervisory Board, other invitees may attend to assist and advise the Board, such invitees may include the architects and/or other professionals. This group will include senior management representatives of both Parties and will provide leadership, direction and overview the Project?s progress to ensure the achievement of the common objectives of the Parties.

AND WHEREAS:

 

J. The Employer wishes to engage the Contractor and the Contractor wishes to be engaged on the terms set out in the Agreement.

IT IS HEREBY AGREED as follows:

 

1. This Articles of Agreement and all the Annexures hereto shall together be taken to be the ?Agreement? for the carrying out of the Project. In the event of any inconsistency or ambiguity between documents comprising this Agreement, the following order of precedence shall apply:

(i) these Articles of Agreement;

(ii) Details of Agreement (Annexure A);

(iii) Conditions of Engagement (Annexure B) (the ?Conditions?);

(iv) Annexures C to H with associated appendices.

 

2. The Employer hereby engages the Contractor to carry out the Services as detailed in the schedule of Services contained in Annexure D and elsewhere in this Agreement including (inter alia) to manage and co-ordinate activities involved in the construction, commissioning and defects rectification of the Project.

 

3. In consideration of the payments to be made to the Contractor by the Employer at the times and in the manner set forth in the Agreement, the Contractor will carry out the Services in accordance with the Agreement.

 

4. Each Party hereto shall perform, fulfil, observe, comply with and submit to the provisions conditions stipulations and requisitions and all matters and things contained expressed or shown in the Agreement and by and on the part of the respective Party to be performed fulfilled observed complied with and submitted to.

 

5.

The Agreement supersedes any prior agreement or representation in respect of the Project, including without limitation the Employer?s letter to the Contractor dated 28 August 2006

 

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incorporating the ?Principles of Understanding? and the Employer?s letter to the Contractor dated 3 November 2006. Any such prior agreement or representation shall be of no effect. Any work or services carried out by the Contractor on the Project before the date of the Agreement shall be treated as if carried out under the Agreement, which shall apply retrospectively to such work or services.

IN WITNESS WHEREOF the Parties hereto have duly executed these Articles of Agreement as a Deed the day and year first above written.

 

Signed, Sealed and Delivered as a Deed   )Authorised signatory                              L.S.
for and on behalf of Melco PBL (COD)   )Full name                                                      
Developments Limited, acting by its   )
authorised signatories:-   )
  )
in the presence of:   )

 

  
Signature of Witness  

 

  
Name:  
Sealed with the Common Seal of   )
Leighton Contractors (Asia) Limited   )                                    L.S.
  )
in the presence of:   )
  )

 

  
(Signature of Witness)  

 

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Sealed with the Common Seal of       )
China State Construction International       )
Holdings Ltd       )                                    L.S.
      )
in the presence of:       )
      )

 

      
Signed, Sealed and Delivered as a Deed       )Authorised signatory                              L.S.
for and on behalf of John Holland Pty       )
acting by its authorised signatories:-       )Full name                                                  
      )
      ) Authorised Signatory                              L.S.
in the presence of:       ) Full name                                                  

 

      
Signature of Witness      

 

      
Name:      

 

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ANNEXURE ?A?

DETAILS OF AGREEMENT

 

Date of Agreement    :    22 August 2007
Employer    :    Melco PBL (COD) Developments Limited
Employer?s Correspondence Address    :    C/o 36/F, The Centrium, 60 Wyndham Street, Central
Contractor    :    Leighton Contractors (Asia) Limited;
      China State Construction International Holdings Ltd.;
      John Holland Pty Limited
      in joint venture named
      the ?Leighton China State John Holland Joint Venture?
Contractor?s Address    :    39/F, Sun Hung Kai Centre, Hong Kong
Date for Commencement    :    28 August 2006
(Article 1 of Annexure B)      
Milestones:      
(Annexure C)      
Stage 1    :    Casino, Crown Tower (partial) and Hard Rock Hotel
Stage 2    :    Dragone Theatre
Stage 3    :    Crown Tower
Stage 4    :    Grand Hyatt and Hyatt Regency Hotels
Stage 5    :    Apartment hotel and all works other than in Stages 1, 2, 3 and 4

 

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Milestone Dates:

 

     

(This column to be deleted when the Stage
descriptions are updated)

   

Target Stage

Completion

   

Committed Stage

Completion

Stage 1    Casino, Hotel A (Hard Rock) & Part Crown Tower (100 Rooms)    31 December 2008    31 March 2009
Stage 2    Dragone Theatre    15 January 2009    31 March 2009
Stage 3    Hotel C (Crown Tower)    31 March 2009    31 March 2009
Stage 4    Hotels B1 and B2 (Grand Hyatt)    30 August 2009    30 September 2009
Stage 5    Apartment Hotel    1 December 2009    31 December 2009

 

