<PAGE> 1
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 0-11532
INLAND CASINO CORPORATION
(Exact name of small business issuer as specified in its charter)
Utah 33-0618806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4225 Executive Square, Suite 1650, La Jolla, California 92037
(Address of principal executive offices)
Issuer's telephone number, including area code: (619) 546-9383
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: as of February 12,
1997, 3,854,548 shares of common stock, $.001 par value per share, were
outstanding.
Transitional Small Business Disclosure Format (check one) Yes No X
-- ---
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INLAND CASINO CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited):
Balance Sheets -
June 30, 1996 and December 31, 1996.......................... 1
Statements of Operations -
Three months ended December 31, 1995 and 1996................ 2
Six months ended December 31, 1995 and 1996.................. 3
Statements of Cash Flows -
Six months ended December 31, 1995 and 1996.................. 4
Notes to Interim Financial Statements........................ 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION............................ 12
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS................................ 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................... 18
</TABLE>
(i)
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INLAND CASINO CORPORATION
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1996
------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 4,347,985 $ 3,492,340
Notes receivable 1,121,009
Accounts receivable 91,154 481,974
Deposits and prepaid expenses 53,130 129,634
----------- -----------
Total current assets 4,492,269 5,224,957
PROPERTY AND EQUIPMENT, NET 167,213 183,196
DEFERRED CONTRACT COSTS, NET 6,505,327 6,030,720
RESTRICTED CASH AND OTHER INVESTMENTS 2,397,993
DEFERRED TAXES 462,126 294,126
DEPOSITS AND OTHER ASSETS 145,074 103,324
----------- -----------
Total assets $11,772,009 $14,234,316
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Advances of future consulting fees $ 2,385,814 $ 2,980,739
Current portion of long-term debt 279,946 279,946
Accounts payable and accrued expenses 449,289 1,080,769
Income taxes payable 210,880 297,680
----------- -----------
Total current liabilities 3,325,929 4,639,134
----------- -----------
LONG TERM DEBT:
Note payable, less current portion 620,054 4,120,054
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.001 par, 100,000,000 shares
authorized, 12,541,793 and 3,854,548 shares
outstanding at June 30, 1996 and December 31,
1996, respectively 2,352,554 3,855
Retained earnings 5,473,472 5,471,273
----------- -----------
Total shareholders' equity 7,826,026 5,475,128
----------- -----------
Total liabilities and shareholders' equity $11,772,009 $14,234,316
=========== ===========
</TABLE>
1
<PAGE> 4
INLAND CASINO CORPORATION
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Revenue $ 1,688,922 $ 3,808,317
Costs and expenses:
General and administrative expenses 1,874,338 2,188,231
Amortization of deferred contract costs 564,180 635,720
------------ ------------
2,438,518 2,823,951
------------ ------------
Operating profit (loss) (749,596) 984,366
Other income and (expense):
Interest income 76,843
Interest expense (1,229) (103,250)
------------ ------------
(1,229) (26,407)
------------ ------------
Income (loss) before income taxes (750,825) 957,959
Income tax provision (credit) (335,000) 402,000
------------ ------------
Net income (loss) $ (415,825) $ 555,959
============ ============
Earnings (loss) per share $ (0.03) $ 0.14
============ ============
Shares used in the computation of income per
common and common equivalent share 12,541,657 4,110,823
============ ============
</TABLE>
2
<PAGE> 5
INLAND CASINO CORPORATION
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
------------ ------------
<S> <C> <C>
Revenue $ 4,341,216 $ 7,758,317
Costs and expenses:
General and administrative expenses 3,580,487 4,066,623
Amortization of deferred contract costs 1,102,507 1,240,091
------------ ------------
4,682,994 5,306,714
------------ ------------
Operating profit (loss) (341,778) 2,451,603
Other income and (expense):
Interest income 133,497
Interest expense (2,922) (119,000)
------------ ------------
(2,922) 14,497
------------ ------------
Income (loss) before income taxes (344,700) 2,466,100
Income tax provision (credit) (132,000) 1,117,000
------------ ------------
Net income (loss) $ (212,700) $ 1,349,100
============ ============
Earnings (loss) per share $ (0.02) $ 0.18
============ ============
Shares used in the computation of income per
common and common equivalent share 12,541,657 7,326,303
============ ============
</TABLE>
3
<PAGE> 6
INLAND CASINO CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
----------- -----------
<S> <C> <C>
Net cash generated by (used in) operating activities:
Net income (loss) $ (212,700) $ 1,349,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 1,118,861 1,265,295
Deferred taxes 126,000 168,000
Changes in assets and liabilities:
Notes receivable (1,121,009)
Accounts receivable (37,000) (390,820)
Prepaid expenses, deposits and other assets (333,344) (34,754)
Accounts payable and accrued expenses 115,007 631,480
Income taxes payable (380,986) 86,800
----------- -----------
Net cash generated by operating activities 395,838 1,954,092
----------- -----------
Cash used in investing activities:
Purchases of furniture and equipment (73,528) (41,185)
Deferred contract costs (891,856) (765,484)
Acquisition of revenue bonds and restricted cash (2,397,993)
-----------
Net cash used in investing activities (965,384) (3,204,662)
----------- -----------
Cash flows generated by (used in) financing activities:
Increase in advances of future
consulting fees 622,875 594,925
Payment of notes payable (19,713)
Repurchase and cancellation of common stock (1,320) (200,000)
----------- -----------
Net cash provided by financing activities 601,842 394,925
----------- -----------
Increase (decrease) in cash 32,296 (855,645)
Cash, beginning of period 1,423,826 4,347,985
----------- -----------
Cash, end of period $ 1,456,122 $ 3,492,340
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Interest expense paid $ 2,922 $ -
=========== ===========
Interest income received $ - $ 57,862
=========== ===========
Income taxes paid $ 16,152 $ 212,000
=========== ===========
Income tax refund received $ 192,316 $ -
=========== ===========
Repurchase of common stock by issuance of
notes payable $ - $ 3,500,000
=========== ===========
</TABLE>
4
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INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. PRESENTATION OF INTERIM FINANCIAL INFORMATION.
Basis of Presentation - The accompanying interim unaudited financial statements
have been prepared by Inland Casino Corporation, a Utah corporation (the
"Company" or "Inland Casino"), in conformity with generally accepted accounting
principles for interim financial information and with the rules and regulations
of the U.S. Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. The interim unaudited financial statements reflect
all normal, recurring adjustments and disclosures which are, in the opinion of
management, necessary for a fair presentation. The results of operations for the
interim periods are not necessarily indicative of the results of the full fiscal
year. The interim financial statements should be read in conjunction with the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996.
Earnings per share - Earnings per common and common equivalent share are
computed using the weighted average number of shares outstanding for the three
and six month periods ended December 31, 1995 and 1996. Equivalent shares are
those issuable upon the assumed exercise of stock options reflected under the
treasury stock method using the average market price of the Company's shares
during the periods when their effect is dilutive.
2. REORGANIZATION AND MERGER. Effective July 1, 1994, Inland Casino Partners, a
California general partnership ("ICP"), and its partners, Inland Casino
Corporation, a Nevada Corporation ("ICC I"), and Eagle Edge Partners ("EEP"),
combined to form a new Delaware Corporation, Inland Casino Corporation ("ICC
II"). Such transaction is hereinafter referred to as the "Roll-Up Transaction".
On May 22, 1995, the merger of ICC II into and with Twin Creek Exploration Co.,
Inc. ("Twin Creek"), a Utah corporation, became effective (the "Merger"). To
effect the merger, the common stock of Twin Creek was reverse split 1 for 100
and the shareholders of ICC II received 11,930,406 shares, representing
approximately 95% of the shares outstanding after the merger. The surviving
company was renamed Inland Casino Corporation ("Inland Casino"), and the fiscal
year end was changed from September 30 to June 30. The transaction was accounted
for as a recapitalization using the carryover basis of the assets and
liabilities of ICC II. Accordingly, the financial statements reflect the
financial condition, results of operations and cash flows of ICC II, and its
predecessors, for periods prior to the merger date, and combined with Twin Creek
from that date forward.
3. BUSINESS AND BASIS OF ACCOUNTING. The Company provides operational and other
consulting services for gaming operations under consulting agreements with
Native American Indian Tribes. Currently, the Company provides services to The
Barona Group of Capitan Grande Band of Mission Indians (the "Barona Tribe") in
connection with the Barona Tribe's operation of a gaming facility located north
of Lakeside, California, in eastern San Diego County. In addition, the Company
provides services to the Klamath and Modoc Tribes and the Yahooskin Band of
Snake Indians (the"Klamath Tribes") in connection with the planned Kla-Mo-Ya
Casino, to be constructed near Chiloquin, in south-central Oregon. The Company
reports revenues and expenses using the accrual method of accounting. All of the
Company's fee revenue for the three and six months ended December 31, 1995 and
1996 was generated
5
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INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
from services provided to the Barona Tribe, with the exception of $65,817 in
fees earned for consulting work performed for a tribe in New Mexico during the
three months ended December 31, 1996.
4. AGREEMENTS WITH THE BARONA TRIBE. Prior to April 1, 1996, the Company
managed, operated and maintained certain gaming and food and beverage operations
in California on behalf of the Barona Tribe in accordance with the terms and
conditions of a certain Gaming Management Agreement (the "Operations Agreement")
with the Barona Tribe, under a grant of authority from the Barona General
Council. The Company's revenue from fees under the Operations Agreement was
based upon a percentage of profits or the excess of revenue over certain
expenses generated from the gaming operations as defined in the Operations
Agreement. In March 1996, the Company entered into a Consulting Agreement with
the Barona Tribe, with an effective date of April 1, 1996, relating to the
operations of the Barona Casino (the "Initial Consulting Agreement"). In May
1996, after the parties recognized an inadvertent mistake in the provision
relating to consulting fees had been made, the Company and the Barona Tribe
agreed to an Amended and Restated Consulting Agreement (the "Barona Consulting
Agreement" or "Consulting Agreement"). In addition, the Company and the Barona
Tribe entered into a Mutual Release releasing each other from certain rights,
duties and obligations set forth in the Operations Agreement (the "Release").
The Barona Consulting Agreement and the Release have effective dates of April 1,
1996.
The Barona Consulting Agreement provides for an initial term of three years,
with an option to extend the agreement for an additional five year period. Under
the terms of the Barona Consulting Agreement, the Barona Tribe has the right to
draw from the gross revenues of the Barona Casino an annual income stream at
least equal to the distributions received by the Barona Tribe for the twelve
month period ended December 31, 1995, and fees paid or payable to the Company
may accordingly be reduced.
In March 1996, the Barona Tribe submitted the Initial Consulting Agreement to
the NIGC and in May 1996 the NIGC determined that the Initial Consulting
Agreement was not a management agreement and, therefore not subject to NIGC
approval, and forwarded such agreement to the Bureau of Indian Affairs (the
"BIA").
In January 1997, the Company entered into a settlement agreement with the NIGC
regarding the Company's relationship with the Barona Tribe. Under the terms of
the settlement agreement, the NIGC held that the relationship between the Barona
Tribe and the Company had benefited the Barona Tribe, and that the Company had
not violated any law. The Company agreed to reimburse the NIGC for
administrative, investigative and legal expenses in the aggregate amount of
$250,000. In addition, the Company agreed to contribute $2 million to the Barona
Tribe for general improvement on the reservation, payable in five equal annual
installments, commencing in January 1997. The $250,000 reimbursement to NIGC was
accrued as an expense as of December 31, 1996, and the Company will account for
the $2 million in payments as deferred contract costs, which will be amortized
over the remaining life of the Consulting Agreement with the Barona Tribe.
In January 1997, the Company submitted the Consulting Agreement to the NIGC.
Although there can be no assurance that the NIGC will conclude that the
Consulting Agreement is not a management agreement, the Company believes that,
based upon its prior ruling with respect to the Initial Consulting Agreement,
and based on its findings in the settlement agreement, the NIGC will make a
similar determination with respect to the Consulting Agreement. If the BIA
determines that the Initial Consulting Agreement and/or
6
<PAGE> 9
INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
the Consulting Agreement is subject to its review, there can be no assurance
that such Agreements will be approved by the BIA. Failure to approve the Initial
Consulting Agreement or the Consulting Agreement may have a material adverse
effect on the business and financial condition of the Company.
5. CONSULTING AGREEMENT WITH THE KLAMATH TRIBES. In June 1996, the Company
entered into a consulting agreement (the "Klamath Agreement") with the Klamath
Tribes. The Klamath Tribes plan to build and operate the Kla-Mo-Ya Casino, to be
constructed near Chiloquin, in south-central Oregon. The opening date of the
facility is scheduled for mid-summer of 1997.
Under the terms of the Company's consulting agreement with the Klamath Tribes,
the Company will consult with and advise the Tribes, provide technical
assistance and training, and provide services as may be directed by the Tribes
in such areas as organization and administration, financing, planning and
development, gaming activities, internal controls, accounting systems and
procedures, engineering and maintenance, housekeeping, human resources,
marketing and advertising, purchasing, surveillance, security and food and
beverage operations.
The Kla-Mo-Ya Casino project is to be constructed on a 42-acre site which has
been acquired by the Klamath Tribes, and which is in the process of being
converted to fee simple property and transferred to the U. S. Government to be
held in trust for the benefit of the Tribes. In connection with the acquisition
of the 42-acre parcel, the Company loaned $1,121,009 to the Klamath Tribes
pursuant to the terms of an 8.25% unsecured promissory note. The loan was repaid
in January 1997. The Klamath Tribes plan to construct a temporary gaming
facility on the site, at an estimated cost of approximately $9.5 million.
Funding for the land purchase and construction of the facility has been obtained
by the sale and issuance of $4,735,000 in revenue bonds issued by the Tribes. In
connection with such bond financing, the Company expended $879,933 to purchase
revenue bonds with a face amount of $900,000. As a condition of the bond
financing, the Company agreed to purchase and hold at least $500,000 face amount
of the such bonds for a five year period. In January 1997, the Company sold
$200,000 face amount of such bonds for $197,415. Preopening costs and expenses
of approximately $1.5 million are being financed by loans made pursuant to a
bank credit agreement with the Klamath Tribes. The Company has pledged to such
bank a certificate of deposit for $1,518,000 as collateral for such loans. In
addition, the Klamath Tribes plan to obtain lease financing for approximately
$3.4 million in gaming and other equipment, signage, furniture and fixtures.
Under the terms of the Tribal State Compact for Regulation of Class III Gaming
between The Klamath Tribes and the State of Oregon (the "Compact"), the Klamath
Tribes plan to open the Kla-Mo-Ya Casino initially as a temporary facility which
will permit the operation of 300 video lottery terminals for a twenty-four-month
period. Under the terms of the Compact, at the end of the twenty-four-month
period, the Klamath Tribes must either increase the square footage of the casino
facility to provide that the video lottery terminal area comprises no more than
fifteen percent (15%) of the total square footage of the casino facility, or
reduce the video lottery terminal area (and therefore the number of terminals or
machines) to equal fifteen percent (15%) of the square footage of the temporary
facility. There is no assurance that financing can be obtained by the Klamath
Tribes to complete either the construction of a permanent facility or the
conversion of the temporary facility into a permanent facility.
If the Klamath Tribes are unable to open the Kla-Mo-Ya Casino or experience long
delays in its opening, or if cash flow from its operations is not adequate to
pay its obligations, the Company may lose all or a portion of its investment in
the revenue bonds it purchased and its certificate of deposit pledged as
7
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INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
collateral for bank loans to the Klamath Tribes, which could have a material
adverse effect on the financial condition of the Company.
As of December 31, 1996, the Company incurred costs and expenses and made
initial payments to certain contractors totalling approximately $428,000 on
behalf of the Klamath Tribes. In January 1997, the Company received
reimbursement for these payments from the Klamath Tribes. The Company has signed
contracts for the construction of the Kla-Mo-Ya Casino totalling approximately
$1,250,000 as of December 31, 1996. The Company is currently in the process of
assigning those contracts to the Klamath Tribes. While the Company believes that
all liabilities under the construction contracts will be assumed directly by the
Klamath Tribes, payments, if any, that the Company is required to make which are
not reimbursed by the Klamath Tribes, could result in losses to the Company,
which could have a material adverse effect on the Company's financial condition.
The term of the Klamath Agreement is 5 years, commencing with the date of
opening of the Kla-Mo-Ya Casino. At any time after the first full year of the
Agreement, the Tribes may terminate the Agreement by giving 30 days' notice to
the Company, during which time the Agreement will remain in effect, and by
paying the Company an amount equal to 12 times the average consulting fees paid
over the past 12 months. The Klamath Tribes will not be required to make these
early termination payments essentially if, upon review and investigations, the
Company does not meet the criteria necessary to qualify as a vendor to Indian
gaming, as determined by the State of Oregon, the Klamath Tribes or the NIGC.
Either party may terminate the Agreement in the event the other party (i)
commits or knowingly allows to be committed any act of theft or embezzlement; or
(ii) commits a material breach of the Agreement, defined as a failure of either
party to perform any duty or obligation required under the Agreement. In
addition, the Tribes may terminate the Agreement if the Company commits a
material breach of any of the Company's representations or fails to disclose
pertinent information that adversely affects its ability to carry out its
responsibilities under the Agreement. After notice and time to cure, remedies
for breach include the Company's meeting and conferring in good faith with the
Tribes' Executive Committee and binding arbitration before the American
Arbitration Association in the State of Oregon.
For services rendered pursuant to the Klamath Agreement, the Company will
receive a base consulting fee of $25,000 per month, commencing from the opening
of the Kla-Mo-Ya Casino if the Casino earns an operating profit of at least
$50,000 per month, and will receive additional consulting fees if certain
operating levels are reached. From June 1996 through to the planned opening of
the casino, the Company will be reimbursed for its out-of-pocket costs and
expenses related to the Kla-Mo-Ya Casino.
Since the Compact permits the Tribe to offer Class III games at its casino, as
that term is defined in the Indian Gaming Regulatory Act and which would include
many of the games allowed in the State of Oregon, including blackjack and video
lottery terminals, the Klamath Agreement must be reviewed by the National Indian
Gaming Commission (the "NIGC") The Klamath Agreement was submitted by the Tribe
to the NIGC, and in January 1997 the NIGC determined that such agreement was not
a management agreement and, therefore not subject to NIGC approval, and
forwarded such agreement to the BIA. If the BIA determines that the Klamath
Agreement is subject to its review, there can be no assurance that such
agreement will be approved by the BIA. Failure to approve Klamath Agreement may
have a material adverse effect on the business and financial condition of the
Company.
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INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
The State of Oregon requires that vendors providing goods and services to Indian
gaming operations apply and receive approval by the Gaming Division of the
Oregon State Police. The Company has completed and submitted its application,
but there is no assurance that the Company will receive such approval. The
Klamath Tribes will operate the Kla-Mo-Ya Casino under the provisions of the
Compact with the State of Oregon.
6. DEFERRED CONTRACT COSTS. Pursuant to oral agreements with the Barona Tribe,
the Company has agreed to fund, or to arrange acceptable financing for, the
construction of facility improvements, furniture and equipment, the
establishment of initial working capital and the losses, if any, of the Barona
Casino's operations. Because the Barona Tribe will not allow its land to be
encumbered and has not assumed liability for any of these obligations, the
Company has capitalized those costs incurred as deferred contract costs, since
(i) the Company had the ultimate responsibility for such costs incurred in
connection with developing the Barona Casino and (ii) management believes that
these costs are fully recoverable over the life of the Operations Agreement and
the Consulting Agreement through receipt of fee income from the Barona Casino.
However, given the nature of the asset, if the recoverability is determined to
be not probable, the Company will expense the unamortized portion. On an ongoing
basis, the Company reviews the valuation and recoverability of these unamortized
deferred contract costs. As part of this review, the Company estimates the
discounted present value of the future projected net income generated by the
Barona Casino and the resulting revenue to the Company to determine whether
impairment has occurred.
Through March 31, 1996, amortization of these deferred costs was calculated as
the greater of the amortization using (i) the straight-line method over the
remaining term of the Operations Agreement or (ii) an accelerated method,
whichever is greater. The accelerated amortization was equal to the excess of
fees earned over 30% of Casino operating income. Beginning April 1, 1996,
amortization of the deferred costs is calculated using the straight-line method
over the remaining term of the Consulting Agreement. Under the terms of the
Operations Agreement and the Consulting Agreement, title to the Barona Casino
facilities, furniture and equipment rests solely with the Barona Tribe, unless
the Barona Tribe agrees otherwise. The Consulting Agreement can be terminated by
the Barona Tribe for any material breach by the Company, as defined in such
Agreement. Management is not aware of any material breach of the Consulting
Agreement.
