Indemnification

It is our understanding that KUD, the construction company that the developer would use, plans to indemnify WDC Baseball Partners for cost overruns or late delivery, but those will not include damages that the District would experience due to delays. Further, the agreements to indemnify WDC Baseball Partners will not be executed until November 2006, according to KUD.

Additional inspections have uncovered more asbestos in the building formerly owned by the Architect of the Capitol. Although the structure was built to be asbestos-free, refrigeration units were brought in and asbestos was found in the insulation.

The removal of this additional asbestos will cost approximately $3 million, which increased environmental remediation costs further to approximately $14.4 million. These higher costs will be paid from the project contingency fund.