Project    :    The City of Dreams
(Article 1 of Annexure B)      
Site (Article 1 of Annexure B)    :    The plot of land with an overall area of 113,325 m2, located in Taipa, near Istmo Street, in the reclaimed area between Taipa and Coloane, marked with letters ?A? and ?B? in the map no.: Processo 6328/2005 and No. Cadastro 61102003, of February 6 April 2005. The parcel marked with letter ?A? in the said map, with an area of 73,528 m2, is registered with the Real Estate Registry (?Registry?) under no. 23 053 and the parcel marked with letter ?B? in the same map, with an area of 39,797 m2, is not registered with the Registry.
Insurance:    :    Provided by the Employer
(Article 13 of Annexure B)      
Fee    :    HK$600,000,000
(Article 14.1 of Annexure B)      
Project Budget    :    HK$12,825,092,610
(Article 1.1 of Annexure B)      
Defects Period    :    for a Stage, 12 months from the Stage
(Article 16.8 of Annexure B)       Completion Date

 

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Employer ? Notice Address    :    36/F, The Centrium, 60 Wyndham Street, Central
      Attention: General Counsel
        Facsimile    :    +852 2537 3618
Contractor - Notice Address    :    39/F, Sun Hung Kai Centre, Hong Kong
      Attention: Managing Director
        Facsimile    :    +852 2528 9030
Governing Law    :    The laws of the Hong Kong Special
(Articles 19.4 and 19.6 of Annexure B)       Administrative Region of the People?s Republic of China

 

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ANNEXURE B

CONDITIONS OF ENGAGEMENT

CONTENTS

 

Article 1    -      Interpretation
Article 2    -      Prosecution of Works
Article 3    -      Project Plan
Article 4    -      Access to Site and Time for Completion
Article 5    -      Responsibilities of the Contractor
Article 6    -      Lenders
Article 7    -      Representatives
Article 8    -      Assignment
Article 9    -      Responsibilities of the Employer
Article 10    -      Not Used
Article 11    -      Trade Contractors
Article 12    -      Changes
Article 13    -      Insurance
Article 14    -      Fee, Incentive Bonus and Payment
Article 15    -      Defects
Article 16    -      Employer?s Access, Stage Completion and Final Completion
Article 17    -      Confidentiality
Article 18    -      Suspension and Determination
Article 19    -      General
       

?     Publicity

       

?     Notices

       

?     Parent Company Guarantees

       

?     Dispute Settlement

       

?     Governing Law and Jurisdiction

       

?     Registration of Contractor?s Business in Macau

Article 20    -      Special Conditions

Annexure C ? Details and Scope of the Project

 

  ?  

Appendix C1 - Drawing Schedules

 

  ?  

Appendix C2 - Benchmarks

 

  ?  

Appendix C3 - Project Budget Scope and Matrix

 

  ?  

Appendix C4 - Exclusions

 

  ?  

Appendix C5 - Project Design Milestones

 

  ?  

Appendix C6 ? Registered Site Layout

 

  ?  

Appendix C7 ? Stage Scope

 

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Annexure D ? The Services

Annexure E ? Project Costs

Annexure F ? Supervisory Board

Annexure G ? Project Budget

Annexure H ? Forms of Parent Company Guarantees

 

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ANNEXURE B

CONDITIONS OF ENGAGEMENT

ARTICLE 1

INTERPRETATION

 

1.1 In the Agreement (as hereinafter defined) the following words and expressions shall have the meaning assigned to them except where the context otherwise requires:

?Agreement? means the concluded agreement (including all the Annexures hereto) made between the Contractor and the Employer as set forth in clause 1 of the Articles of Agreement;

?Annexures? means the annexures (and each of them) to the Agreement?namely this Annexure B and Annexures A and C to H;

?Article? means an article in these Conditions of Engagement;

?Associated Company? means any company which is the holding company or a subsidiary company of, or any company whose holding company is the holding company of, the Employer (holding company and subsidiary company have the meanings given to them in the Companies Ordinance (Cap 32)).

?Authority? means any government department, body, instrumentality or other public authority which in any way affect, are applicable to or have jurisdiction in respect of the performance of the Works or of the Project;

?Authority Approval? means any consent, approval, certification, review, permit, licence, permission or other instrument issued by a relevant Authority, authorising construction of the Works on such conditions (if any) as are contained in the consent, approval, certification, review permit, licence, permission or instrument;

?Certificate of Final Completion? means the certificate referred to as such in Article 16.9;

?Certificate of Stage Completion? means the certificate referred to as such in Article 16.8;

?Change? shall mean a change in or an upward or downward adjustment to (i) the overall construction floor area and/or the volume of the buildings/structures comprising the Works; or (ii) the use or function of an area of the Works (iii) a significant change in the benchmark schedule (attached to Annexure C); or (iv) a significant change in the timing or sequencing of the Works which impacts upon any Stage Completion and/or the Project Budget. Notwithstanding the foregoing, Design Development shall not constitute a Change for the purposes of Fee adjustment, irrespective of whether it is submitted in the form of a Design Change Request, Design Change Notification or pursuant to Article 12.7.

?Committed Stage Completion Date? means for a particular Stage, the relevant Committed Stage Completion date identified in Annexure A as may be extended under the Agreement;



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