7. COMMON STOCK REPURCHASE. On March 4, 1996, the Company repurchased 1,908,865
shares of its common stock and an option to purchase 894,780 shares of its
common stock from Jack R. Smith, a former executive officer, director, and
principal shareholder of the Company, for consideration totaling $1,400,000. The
purchase price consisted of a $500,000 cash payment and issuance of a $900,000,
7% unsecured promissory note, payable in three equal annual installments of
principal and interest of $342,947. In addition, if the Company's common stock
reaches certain levels during measurement periods prior to March 1998 and 1999,
Mr. Smith will be entitled to receive up to $250,000 for each measurement
period. On September 30, 1996, pursuant to a Stock Purchase and Settlement and
Release Agreement dated September 27, 1996 (the "Stock Purchase Agreement") by
and among Jonathan Ungar, Alan Henry Woods and the Company, the Company
purchased 3,424,913 shares of its common stock from Mr. Ungar, a former director
of the Company, and 3,353,331 shares of its common stock from Mr. Woods. The
terms of the Stock Purchase Agreement include (i) a cash payment of $200,000
upon closing, (ii) the issuance of unsecured promissory notes in the principal
amount of $3,500,000, with interest at the rate of 10%, payments of interest
only for the first three years, followed by three equal
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INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
annual installments of principal repayment, with interest on the remaining
balance commencing September 30, 1997, (iii) a contingent obligation (the
"Initial Contingent Obligations") to issue a total of $9,856,488 in unsecured
promissory notes ($4,981,276 in principal amount to Mr. Ungar and $4,875,212 in
principal amount to Mr. Woods) including $2,000,000 in principal amount of notes
each year for four years and $1,856,488 in principal amount of notes to be
issued in a fifth year, each note with interest at 10%, payment of interest only
for three years, followed by three equal annual installments of principal plus
interest on the remaining principal balance, and (iv) another contingent
obligation to issue an additional $3,000,000 in principal amount ($1,515,000 to
Mr. Ungar and $1,485,000 to Mr. Woods) in unsecured promissory notes (or cash,
if the Company has closed a firm commitment underwritten public offering of
securities of not less than $35 million prior to the contingencies being met)
when and if certain conditions are met, with interest at the then "preferred" or
"prime" rate of interest charged to the Company by the Company's principal bank,
with interest only for three years from the date of issuance, followed by two
equal annual installments of principal, plus interest on the remaining principal
balances.
The obligations to issue the Initial Contingent Obligations (i.e., $2,000,000 in
notes for four years and $1,856,488 in notes for a fifth year) are contingent
upon the Company's retained earnings balance being at least $4,000,000 for the
fiscal year ending immediately prior to the date the notes are to be issued.
Dividends paid by the Company and certain other payments, if any, are to be
added back to the retained earnings balance for purposes of this contingency
calculation. The period for determining the Company's obligation to issue each
of the $2,000,000 and $1,856,488 in principal amount of notes is an eight year
period commencing with the fiscal year ending June 30, 1997. If the $4,000,000
retained earnings test is not met in one year, the Company is not obligated to
issue the notes in that year. However, the test is to be made each year for
eight successive years commencing with the fiscal year ending June 30, 1997, but
each year can be used only once during the eight year period, and only five out
of the eight years may be used. The Second Contingent Obligation is subject to
the following conditions: (i) the Barona Tribe enters into a Class III Gaming
Compact (the "Compact") with the State of California which permits the operation
of video gaming machines at the Barona Casino in San Diego County; (ii) at the
time that the Barona Tribe enters into the Compact, the Company has a consulting
agreement or similar contractual arrangement with the Barona tribe: and (iii)
consulting fees paid to the Company by the Barona Tribe relating to the Barona
Casino for any consecutive 12-month period within five years after the Barona
Tribe has entered into the Compact, equals or exceeds one and one-half times
such consulting fees for the year ended June 30, 1996. The Company intends to
record as the additional cost of the repurchase of its common stock, each
contingent obligation as each contingency or condition is met. All payments
pursuant to the Stock Purchase Agreement are further subject to compliance with
certain state law provisions and the Company's Articles of Incorporation
concerning repurchase transactions.
8. COMMITMENTS AND CONTINGENCIES - LITIGATION. Indian Gaming is the subject of
numerous lawsuits in various court jurisdictions at both federal and state
levels. These court cases are attempting to define the permissible gaming
activities on Indian reservations, the states' rights or limitations on control
of gaming, and numerous other issues. The Barona Tribe is not a party to these
cases nor is the Barona Reservation within the jurisdiction of certain courts in
which many of these cases will be decided; therefore, the impact, if any, on the
operations of the Barona Casino cannot be determined at this time.
The impact of decisions in various cases, however, could have a significant
impact on the operations of Barona Casino and the Company when decided.
Specifically, current cases are addressing the legality of electronic gaming
equipment and certain card games in California (currently used in the Barona
Casino)
10
<PAGE> 13
INLAND CASINO CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
and the enforcement rights applicable to Federal and State governments. Various
courts have ruled in different cases, or in different hearings on the same case,
both in the states' favor and in the tribes' favor on the same or similar
issues. There are appeals remaining in a number of cases and other cases may
rise. Until there are definitive rulings by the courts, the legality of the
gaming activities in California will not be known.
On June 30, 1994, the U.S. Attorney of the Southern District of California
announced a verbal understanding with a number of Southern California tribes,
including the Barona Tribe, that would allow the Barona Tribe to continue to
operate without expansion of gaming activities until one or more of the
following occurs:
- - A compact with the State of California is negotiated or the Secretary
of the Interior that expressly authorizes gaming, such as certain card
or electronic/video gaming, which have not been previously addressed;
- - Entry of final judgments and exhaustion of all appellate remedies in
certain suits pending before federal courts;
- - Enactment of federal legislation that authorizes the operation of the
electronic/video games at issue without a tribal-state compact;
- - Amendment of the NIGC's regulations to include the electronic/video
games within the definition of gaming or permissible technologic aids
thereto which are not subject to State compact; or
- - Material breach of the understanding by the tribes.
Management is not aware of any violations of the verbal understanding by the
Barona Tribe or any other Indian Tribe which is a party to such understandings.
The Company is also subject to claims and lawsuits which arise in the ordinary
course of business. The Company does not anticipate any material losses with
respect to such existing or pending claims and lawsuits.
11
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
From its formation through March 31, 1996, the Company provided services for the
Barona Tribe at the Barona Casino under the terms of the Operations Agreement,
including providing assistance to the Barona Tribe in the development and
expansion of the "Big Top" facility at the Barona Casino. Through March 31,
1996, the Company earned fees based upon a percentage of the "net profits"
generated by the Barona Casino. As used in this Report, the term "net profits"
is not intended to mean net profits as defined by generally accepted accounting
principles or by the Indian Gaming Regulatory Act ("IGRA"). Generally, the
Operations Agreement defined "net profit" as the total amount of moneys
remaining from monthly gross receipts after payment of the operating expenses
for such month which amount shall be calculated on a cash basis. The Company
provided certain personnel, at its expense, to operate the activities at the
Barona Casino, and it entered into agreements such as leases or other contracts
for the Barona Casino in which the Company was the obligor (e.g., leases for
gaming equipment, the Big Top lease, etc.).
Effective April 1, 1996, the Company commenced providing consulting services to
the Barona Tribe pursuant to the Consulting Agreement. The Company and the
Barona Tribe also entered into a Mutual Release, effective April 1, 1996,
releasing each other from their respective duties and obligations under the
Operations Agreement.
As part of its obligation to the Barona Tribe under the Operations Agreement,
Inland Casino provided significant financing for the construction and expansion
of the Barona Casino. The financing costs have been recognized as an asset in
the financial statements of the Company, designated as deferred contract costs,
and are being amortized to expense over the combined lives of the Operations and
Consulting Agreements through March 1999. The recovery of these deferred costs
is achieved through the fees earned by Inland Casino pursuant to the agreements
with the Barona Tribe. Construction financing obligations with the Barona Tribe,
such as those described herein, are incurred upon the recommendation of the
Company and are subject to acceptance by the Barona Tribe.
In addition to its obligations under the Consulting Agreement and collateral
contracts for the benefit of the Barona Tribe, the Company's consulting
activities include assisting clients in arranging financing to support casino
construction projects and monitoring of Indian Gaming legislative and litigation
matters.
In June 1996, the Company began providing consulting services for the
Confederated Tribes of Siletz Indians of Oregon (the "Siletz Tribes") at the
Chinook Winds Gaming and Convention Center in Lincoln City, Oregon, and with the
Associated Tribes of Northwest Indians in Oregon. In October 1996, the
consulting agreement with the Siletz Tribes was terminated.
Also in June 1996, the Company entered into a consulting agreement with the
Klamath Tribes to assist with the development, construction and eventual
operation of the Kla-Mo-Ya Casino, to be constructed near Chiloquin, in
south-central Oregon. The opening date of the facility is scheduled for
mid-summer of 1997. Under the terms of its agreement with the Klamath Tribes,
the Company will not receive fees for consulting services until the facility is
opened and operating, and earning at least $50,000 in operating profits. In
connection with the financing of the Kla-Mo-Ya Casino project, the Company
expended $879,933 to purchase revenue bonds with a face amount of $900,000, as
part of a $4,735,000 face amount of bond financing. In January 1997, the Company
sold $200,000 face amount of such bonds for $197,415. In addition to the bond
financing, the Company pledged a certificate of deposit for $1,518,000 as
collateral for bank loans to the Klamath Tribes, and signed contracts for the
construction of the Kla-Mo-Ya Casino totalling approximately $1,250,000 as of
December 31, 1996. The Company is currently in the process of assigning the
contracts to the Klamath Tribes. While the Company believes that all liabilities
under the construction contracts will be assumed by the Klamath Tribes,
payments, if any, that the Company is required to make which are not reimbursed
to the Company by the Klamath Tribes, could result in losses to the Company,
which could have a material adverse effect on the Company's financial
12
<PAGE> 15
condition. If the Klamath Tribes are unable to complete the construction of the
Kla-Mo-Ya Casino, or for any other reason are unable to open and operate the
Kla-Mo-Ya Casino, or if the Kla-Mo-Ya Casino sustains operating losses after
opening, the Company may lose a portion or all of its approximately $700,000
investment in revenue bonds and its pledged $1,518,000 certificate of deposit,
which could have a material adverse effect on the Company's financial condition.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH THE THREE MONTHS ENDED
DECEMBER 31, 1996.
REVENUE. Revenue increased 125.5% from $1,688,922 for the three months ended
December 31, 1995 to $3,808,317 for the three months ended December 31, 1996, as
a result of higher profit margins at the Barona Casino during the same
three-month period. The Company's revenue was solely from fees earned under
agreements with the Barona Tribe; namely, the Operations Agreement during the
three months ended December 31, 1995, and the Consulting Agreement during the
three months ended December 31, 1996, with the exception of $65,817 in fees
earned from consulting services provided to a tribe in New Mexico during the
three months ended December 31, 1996.
OPERATING EXPENSES. General and administrative expenses increased 16.7% from
$1,874,338 for the three months ended December 31, 1995 to $2,188,231 for the
three months ended December 31, 1996, resulting primarily from increases in
professional and other consulting fees, an increase in the provision for
doubtful accounts to cover anticipated losses resulting from certain consulting
engagements, increases in travel expenses incurred in connection with consulting
work in Oregon and New Mexico, an increase in compensation expense (reflecting a
net increase in the number of full-time employees from 23 to 30 from December
31, 1995 to December 31, 1996 and increases in salaries and other benefits),
increases in allowable political contributions, and increases in costs incurred
in connection with the NIGC settlement agreement. The increases were partially
offset by decreases in sponsorships costs, other promotional costs, charitable
contributions and business development costs.
Amortization of deferred contract costs increased 12.7% from $564,180 for the
three months ended December 31, 1995 to $635,720 for the three months ended
December 31, 1996, resulting primarily from calculating amortization on a higher
asset value for the three months ended December 31, 1996.
OTHER INCOME AND EXPENSE. For the three months ended December 31, 1996, interest
income was $76,843 compared to zero for the three months ended December 31,
1995. Prior to April 1, 1996, while the Company performed services at the Barona
Casino under the terms of the Operations Agreement with the Barona Tribe, it was
determined by management that as long as the Company had outstanding advances of
future fees due to the Barona Casino, interest earned on excess cash balances
would be paid to the Barona Casino. Commencing April 1, 1996, the effective date
on which the Consulting Agreement between the Company and the Barona Tribe
replaced the Operations Agreement, the Company began to realize interest income
on its cash balances available for investment.
Interest expense increased from $1,229 for the three months ended December 31,
1995 to $103,250 for the three months ended December 31, 1996, primarily as a
result of accrued interest during the three months ended December 31, 1996 on
notes payable issued in March 1996 in connection with the repurchase of
1,908,865 shares of the Company's common stock from a former officer and
director of the Company, and in September 1996 in connection with the repurchase
of 6,778,244 shares of the Company's common stock from two major shareholders,
including a former director of the Company.
INCOME TAX PROVISION. The Company recorded an income tax provision $402,000 for
the three months ended December 31, 1996, based on income before income taxes of
$957,959 for the period, compared to an income tax credit of $335,000 based on
an operating loss of $750,825 for the three months ended December 31, 1995.
13
<PAGE> 16
SIX MONTHS ENDED DECEMBER 31, 1995 COMPARED WITH THE SIX MONTHS ENDED DECEMBER
31, 1996.
REVENUE. Revenue increased 78.7% from $4,341,216 for the six months ended
December 31, 1995 to $7,758,317 for the six months ended December 31, 1996, as a
result of higher profit margins at the Barona Casino during the same six-month
period. With the exception of $65,817 in fees earned from consulting services
provided to a tribe in New Mexico, the Company's revenue was solely from fees
earned under agreements with the Barona Tribe; namely, the Operations Agreement
during the six months ended December 31, 1995, and the Consulting Agreement
during the six months ended December 31, 1996.
OPERATING EXPENSES. General and administrative expenses increased 13.6% from
$3,580,487 for the six months ended December 31, 1995 to $4,066,623 for the six
months ended December 31, 1996, resulting primarily from increases promotional
costs, an increase in the provision for doubtful accounts to cover anticipated
losses resulting from certain consulting engagements, increases in professional
and other consulting fees, an increase in compensation expense (reflecting a net
increase in the number of full-time employees and increases in salaries and
other benefits), increases in allowable political contributions, increases in
costs incurred in connection with the NIGC settlement agreement, and increases
in travel expenses incurred in connection with consulting work in Oregon and New
Mexico. The increases were partially offset by decreases in sponsorship costs
and charitable contributions.
Amortization of deferred contract costs increased 12.5% from $1,102,507 for the
six months ended December 31, 1995 to $1,240,091 for the six months ended
December 31, 1996, resulting primarily from calculating amortization on a higher
asset value for the six months ended December 31, 1996.
OTHER INCOME AND EXPENSE. For the six months ended December 31, 1996, interest
income was $133,497 compared to zero for the six months ended December 31, 1995.
Prior to April 1, 1996, while the Company performed services at the Barona
Casino under the terms of the Operations Agreement with the Barona Tribe, it was
determined by management that as long as the Company had outstanding advances of
future fees due to the Barona Casino, interest earned on excess cash balances
would be paid to the Barona Casino. Commencing April 1, 1996, the effective date
on which the Consulting Agreement between the Company and the Barona Tribe
replaced the Operations Agreement, the Company began to realize interest income
on its cash balances available for investment.
Interest expense increased from $2,922 for the six months ended December 31,
1995 to $119,000 for the six months ended December 31, 1996, primarily as a
result of accrued interest during the six months ended December 31, 1996 on
notes payable issued in March 1996 in connection with the repurchase of
1,908,865 shares of the Company's common stock from a former officer and
director of the Company, and in September 1996 in connection with the repurchase
of 6,778,244 shares of the Company's common stock from two major shareholders,
including a former director of the Company.
INCOME TAX PROVISION. The Company recorded an income tax provision $1,117,000
for the six months ended December 31, 1996, based on income before income taxes
of $2,466,100 for the period, compared to an income tax credit of $132,000 based
on an operating loss of $344,700 for the six months ended December 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES.
During the six months ended December 31, 1996, the Company's cash position
decreased $855,645 from the June 30, 1996 balance of $4,347,985, to $3,492,340
at December 31, 1996. The decrease was principally due to the use of cash for
investing activities of $3,204,662, partially reduced by net cash generated by
operating activities of $1,954,090 during the period and by cash flows generated
by financing activities of $394,925.
Notes receivable increased as a result of a $1,212,009 loan to the Klamath
Tribes for land acquisition, which was repaid in January 1997. Accounts
receivable increased $390,820 during the six months ended
14
<PAGE> 17
December 31, 1996 primarily as a result of $428,123 in construction and other
costs paid on behalf of the Klamath Tribes in connection with the development of
the Kla-Mo-Ya Casino, which was also repaid in January 1997.
Accounts payable and accrued expenses increased $631,480 as a result of accrued
costs and expenses associated with the NIGC settlement agreement, accrued
expenses incurred in connection with consulting contracts, and accrued interest
on notes payable issued in connection with the repurchase of common stock.
Deferred contract costs have been financed principally by cash generated from
operations, advances of future fees from the Barona Casino, working capital and
advances and capital contributions from shareholders. From the inception of the
Company through December 31, 1996, in addition to its general and administrative
expenses, the Company's most significant expenditure has been the funding of the
deferred contract costs related to an expansion of the facilities at the Barona
Casino. Net cash provided by operations from fees earned during this same period
was insufficient by itself to fund the deferred contract costs. In addition to
fees earned under the Operations and Consulting Agreements, the Company also has
received advances against future fees from the Barona Tribe and received capital
contributions from its shareholders. The increase in deferred contract costs
from $13,160,953 at June 30, 1996 to $13,926,437 at December 31, 1996, was
financed primarily by an increase of $594,925 in advances of future fees from
the Barona Casino during the same period. At December 31, 1996, outstanding
advances of future fees from the Barona Casino were $2,980,739. Advances do not
bear interest and are due on demand.
Cash flows used in financing activities for the six months ended December 31,
1996 include the purchase of a $1,518,000 bank certificate of deposit, which has
been pledged as collateral by the Company to secure loans made pursuant to a
bank credit agreement with the Klamath Tribes to finance preopening costs and
expenses of approximately $1.5 million, and an $879,933 investment in $900,000
face amount of revenue bonds issued by the Klamath Tribes. In January 1997, the
Company sold $200,000 face amount of the revenue bonds for $197,415, reducing
its net investment in the bonds to $682,578. Cash flows used in financing
activities also include $200,000 in payments related to the repurchase of shares
of common stock. Cash flows generated by financing activities during the six
months ended December 31, 1996 included an increase of $594,925 in advances of
future fees from the Barona Casino.
Long term debt increased $3,500,000, as a result of the issuance of notes
payable in connection with the repurchase of shares of common stock.
It is the Company's intention to assist the Barona Tribe in funding, or finding
acceptable sources of funding for future improvements in the Barona Casino.
Depending on the nature and extent of the improvement project, to the extent
practicable, it is the Company's intent to first explore funding such
improvement projects from the Company's working capital and through advances of
future fees, before seeking outside debt or equity financing. However, outside
sources of financing may be required or sought at any time.
Inland Casino has announced plans to expand and improve the existing facilities
at the Barona Casino, which expansion is subject to the approval of the Barona
Tribe and also is subject to obtaining appropriate financing. The expansion will
not increase the number of gaming devices, but is expected to expand off-track
betting and other non-gaming activities, as permitted under the verbal agreement
with the U.S. Attorney for the Southern District of California and the compact
with the State of California concerning off-track betting. This proposed
expansion project is estimated to cost up to $17.5 million and the Company and
the Barona Tribe are exploring financing alternatives for the project.
The Barona Casino and all of the related facilities are capital improvements
upon land which belongs to the Barona Tribe. As such, the Company has no
ownership whatsoever in any of the improvements to such land. All of these
improvements belong to the Barona Tribe.
15
<PAGE> 18
In October, 1996, the Company cancelled a bank credit agreement. Pursuant to
such agreement, among other things, the Company granted to the bank a security
interest in the Company's assets and an immediately exerciseable warrant to
purchase 40,000 shares of the Company's common stock at a price of $5.00 per
share. Pursuant to such cancellation, the bank agreed to cancel the credit
agreement and terminate its security interest in the Company's assets, but
retained the warrant. During the six months ended December 31, 1996 and all
prior periods, the Company did not utilize such credit facility.
SEASONALITY.
The Barona Casino is located approximately 30 miles east of downtown San Diego,
California where the population is relatively stable throughout the year,
although it peaks to some extent due to tourism during the summer months and to
a lesser extent during the winter months. On the basis of its experience to
date, the Company anticipates that the Barona Casino's business may peak in
summer and, to some extent, in winter, and may decline somewhat in early spring
and late fall. However, at this time, the Company cannot accurately predict the
continued effect of seasonality on its business.
INFLATION.
To date, inflation has not had a material impact on the Company's financial
condition or its results of operations.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS AND FORWARD-LOOKING
STATEMENTS.
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS.
Gaming on Indian land is extensively regulated by Federal, State and Tribal
governments. The present regulatory environment is extremely uncertain because
of certain pending litigation and legislation. Adverse findings for any of the
Indian tribes in any of the pending actions could have a material adverse effect
on the operations of Inland Casino, as would criminal and civil enforcement
actions taken by federal agencies which could be commenced before the outcome of
such litigation is known.
In addition, the Company's Consulting Agreements with the Barona Tribe and the
Klamath Tribes have not yet been approved by all regulatory authorities. If the
Consulting Agreements (particularly, the Barona Consulting Agreement) are not
approved or are significantly modified from the standpoint of consulting
revenue, such action would have a material adverse effect on the business and
financial condition of the Company.
In any event, any material reduction in fees payable to the Company, whether as
a result of a modification to the agreements between the Company and the Barona
Tribe as a result of regulatory compliance requirements or weakness in the
operations of the Barona Casino, could have a material adverse effect on the
business and financial condition of the Company, if the Company could not either
reduce expenses or increase revenues from other sources.
FORWARD-LOOKING STATEMENTS.
Included in the Notes to the Interim Financial Statements, this Item 2.
Management's Discussion and Analysis or Plan of Operation and elsewhere in this
Report are certain forward-looking statements reflecting the Company's current
expectations. Although the Company believes that its expectations are based on
reasonable assumptions, there can be no assurance that the Company's financial
goals or expectations will be realized. Numerous factors may affect the
Company's actual results and may cause results to differ materially from that
expressed in forward-looking statements made by or on behalf of the Company.
Some of these factors include the uncertainty involved in the regulatory
approval process relating to the Consulting Agreement and the Klamath Agreement,
the outcome of a variety of pending litigation and legislation at the federal
and state levels regarding Indian gaming; the availability of funding
alternatives to fulfill certain contemplated development projects at the Barona
Casino and the Kla-Mo-Ya Casino; and general economic factors affecting the
gaming industry in general and Indian gaming in particular in the respective
geographic markets within which the Company competes.
16
<PAGE> 19
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
On December 12, 1996, the Company held its Annual Meeting of Shareholders. At
such Meeting, the following matters were approved by the shareholders:
(a) Duane M. Eberlein, Forrest J. Gerard, Andrew B. Laub, Jana McKeag,
G. Fritz Opel, Arthur R. Pfizenmayer, Cornelius E. ("Neil") Smyth and L. Donald
Speer II were each elected to serve as directors of the Company to hold office
for a term of one year and until their respective successors are elected and
qualified. The tabulation of the votes cast for election of Directors was as
follows:
<TABLE>
<CAPTION>
Nominee Votes For Votes Withheld
------- --------- --------------
<S> <C> <C>
Duane M. Eberlein 3,542,246 80
Forrest J. Gerard 3,542,271 55
Andrew B. Laub 3,542,256 70
Jana McKeag 3,542,326 0
G. Fritz Opel 3,542,216 110
Arthur R. Pfizenmayer 3,542,246 80
Cornelius E. ("Neil") Smyth 3,542,271 55
L. Donald Speer II 3,542,266 60
</TABLE>
and
(b) The Company's 1996 Nonemployee Directors Stock Option Plan was
approved. The tabulation of the votes was as follows:
<TABLE>
<S> <C>
Votes For 3,495,956
Votes Against 41,171
Abstentions 9,123
Broker Non-Votes 6,729
</TABLE>
17
<PAGE> 20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibit No.
3.1 Amended and Restated Articles of Incorporation of the
Company (formerly known as Twin Creek Exploration Co.,
Inc.), previously filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-KSB for the fiscal year ended June
30, 1995, filed with the U.S. Securities and Exchange
Commission (the "Commission") on October 12, 1995 (File No.
0-11532), which is hereby incorporated herein by reference.
3.2 Amended and Restated By-laws of the Company (formerly known
as Twin Creek Exploration Co., Inc.), previously filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-QSB
for the quarterly period ended March 31, 1996, filed with
the Commission on May 17, 1996 (File No. 0-11532), which is
hereby incorporated herein by reference.
10.1 Standard Form of Agreement Between Owner and Architect,
dated October 24, 1996 between Inland Casino Corporation,
Consultant, and Gaming Environments Design, Inc., in
connection with the development and construction of the
Kla-Mo-Ya Casino by the Klamath Tribes.
10.2 (a) Letter Agreement dated October 24, 1996 between Inland
Casino Corporation and Nelson-Bourdages, Inc. P.S., for
structural engineering consulting services in connection
with the development and construction of the Kla-Mo-Ya
Casino by the Klamath Tribes.
10.2 (b) Letter Agreement dated October 24, 1996 between Inland
Casino Corporation and Nelson-Bourdages, Inc. P.S., for
civil engineering consulting services in connection
with the development and construction of the Kla-Mo-Ya
Casino by the Klamath Tribes.
10.3 Abbreviated Form of Agreement Between Owner and Contractor,
dated December 3, 1996 between Inland Casino Corporation and
Pacific Industries Northwest, Inc., in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.4 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 3, 1997 between Inland Casino
Corporation and Coit Power Incorporated, in connection with
the development and construction of the Kla-Mo-Ya Casino by
the Klamath Tribes.
10.5 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 6, 1997 between Inland Casino
Corporation and Bellet Construction, in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
18
<PAGE> 21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (Continued).
(a) Exhibits.(Continued)
Exhibit No.
10.6 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 6, 1997 between Inland Casino
Corporation and L.J. Barney and Sons, in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.7 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 22, 1997 between Inland Casino
Corporation and Powley Plumbing, Inc., in connection with
the development and construction of the Kla-Mo-Ya Casino by
the Klamath Tribes.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
During the three months ended December 31, 1996, a Current Report on Form 8-K
dated October 1, 1996 was filed by the Company, disclosing under Item 5. Other
Events the terms of the repurchase of 6,778,244 shares of the Company's common
stock from two of its principal shareholders on September 30, 1996, pursuant to
that certain Stock Purchase and Settlement and Release Agreement by and among
the Company, Jonathan Ungar and Alan Henry Woods, dated September 27, 1996 (the
"Stock Purchase Agreement"). The Stock Purchase Agreement and certain related
promissory notes were filed as exhibits under Item 7 of the Report.
19
<PAGE> 22
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INLAND CASINO CORPORATION,
a Utah Corporation (Registrant)
Date: February 14, 1997 By: /S/ Duane M. Eberlein
--------------------------
Duane M. Eberlein
Vice President, Chief Financial
Officer and Secretary
(Principal Financial and
and Accounting Officer)
20
<PAGE> 23
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Amended and Restated Articles of Incorporation of the Company
(formerly known as Twin Creek Exploration Co., Inc.), previously
filed as Exhibit 3.1 to the Company's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1995, filed with the
U.S. Securities and Exchange Commission (the "Commission") on
October 12, 1995 (File No. 0-11532), which is hereby
incorporated herein by reference.
3.2 Amended and Restated By-laws of the Company (formerly known as
Twin Creek Exploration Co., Inc.), previously filed as Exhibit
3.1 to the Company's Quarterly Report on Form 10-QSB for the
quarterly period ended March 31, 1996, filed with the Commission
on May 17, 1996 (File No. 0-11532), which is hereby incorporated
herein by reference.
10.1 Standard Form of Agreement Between Owner and Architect, dated
October 24, 1996 between Inland Casino Corporation, Consultant,
and Gaming Environments Design, Inc., in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.2 (a) Letter Agreement dated October 24, 1996 between Inland Casino
Corporation and Nelson-Bourdages, Inc. P.S., for structural
engineering consulting services in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.2 (b) Letter Agreement dated October 24, 1996 between Inland Casino
Corporation and Nelson-Bourdages, Inc. P.S., for civil
engineering consulting services in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.3 Abbreviated Form of Agreement Between Owner and Contractor,
dated December 3, 1996 between Inland Casino Corporation and
Pacific Industries Northwest, Inc., in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.4 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 3, 1997 between Inland Casino
Corporation and Coit Power Incorporated, in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
10.5 Standard Form of Agreement Between Contractor and
Subcontractor, dated January 6, 1997 between Inland Casino
Corporation and Bellet Construction, in connection with the
development and construction of the Kla-Mo-Ya Casino by the
Klamath Tribes.
21
<PAGE> 24
EXHIBIT INDEX (Continued)
Exhibit No. Description
----------- -----------
10.6 Standard Form of Agreement Between Contractor and Subcontractor,
dated January 6, 1997 between Inland Casino Corporation and L.J.
Barney and Sons, in connection with the development and
construction of the Kla-Mo-Ya Casino by the Klamath Tribes.
10.7 Standard Form of Agreement Between Contractor and Subcontractor,
dated January 22, 1997 between Inland Casino Corporation and
Powley Plumbing, Inc., in connection with the development and
construction of the Kla-Mo-Ya Casino by the Klamath Tribes.
27 Financial Data Schedule.
22
<PAGE> 1
[AIA LOGO]
EXHIBIT 10.1
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AIA DOCUMENT B141
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND ARCHITECT
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
- --------------------------------------------------------------------------------
AGREEMENT
made as of the Twenty-Four day of October in the year of Nineteen Hundred and
Ninety Six
BETWEEN the Consultant: (All further reference to owner in this agreement shall
(Name and Address) be Consultant)
Inland Casino Corporation
4225 Executive Square, Suite 1650
La Jolla, CA 92037
and the Architect:
(Name and Address) Gaming Environments Design, Inc.
1813 130th Ave NE, Suite 220
Bellevue, WA 98005
For the following Project:
(Include detailed description of Project, location, address and scope)
KLA-MO-YA Falls Casino located in Chiloquin,
Oregon on Hwy. 97. Approximately 16,000 SF metal
building with a metal roof and wood siding with
a stone base. Included is a port coshere a
buffet style restaurant, and offices. The casino
will house approximately 300 gaming machines, 6
blackjack tables, and 4 poker tables.
The Owner and Architect agree as set forth below.
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Copyright 1917, 1926, 1948, 1951, 1958, 1961, 1963, 1966, 1967, 1970, 1974,
1977, (C)1987 by the American Institute of Architects, 1735 New York
Avenue, N.W., Washington, D.C. 20006. Reproduction of the material herein
or substantial quotation of its provisions without written permission of
the AIA violates the copyright laws of the United States and will be
subject to legal prosecution.
- --------------------------------------------------------------------------------
AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT -
FOURTEENTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 B141-1987 1
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 2
EDITOR'S NOTE
From time to time, the AIA makes minor corrections and clarifications in its
documents as they are reprinted. Changes in the 7/88 reprinting of the 1987
edition of B141 were made in Subparagraphs 2.6.1 and 11.3.2. Changes in this
6/92 reprinting were made in Subparagraph 2.6.10 and Paragraph 4.5. See Section
C of the Instruction Sheet for a detailed description of these changes.
<PAGE> 3
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF AGREEMENT BETWEEN OWNER AND ARCHITECT
- --------------------------------------------------------------------------------
ARTICLE 1
ARCHITECT'S RESPONSIBILITIES
1.1 ARCHITECT'S SERVICES
1.1.1 The Architect's services consist of those services performed by the
Architect, Architect's employees and Architect's consultants as enumerated in
Articles 2 and 3 of this Agreement and any other services included in Article
12.
1.1.2 The Architect's services shall be performed as expeditiously as is
consistent with professional skill and care and the orderly progress of the
Work. Upon request of the Owner, the Architect shall submit for the Owner's
approval a schedule for the performance of the Architect's services which may be
adjusted as the Project proceeds, and shall include allowances for periods of
time required for the Owner's review and for approval of submissions by
authorities having jurisdiction over the Project. Time limits established by
this schedule approved by the Owner shall not, except for reasonable cause, be
exceeded by the Architect or Owner.
1.1.3 The services covered by this Agreement are subject to the time
limitations contained in Subparagraph 11.5.1.
ARTICLE 2
SCOPE OF ARCHITECT'S BASIC SERVICES
2.1 DEFINITION
2.1.1 The Architect's Basic Services consist of those described in Paragraphs
2.2 through 2.6 and any other services identified in Article 12 as part of Basic
Services, and include normal structural, mechanical and electrical engineering
services.
2.2 SCHEMATIC DESIGN PHASE
2.2.1 The Architect shall review the program furnished by the Owner to
ascertain the requirements of the Project and shall arrive at a mutual
understanding of such requirements with the Owner.
2.2.2 The Architect shall provide a preliminary evaluation of the Owner's
program, schedule and construction budget requirements, each in terms of the
other, subject to the limitations set forth in Subparagraph 5.2.1.
2.2.3 The Architect shall review with the Owner alternative approaches to
design and construction of the Project.
2.2.4 Based on the mutually agreed-upon program, schedule and construction
budget requirements, the Architect shall prepare, for approval by the Owner,
Schematic Design Documents consisting of drawings and other documents
illustrating the scale and relationship of Project components.
2.2.5 The Architect shall submit to the Owner a preliminary estimate of
Construction Cost based on current area, volume or other unit costs.
2.3 DESIGN DEVELOPMENT PHASE
2.3.1 Based on the approved Schematic Design Documents and any adjustments
authorized by the Owner in the program, schedule or construction budget, the
Architect shall prepare, for approval by the Owner, Design Development Documents
consisting of drawings and other documents to fix and describe the size and
character of the Project as to architectural, structural, mechanical and
electrical systems, materials and such other elements as may be appropriate.
2.3.2 The Architect shall advise the Owner of any adjustments to the
preliminary estimate of Construction Cost.
2.4 CONSTRUCTION DOCUMENTS PHASE
2.4.1 Based on the approved Design Development Documents and any further
adjustments in the scope or quality of the Project or in the construction budget
authorized by the Owner, the Architect shall prepare, for approval by the Owner,
Construction Documents consisting of Drawings and Specifications setting forth
in detail the requirements for the construction of the Project.
2.4.2 The Architect shall assist the Owner in the preparation of the necessary
bidding information, bidding forms, the Conditions of the Contract, and the form
of Agreement between the Owner and Contractor.
2.4.3 The Architect shall advise the Owner of any adjustments to previous
preliminary estimates of Construction Cost indicated by changes in requirements
or general market conditions.
2.4.4 The Architect shall assist the Owner in connection with the Owner's
responsibility for filing documents required for the approval of governmental
authorities having jurisdiction over the Project.
2.5 BIDDING OR NEGOTIATION PHASE
2.5.1 The Architect, following the Owner's approval of the Construction
Documents and of the latest preliminary estimate of Construction Cost, shall
assist the Owner in obtaining bids or negotiated proposals and assist in
awarding and preparing contracts for construction.
2.6 CONSTRUCTION PHASE--ADMINISTRATION OF THE CONSTRUCTION CONTRACT
2.6.1 The Architect's responsibility to provide Basic Services for the
Construction Phase under this Agreement commences with the award of the Contract
for Construction and terminates at the earlier of the issuance to the Owner of
the final Certificate for Payment or 60 days after the date of Substantial
Completion of the Work.
2.6.2 The Architect shall provide administration of the Contract for
Construction as set forth below and in the edition of AIA Document A201, General
Conditions of the Contract for Construction, current as of the date of this
Agreement, unless otherwise provided in this Agreement.
2.6.3 Duties, responsibilities and limitations of authority of the Architect
shall not be restricted, modified or extended without written agreement of the
Owner and Architect with consent of the Contractor, which consent shall not be
unreasonably withheld.
- --------------------------------------------------------------------------------
AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT - B141-1987 2
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 4
2.6.4 The Architect shall be a representative of and shall advise and consult
with the Owner (1) during construction until final payment to the Contractor is
due, and (2) as an Additional Service at the Owner's direction from time to time
during the correction period described in the Contract for Construction. The
Architect shall have authority to act on behalf of the Owner only to the extent
provided in this Agreement unless otherwise modified by written instrument.
2.6.5 The Architect shall visit the site at intervals appropriate to the state
of construction or as otherwise agreed by the Owner and Architect in writing to
become generally familiar with the progress and quality of the Work completed
and to determine in general if the Work is being performed in a manner
indicating that the Work when completed will be in accordance with the Contract
Documents. However, the Architect shall not be required to make exhaustive or
continuous on-site inspections to check the quality or quantity of the Work. On
the basis of on-site observations as an architect, the Architect shall keep the
Owner informed of the progress and quality of the Work, and shall endeavor to
guard the Owner against defects and deficiencies in the Work. (More extensive
site representation may be agreed to as an Additional Service, as described in
Paragraph 3.2.)
2.6.6 The Architect shall not have control over or charge of and shall not be
responsible for construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection with the Work,
since these are solely the Contractor's responsibility under the Contract for
Construction. The Architect shall not be responsible for the Contractor's
schedules or failure to carry out the Work in accordance with the Contract
Documents. The Architect shall not have control over or charge of acts or
omissions of the Contractor, Subcontractors, or their agents or employees, or of
any other persons performing portions of the Work.
2.6.7 The Architect shall at all times have access to the Work wherever it is
in preparation or progress.
2.6.8 Except as may otherwise be provided in the Contract Documents or when
direct communications have been specially authorized, the Owner and Contractor
shall communicate through the Architect. Communications by and with the
Architect's consultants shall be through the Architect.
2.6.9 Based on the Architect's observations and evaluations of the
Contractor's Applications for Payment, the Architect shall review and certify
the amounts due the Contractor.
2.6.10 The Architect's certification for payment shall constitute a
representation to the Owner, based on the Architect's observations at the site
as provided in Subparagraph 2.6.5 and on the data comprising the Contractor's
Application for Payment, that, to the best of the Architect's knowledge,
information and belief, the Work has progressed to the point indicated and the
quality of Work is in accordance with the Contract Documents. The foregoing
representations are subject to an evaluation of the Work for conformance with
the Contract Documents upon Substantial Completion, to results of subsequent
tests and inspections, to minor deviations from the Contract Documents
correctable prior to completion and to specific qualifications expressed by the
Architect. The issuance of a Certificate for Payment shall further constitute a
representation that the Contractor is entitled to payment in the amount
certified. However, the issuance of a Certificate for Payment shall not be a
representation that the Architect has (1) made exhaustive or continuous on-site
inspections to check the quality or quantity of the Work, (2) reviewed
construction means, methods, techniques, sequences or procedures, (3) reviewed
copies of requisitions received from Subcontractors and material suppliers and
other data requested by the Owner to substantiate the Contractor's right to
payment or (4) ascertained how or for what purpose the Contractor has used money
previously paid on account of the Contract Sum.
2.6.11 The Architect shall have authority to reject Work which does not conform
to the Contract Documents. Whenever the Architect considers it necessary or
advisable for implementation of the intent of the Contract Documents. Whenever
the Architect considers it necessary or advisable for implementation of the
intent of the Contract Documents, the Architect will have authority to require
additional inspection or testing of the Work in accordance with the provisions
of the Contract Documents, whether or not such Work is fabricated, installed or
completed. However, neither this authority of the Architect nor a decision made
in good faith either to exercise or not to exercise such authority shall give
rise to a duty or responsibility of the Architect to the Contractor,
Subcontractors, material and equipment suppliers, their agents or employees or
other persons performing portions of the Work.
2.6.12 The Architect shall review and approve or take other appropriate action
upon Contractor's submittals such as Shop Drawings, Product Data and Samples,
but only for the limited purpose of checking for conformance with information
given and the design concept expressed in the Contract Documents. The
Architect's action shall be taken with such reasonable promptness as to cause no
delay in the Work or in the construction of the Owner or of separate
contractors, while allowing sufficient time in the Architect's professional
judgment to permit adequate review. Review of such submittals is not conducted
for the purpose of determining the accuracy and completeness of other details
such as dimensions and quantities or for substantiating instructions for
installation or performance of equipment or systems designed by the Contractor,
all of which remain the responsibility of the Contractor to the extent required
by the Contract Documents. The Architect's review shall not constitute approval
of safety precautions or, unless otherwise specifically stated by the Architect,
of construction means, methods, techniques, sequences or procedures. The
Architect's approval of a specific item shall not indicate approval of an
assembly of which the item is a component. When professional certification of
performance characteristics of materials, systems or equipment is required by
the Contract Documents, the Architect shall be entitled to rely upon such
certification to establish that the materials, systems or equipment will meet
the performance criteria required by the Contract Document.
2.6.13 The Architect shall prepare Change Orders and Construction Change
Directives, with supporting documentation and data if deemed necessary by the
Architect as provided in Subparagraphs 3.1.1 and 3.3.3, for the Owner's approval
and execution in accordance with the Contract Documents, and may authorize minor
changes in the Work not involving an adjustment in the Contract Sum or an
extension of the Contract Time which are not inconsistent with the intent of the
Contract Documents.
2.6.14 The Architect shall conduct inspections to determine the date or dates
of Substantial Completion and the date of final completion, shall receive and
forward to the Owner for the Owner's review and records written warranties and
related documents required by the Contract Documents and assembled by the
Contractor, and shall issue a final Certificate for Payment upon compliance with
the requirements of the Contract Documents.
- --------------------------------------------------------------------------------
3 B141-1987 AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT -
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 5
2.6.15 The Architect shall interpret and decide matters concerning performance
of the Owner and Contractor under the requirements of the Contract Documents on
written request of either the Owner or Contractor. The Architect's response to
such requests shall be made with reasonable promptness and within any time
limits agreed upon.
2.6.16 Interpretations and decisions of the Architect shall be consistent with
the intent of and reasonably inferable from the Contract Documents and shall be
in writing or in the form of drawings. When making such interpretations and
initial decisions, the Architect shall endeavor to secure faithful performance
by both Owner and Contractor, shall not show partiality to either, and shall
not be liable for results of interpretations or decisions so rendered in good
faith.
2.6.17 The Architect's decisions on matters relating to aesthetic effect shall
be final if consistent with the intent expressed in the Contract Documents.
2.6.18 The Architect shall render written decisions within a reasonable time
on all claims, disputes or other matters in question between the Owner and
Contractor relating to the execution or progress of the Work as provided in the
Contract Documents.
2.6.19 The Architect's decisions on claims, disputes or other matters,
including those in question between the Owner and Contractor, except for those
relating to aesthetic effect as provided in Subparagraph 2.6.17, shall be
subject to arbitration as provided in this Agreement and in the Contract
Documents.
ARTICLE 3
ADDITIONAL SERVICES
3.1 GENERAL
3.1.1 The services described in this Article 3 are not included in Basic
Services unless so identified in Article 12, and they shall be paid for by the
Owner as provided in this Agreement, in addition to the compensation for Basic
Service. The services described under Paragraphs 3.2 and 3.4 shall only be
provided if authorized or confirmed in writing by the Owner. If services
described under Contingent Additional Services in Paragraph 3.3 are required
due to circumstances beyond the Architect's control, the Architect shall notify
the Owner prior to commencing such services. If the Owner deems that such
services described under Paragraph 3.3 are not required, the Owner shall give
prompt written notice to the Architect. If the Owner indicates in writing that
all or part of such Contingent Additional Services are not required, the
Architect shall have no obligation to provide those services.
3.2 PROJECT REPRESENTATION BEYOND BASIC SERVICES
3.2.1 If more extensive representation at the site than is described in
Subparagraph 2.6.5 is required, the Architect shall provide one or more Project
Representatives to assist in carrying out such additional on-site
responsibilities.
3.2.2 Project Representatives shall be selected, employed and directed by the
Architect, and the Architect shall be compensated therefor as agreed by the
Owner and Architect. The duties, responsibilities and limitations of authority
of Project Representatives shall be as described in the edition of AIA Document
B352 current as of the date of this Agreement, unless otherwise agreed.
3.2.3 Through the observations by such Project Representatives, the Architect
shall endeavor to provide further protection for the Owner against defects and
deficiencies in the Work, but the furnishing of such project representation
shall not modify the rights, responsibilities or obligations of the Architect
as described elsewhere in this Agreement.
3.3 CONTINGENT ADDITIONAL SERVICES
3.3.1 Making revisions in Drawings, Specifications or other documents when
such revisions are:
.1 inconsistent with approvals or instructions previously given by the
Owner, including revisions made necessary by adjustments in the
Owner's program or Project budget;
.2 required by the enactment or revision of codes, laws or regulations
subsequent to the preparation of such documents; or
.3 due to charges required as a result of the Owner's failure to
render decisions in a timely manner.
3.3.2 Providing services required because of significant changes in the
Project including, but not limited to, size, quality, complexity, the Owner's
schedule, or the method of bidding or negotiating and contracting for
construction, except for services required under Subparagraph 5.2.5.
3.3.3 Preparing Drawings, Specifications and other documentation and
supporting data, evaluating Contractor's proposals, and providing other
services in connection with Change Orders and Construction Change Directives.
3.3.4 Providing services in connection with evaluating substitutions proposed
by the Contractor and making subsequent revisions to Drawings, Specifications
and other documentation resulting therefrom.
3.3.5 Providing consultation concerning replacement of Work damaged by fire
or other cause during construction, and furnishing services required in
connection with the replacement of such Work.
3.3.6 Providing services made necessary by the default of the Contractor, by
major defects or deficiencies in the Work of the Contractor, or by failure of
performance of either the Owner or Contractor under the Contract for
Construction.
3.3.7 Providing services in evaluating an extensive number of claims
submitted by the Contractor or others in connection with the Work.
3.3.8 Providing services in connection with a public hearing, arbitration
proceeding or legal proceeding except where the Architect is party thereto.
3.3.9 Preparing documents for alternate, separate or sequential bids or
providing services in connection with bidding, negotiation or construction
prior to the completion of the Construction Documents Phase.
3.4 OPTIONAL ADDITIONAL SERVICES
3.4.1 Providing analyses of the Owner's needs and programming the
requirements of the Project.
3.4.2 Providing financial feasibility or other special studies.
3.4.3 Providing planning surveys, site evaluations or comparative studies of
prospective sites.
- --------------------------------------------------------------------------------
AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT - B141-1987 4
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 6
3.4.4 Providing special surveys, environmental studies and submissions
required for approvals of governmental authorities or others having
jurisdiction over the Project.
3.4.5 Providing services relative to future facilities, systems and equipment.
3.4.6 Providing services to investigate existing conditions or facilities or
to make measured drawings thereof.
3.4.7 Providing services to verify the accuracy of drawings or other
information furnished by the Owner.
3.4.8 Providing coordination of construction performed by separate
contractors or by the Owner's own forces and coordination of services required
in connection with construction performed and equipment supplied by the Owner.
3.4.9 Providing services in connection with the work of a construction
manager or separate consultants retained by the Owner.
3.4.10 Providing detailed estimates of Construction Cost.
3.4.11 Providing detailed quantity surveys or inventories of material,
equipment and labor.
3.4.12 Providing analyses of owning and operating costs.
3.4.13 Providing interior design and other similar services required for or in
connection with the selection, procurement or installation of furniture,
furnishings and related equipment.
3.4.14 Providing services for planning tenant or rental spaces.
3.4.15 Making investigations, inventories of materials or equipment, or
valuations and detailed appraisals of existing facilities.
3.4.16 Preparing a set of reproducible record drawings showing significant
changes in the Work made during construction based on marked-up prints,
drawings and other data furnished by the Contractor to the Architect.
3.4.17 Providing assistance in the utilization of equipment or systems such as
testing, adjusting and balancing, preparation of operation and maintenance
manuals, training personnel for operation and maintenance, and consultation
during operation.
3.4.18 Providing services after issuance to the Owner of the final Certificate
for Payment, or in the absence of a final Certificate for Payment, more than 60
days after the date of Substantial Completion of the Work.
3.4.19 Providing services of consultants for other than architectural,
structural, mechanical and electrical engineering portions of the Project
provided as a part of Basic Services.
3.4.20 Providing any other services not otherwise included in this Agreement
or not customarily furnished in accordance with generally accepted
architectural practice.
ARTICLE 4
OWNER'S RESPONSIBILITIES
4.1 The Owner shall provide full information regarding requirements for the
Project, including a program which shall set forth the Owner's objectives,
schedule, constraints and criteria, including space requirements and
relationships, flexibility, expandability, special equipment, systems and site
requirements.
4.2 The Owner shall establish and update an overall budget for the Project,
including the Construction Cost, the Owner's other costs and reasonable
contingencies related to all of these costs.
4.3 If requested by the Architect, the Owner shall furnish evidence that
financial arrangements have been made to fulfill the Owner's obligations under
this Agreement.
4.4 The Owner shall designate a representative authorized to act on the
Owner's behalf with respect to the Project. The Owner or such authorized
representative shall render decisions in a timely manner pertaining to
documents submitted by the Architect in order to avoid unreasonable delay in
the orderly and sequential progress of the Architect's services.
4.5 The Owner shall furnish surveys describing physical characteristics,
legal limitations and utility locations for the site of the Project, and a
written legal description of the site. The surveys and legal information shall
include, as applicable, grades and lines of streets, alleys, pavements and
adjoining property and structures; adjacent drainage, right-of-way,
restrictions, easements, encroachments, zoning, deed restrictions, boundaries
and contours of the site, locations, dimensions and necessary data pertaining
to existing buildings, other improvements and trees; and information concerning
available utility services and lines, both public and private, above and below
grade, including inverts and depths. All the information on the survey shall be
referenced to a Project benchmark.
4.6 The Owner shall furnish the services of geotechnical engineers when
such services are requested by the Architect. Such services may include but are
not limited to test borings, test pits, determinations of soil bearing values,
percolation tests, evaluations of hazardous materials, ground corrosion and
resistivity tests, including necessary operations for anticipating subsoil
conditions, with reports and appropriate professional recommendations.
4.6.1 The Owner shall furnish the services of other consultants when such
services are reasonably required by the scope of the Project and are requested
by the Architect.
4.7 The Owner shall furnish structural, mechanical, chemical, air and water
pollution tests, tests for hazardous materials, and other laboratory and
environmental tests, inspections and reports required by law or the Contract
Documents.
4.8 The Owner shall furnish all legal, accounting and insurance counseling
services as may be necessary at any time for the Project, including auditing
services the Owner may require to verify the Contractor's Applications for
Payment or to ascertain how or for what purposes the Contractor has used the
money paid by or on behalf of the Owner.
4.9 The services, information, surveys and reports required by Paragraphs
4.5 through 4.8 shall be furnished at the Owner's expense, and the Architect
shall be entitled to rely upon the accuracy and completeness thereof.
4.10 Prompt written notice shall be given by the Owner to the Architect if
the Owner becomes aware of any fault or defect in the Project or nonconformance
with the Contract Documents.
4.11 The proposed language of certificates or certifications requested of
the Architect or Architect's consultants shall be submitted to the Architect
for review and approval at least 14 days prior to execution. The Owner shall
not request certifications that would require knowledge or services beyond the
scope of this Agreement.
- --------------------------------------------------------------------------------
5 B141-1987 AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT -
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 7
ARTICLE 5
CONSTRUCTION COST
5.1 DEFINITION
5.1.1 The Construction Cost shall be the total cost or estimated cost to the
Owner of all elements of the Project designed or specified by the Architect.
5.1.2 The Construction Cost shall include the cost at current market rates of
labor and materials furnished by the Owner and equipment designed, specified,
selected or specially provided for by the Architect, plus a reasonable
allowance for the Contractor's overhead and profit. In addition, a reasonable
allowance for contingencies shall be included for market conditions at the time
of bidding and for changes in the Work during construction.
5.1.3 Construction Cost does not include the compensation of the Architect
and Architect's consultants, the costs of the land, rights-of-way, financing or
other costs which are the responsibility of the Owner as provided in Article 4.
5.2 RESPONSIBILITY FOR CONSTRUCTION COST
5.2.1 Evaluations of the Owner's Project budget, preliminary estimates of
Construction Cost and detailed estimates of Construction Cost, if any, prepared
by the Architect, represent the Architect's best judgment as a design
professional familiar with the construction industry. It is recognized, however,
that neither the Architect nor the Owner has control over the cost of labor,
materials or equipment, over the Contractor's methods of determining bid prices,
or over competitive bidding, market or negotiating conditions. Accordingly, the
Architect cannot and does not warrant or represent that bids or negotiated
prices will not vary from the Owner's Project budget or from any estimate of
Construction Cost or evaluation prepared or agreed to by the Architect.
5.2.2 No fixed limit of Construction Cost shall be established as a condition
of this Agreement by the furnishing, proposal or establishment of a Project
budget, unless such fixed limit has been agreed upon in writing and signed by
the parties hereto. If such a fixed limit has been established, the Architect
shall be permitted to include contingencies for design, bidding and price
escalation, to determine what materials, equipment, component systems and types
of construction are to be included in the Contract Documents, to make reasonable
adjustments in the scope of the Project and to include in the Contract Documents
alternative bids to adjust the Construction Cost to the fixed limit. Fixed
limits, if any, shall be increased in the amount of an increase in the Contract
Sum occurring after execution of the Contract for Construction.
5.2.3 If the Bidding or Negotiation Phase has not commenced within 90 days
after the Architect submits the Construction Documents to the Owner, any
Project budget or fixed limit of Construction Cost shall be adjusted to reflect
changes in the general level of prices in the construction industry between the
date of submission of the Construction Documents to the Owner and the date on
which proposals are sought.
5.2.4 If a fixed limit of Construction Cost (adjusted as provided in
Subparagraph 5.2.3) is exceeded by the lowest bona fide bid or negotiated
proposal, the Owner shall:
.1 give written approval of an increase in such fixed limit;
.2 authorize rebidding or renegotiating of the Project within a
reasonable time;
.3 if the Project is abandoned, terminate in accordance with
Paragraph 8.3; or
.4 cooperate in revising the Project scope and quality as required
to reduce the Construction Cost.
5.2.5 If the Owner chooses to proceed under Clause 5.2.4.4. the Architect,
without additional charge, shall modify the Contract Documents as necessary to
comply with the fixed limit, if established as a condition of this Agreement.
The modification of Contract Documents shall be the limit of the Architect's
responsibility arising out of the establishment of a fixed limit. The Architect
shall be entitled to compensation in accordance with this Agreement for all
services performed whether or not the Construction Phase is commenced.
ARTICLE 6
USE OF ARCHITECT'S DRAWINGS, SPECIFICATIONS AND OTHER DOCUMENTS
6.1 The Drawings, Specifications and other documents prepared by the
Architect for this Project are instruments of the Architect's service for use
solely with respect to this Project and, unless otherwise provided, the
Architect shall be deemed the author of these documents and shall retain all
common law, statutory and other reserved rights, including the copyright. The
Owner shall be permitted to retain copies, including reproducible copies, of
the Architect's Drawings, Specifications and other documents for information
and reference in connection with the Owner's use and occupancy of the Project.
The Architect's Drawings, Specifications or other documents shall not be used
by the Owner or others on other projects, for additions to this Project or for
completion of this Project by others, unless the Architect is adjudged to be in
default under this Agreement, except by agreement in writing and with
appropriate compensation to the Architect.
6.2 Submission or distribution of documents to meet official regulatory
requirements or for similar purposes in connection with the Project is not to
be construed as publication in derogation of the Architect's reserved rights.
ARTICLE 7
ARBITRATION
7.1 Claims, disputes or other matters in question between the parties to
this Agreement arising out of or relating to this Agreement or breach thereof
shall be subject to and decided by arbitration in accordance with the
Construction Industry Arbitration Rules of the American Arbitration Association
currently in effect unless the parties mutually agree otherwise.
7.2 Demand for arbitration shall be filed in writing with the other party
to this Agreement and with the American Arbitration Association. A demand for
arbitration shall be made within a reasonable time after the claim, dispute or
other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statutes of limitations.
7.3 No arbitration arising out of or relating to this Agreement shall
include, by consolidation, joinder or in any other manner, an additional person
or entity not a party to this Agreement,
- --------------------------------------------------------------------------------
AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT - B141-1987 6
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 8
except by written consent containing a specific reference to this Agreement
signed by the Owner, Architect, and any other person or entity sought to be
joined. consent to arbitration involving an additional person or entity shall
not constitute consent to arbitration of any claim, dispute or other manner in
question not described in the written consent or with a person or entity not
named or described therein. The foregoing agreement to arbitrate and other
agreements to arbitrate with an additional person or entity duly consented to
by the parties to this Agreement shall be specifically enforceable in
accordance with applicable law in any court having jurisdiction thereof.
7.4 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
ARTICLE 8
TERMINATION, SUSPENSION OR ABANDONMENT
8.1 This Agreement may be terminated by either party upon not less than
seven days' written notice should the other party fail substantially to perform
in accordance with the terms of this Agreement through no fault of the party
initiating the termination.
8.2 If the Project is suspended by the Owner for more than 30 consecutive
days, the Architect shall be compensated for services performed prior to notice
of such suspension. When the Project is resumed, the Architect's compensation
shall be equitably adjusted to provide for expenses incurred in the
interruption and resumption of the Architect's services.
8.3 This Agreement may be terminated by the Owner upon not less than seven
days' written notice to the Architect in the event that the Project is
permanently abandoned. If the Project is abandoned by the Owner for more than
90 consecutive days, the Architect may terminated this Agreement by giving
written notice.
8.4 Failure of the Owner to make payments to the Architect in accordance
with this Agreement shall be considered substantial nonperformance and cause
for termination.
8.5 If the Owner fails to make payment when due the Architect for services
and expenses, the Architect may, upon seven days' written notice to the Owner,
suspend performance of services under this Agreement. Unless payment in full is
received by the Architect within seven days of the date of the notice, the
suspension shall take effect without further notice. In the event of a
suspension of services, the Architect shall have no liability to the Owner for
delay or damage caused the Owner because of such suspension of services.
8.6 In the event of termination not the fault of the Architect, the
Architect shall be compensated for services performed prior to termination,
together with Reimbursable Expenses then due and all Termination Expenses as
defined in Paragraph 8.7.
8.7 Termination Expenses are in addition to compensation for Basic and
Additional Services, and include expenses which are directly attributable to
termination. Termination Expenses shall be computed as a percentage of the
local compensation for Basic Services and Additional Services earned to the
time of termination, as follows:
.1 Twenty percent of the total compensation for Basic and Additional
Services earned to date if termination occurs before or during the
predesign, site analysis, or Schematic Design Phases; or
.2 Ten percent of the total compensation for Basic and Additional
Services earned to date if termination occurs during the Design
Development Phased; or
.3 Five percent of the total compensation for Basic and Additional
Services earned to date if termination occurs during any subsequent
phase.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Unless otherwise provided, this Agreement shall be governed by the law
of the principal place of business of the Architect.
9.2 Terms in this Agreement shall have the same meaning as those in AIA
Document A201, General Conditions of the Contract for Construction, current as
of the date of this Agreement.
9.3 Causes of action between the parties to this Agreement pertaining to
acts or failures to act shall be deemed to have accrued and the applicable
statutes of limitations shall commence to run not later than either the date of
Substantial Completion for acts or failures to act occurring prior to
Substantial Completion, or the date of issuance of the final Certificate for
Payment for acts or failures to act occurring after Substantial Completion.
9.4 The Owner and Architect waive all rights against each other and
against the contractors, consultants, agents and employees of the other for
damages, but only to the extent covered by property insurance during
construction, except such rights as they may have to the proceeds of such
insurance as set forth in the edition of AIA Document A201, General Conditions
of the Contract for Construction, current as of the date of this Agreement. The
Owner and Architect each shall require similar waivers from their contractors,
consultants and agents.
9.5 The Owner and Architect, respectively, bind themselves, their partners,
successors, assigns and legal representatives to the other party to this
Agreement and to the partners, successors, assigns and legal representatives of
such other party with respect to all covenants of this Agreement. Neither Owner
nor Architect shall assign this Agreement without the written consent of the
other.
9.6 This Agreement represents the entire and integrated agreement between
the Owner and Architect and supersedes all prior negotiations, representations
or agreements, either written or oral. This Agreement may be amended only by
written instrument signed by both Owner and Architect.
9.7 Nothing contained in this Agreement shall create a contractual
relationship with or a cause of action in favor of a third party against either
the Owner or Architect.
9.8 Unless otherwise provided in this Agreement, the Architect and
Architect's consultants shall have no responsibility for the discovery,
presence, handling, removal or disposal of or exposure of persons to hazardous
materials in any form at the Project site, including but not limited to
asbestos, asbestos products, polychlorinated biphenyl (PCB) or other toxic
substances.
9.9 The Architect shall have the right to include representations of the
design of the Project, including photographs of the exterior and interior, among
the Architect's promotional and professional materials. The Architect's
materials shall not include the Owner's confidential or proprietary information
if the Owner has previously advised the Architect in writing of
- --------------------------------------------------------------------------------
7 B141-1987 AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT -
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 9
the specific information considered by the Owner to be confidential or
proprietary. The Owner shall provide professional credit for the Architect on
the construction sign and in the promotional materials for the Project.
ARTICLE 10
PAYMENTS TO THE ARCHITECT
10.1 DIRECT PERSONNEL EXPENSE
10.1.1 Direct Personnel Expense is defined as the direct salaries of the
Architect's personnel engaged on the Project and the portion of the cost of
their mandatory and customary contributions and benefits related thereto, such
as employment taxes and other statutory employee benefits, insurance, sick
leave, holidays, vacations, pensions and similar contributions and benefits.
10.2 REIMBURSABLE EXPENSES
10.2.1 Reimbursable Expenses are in addition to compensation for Basic and
Additional Services and include expenses incurred by the Architect and
Architect's employees and consultants in the interest of the Project, as
identified in the following Clauses.
10.2.1.1 Expense of transportation in connection with the Project; expenses
in connection with authorized out-of-town travel; long-distance communications,
and fees paid for securing approval of authorities having jurisdiction over the
Project.
10.2.1.2 Expense of reproductions, postage and handling of Drawings,
Specifications and other documents.
10.2.1.3 If authorized in advance by the Owner, expense of overtime work
requiring higher than regular rates.
10.2.1.4 Expense of renderings, models and mock-ups requested by the Owner.
10.2.1.5 Expense of additional insurance coverage or limits, including
professional liability insurance, requested by the Owner in excess of that
normally carried by the Architect and Architect's consultants.
10.2.1.6 Expense of computer-aided design and drafting equipment time when
used in connection with the Project.
10.3 PAYMENTS ON ACCOUNT OF BASIC SERVICES
10.3.1 An initial payment as set forth in Paragraph 11.1 is the minimum
payment under this Agreement.
10.3.2 Subsequent payments for Basic Services shall be made monthly and, where
applicable, shall be in proportion to services performed within each phase of
service, on the basis set forth in Subparagraph 11.2.2.
10.3.3 If and to the extent that the time initially established in
Subparagraph 11.5.1 of this Agreement is exceeded or extended through no fault
of the Architect, compensation for any services rendered during the additional
period of time shall be computed in the manner set forth in Subparagraph 11.3.2.
10.3.4 When compensation is based on a percentage of Construction Cost and any
portions of the Project are deleted or otherwise not constructed, compensation
for those portions of the Project shall be payable to the extent services are
performed on those portions, in accordance with the schedule set forth in
Subparagraph 11.2.2, based on (1) the lowest bona fide bid or negotiated
proposal, or (2) if no such bid or proposal is received, the most recent
preliminary estimate of Construction Cost or detailed estimate of Construction
Cost for such portions of the Project.
10.4 PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES
10.4.1 Payments on account of the Architect's Additional Services and for
Reimbursable Expenses shall be made monthly upon presentation of the
Architect's statement of services rendered or expenses incurred.
10.5 PAYMENTS WITHHELD
10.5.1 No deductions shall be made from the Architect's compensation on
account of penalty, liquidated damages or other sums withheld from payments to
contractors, or on account of the cost of changes in he Work other than those
for which the Architect has been found to be liable.
10.6 ARCHITECT'S ACCOUNTING RECORDS
10.6.1 Records of Reimbursable Expenses and expenses pertaining to Additional
Services and services performed on the basis of a multiple of Direct Personnel
Expense shall be available to the Owner or the Owner's authorized representative
at mutually convenient times.
ARTICLE 11
BASIS OF COMPENSATION
The Owner shall compensate the Architect as follows:
11.1 AN INITIAL PAYMENT of Twenty Thousands Dollars ($20,000) shall be made
upon execution of this Agreement and credited to the Owner's account at final
payment.
11.2 BASIC COMPENSATION
11.2.1 FOR BASIC SERVICES, as described in Article 2, and any other services
included in Article 12 as part of Basic Services, Basic Compensation shall be
computed as follows:
(Insert basis of compensation, including stipulated costs, multiples or
percentages, and identify plans to which particular methods of compensation
apply, if applicable).
Stipulated sum
- --------------------------------------------------------------------------------
AIA DOCUMENT B141 - OWNER-ARCHITECT AGREEMENT - B141-1987 8
FOURTEENTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 10
11.2.2 Where compensation is based on a stipulated sum or percentage of
Construction Cost, progress payments for Basic Services in each phase shall
total the following percentages of the total Basic Compensation payable:
(Insert additional phases as appropriate.)
Kitchen Design: $ 9,000
Schematic Design Phase: $ 15,300 percent (15%)
Design Development Phase: $ 35,700 percent (35%)
Construction Documents Phase: $ 30,600 percent (30%)
Bidding or Negotiation Phase: $ 4,080 percent ( 4%)
Construction Phase: $ 16,320 percent (16%)
---------------------------------------------------------------------
Total Basic Compensation: $111,000 one hundred percent (100%)
11.3 COMPENSATION FOR ADDITIONAL SERVICES
11.3.1 FOR PROJECT REPRESENTATION BEYOND BASIC SERVICES, as described in
Paragraph 3.2, compensation shall be computed as follows:
Stipulated Sum plus 15%
11.3.2 FOR ADDITIONAL SERVICES OF THE ARCHITECT, as described in Articles 3
and 12, other than (1) Additional Project Representation, as described in
Paragraph 3.2, and (2) services included in Article 12 as part of Basic
Services, but excluding services of consultants, compensation shall be computed
as follows:
(Insert basis of compensation, including rates and/or multiples of Direct
Personnel Expense for Principals and employees, and identify Principals and
classify employees, if required, certify specific services in which particular
methods of compensation apply if necessary.)
Principals $85.00/hr.
Project Architect $65.00/hr.
Technician I $55.00/hr.
Support Staff $45.00/hr.
11.3.3 FOR ADDITIONAL SERVICES OF CONSULTANTS, including additional
structural, mechanical and electrical engineering services and those provided
under Subparagraph 3.4.19 or identified in Article 12 as part of Additional
Services, a multiple of N/A ( ) times the amounts billed to the Architect
for such services.
(Identify specific types of consultants to Article 12, if required.)
11.4 REIMBURSABLE EXPENSES
11.4.1 FOR REIMBURSABLE EXPENSES, as described in Paragraph 10.2, and any
other items included in Article 12 as Reimbursable Expenses, a multiple of One
point one five (1.15) times the expenses incurred by the Architect, the
Architect's employees and consultants in the interest of the Project.
11.5 ADDITIONAL PROVISIONS
11.5.1 IF THE BASIC SERVICES covered by this Agreement have not been completed
within Nine (9) months of the date hereof, through no fault of the Architect,
extension of the Architect's services beyond that time shall be compensated as
provided in Subparagraphs 10.3.3 and 11.3.2.
11.5.2 Payments are due and payable Thirty (30) days from the date of the
Architect's invoice. Amounts unpaid Forty-five (45) days after the invoice date
shall bear interest at the rate entered below, or in the absence thereof
at the legal rate prevailing from time to time at the principal place of
business of the Architect.
(Interest rate of interest agreed upon.)
1.5%/month or 18%/year
- -------------------------------------------------------------------------------
9 B141-1987 AIA DOCUMENT B141 o OWNER-ARCHITECT AGREEMENT o FOURTEENTH
EDITION o AIA(R) o (c) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 11
11.5.3 The rules and multiples set forth for Additional Services shall be
annually adjusted in accordance with normal salary review practices of the
Architect.
ARTICLE 12
OTHER CONDITIONS OR SERVICES
(Insert description of other services, identify Additional Services included
within Basic Compensation and modifications to the payment and compensation
terms included in this Agreement.)
Under separate contract to the owner will be the following consultants - chosen
by the architect and approved and compensated by the owner:
Civil Engineer
Structural Engineer
Electrical and Mechanical Engineer for the performance specification and
reviewing subcontractor bids.
Other required consultants discussed and approved by the owner.
This Agreement entered into as of the day and year first written above.
OWNER Inland Casino Corporation ARCHITECT Gaming Environments
Design, Inc.
/s/ DUNCAN EDWARDS /s/ JULIE ANNE LAWTON Julie Anne Lawton
- ----------------------------------- ----------------------------------------
(Signature) (Signature)
Principal
DUNCAN EDWARDS - CONSULTANTS AGENT /s/ FREDERICK ALEXANDER LILLIAN
- ----------------------------------- ----------------------------------------
(Principal name and title) (Printed name and title)
Principal
[AIA LOGO] CAUTION: YOU SHOULD SIGN AN ORIGINAL AIA DOCUMENT WHICH HAS THIS
CAUTION PRINTED IN RED. AN ORIGINAL ASSURES THAT CHANGES WILL NOT
BE OBSCURED AS MAY OCCUR WHEN DOCUMENTS ARE REPRODUCED.
- -------------------------------------------------------------------------------
AIA DOCUMENT B141 o OWNER-ARCHITECT AGREEMENT o FOURTEENTH B141-1987 10
EDITION o AIA(R) o (c) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 1
EXHIBIT 10.2(a)
[NELSON-BOURDAGES, INC., P.S. LETTERHEAD]
October 24, 1996
Inland Casino Corporation
c/o Julie Lawton
Lawton Architectural Group
5588 Canfield Place N.
Seattle, WA 98109
Dear Mr. Lawton:
RE: Klamath Falls Casino
Inland Casino Corporation
Chiloquin, Oregon
We are pleased to present this proposal for structural engineering consulting
services.
A. Project Description:
Proposed 19,000 sf gaming facility, as defined in a preliminary floor
plan and site plan prepared by the Lawton Architectural Group dated
10/17/96.
Building materials are understood to be:
o Pre-manufactured metal building
o Conventional and shallow foundation
o Slab on grade that is supported by an adequate subgrade
B. Scope of Work:
Structural engineering consulting services.
B.1 Contract Document Phase
Task 1 Prepare structural engineering contract documents in
accordance with the Uniform Building Code for the
following elements:
a. cast in place foundation and slab on grade
b. soffit framing
c. stage platform
d. interior timber pole supports
Contract Documents shall comprise all documents related to the
project, issued by or through Nelson-Bourdages, Inc., P.S.,
including the plans, drawings, calculations, specifications and
schedules, and variations and modifications thereto approved by
Nelson-Bourdages, Inc., P.S.
Task 2 Coordinate concrete/steel interface details with the
metal building manufacturer.
Task 3 Response to plan review comments prepared by the local
Building Official.
<PAGE> 2
Revised Klamath Falls Casino Structural Proposal
October 24, 1996
Page 2
B.2 Construction Phase.
Task 1 Review the following submittals
a. rebar shop drawings
b. structural steel shop drawings for work prepared
by NB
c. concrete design mixes
Task 2 Construction support. Respond to field questions,
revisions and clarifications.
Task 3 Site visits and reports.
C. Payment of Fees:
C.1 Fee Schedule. Professional services related to item:
Contract Document Phase
Task 1
Schematic Design Phase......... $ 3,300
Design Development Phase....... $ 4,700
Contract Document Phase........ $ 4,300
Bidding Phase.................. $ 270
-------
Total.................... $12,570
Task 2 (Coordination).......... $ 800.
Task 3 (Plan check response)......hourly, not to exceed $1,200.
Construction Phase
Task 1 (submittal review)...... $ 600.
Task 2 (technical support)........hourly, not to exceed $1,600.
Task 3 (site visits)..............hourly, plus expenses.
C.2 Hourly Rate Schedule:
Principal.......... $95
Engineers.......... 82
CAD Drafters....... 50
Administrative..... 32
C.3 Terms:
The Client shall pay to the Engineer when invoiced for the
services set forth in the Agreement. The Engineer's accounts are
due when presented and accounts overdue shall bear a service
charge of 1.5 percent per month. Delay of payment may affect
project schedule.
<PAGE> 3
Revised Klamath Falls Casino Structural Proposal
October 24, 1996
Page 3
D. Additional Services:
The work noted above is for a one time performance only. Additional work
or redesign occasioned by others shall constitute additional services,
and are to be reimbursed on an hourly basis. Additional services shall
not be executed without authorization.
E. Ownership of Documents:
See attached Exhibit A.
F. Reimbursable Expenses:
See attached Exhibit A.
G. Transfer of Electronic Media:
See attached Exhibit B.
This concludes our proposal for structural engineering consulting services.
These terms are valid for 60 days. Should you find these documents acceptable,
we will submit a contract for signature. We thank you for this opportunity and
look forward to working with you again.
Sincerely,
/s/ ROBERT BOURDAGES
- -----------------------------
Robert Bourdages, P.E.
President
Nelson-Bourdages, Inc., P.S.
ACCEPTED BY: /s/ DUNCAN EDWARDS 10-28-96
---------------------------- --------------
FOR: Inland Casino Corporation DATE:
<PAGE> 4
Revised Klamath Falls Casino Civil Engineering Proposal
October 24, 1996
Page 5
EXHIBIT "A":
OWNERSHIP OF DOCUMENTS:
Contract documents, as instruments of professional service, are and shall
remain the property of the Engineer, whether the Project for which they are
made is executed or not. The Client shall be permitted to retain copies,
including reproducible copies, of plans and specifications for information and
reference. The plans and the contract documents shall not be used by the Client
on other projects, for additions to the Project, or for completion of this
Project by others except by agreement in writing and with appropriate
compensation to the Engineer.
REIMBURSABLE EXPENSES:
Reimbursable Expenses shall be billed to and paid by Client directly for
expenses with a ten percent mark-up by Engineer for handling. Reimbursable
Expenses shall be defined as the actual expenses incurred by Engineer or
Engineer's independent professional associates or consultants, directly or
indirectly in connection with the Project, such as expenses for: transportation,
obtaining bids or proposals from Contractor(s), toll telephone calls and
deliveries, "FAX" telephone transmissions, deliveries, reproduction of reports,
electrostatic plotting beyond one progress and one final plot, Drawings,
Specifications, Bidding Documents, and similar Project-related items. Blue
prints shall be charged at 0.20 cents per square foot.
PLEASE INITIAL: /s/ DUNCAN EDWARDS Date 10-28-96
------------------ --------------
<PAGE> 5
Revised Klamath Falls Casino Structural Proposal
October 24, 1996
Page 6
Exhibit "B"
NELSON-BOURDAGES INC., P.S. (Engineer)
512 6th Street South Suite 202
Kirkland, WA 98033
October 24, 1996
TRANSFER OF AUTOCAD FILES FROM ENGINEER TO USER
The user recognizes that changes or modifications to the Engineer's instruments
of professional service introduced by anyone other than the Engineer may result
in adverse consequences which the Engineer can neither predict nor control.
Therefore, and in consideration of the Engineer's agreement to deliver its
instruments of professional service in machine readable form, the User agrees
to the fullest extent permitted by law, to hold harmless and indemnify the
Engineer from and against all claims, liabilities, losses, damages, and costs,
including, but not limited to attorney's fees arising out of or in any way
connected with the modification, misinterpretation, misuse, or reuse by others
of the machine readable information and data provided by the Engineer under
this Agreement. The foregoing indemnification applies, without limitation, to
any use of the project documentation on other projects, for additions to this
project, or for completion of this project by others, excepting only such use
as may be authorized, in writing, by the Engineer. Transfer fee shall be
$100.00 a disk.
ACCEPTED
/s/ DUNCAN EDWARDS 10-28-96
- ------------------------ ------------------------
USER DATE
REPRESENTING: Inland Casino Corp.
----------------------------------------------------
NAME OF BUSINESS __________________________________________________
ADDRESS ___________________________________________________________
PROJECT NAME Klamath Falls Casino NB JOB # F896088
---------------------- -------------------
<PAGE> 1
EXHIBIT 10.2(b)
[NELSON-BOURDAGES LETTERHEAD]
October 24, 1996
Inland Casino Corporation
c/o Julie Lawton
Lawton Architectural Group
5588 Canfield Place N.
Seattle, WA 98109
RE: Klamath Falls Casino
Inland Casino Corp.
Chiloquin, Oregon
We are pleased to present this proposal for professional civil engineering
consulting services.
A. Pricing Description:
Proposed gaming facility for the Klamath Tribes, located south of the
City of Chiloquin in Klamath County, Oregon. The development will be on
approximately 20 acres of the 42.31 acres available. The building is
approximately 19,000sf with parking area of 2.6 acres, as shown on
drawings S-1 and K-1 by your office, dated 10/17/96.
B. Scope of Work:
B.1 Contract Document Phase
1. Site plan and grading plan
Prepare plan indicating location of parking lots,
curbing and sidewalks, utility location and
coordination, earthwork analysis (cut/fill), details.
2. Stormwater drainings plan
Conduct on-site and off-site analysis, design of
stormwater conveyance system, and water quality
assurance. It is understood that detention is not
required, but that the probable water quality solution
will be drainfields (also indicated in the Environmental
Assessment, by WEST, Inc., dated 7/27/96). Methodology
for hydrologic design will be SBUM. Other anticipated
features include connection to roof drains and an
oil/water separator preceding the drainfield. Work will
comply with standard requirements of E.P.A. and the
Oregon Department of Environmental Quality for NPDES
permit. It is assumed that the system will be gravity
flow; no pump design is anticipated.
3. Temporary erosion and sediment control plan
As in Item B.1.2 requirements for the NPDES permit will
be met. Control measures may include a temporary
sediment pond, fabric fencing, other intercept measures,
construction sequencing, construction entrance and
setting clearing limits.
<PAGE> 2
Revised Klamath Falls Casino Civil Engineering Proposal
October 24, 1996
Page 2
4. Respond to building official plan review comments.
Contract Documents shall comprise all documents related to the
project, issued by or through Nelson-Bourdages, Inc., P.S.,
including the plans, drawings, calculations, specifications and
schedules, and variations and modifications thereto approved by
Nelson-Bourdages, Inc., P.S. All plans and details will be
prepared using AutoCad ver. 12.
B.2 Construction Phase
1. Submittal review for:
drainage products
2. Construction Support. Respond to field questions, revisions and
clarifications.
3. Provide site visits and reports
Exclusions: Hydrogeologic services
Surveying
Soils analysis, testing
"dry" utilities - electricity, gas
Water supply, sanitary sewer
Owner will provide a digital copy of a current topographic survey, boundary
survey and a soils report, particularly with soil type, strength and
infiltration data.
C. PAYMENT OF FEES:
C.1. Fee Schedule. Professional services related to item:
Contract Document Phase
Drainage System, Erosion Control and Layout...... $19,180.
Master Planning for drainage,
grading and Erosion Control................... 4,200.
Schematic Design Phase........................ 30% of fee
Design Development Phase...................... 30% of fee
Contract Document Phase....................... 40% of fee
Bidding Phase.................................... $600.
Construction Phase
Task 1 (submittal review)........ $800.
Task 2 (technical support)....... hourly, not to exceed $2,000.
Task 3 (site visits)............. hourly, plus expenses.
<PAGE> 3
Revised Klamath Falls Casino Civil Engineering Proposal
October 24, 1996
Page 3
C.2 Hourly Rate Schedule:
Principal........ $95.
Engineers........ 82.
CAD Drafters..... 50.
Administrative... 32.
C.3 Terms:
The Client shall pay to the Engineer when invoiced for
the services set forth in the Agreement. The Engineer's
accounts are due when presented and accounts overdue
shall bear a service charge of 1.5 percent per month.
Delay of payment may affect project schedule. We
request a retainer of $7,720, at the commencement of
work.
Fees for the original design to this date, are $2,925.50
and are in addition to this agreement.
D. Additional Services:
The work noted above is for a one time performance only. Additional work
or redesign occasioned by others shall constitute additional services,
and are to be reimbursed on an hourly basis. Additional services shall
not be executed without authorization.
E. Ownership of Documents:
See attached Exhibit A.
F. Reimbursable Expenses:
See attached Exhibit A.
G. Transfer of Electronic Media:
See attached Exhibit B.
<PAGE> 4
Revised Klamath Falls Casino Civil Engineering Proposal
October 24, 1996
Page 4
This concludes our proposal for civil engineering consulting services. These
terms are valid for 60 days. Should you find these documents acceptable, we
will submit a contract for signature. We thank you for this opportunity and
look forward to working with you again.
Sincerely,
/s/ ROBERT BOURDAGES
- ---------------------------
Robert Bourdages, P.E.
President
Nelson-Bourdages, Inc., P.S.
ACCEPTED BY: /s/ DUNCAN EDWARDS 10-28-96
----------------------------- ---------------
FOR: Inland Casino Corporation DATE:
<PAGE> 5
Revised Klamath Falls Casino Civil Engineering Proposal
October 24, 1996
Page 5
EXHIBIT "B"
NELSON BOURDAGES INC., P.S. (Engineer)
512 6th Street South Suite 202
Kirkland, WA 98033
October 24, 1996
TRANSFER OF AUTOCAD FILES FROM ENGINEER TO USER
The user recognizes that changes or modifications to the Engineer's instruments
of professional service introduced by anyone other than the Engineer may result
in adverse consequences which the Engineer can neither predict nor control.
Therefore, and in consideration of the Engineer's agreement to deliver its
instruments of professional service in machine readable form, the User agrees
to the fullest extent permitted by law, to hold harmless and indemnify the
Engineer from and against all claims, liabilities, losses, damages, and costs,
including, but not limited to attorney's fees, arising out of or in any way
connected with the modification, misinterpretation, misuse, or reuse by others
of the machine readable information and data provided by the Engineer under
this Agreement. The foregoing indemnification applies, without limitation, to
any use of the project documentation on other projects, for additions to this
project, or for completion of this project by others, excepting only such use as
may be authorized, in writing, by the Engineer. Transfer fee shall be $100.00
a disk.
ACCEPTED
/s/ DUNCAN EDWARDS 10-28-96
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USER DATE
REPRESENTING: INLAND CASINO CORP.
---------------------------------------------------
NAME OF BUSINESS
-------------------------------------------------
ADDRESS
---------------------------------------------------------
PROJECT NAME KLAMATH FALLS CASINO NB JOB # 96200C
-------------------------- --------------
<PAGE> 1
T H E A M E R I C A N I N S T I T U T E O F A R C H I T E C T S
Exhibit 10.3
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AIA Document A107
ABBREVIATED FORM OF AGREEMENT
BETWEEN OWNER AND CONTRACTOR
For CONSTRUCTION PROJECTS OF LIMITED SCOPE where
the Basis of Payment is a STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document includes abbreviated General Conditions
and should not be used with other general conditions.
It has been approved and endorsed by
The Associated General Contractors of America
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AGREEMENT
made as of the third day of December in the year of Nineteen Hundred and Ninety
Six
BETWEEN the Owner: Inland Casino Corporation
(Name and address) 4225 Executive Square
Suite 1650
La Jolla, CA 92037
and the Contractor: Pacific Industries Northwest, Inc.
(Name and address) dba Commercial Pacific Company
P.O. Box 584
Woodinville, WA 98072
The Project is: Kla-Mo-Ya Casino
(Name and address) Highway 97
Chiloquin, ID
The Architect is: Gaming Environment Design, Inc.
(Name and address) 1813 130th Avenue N.E.
Suite 220
BELLEVUE, WA 98005
The Owner and Contractor agree as set forth below.
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Copyright 1936, 1951, 1958, 1961, 1963, 1966, 1974, 1978, (c) 1987 by The
American Institute of Architects, 1735 New York Avenue, N.W., Washington,
D.C. 20006. Reproduction of the materiel herein or substantial quotation of
its provisions without written permission of the AIA violates the copyright
laws of the United States and will be subject to legal prosecution.
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT -
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A107-1987 1
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<PAGE> 2
ARTICLE 1
THE WORK OF THIS CONTRACT
1.1 The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract
Documents to be the responsibility of others, or as follows:
Varco-Pruden structural framing, roof secondary, "Patina Green" standing
seam roof with copper battens, wall secondary, furring channel on
outside of wall secondary, gable trim, gutters & downspouts, soffit at
2' overhand and all other required trims and flashing. Exact description
and scope of work per 11/18/96 proposal - attached herewith as
"Attachment A".
ARTICLE 2
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1 The date of commencement is the date from which the Contract Time of
Paragraph 2.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, show that the date will be fixed by a notice to proceed.)
2.2 The Contractor shall achieve Substantial Completion of the entire Work
not later than
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion
of certain portions of the Work, if not slated elsewhere in the Contract
Documents.)
March 15, 1996
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)
n/a
ARTICLE 3
CONTRACT SUM
3.1 The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum of Three Hundred
Twenty One Thousand Five Hundred Fifty Dollars ($321,550.00), subject to
additions and deductions as provided in the Contract Documents.
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT -
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A107-1987 2
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<PAGE> 3
3.2 The Contract Sum is based upon the following alternates, if any, which are
described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If decisions
on other alternates are to be made by the Owner subsequent to the execution of
this Agreement, attach a schedule of such other alternates showing the amount
for each and the date until which that amount is valid.
n/a
3.3 Unit prices, if any, are as follows:
n/a
ARTICLE 4
PROGRESS PAYMENTS
4.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner
shall make progress payments on accounts of the Contract Sum to the Contractor
as provided below and elsewhere in the Contract Documents. The period covered
by each Application for Payment shall be one calendar month ending on the last
day of the month, or as follows:
Work invoiced through end of month, due and payable on the 10th of the
following month.
4.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal place of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006 A107-1987 4
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ARTICLE 5
FINAL PAYMENT
5.1 Final payment, constituting the entire unpaid balance of the Contract Sum,
shall be made by the Owner to the Contractor when the Work has been completed,
the Contract fully performed, and a final Certificate for Payment has been
issued by the Architect.
ARTICLE 6
ENUMERATION OF CONTRACT DOCUMENTS
6.1 The Contract Documents are listed in Article 7 and, except for
Modifications issued after execution of this Agreement, are enumerated as
follows:
6.1.1 The Agreement is this executed Abbreviated Form of Agreement Between
Owner and Contractor, AIA Document A107, 1987 Edition.
6.1.2 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated ________________________ , and are as
follows:
Document Title Pages
n/a
6.1.3 The Specifications are those contained in the Project Manual dated as in
Subparagraph 6.1.2, and are as follows:
Section Title Pages
n/a
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
A107-1987 4
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<PAGE> 5
6.1.4 The Drawings are as follows, and are dated 11/19/96 unless a different
date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
Number Title Date
Preliminary Drawing Floor Plan (1) 11/19/96
By: Gaming Environment Design Inc.
dated: 11/19/96
6.1.5 The Addenda, if any, are as follows:
Number Title Pages
n/a
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 6.
6.1.6 Other documents, if any, forming part of the Contract Documents are as
follows:
(List any additional documents which are intended to form part of the Contract
Documents.)
Commercial Pacific Company proposal dated 11/18/96.
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
A107-1987 5
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GENERAL CONDITIONS
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ARTICLE 7
---------
CONTRACT DOCUMENTS
7.1 The Contract Documents consist of this Agreement with Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, addenda issued prior to the execution of this Agreement, other
documents listed in this Agreement and Modifications issued after execution of
this Agreement. The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work by the Contractor.
The Contract Documents are complementary, and what is required by one shall be
as binding as if required by all; performance by the Contractor shall be
required only to the extent consistent with the Contract Documents and
reasonably inferable from them as being necessary to produce the intended
results.
7.2 The Contract Documents shall not be construed to create a contractual
relationship of any kind (1) between the Architect and Contractor, (2) between
the Owner and a Subcontractor or Sub-subcontractor or (3) between any persons
or entities other than the Owner and Contractor.
7.3 Executions of the Contract by the Contractor is a representation that
the Contractor has visited the site and become familiar with the local
conditions under which the Work is to be performed.
7.4 The term "Work" means the construction and services required by the
Contract Documents, whether completed or partially completed, and includes all
other labor, materials, equipment and services provided or to be provided by
the Contractor to fulfill the Contractor's obligations. The work may constitute
the whole or a part of the Project.
ARTICLE 8
---------
OWNER
8.1 The Owner shall furnish surveys and a legal description of the site.
8.2 Including for permits and fees which are the responsibility of the
Owner under the Contract Documents, the Owner shall secure and pay for
necessary approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or permanent changes in
existing facilities.
8.3 If the Contractor fails to correct Work which is not in accordance with
the requirements of the Contract Documents or persistently fails to carry out
the Work in accordance with the Contract Documents, the Owner, by a written
order, may order the Contractor to stop the Work, or any portion thereof, until
the cause for such order has been eliminated; however, the right of the Owner to
stop the Work shall not give rise to a duty on the part of the Owner to exercise
this right for the benefit of the Contractor or any other person or entity.
ARTICLE 9
---------
CONTRACTOR
9.1 The Contractor shall supervise and direct the Work, using the
Contractor's best skill and attention. The Contractor shall be solely
responsible for and have control over construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the Work under
the Contract, unless Contract Documents give other specific instructions
concerning these matters.
9.2 Unless otherwise provided in the Contract Documents, the Contractor
shall provide and pay for labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for the proper execution and completion of
the Work, whether temporary or permanent and whether or not incorporated or to
be incorporated in the Work.
9.3 The Contractor shall enforce strict discipline and good order among the
Contractor's employees and other persons carrying out the Contract. The
Contractor shall not permit employment of unfit persons or persons not skilled
in tasks assigned to them.
9.4 The Contractor warrants to the Owner and Architect that materials and
equipment furnished under the Contract will be of good quality and new unless
otherwise required or permitted by the Contract Documents, that the Work will
be free from defects not inherent in the quality required or permitted, and
that the Work will conform with the requirements of the Contract Documents.
Work not conforming to these requirements, including substitutions not properly
approved and authorized, may be considered defective. The Contractor's warranty
excludes remedy for damage or defect caused by abuse, modifications not
executed by the Contractor, improper or insufficient maintenance, improper
operation, or normal wear and tear under normal usage. If required by the
Architect, the Contractor shall furnish satisfactory evidence as to the kind
and quality of materials and equipment.
9.5 Unless otherwise provided in the Contract Documents, the Contractor
shall pay sales, consumer, use, and other similar taxes which are legally
enacted when bids are received or negotiations concluded, whether or not yet
effective or merely scheduled to go into effect, and shall secure and pay for
the building permit and other permits and governmental fees, licenses and
inspections necessary for proper execution and completion of the Work.
9.6 The Contractor shall comply with and give notices required by laws,
ordinances, rules, regulations, and lawful orders of public authorities bearing
on performance of the Work. The Contractor shall promptly notify the Architect
and owner if the Drawings and Specifications are observed by the Contractor to
be at variance therewith.
9.7 The Contractor shall be responsible to the Owner for the acts and
omissions of the Contractor's employees, Subcontractors and their agents and
employees, and other persons performing portions of the Work under a contract
with the Contractor.
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT -
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A107-1987 6
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<PAGE> 7
9.8 The Contractor shall review, approve and submit to the Architect Shop
Drawings, Product Data, Samples and similar submittals required by the Contract
Documents with reasonable promptness. The Work shall be in accordance with
approved submittals. When professional certification of performance criteria of
materials, systems or equipment is required by the Contract Documents, the
Architect shall be entitled to rely upon the accuracy and completeness of such
certifications.
9.9 The Contractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations under the
Contract. At completion of the Work the Contractor shall remove from and about
the Project waste materials, rubbish, the Contractor's tools, construction
equipment, machinery and surplus materials.
9.10 The Contractor shall provide the Owner and Architect access to the Work
in preparation and progress wherever located.
9.11 The Contractor shall pay all royalties and license fees; shall defend
suits or claims for infringement of patent rights and shall hold the Owner
harmless from loss on account thereof, but shall not be responsible for such
defense or loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by the Contract Documents unless the
Contractor has reason to believe that there is an infringement of patent.
9.12 To the fullest extent permitted by law, the Contractor shall indemnify
and hold harmless the Owner, Architect, Architect's consultants, and agents and
employees of any of them from and against claims, damages, losses and expenses,
including but not limited to attorneys' fees, arising out of or resulting from
performance of the Work, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Contractor, a Subcontractor, anyone directly
or indirectly employed by them or anyone for whose acts they may be liable,
regardless of whether or not such claim, damage, loss or expense is caused in
part by a party indemnified hereunder. Such obligation shall not be construed
to negate, abridge, or reduce other rights or obligations of indemnity which
would otherwise exist as to a party or person described in this Paragraph 9.12.
9.12.1 In claims against any person or entity indemnified under this Paragraph
9.12 by an employee of the Contractor, a Subcontractor, anyone directly or
indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under this Paragraph 9.12 shall not be limited by a
limitation on amount or type of damages, compensation or benefits payable by or
for the Contractor or a Subcontractor under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.
9.12.2 The obligations of the Contractor under this Paragraph 9.12 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders,
Construction Change Directives, designs or specifications, or (2) the giving of
or the failure to give directions or instructions by the Architect, the
Architect's consultants, and agents and employees of any of them provided such
giving or failure to give is the primary cause of the injury or damage.
ARTICLE 10
----------
ADMINISTRATION OF THE CONTRACT
10.1 The Architect will provide administration of the Contract and will be
the Owner's representative (1) during construction, (2) until final payment is
due and (3) with the Owner's concurrence, from time to time during the
correction period described in Paragraph 18.1
10.2 The Architect will visit the site at intervals appropriate to the stage
of construction to become generally familiar with the progress and quality of
the completed Work and to determine in general if the Work is being performed in
a manner indicating that the Work, when completed, will be in accordance with
the Contract Documents. However, the Architect will not be required to make
exhaustive or continuous on-site inspections to check quality or quantity of the
Work. On the basis of on-site observations as an architect, the Architect will
keep the Owner informed of progress of the Work and will endeavor to guard the
Owner against defects and deficiencies in the Work.
10.3 The Architect will not have control over or charge of and will not be
responsible for construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection with the Work,
since these are solely the Contractor's responsibility as provided in Paragraphs
9.1 and 16.1. The Architect will not be responsible for the Contractor's
failure to carry out the Work in accordance with the Contract Documents.
10.4 Based on the Architect's observations and evaluations of the
Contractor's Applications for Payment, the Architect will review and certify the
amounts due the Contractor and will issue Certificates for Payment in such
amounts.
10.5 The Architect will interpret and decide matters concerning performance
under and requirements of the Contract Documents on written request of either
the Owner or Contractor. The Architect will make initial decisions on all
claims, disputes or other matters in question between the Owner and Contractor,
but will not be liable for results of any interpretations or decisions rendered
in good faith. The Architect's decisions in matters relating to aesthetic
effect will be final if consistent with the intent expressed in the Contract
Documents. All other decisions of the Architect, except those which have been
waived by making or acceptance of final payment, shall be subject to arbitration
upon the written demand of either party.
10.6 The Architect will have authority to reject Work which does not conform
to the Contract Documents.
10.7 The Architect will review and approve or take other appropriate action
upon the Contractor's submittals such as Shop Drawings, Product Data and
Samples, but only for the limited purpose of checking for conformance with
information given and the design concept expressed in the Contract Documents.
10.8 All claims or disputes between the Contractor and the Owner arising out
or relating to the Contract, or the breach thereof, shall be decided by
arbitration in accordance with the Construction Industry Arbitration Rules of
the American Arbitration Association currently in effect unless the parties
mutually agree otherwise and subject to an initial presentation of the claim or
dispute to the Architect as required under Paragraph 10.5. Notice of the demand
for arbitration shall be filed in writing with the other party to this Agreement
and with the American Arbitration Association and shall be made within a
reasonable time after the dispute has arisen. The award rendered by
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AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
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<PAGE> 8
the arbitrator or arbitrators shall be final, and judgment may be entered upon
it in accordance with applicable law in any court having jurisdiction thereof.
Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Contract Documents shall include,
by consolidation, joinder or in any other manner, any person or entity not a
party to the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in
the arbitration, (3) the interest or responsibility of such person or entity in
the matter is not insubstantial, and (4) such person or entity is not the
Architect or any of the Architect's employees or consultants. The agreement
herein among the parties to the Agreement and any other written agreement to
arbitrate referred to herein shall be specifically enforceable under applicable
law in any court having jurisdiction thereof.
ARTICLE 11
----------
SUBCONTRACTS
11.1 A Subcontractor is a person or entity who has a direct contract with
the Contractor to perform a portion of the Work at the site.
11.2 Unless otherwise stated in the Contract Documents or the bidding
requirements, the Contractor, as soon as practicable after award of the
Contract, shall furnish in writing to the Owner through the Architect the names
of the Subcontractors for each of the principal portions of the Work. The
Contractor shall not contract with any Subcontractor to whom the Owner or
Architect has made reasonable and timely objection. The Contractor shall not be
required to contract with anyone to whom the Contractor has made reasonable
objection. Contracts between the Contractor and Subcontractors shall (1)
require each Subcontractor, to the extent of the Work to be performed by the
Subcontractor, to be bound to the Contractor by the terms of the Contract
Documents, and to assume toward the Contractor all the obligations and
responsibilities which the Contractor, by the Contract Documents, assumes
toward the Owner and Architect, and (2) allow to the Subcontractor the benefit
of all rights, remedies and redress afforded to the Contractor by these
Contract Documents.
ARTICLE 12
----------
CONSTRUCTION BY OWNER OR
BY SEPARATE CONTRACTORS
12.1 The Owner reserves the right to perform construction or operations
related to the Project with the Owner's own forces, and to award separate
contracts in connection with other portions of the Project or other
construction or operations on the site under conditions of the contract
identical or substantially similar to these, including those portions related
to insurance and waiver of subrogation. If the Contractor claims that delay or
additional cost is involved because of such action by the Owner, the Contractor
shall make such claim as provided elsewhere in the Contract Documents.
12.2 The Contractor shall afford the Owner and separate contractors
reasonable opportunity for the introduction and storage of their materials and
equipment and performance of their activities, and shall connect and coordinate
the Contractor's construction and operations with theirs as required by the
Contract Documents.
12.3 Costs caused by delays, improperly timed activities or defective
construction shall be borne by the party responsible therefor.
ARTICLE 13
----------
CHANGES IN THE WORK
13.1 The Owner, without invalidating the Contract, may order changes in the
Work consisting of additions, deletions or modifications, the Contract Sum and
Contract Time being adjusted accordingly. Such changes in the Work shall be
authorized by written Change Order signed by the Owner, Contractor and
Architect, or by written Construction Change Directive signed by the Owner and
Architect.
13.2 The Contract Sum and Contract Time shall be changed only by Change
Order.
13.3 The cost or credit to the Owner from a change in the Work shall be
determined by mutual agreement.
ARTICLE 14
----------
TIME
14.1 Time limits stated in the Contract Documents are of the essence of the
Contract. By executing the Agreement the Contractor confirms that the Contract
Time is a reasonable period for performing the Work.
14.2 The date of Substantial Completion is the date certified by the
Architect in accordance with Paragraph 15.3.
14.3 If the Contractor is delayed at any time in progress of the Work by
changes ordered in the Work, by labor disputes, fire, unusual delay in
deliveries, abnormal adverse weather conditions not reasonably anticipatable,
unavoidable casualties or any causes beyond the Contractor's control, or by
other causes which the Architect determines may justify delay, then the
Contract Time shall be extended by Change Order for such reasonable time as the
architect may determine.
ARTICLE 15
----------
PAYMENTS AND COMPLETION
15.1 Payments shall be made as provided in Articles 4 and 5 of this
Agreement.
15.2 Payments may be withheld on account of (1) defective Work not remedied,
(2) claims filed by third parties, (3) failure of the Contractor to make
payments properly to Subcontractors or for labor, materials or equipment, (4)
reasonable evidence that the Work cannot be completed for the unpaid balance of
the Contract Sum, (5) damage to the Owner or another contractor, (6) reasonable
evidence that the Work will not be completed within the Contract Time and that
the unpaid balance would not be adequate to cover actual or liquidated damages
for the anticipated delay, or (7) persistent failure to carry out the Work in
accordance with the Contract Documents.
15.3 When the Architect agrees that the Work is substantially complete, the
Architect will issue a Certificate of Substantial Completion.
15.4 Final payment shall not become due until the Contractor has delivered
to the Owner a complete release of all liens arising out of this Contract or
receipts in full covering all labor, materials and equipment for which a lien
could be filed, or a bond satisfactory to the Owner to indemnify the Owner
against such
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AIA DOCUMENT A107 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
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WASHINGTON, D.C., 20006
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<PAGE> 9
lien. If such lien remains unsatisfied after payments are made, the Contractor
shall refund to the Owner all money that the Owner may be compelled to pay in
discharging such lien, including all costs and reasonable attorneys' fees.
15.5 The making of final payment shall constitute a waiver of claims by the
Owner except those arising from:
.1 liens, claims, security interests or encumbrances arising out of the
Contract and unsettled;
.2 failure of the Work to comply with the requirements of the Contract
Documents; or
.3 terms of special warranties required by the Contract Documents.
Acceptance of final payment by the Contractor, a Subcontractor or material
supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the
time of final Application for Payment.
ARTICLE 16
----------
PROTECTION OF PERSONS AND PROPERTY
16.1 The Contractor shall be responsible for initiating, maintaining, and
supervising all safety precautions and programs in connection with the
performance of the Contract. The Contractor shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage,
injury or loss to:
.1 employees on the Work and other persons who may be affected thereby;
.2 the Work and materials and equipment to be incorporated therein; and
.3 other property at the site or adjacent thereto.
The Contractor shall give notices and comply with applicable laws, ordinances,
rules, regulations and lawful orders of public authorities bearing on safety of
persons and property and their protection from damage, injury or loss. The
Contractor shall promptly remedy damage and loss to property at the site caused
in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or
anyone directly or indirectly employed by any of them, or by anyone for whose
acts they may be liable and for which the Contractor is responsible under
Subparagraphs 16.1.2 and 16.1.3, except for damage or loss attributable to acts
or omissions of the Owner or Architect or by anyone for whose acts either of
them may be liable, and not attributable to the fault or negligence of the
Contractor. The foregoing obligations of the Contractor are in addition to the
Contractor's obligations under Paragraph 9.12.
16.2 The Contractor shall not be required to perform without consent any
Work relating to asbestos or polychlorinated biphenyl (PCB).
ARTICLE 17
----------
INSURANCE
17.1 The Contractor shall purchase from and maintain in a company or
companies lawfully authorized to do business in the jurisdiction in which the
Project is located insurance for protection from claims under workers' or
workmen's compensation acts and other employee benefit acts which are
applicable, claims for damages because of bodily injury, including death, and
from claims for damages, other than to the Work itself, to property which may
arise out of or result from the Contractor's operations under the Contract,
whether such operations be by the Contractor or by a Subcontractor or anyone
directly or indirectly employed by any of them. This insurance shall be written
for not less than limits of liability specified in the Contract Documents or
required by law, whichever coverage is greater, and shall include contractual
liability insurance applicable to the Contractor's obligations under Paragraph
9.12. Certificates of such insurance shall be filed with the Owner prior to the
commencement of the Work.
17.2 The Owner shall be responsible for purchasing and maintaining the
Owner's usual liability insurance. Optionally, the Owner may purchase and
maintain other insurance for self-protection against claims which may arise
from operations under the Contract. The Contractor shall not be responsible for
purchasing and maintaining this optional Owner's liability insurance unless
specifically required by the Contract Documents.
17.3 Unless otherwise provided, the Owner shall purchase and maintain, in a
company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located, property insurance upon the entire Work at the
site to the full insurable value thereof. This insurance shall be on an
all-risk policy form and shall include interests of the Owner, the Contractor,
Subcontractors and Sub-subcontractors in the Work and shall insure against the
perils of fire and extended coverage and physical loss or damage including,
without duplication of coverage, theft, vandalism and malicious mischief.
17.4 A loss insured under Owner's property insurance shall be adjusted with
the Owner and made payable to the Owner as fiduciary for the insureds, as their
interests may appear, subject to the requirements of any applicable mortgagee
clause.
17.5 The Owner shall file a copy of each policy with the Contractor before
an exposure to loss may occur. Each policy shall contain a provision that the
policy will not be cancelled or allowed to expire until at least 30 days' prior
written notice has been given to the Contractor.
17.6 The Owner and Contractor waive all rights against each other and the
Architect, Architect's consultants, separate contractors described in Article
12, if any, and any of their subcontractors, sub-subcontractors, agents and
employees, for damages caused by fire or other perils to the extent covered by
property insurance obtained pursuant to this Article 17 or any other property
insurance applicable to the Work, except such rights as they may have to the
proceeds of such insurance held by the Owner as fiduciary. The Contractor shall
require similar waivers in favor of the Owner and the Contractor by
Subcontractors and Sub-subcontractors. The Owner shall require similar waivers
in favor of the Owner and Contractor by the Architect, Architect's consultants,
separate contractors described in Article 12, if any, and the subcontractors,
sub-subcontractors, agents and employees of any of them.
ARTICLE 18
----------
CORRECTION OF WORK
18.1 The Contractor shall promptly correct Work rejected by the Architect or
failing to conform to the requirements of the Contract Documents, whether
observed before or after Substantial Completion and whether or not fabricated,
installed or completed, and shall correct any Work found to be not in
accordance with the requirements of the Contract Documents within a period of
one year from the date of Substantial Com-
- -------------------------------------------------------------------------------
AIA DOCUMENT A107 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
9 A107-1987 NINTH EDITION * AIA * copyright 1987 * THE AMERICAN
INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.
<PAGE> 10
pletion of the Contract or by terms of an applicable special warranty required
by the Contract Documents. The provisions of this Article 18 apply to Work
done by Subcontractors as well as to Work done by direct employees of the
Contractor.
18.2 Nothing contained in this Article 18 shall be construed to establish a
period of limitation with respect to other obligations which the Contractor
might have under the Contract Documents. Establishment of the time period of
one year as described in Paragraph 18.1 relates only to the specific obligation
of the Contractor to correct the Work, and has no relationship to the time
within which the obligation to comply with the Contract Documents may be sought
to be enforced, nor to the time within which proceedings may be commenced to
establish the Contractor's liability with respect to the Contractor's
obligations other than specifically to correct the Work.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 The Contract shall be governed by the law of the place where the Project
is located.
19.2 As between the Owner and the Contractor, any applicable statute of
limitations shall commence to run and any alleged cause of action shall be
deemed to have accrued:
.1 not later than the date of Substantial Completion for acts or
failures to act occurring prior to the relevant date of
Substantial Completion;
.2 not later than the date of issuance of the final Certificate for
Payment for acts or failures to act occurring subsequent to the
relevant date of Substantial Completion and prior to issuance of
the final Certificate for Payment; and
.3 not later than the date of the relevant act or failure to act by
the Contractor for acts or failures to act occurring after the
date of the final Certificate for Payment.
ARTICLE 20
TERMINATION OF THE CONTRACT
20.1 If the architect fails to recommend payment for a period of 30 days
through no fault of the Contractor, or if the Owner fails to make payment
thereon for a period of 30 days, the Contractor may, upon seven additional
days' written notice to the Owner and the Architect, terminate the Contract and
recover from the Owner payment for Work executed and for proven loss with
respect to materials, equipment, tools and construction equipment and
machinery, including reasonable overhead, profit and damages applicable to the
Project.
20.2 If the Contractor defaults or persistently fails or neglects to carry
out the Work in accordance with the Contract Documents or fails to perform a
provision of the Contract, the Owner, after seven days' written notice to the
Contractor and without prejudice to any other remedy the Owner may have, may
make good such deficiencies and may deduct the cost thereof, including
compensation for the Architect's services and expenses made necessary thereby,
from the payment then or thereafter due the Contractor. Alternatively, at the
Owner's option, and upon certification by the Architect, that sufficient cause
exists to justify such action, the Owner may terminate the Contract and take
possession of the site and of all materials, equipment, tools, and construction
equipment and machinery thereon owned by the Contractor and may finish the Work
by whatever method the Owner may deem expedient. If the unpaid balance of the
Contract Sum exceeds costs of finishing the Work, including compensation for
the Architect's services and expenses made necessary thereby, such excess shall
be paid to the Contractor, but if such costs exceeded such unpaid balance, the
Contractor shall pay the difference to the Owner.
<TABLE>
<CAPTION>
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<S> <C>
AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
10 A107-1987 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to legal prosecution.
</TABLE>
<PAGE> 11
ARTICLE 21
----------
OTHER CONDITIONS OR PROVISIONS
This Agreement entered into as of the day and year first written above.
OWNER CONTRACTOR
Pacific Industries, Inc.
DBA Commercial Pacific Co.
/s/ Duncan Edwards /s/ James F. Armstrong
- ---------------------------- -------------------------------
(Signature) (Signature)
Duncan Edwards, as Agent for James F. Armstrong,
Inland Casino Corporation Operations Manager
- ---------------------------- -------------------------------
(Printed name and title) (Printed name and title)
[AIA LOGO] CAUTION: You should sign an original AIA document which has this
caution printed in red. An original assures that changes will
not be obscured as may occur when documents are reproduced.
- --------------------------------------------------------------------------------
AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT -
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A107-1987 11
WARNING: Unlicensed photocopying violates U.S. copyright law and is subject to
legal prosecution
11
<PAGE> 12
[COMMERCIAL PACIFIC LOGO] ATTACHMENT A
COMMERCIAL PACIFIC
COMPANY
P.O. Box 584
Woodinville, Washington 98072
(206) 483-6686 - Fax: (206) 486-2158
November 18, 1996
Lawton Design Group
5566 Canfield Place North
Seattle, WA 98103
ATTN: Julie Lawton
RE: Klamath Falls Casino
Dear Julie,
Thank you for your continued interests in a new Varco-Pruden Building. Based on
your revised preliminary drawing we received, Commercial Pacific Company
proposes to furnish and erect one building with the following specifications:
1. Size
----
One building 90'-0 feet wide x 178'-0 long with an eave height of 14
feet. Roof slope to be 6:12.
62' gable / dormer with valley framing at North side.
62' x 9' "push out" area with gable / dormer and valley framing at
South side.
2. Design Loads
------------
1994 UBC
50 PSF snow load
30 MPH wind load, exposure "B"
5 PSF sprinkler / mechanical load
3. Insulation
----------
Fiberglass blanket with R-19, U.L. rated with black vinyl facing.
Insulation is to be installed at roof area only.
A PACIFIC INDUSTRIES NORTHWEST, INC., COMPANY
<PAGE> 13
Lawton Design Group November 18, 1996
Attn: Julie Lawton Page Two
4. Wall Secondary
--------------
Wall girts 4'-0 with vertical furring channel at 2'-0 o.c. Wood siding
and batt insulation by others.
5. Roof Sheeting
-------------
Roof to be Varco Pruden - 24 gauge "Patina Green", with 20 year factory
paint finish and "Copper" battens.
6. Canopy / Overhang
-----------------
2'-0 roof canopy / overhang furnished all around building with metal
panel soffit.
7. Gutters and Downspouts
----------------------
Eave gutter and downspouts furnished as required.
8. Porte Cochere
-------------
45' x 62' porte cochere structural steel (tube columns and perimeter
beams) with roof to match building. Wood trusses and purlins by others.
9. Mezzanine
---------
Approximately 300 sf mechanical mezzanine structural framing furnished
including columns, beams, bar joists, pan deck with edge angle, and one
steel stair. Concrete floor and stair streads by others.
10. Drawings
--------
Anchor bolts drawings, steel building drawings, and structural
calculations will be provided.
ALSO INCLUDED:
- --------------
Anchor bolts and complete erection service.
<PAGE> 14
Lawton Design Group November 18, 1996
Attn: Julie Lawton Page Three
THE FOLLOWING ITEMS ARE NOT INCLUDED:
- ------------------------------------
Building permit or plan check fees, architectural drawings, site work,
foundations and floor slabs, plumbing, electrical, heating, any interior
finish, wall siding, wall insulation, trusses at porte cochere, structural
steel finish paint, if required, fans, louvers, vents, windows and doors.
PRICE
- -----
The total price for the above described building erected is Three Hundred
Twenty One Thousand Five Hundred Fifty Dollars ($321,550.00), not including any
applicable taxes.
GENERAL CONDITIONS
- ------------------
1. Terms - 20% deposit with order, balance on completion or work completed
at the end of the month, invoiced and payable by the 10th of the
following month.
2. This quotation is good for 30 days.
3. Labor prices included are subject to 20 feet minimum clear, level
(backfilled) ground around perimeter of building.
If you would like us to proceed with this building, please indicate your
acceptance by signing in the space provided below and return one copy for our
files, along with the deposit check.
Please call if you have any questions.
Cordially yours,
COMMERCIAL PACIFIC COMPANY
James F. Armstrong
JFA:la
Accepted by:________________________________
Date__________________ j/klamath.pro
<PAGE> 1
EXHIBIT 10.4
[THE AMERICAN INSTITUTE OF ARCHITECTS LETTERHEAD]
AIA Document A401
STANDARD FORM OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document has been approved and endorsed by the American
Subcontractors Association and the Associated Specialty Contractors, Inc.
- --------------------------------------------------------------------------------
AGREEMENT
made as of the Third (3) day of January in the year of Nineteen Hundred and
Ninety Seven
BETWEEN the Contractor: Inland Casino Corporation
(Name and Address) 4225 Executive Square, Suite 1650
La Jolla, CA 92037
Coit Power Inc.
1209 N. 2nd Street
Suite 108
El Cajon, CA 92021
and the Subcontractor: Coit Power Incorporated
(Name and Address) 1209 N. 2nd Street, Suite 108
El Cajon, CA 92021
The Contractor has made a contract for construction dated_______________with
The Owner: Inland Casino Corporation
(Name and Address) 4225 Executive Square, Suite 1650
La Jolla, CA 92037
For the following Project:
(Name and Location) KLA-MO-YA Casino Phase I
34333 Highway 97 North
Chiloquin, Oregon 97624
which Contract is hereinafter referred to as the Prime Contract and which
provides for the furnishing of labor, materials, equipment and services in
connection with the construction of the Project. A copy of the Prime Contract,
consisting of the Agreement Between Owner and Contractor (from which
compensation amounts may be deleted) and the other Contract Documents
enumerated therein has been made available to the Subcontractor.
The Architect for the Project is: Gaming Environment Design, Inc.
(Name and Address) 1813 130th Ave. NE, Suite 220
Bellevue, WA 98005
The Contractor and the Subcontractor agree as set forth below.
- ------------------------------------------------------------------------------
Copyright 1915, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967, 1972, 1978,
(C)1987 by the American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006. Reproduction of the material herein or substantial
quotation of its provisions without written permission of the AIA violates the
copyright laws of the United States and will be subject to legal prosecution.
- -------------------------------------------------------------------------------
<PAGE> 2
- -------------------------------------------------------------------------------
TERMS AND CONDITIONS OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
- -------------------------------------------------------------------------------
ARTICLE 1
THE SUBCONTRACT DOCUMENTS
1.1. The Subcontract Documents consist of (1) this Agreement; (2) the Prime
Contract, consisting of the Agreement between the Owner and Contractor and the
other Contract Documents enumerated therein, including Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of the Agreement between the
Owner and Contractor and Modifications issued subsequent to the execution of the
Agreement between the Owner and Contractor, whether before or after the
execution of this Agreement, and other Contract Documents, if any, listed in the
Owner-Contractor Agreement; (3) other documents listed in Article 16 of this
Agreement; and (4) Modifications to this Subcontract issued after execution of
this Agreement. These form the Subcontract, and are as fully a part of the
Subcontract as if attached to this Agreement or repeated herein. The Subcontract
represents the entire and integrated agreement between the parties hereto and
supersedes prior negotiations, representations or agreements, either written or
oral. An enumeration of the Subcontract Documents, other than Modifications
issued subsequent to the execution of this Agreement, appears in Article 16.
1.2 The Subcontractor shall be furnished copies of the Subcontract Documents
upon request, but the Contractor may charge the Subcontractor for the cost of
reproduction.
ARTICLE 2
MUTUAL RIGHTS AND RESPONSIBILITIES
2.1 The Contractor and Subcontractor shall be mutually bound by the terms of
this Agreement and, to the extent that provisions of the Prime Contract apply to
the Work of the Subcontractor, the Contractor shall assume toward the
Subcontractor all obligations and responsibilities that the Owner, under the
Prime Contract, assumes toward the Contractor, and the Subcontractor shall
assume toward the Contractor all obligations and responsibilities which the
Contractor, under the Prime Contract, assumes toward the Owner and the
Architect. The Contractor shall have the benefit of all rights, remedies and
redress against the Subcontractor which the Owner, under the Prime Contract, has
against the Contractor, and the Subcontractor shall have the benefit of all
rights, remedies and redress against the Contractor which the Contractor, under
the Prime Contract, has against the Owner, insofar as applicable to this
Subcontract. Where a provision of the Prime Contract is inconsistent with a
provision of this Agreement, this Agreement shall govern.
2.2 The Contractor may require the Subcontractor to enter into agreements
with Sub-subcontractors performing portions of the Work of this Subcontract by
which the Subcontractor and the Sub-subcontractor are mutually bound, to the
extent of the Work to be performed by the Sub-subcontractor, assuming toward
each other all obligations and responsibilities which the Contractor and
Subcontractor assume toward each other and having the benefit of all rights,
remedies and redress each against the other which the Contractor and
Subcontractor have by virtue of the provisions of this Agreement.
ARTICLE 3
CONTRACTOR
3.1 SERVICES PROVIDED BY THE CONTRACTOR
3.1.1 The Contractor shall cooperate with the Subcontractor in scheduling and
performing the Contractor's Work to avoid conflicts or interference in the
Subcontractor's Work and shall expedite written responses to submittals made by
the Subcontractor in accordance with Paragraph 4.1 and Article 5. As soon as
practicable after execution of this Agreement, the Contractor shall provide the
Subcontractor copies of the Contractor's construction schedule and schedule of
submittals, together with such additional scheduling details as will enable the
Subcontractor to plan and perform the Subcontractor's Work properly. The
Subcontractor shall be notified promptly of subsequent changes in the
construction and submittal schedules and additional scheduling details.
3.1.2 The Contractor shall provide suitable areas for storage of the
Subcontractor's materials and equipment during the course of the Work.
Additional costs to the Subcontractor resulting from relocation of such
facilities at the direction of the Contractor, except as previously agreed upon,
shall be reimbursed by the Contractor.
3.1.3 Except as provided in Article 14, the Contractor's equipment will be
available to the Subcontractor only at the Contractor's discretion and on
mutually satisfactory terms.
3.2 COMMUNICATIONS
3.2.1 The Contractor shall promptly make available to the Subcontractor
information which affects this Subcontract and which becomes available to the
Contractor subsequent to execution of the Subcontract.
3.2.2 The Contractor shall not give instructions or orders directly to
employees or workmen of the Subcontractor, except to persons designated as
authorized representatives of the Subcontractor.
3.2.3 The Contractor shall permit the Subcontractor to request directly from
the Architect information regarding the percentages of completion and the
amount certified on account of Work done by the Subcontractor.
3.2.4 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Contractor, a
subcontractor or anyone directly or indirectly employed by them (other than the
Subcontractor), the Contractor shall, prior to harmful exposure of the
Subcontractor's employees to such substance, give written notice of the chemical
composition thereof to the Subcontractor in sufficient detail and time to permit
the Subcontractor's compliance with such laws.
3.3 CLAIMS BY THE CONTRACTOR
3.3.1 Liquidated damages for delay, if provided for in Paragraph 9.3 of this
Agreement, shall be assessed against the Subcontractor only to the extent caused
by the Subcontractor, the Subcontractor's employees and agents,
Sub-subcontractors, suppliers or any person or entity for whose acts the Subcon-
- -------------------------------------------------------------------------------
AIA DOCUMENT ASDI o CONTRACTOR-SUBCONTRACTOR AGREEMENT o
TWELFTH EDITION o AIA(R) o (C) 1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A401-1987 2
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 3
tractor may be liable, and in no case for delays or causes arising outside the
scope of this Subcontract.
3.3.3 Except as may be indicated in this Agreement, the Contractor agrees that
no claim for payment for services rendered or materials and equipment furnished
by the Contractor to the Subcontractor shall be valid without prior notice to
the Subcontractor and unless written notice thereof is given by the Contractor
to the Subcontractor not later than the ninth day of the calendar month
following that in which the claim originated.
3.4 CONTRACTOR'S REMEDIES
3.4.1 If the Subcontractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within three working days after receipt
of written notice from the Contractor to commence and continue correction of
such default or neglect with diligence and promptness, the Contractor may, after
three days following receipt by the Subcontractor of an additional written
notice, and without prejudice to any other remedy the Contractor may have, make
good such deficiencies and may deduct the cost thereof from the payments then or
thereafter due the Subcontractor, provided, however, that if such action is
based upon faulty workmanship or materials and equipment, the Architect shall
first have determined that the workmanship or materials and equipment are not in
accordance with requirements of the Prime Contract.
ARTICLE 4
SUBCONTRACTOR
4.1 EXECUTION AND PROGRESS OF THE WORK
4.1.1 The Subcontractor shall cooperate with the Contractor in scheduling and
performing the Subcontractor's Work to avoid conflict, delay in or interference
with the Work of the Contractor, other subcontractors or Owner's own forces.
4.1.2 The Subcontractor shall promptly submit Shop Drawings, Product Data,
Samples and similar submissions required by the Subcontractor Documents with
reasonable promptness and in such sequence as to cause no delay in the Work or
in the activities of the Contractor or other subcontractors.
4.1.3 The Subcontractor shall submit to the Contractor a schedule of values
allocated to the various parts of the Work of this Subcontract, aggregating the
Subcontract Sum, made out in such detail as the Contractor and Subcontractor may
agree upon or as required by the Owner, and supported by such evidence as the
Contractor may direct. In applying for payment, the Subcontractor shall submit
statements based upon this schedule.
4.1.4 The Subcontractor shall furnish to the Contractor periodic progress
reports on the Work of this Subcontract as mutually agreed, including
information on the status of materials and equipment which may be in the course
of preparation or manufacture.
4.1.5 The Subcontractor agrees that the Architect will have the authority to
reject Work which does not conform to the Prime Contract. The Architect's
decisions on matters relating to aesthetic effect shall be final if consistent
with the intent expressed in the Prime Contract.
4.1.6 The Subcontractor shall pay for materials, equipment and labor used in
connection with the performance of this Subcontract through the period covered
by previous payments received from the Contractor, and shall furnish
satisfactory evidence, when requested by the Contractor, to verify compliance
with the above requirements.
4.1.7 The Subcontractor shall take necessary precautions to protect properly
the Work of other subcontractors from damage caused by operations under this
Subcontract.
4.1.8 The Subcontractor shall cooperate with the Contractor, other
subcontractors and the Owner's own forces whose Work might interfere with the
Subcontractor's Work. The Subcontractor shall participate in the preparation of
coordinated drawings in areas of congestion, if required by the Prime Contract,
specifically noting and advising the Contractor of potential conflicts between
the Work of the Subcontractor and that of the Contractor, other subcontractors
or the Owner's own forces.
4.2 LAWS, PERMITS, FEES AND NOTICES
4.2.1 The Subcontractor shall give notices and comply with laws, ordinances,
rules, regulations and orders of public authorities bearing on performance of
the Work of this Subcontract. The Subcontractor shall secure and pay for
permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Subcontractor's Work, the furnishing of which is
required of the Contractor by the Prime Contract.
4.2.2 The Subcontractor shall comply with Federal, state and local tax laws,
social security acts, unemployment compensation acts and workers' or workmen's
compensation acts insofar as applicable to the performance of this Subcontract.
4.3 SAFETY PRECAUTIONS AND PROCEDURES
4.3.1 The Subcontractor shall take reasonable safety precautions with respect
to performance of this Subcontract, shall comply with safety measures initiated
by the Contractor and with applicable laws, ordinances, rules, regulations and
orders of public authorities for the safety of persons or property in accordance
with the requirements of the Prime Contract. The Subcontractor shall report to
the Contractor within three days an injury to an employee or agent of the
Subcontractor which occurred at the site.
4.3.2 If hazardous substances of a type of which an employer is required by law
to notify its employees are being used on the site by the Subcontractor, the
Subcontractor's Sub-subcontractors or anyone directly or indirectly employed by
them, the Subcontractor shall, prior to harmful exposure of any employees on the
site to such substance, give written notice of the chemical composition thereof
to the Contractor in sufficient detail and time to permit compliance with such
laws by the Contractor, other subcontractors and other employers on the site.
4.3.3 In the event the Subcontractor encounters on the site material reasonably
believed to be asbestos or polychlorinated biphenyl (PCB) which has not been
rendered harmless, the Subcontractor shall immediately stop Work in the area
affected and report the condition to the Contractor in writing. The Work in the
affected area shall resume in the absence of asbestos or polychlorinated
biphenyl (PCB), or when it has been rendered harmless, by written agreement of
the Contractor and Subcontractor, or in accordance with final determination by
the Architect on which arbitration has not been demanded, or by arbitration as
provided in this Agreement. The Subcontractor shall not be required pursuant to
Article 5 to perform without consent any Work relating to asbestos or
polychlorinated biphenyl (PCB).
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
3 A401-1987 NINTH EDITION * AIA * copyright 1987 * THE AMERICAN
INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.
<PAGE> 4
4.3.4 To the fullest extent permitted by law, the Contractor shall indemnify
and hold harmless the Subcontractor, the Subcontractor's Sub-subcontractors, and
agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorneys' fees, arising out of or
resulting from performance of the Work in the affected area if in fact the
material is asbestos or polychlorinated biphenyl (PCB) and has not been rendered
harmless, provided that such claim, damage, loss or expense is attributable to
bodily injury, sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself) including loss of use resulting
therefrom, but only to the extent caused in whole or in part by negligent acts
or omissions of the Contractor, Architect, Owner, anyone directly or indirectly
employed by any of them, or anyone for whose acts any of them may be liable,
regardless of whether or not such claim, damage, loss or expense is caused in
part by a party indemnified hereunder. Such obligation shall not be construed to
negate, abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Subparagraph 4.3.4.
4.4 CLEANING UP
4.4.1 The Subcontractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations performed under
this Subcontract. The Subcontractor shall not be held responsible for unclean
conditions caused by other contractors or subcontractors.
4.5 WARRANTY
4.5.1 The Subcontractor warrants to the Owner, Architect and Contractor that
materials and equipment furnished under this Subcontract will be of good quality
and new unless otherwise required or permitted by the Subcontract Documents,
that the Work of this Subcontract will be free from defects not inherent in the
quality required or permitted, and that the Work will conform with the
requirements of the Subcontract Documents. Work not conforming to these
requirements, including substitutions not properly approved and authorized, may
be considered defective. The Subcontractor's warranty excludes remedy for damage
or defect caused by abuse, modifications not executed by the Subcontractor,
improper or insufficient maintenance, improper operation, or normal wear and
tear under normal usage. This warranty shall be in addition to and not in
limitation of any other warranty or remedy required by law or by the Subcontract
Documents.
4.6 INDEMNIFICATION
4.6.1 To the fullest extent permitted by law, the Subcontractor shall
indemnify and hold harmless the Owner, Contractor, Architect, Architect's
consultants, and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorney's fees,
arising out of or resulting from performance of the Subcontractor's Work under
this Subcontract, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Subcontractor, the Subcontractor's
Sub-subcontractors, anyone directly or indirectly employed by them or anyone for
whose acts they may be liable, regardless of whether or not such claim, damage,
loss or expense is caused in part by a party indemnified hereunder. Such
obligation shall not be construed to negate, abridge, or otherwise reduce other
rights or obligations of indemnity which would otherwise exist as to a party or
person described in this Paragraph 4.6.
4.6.2 In claims against any person or entity indemnified under this Paragraph
4.6 by an employee of the Subcontractor, the Subcontractor's Sub-subcontractors,
anyone directly or indirectly employed by them or anyone for whose acts they may
be liable, the indemnification obligation under this Paragraph 4.6 shall not be
limited by a limitation on amount or type of damages, compensation or benefits
payable by or for the Subcontractor or the Subcontractor's Sub-subcontractors
under workers' or workmen's compensation acts, disability benefit acts or other
employee benefit acts.
4.6.3 The obligations of the Subcontractor under this Paragraph 4.6 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders, designs
or specifications, or (2) the giving of or the failure to give directions or
instructions by the Architect, the Architect's consultants, and agents and
employees of any of them, provided such giving or failure to give is the primary
cause of the injury or damage.
4.7 REMEDIES FOR NONPAYMENT
4.7.1 If the Contractor does not pay the Subcontractor through no fault of the
Subcontractor, within seven days from the time payment should be made as
provided in this Agreement, the Subcontract may, without prejudice to other
available remedies, upon seven additional days' written notice to the
Contractor, stop the Work of this Subcontract until payment of the amount owing
has been received. The Subcontract Sum shall, by appropriate adjustment, be
increased by the amount of the Subcontractor's reasonable costs of shutdown,
delay and start-up.
ARTICLE 5
CHANGES IN THE WORK
5.1 The Owner may make changes in the Work by issuing Modifications to the
Prime Contract. Upon receipt of such a modification issued subsequent to the
execution of the Subcontract Agreement, the Contractor shall promptly notify the
Subcontractor of the Modification. Unless otherwise directed by the Contractor,
the Subcontractor shall not thereafter order materials or perform Work which
would be inconsistent with the changes made by the Modifications to the Prime
Contract.
5.2 The Subcontractor may be ordered in writing by the Contractor, without
invalidating this Subcontract, to make changes in the Work within the general
scope of this Subcontract consisting of additions, deletions or other revisions,
including those required by Modifications to the Prime Contract issued
subsequent to the execution of this Agreement, the Subcontract Sum and the
Subcontract Time being adjusted accordingly. The Subcontractor, prior to the
commencement of such changed or revised Work, shall submit promptly to the
Contractor written copies of a claim for adjustment to the Subcontract Sum and
Subcontract Time for such revised Work in a manner consistent with requirements
of the Subcontract Documents.
5.3 The Subcontractor shall make claims promptly to the Contractor for
additional cost, extensions of time and damages for delays or other causes in
accordance with the Subcontract
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - OWNER-ARCHITECT AGREEMENT - A401-1987 4
TWELFTH EDITION - AIA - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 5
Documents. A claim which will affect or become part of a claim which the
Contractor is required to make under the Prime Contract within a specified time
period or in a specified manner shall be made in sufficient time to permit the
Contractor to satisfy the requirements of the Prime Contract. Such claims shall
be received by the Contractor not less than two working days preceding the time
by which the Contractor's claim must be made. Failure of the Subcontractor to
make such a timely claim shall bind the Subcontractor to the same consequences
as those to which the Contractor is bound.
ARTICLE 6
ARBITRATION
6.1 Any controversy or claim between the Contractor and the Subcontractor
arising out of or related to this Subcontract, or the breach thereof, shall be
settled by arbitration, which shall be conducted in the same manner and under
the same procedure as provided in the Prime Contract with respect to claims
between the Owner and the Contractor, except that a decision by the Architect
shall not be a condition precedent to arbitration. If the Prime Contract does
not provide for arbitration or fails to specify the manner and procedure for
arbitration, it shall be conducted in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise.
6.2 Except by written consent of the person or entity sought to be joined,
no arbitration arising out of or relating to the Subcontract, shall include, by
consolidation or joinder or in any other manner, any person or entity not a
party to the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, (3) the interest or responsibility of such person or entity in the
matter is not insubstantial, and (4) such person or entity is not the Architect,
the Architect's employee, the Architect's consultant, or an employee or agent of
any of them. This agreement to arbitrate and any other written agreement to
arbitrate with an additional person or persons referred to herein shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
6.3 The Contractor shall give the Subcontractor prompt written notice of any
demand received or made by the Contractor for arbitration if the dispute
involves or relates to the Work, materials, equipment, rights or
responsibilities of the Subcontractor. The Contractor shall consent to inclusion
of the Subcontractor in the arbitration proceeding whether by joinder,
consolidation or otherwise, if the Subcontractor requests in writing to be
included within ten days after receipt of the Contractor's notice.
6.4 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
6.5 This Article 6 shall not be deemed a limitation of rights or remedies
which the Subcontractor may have under Federal law, under state mechanics' lien
laws, or under applicable labor or material payment bonds unless such rights or
remedies are expressly waived by the Subcontractor.
ARTICLE 7
TERMINATION, SUSPENSION OR ASSIGNMENT OF THE SUBCONTRACT
7.1 TERMINATION BY THE SUBCONTRACTOR
7.1.1 The Subcontractor may terminate the Subcontract for the same reasons and
under the same circumstances and procedures with respect to the Contractor as
the Contractor may terminate with respect to the Owner under the Prime Contract,
or for nonpayment of amounts due under this Subcontract for 60 days or longer.
In the event of such termination by the Subcontractor for any reason which is
not the fault of the Subcontractor, Sub-subcontractors or their agents or
employees or other persons performing portions of the Work under contract with
the Subcontractor, the Subcontractor shall be entitled to recover from the
Contractor payment for Work executed and for proven loss with respect to
materials, equipment, tools, and construction equipment and machinery, including
reasonable overhead, profit and damages.
7.2 TERMINATION BY THE CONTRACTOR
7.2.1 If the Subcontractor persistently or repeatedly fails or neglects to
carry out the Work in accordance with the Subcontract Documents or otherwise to
perform in accordance with this Agreement and fails within seven days after
receipt of written notice to commence and continue correction of such default or
neglect with diligence and promptness, the Contractor may, after seven days
following receipt by the Subcontractor of an additional written notice and
without prejudice to any other remedy the Contractor may have, terminate the
Subcontract and finish the Subcontractor's Work by whatever method the
Contractor may deem expedient. If the unpaid balance of the Subcontract Sum
exceeds the expense of finishing the Subcontractor's Work, such excess shall be
paid to the Subcontractor, but if such expense exceeds such unpaid balance, the
Subcontractor shall pay the difference to the Contractor.
7.3 ASSIGNMENT OF THE SUBCONTRACT
7.3.1 In the event of termination of the Prime Contract by the Owner, the
Contractor may assign this Subcontract to the Owner, with the Owner's agreement,
subject to the provisions of the Prime Contract and to the prior rights of the
surety, if any, obligated under bonds relating to the Prime Contract. If the
Work of the Prime Contract has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.
7.3.2 The Subcontractor shall not assign the Work of this Subcontract without
the written consent of the Contractor, nor subcontract the whole of this
Subcontract without the written consent of the Contractor, nor further
subcontract portions of this Subcontract without written notification to the
Contractor when such notification is requested by the Contractor.
- --------------------------------------------------------------------------------
5 A401-1987 AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 6
ARTICLE 8
THE WORK OF THIS SUBCONTRACT
8.1 The Subcontractor shall execute the following portion of the Work
described in the Subcontract Documents, including all labor, materials,
equipment, services and other items required to complete such portion of the
Work, except to the extent specifically indicated in the Subcontract Documents
to be the responsibility of others:
Design Build electrical system and lighting for the KLA-MO-YA Casino in
Chiloquin Oregon. The bid is based on the design Development drawings - C-1,
C-2, C-3, C-4, C-5, C-6, C-7, C-8, C-9, C-10, C-11, C-12 - all dated 12-20-96,
A1.0, A1.1, A1.2 A1.3, A2.0, A2.1, A3.0, A3.1, A3.2, A4.0, S1, S2, S3, K1, K2,
K3, K4, K5, K6, K7. The K drawings are dated 12-16-96, the S drawings are
dated 12-3-96, A1.0-1.3, and 3.0 are dated 11-8-96 A2.0 - 4.0 are dated 12-2-96.
Electrical Performance Specification.
ARTICLE 9
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
9.1 The subcontractor's date of commencement is the date from which the
Contract Time of Paragraph 9.3 is measured; it shall be the date of the
Agreement, as first witness above, unless a different date is stated below or
provision is made for the date to be fixed in a notice to proceed issued by
the Contractor.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)
2-1-97
9.2 Unless the date of commencement is established by a notice to proceed
issued by the Contractor, or the Contractor has commenced visible Work at the
site under the Prime Contract, the Subcontractor shall notify the Contractor in
writing not less than five days before commencing the Subcontractor's Work to
permit the timely filing of mortgages, mechanic's liens and other security
interests.
9.3 The Work of this Subcontract shall be substantially completed not later
than 6-30-97
(Insert the calendar date or number of calendar days after the Subcontractor's
date of commencement. Also insert any requirements for earlier substantial
completion of certain portions of the Subcontractor's work, if not stated
elsewhere in the Subcontract Documents.)
, subject to adjustments of this Subcontract There as provided in the
Subcontract Documents.
(Insert provisions, if any, for Liquidated damages relating to failure to
complete on time.)
9.4 Time is of the essence of this Subcontract.
9.5 No extension of which will be valid without the Contractor's written
consent after claims made by the Subcontractor in accordance with Paragraph
5.2.
- -------------------------------------------------------------------------------
AIA DOCUMENT ASDI o CONTRACTOR-SUBCONTRACTOR AGREEMENT o
TWELFTH EDITION o AIA(R) o (C)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A401-1987 6
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 7
ARTICLE 10
SUBCONTRACT SUM
10.1 The Contractor shall pay the Subcontractor in current funds for
performance of the Subcontract the Subcontract Sum of subject to additions
and deductions as provided in the Subcontract Documents.
Two Hundred Eighty Four Thousand Four Hundred Sixty Seven and 33/100 Dollars
($284,467.33) subject to additions and deductions as provided in the
Subcontract Documents.
10.2 The Subcontract Sum is based upon the following alternates if any, which
are described in the Subcontract Documents and have been accepted by the Owner
and the Contractor:
(Insert the numbers or other identification of accepted alternates) N/A
10.3 Unit prices, if any, are as follows:
NA
ARTICLE 11
PROGRESS PAYMENTS
11.1 Based upon applications for payment submitted to the Contractor
by the Subcontractor, corresponding to Applications for Payment submitted by
the Contractor to the Architect, and Certificates for Payment issued by the
Architect, the Contractor shall make progress payments on account of the
Subcontract Sum to the Subcontractor as provided below and elsewhere in the
Subcontract Documents.
11.2 The period covered by each application for payment shall be one
calendar month ending on the last day of the month, or as follows:
The Twenty Fifth of the Month.
11.3 Provided an application for payment is received by the Contractor not
later than the _____ Twenty-Five day of a month, the Contractor shall include
the Subcontractor's Work covered by that application in the next Application for
Payment which the Contractor is entitled to submit to the Architect. The
Contractor shall pay the Subcontractor each progress payment
- ------------------------------------------------------------------------------
AIA DOCUMENT A107 o ABBREVIATED OWNER-SUBCONTRACTOR AGREEMENT o
NINTH EDITION o AIA(R) o (C)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006 A107-1987 7
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 8
within three working days after the Contractor receives payment from the
Owner. If the Architect does not issue a Certificate for Payment or the
Contractor does not receive payment for any cause which is not the fault of
the Subcontractor, the Contractor shall pay the Subcontractor, on demand, a
progress payment computed as provided in Paragraphs 11.7 and 11.8.
11.4 If an application for payment is received by the Contractor after the
application date fixed above, the Subcontractor's Work covered by it shall be
included by the Contractor in the next Application for Payment submitted to
the Architect.
11.5 Each application for payment shall be based upon the most recent
schedule of values submitted by the Subcontractor in accordance with the
Subcontract Documents. The schedule of values shall allocate the entire
Subcontract Sum among the various portions of the Subcontractor's Work and be
prepared in such form and supported by such data to substantiate its accuracy
as the Contractor may require. This schedule, unless objected to by the
Contractor, shall be used as a basis for reviewing the Subcontractor's
applications for payment.
11.6 Applications for payment submitted by the Subcontractor shall indicate
the percentage of completion of each position of the Subcontractor's Work as of
the end of the period covered by the application for payment.
11.7 Subject to the provisions of the Subcontract Documents, the amount of
each progress payment shall be computed as follows:
11.7.1 Take that portion of the Subcontractor Sum properly allocable to
completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract Sum
allocated to that portion of the Subcontractor's Work in the schedule of
values, less that percentage actually released, if any, from payments to the
Contractor on account of the Work of the Subcontractor. Pending final
determination of cost to the Contractor of changes in the Work which have been
properly authorized by Construction Change Directive, amounts not in dispute may
be included to the same extent provided in the Prime Contract, even though the
Subcontract Sum has not yet been adjusted;
11.7.2 Add that portion of the Subcontract Sum properly allocable to materials
and equipment delivered and suitably stored at the site by the Subcontractor
for subsequent incorporation in the Subcontractor's Work or, if approved in
advance by the Owner, suitably stored off the site at a location agreed upon in
writing, less the same percentage retainage required by the Prime Contract to be
applied to such materials and equipment in the Contractor's Application for
Payment;
11.7.3 Subtract the aggregate of previous payments made by the Contractor; and
11.7.4 Subtract amounts, if any, calculated under Subparagraph 11.7.1 or
11.l7.2 which are related to Work of the Subcontractor for which the Architect
has withheld or nullified, in whole or in part, a Certificate of Payment for a
cause which is the fault of the Subcontractor.
11.8 SUBSTANTIAL COMPLETION
11.8.1 When the Subcontractor's Work or a designated portion thereof is
substantially complete and in accordance with the requirements of the Prime
Contract, the Contractor shall, upon application by the Subcontractor, make
prompt application for payment for such Work. Within 30 days following
issuance by the Architect of the Certificate for Payment covering such
substantially completed Work, the Contractor shall, to the full extent allowed
in the Prime Contract, make payment to the Subcontractor, deducting any portion
of the funds for the Subcontractor's Work withheld in accordance with the
Certificate to cover costs of items to be completed or corrected by the
Subcontractor. Such payment to the Subcontractor shall be the entire unpaid
balance of the Subcontract Sum if a full release of retainage is allowed under
the Prime Contract for the Subcontractor's Work prior to the completion of the
entire Project. If the Prime Contract does not allow for a full release of
retainage, then such payment shall be an amount which, when added to previous
payments to the Subcontractor, will reduce the retainage on the Subcontractor's
substantially completed Work to the same percentage of retainage as that on the
Contractor's Work covered by the Certificate.
ARTICLE 12
FINAL PAYMENT
12.1 Final payment, constituting the entire unpaid balance of the
Subcontract Sum, shall be made by the Contractor to the subcontractor when the
Subcontractor's Work is fully performed in accordance with the requirements of
the Contract Documents, the Architect has issued a Certificate for Payment
covering the Subcontractor's completed Work and the Contractor has received
payment from the Owner. If, for any cause which is not the fault of the
Subcontractor, a Certificate for payment is not issued or the Contractor does
not receive timely payment or does not pay the Subcontractor within three
working days after receipt of payment from the owner, final payment to the
Subcontractor shall be made upon demand.
(Insert provisions for earlier final payment to the Subcontractor, if
applicable)
NA
12.2 Before issuance of the final payment, the Subcontractor, if required,
shall submit evidence satisfactory to the Contractor that all payrolls, bills
for materials and equipment, and all known indebtedness connected with the
Subcontractor's Work have been satisfied.
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
NINTH EDITION * AIA * copyright 1987 * THE AMERICAN A401-1987 8
INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.
<PAGE> 9
ARTICLE 13
----------
INSURANCE AND BONDS
-------------------
13.1 The Subcontractor shall purchase and maintain insurance on the
following types of coverage and limits of liability:
Insurance $1,000,000.00 coverage and Oregon Contractors License
13.2 Coverages, whether written on an occurrence or claims-made basis, shall
be maintained without interruption from date of commencement of the
Subcontractor's Work until date of final payment and termination of any coverage
required to be maintained after final payment.
13.3 Certificates of insurance acceptable to the Contractor shall be filed
with the Contractor prior to commencement of the Subcontractors' Work. These
certificates and the insurance policies required by this Article 13 shall
contain a provision that coverages afforded under the policies will not be
cancelled or allowed to expire until at least 30 days' prior written notice has
been given to the Contractor. If any of the foregoing insurance coverages are
required to remain in force after final payment and are reasonably available,
an additional certificate evidencing continuation of such coverage shall be
submitted with the final application for payment as required in Article 12. If
any information concerning reduction of coverage is not furnished by the
insurer, it shall be furnished by the Subcontractor with reasonable promptness
according to the Subcontractor's information and belief.
13.4 The Contractor shall furnish to the Subcontractor satisfactory evidence
of insurance required of the Contractor under the Prime Contract.
13.5 Waivers of Subrogation. The Contractor and Subcontractor waive all
rights against (1) each other and any of their Subcontractors,
Sub-subcontractors, agents and employees, each of the other, and (2) the Owner,
the Architect, the Architect's consultants, separate contractors, and any of
their subcontractors, sub-subcontractors, agents and employees for damages
caused by fire or other perils to the extent covered by property insurance
provided under the Prime Contract or other property insurance applicable to the
Work, except such rights as they may have to proceeds of such insurance held
by the Owner as fiduciary. The Subcontractor shall require of the
Subcontractor's Sub-subcontractors, agents and employees, by appropriate
agreements, written where legally required for validity, similar waivers in
favor of other parties enumerated herein. The policies shall provide such
waivers of subrogation by endorsement or otherwise. A waiver of subrogation
shall be effective as to a person or entity even though that person or entity
would otherwise have a duty of indemnification, contractual or otherwise, did
not pay the insurance premium directly or indirectly, and whether or not the
person or entity had an insurable interest in the property damaged.
13.6 The Contractor shall promptly, upon request of the Subcontractor,
furnish a copy or permit a copy to be made of any bond covering, payment of
obligations arising under the Subcontract.
13.7 Performance Bond and Payment Bond:
(If the Subcontractor is to furnish bonds, insert the specific requirements
here.)
NA
ARTICLE 14
----------
TEMPORARY FACILITIES AND WORKING CONDITIONS
14.1 The Contractor shall furnish and make available to the Subcontractor
the following temporary facilities, equipment and services; these shall be
furnished at no cost to the Subcontractor unless otherwise indicated below.
14.2 Specific working conditions: (Insert any applicable arrangements
concerning working conditions and labor matters for the project.)
NA
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 9
<PAGE> 10
ARTICLE 15
----------
MISCELLANEOUS PROVISIONS
15.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Subcontract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Subcontract
Documents.
15.2 Payments due and unpaid under this Subcontract shall bear interest from
the date payment is due at such rate as the parties may agree upon in writing
or, in the absence thereof, at the legal care prevailing from time to time at
the place where the Project is located.
(Insert rate of interest agreed upon, if any.)
NA
(Using laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's,
Contractor's and Subcontractor's principal places of business, the location of
the Project and elsewhere may effect the rapidity of this provision. Legal
advice should be obtained with respect to deletions or modifications, and also
regarding requirements each to written disclosures or waivers.)
ARTICLE 16
----------
ENUMERATION OF SUBCONTRACT DOCUMENTS
16.1 The Subcontract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows;
16.1.1 This executed Standard Form of Agreement Between Contractor and
Subcontractor, AIA Document A401, 1987 Edition;
16.1.2 The Prime Contract, consisting of the Agreement between the Owner and
Contractor dated as first entered above and the other Contract Documents
enumerated in the Owner-Contractor Agreement; Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda and other documents enumerated therein;
16.1.3 The following Modifications to the Prime Contract, if any, issued
subsequent to the execution of the Owner-Contractor Agreement but prior to the
execution of this Agreement;
Modification Date
See Attached
16.1.4 Other Documents, if any, forming part of the Subcontract Documents are
as follows:
(List any additional documents which are intended to form part of the
Subcontract Document. Requests for proposal and the Subcontractor's bid or
proposal should be listed here only if intended to be part of the Subcontract
Documents).
This Agreement entered into as of the day and year first written above.
CONTRACTOR SUBCONTRACTOR
/s/ Duncan Edwards /s/ Frank M. Coit
- -------------------------------- --------------------------------
(Signature) Duncan Edwards (Signature) Frank M. Coit
DUNCAN EDWARDS AGENT FOR:
INLAND CASINO CORP. FRANK M. COIT-PRESIDENT
- -------------------------------- --------------------------------
(PRINTED NAME AND TITLE) PRINTED NAME AND TITLE
[LOGO]
CAUTION: YOU SHOULD USE AN ORIGINAL AIA DOCUMENT WHICH HAS THIS CAUTION PRINTED
IN RED. AN ORIGINAL ASSURES THAT CHANGES WILL NOT BE OBSCURED AS MAY OCCUR WHEN
DOCUMENTS ARE REPRODUCED.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 A401-1987 10
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 11
[COIT POWER INC. LETTERHEAD]
December 23, 1996
Duncan Edwards
Timbercreek Consulting Group Inc.
2210 Greenfield Drive
El Cajon, Ca 92019
Re: Kla-Mo-Ya Casino electrical proposal
Dear Duncan,
Enclosed please find our proposal for the electrical system at the Chiloquin,
Oregon gaming facility. This of course is just an informal proposal to outline
what we can include for the price listed. Since this is a design-build format
for this project, some of the spec's are not available at this time, but can be
forseen in this estimate from our extensive experience with previous gaming
projects. Unless a substantial design change occurs, you can be assured that
the price of this electrical system as we outlined, will remain true.
As always, if you have any questions whatsoever, please give me a call at your
convenience.
Sincerely,
/s/ Frank M. Coit
Frank M. Coit
President
<PAGE> 12
[COIT POWER INC. LETTERHEAD]
PROPOSAL
We are pleased to submit for your consideration the following cost estimate for
the electrical system installation of the temporary gaming facility at
Chiloquin, Oregon.
Items included at this price are:
a) 10 - 25 ft. dual-head (bronze shoebox style), 1000 watt, metal halide light
pole fixtures, 480 volt, with 120 volt convenience outlets attached.
b) 11 - 100 watt, "Hadco", RF6 metal halide bollards, 277 volt.
c) "Halo" single circuit track lighting system, with L1540 fixtures.
d) 10 - "Hadco" WA2 - 70 watt metal halide floods for building exterior.
e) 1200 amp, 3-phase, 480 volt, main service cabinet, with ground fault
protection.
f) 100 amp, 480 volt, 3-phase service to marquee signage at road entry.
g) All materials needed to install wiring as per plans and specs submitted to
date.
h) Electrical design and engineering.
i) Exit and emergency lighting as required.
j) "Lithonia" 18-cell, parabolic lensed, fluorescent 2x4 lay-in, 3-lamp fixtures
in all management and computer operator's offices.
k) "Carlon" PVC floor boxes, with dark bronze PVC outlet covers, brass covers in
traffic areas. 1 - system for power, 1 - system for data (no wiring, conduit
only).
l) Underground utility trenching, conduit, and pull boxes to accommodate 4000
amp main building service as well as temporary building service.
Items excluded at this price:
a) Any wired systems below 120 volt.
b) Concrete bases for lighting poles or ground-based fixtures.
c) Signage wiring: supply power connections only.
d) Any fees associated with power company services.
e) Any wiring associated with gaming machines or signage other than supply
power to floor location, (floor box outlet).
g) Electrical permits or other government documents.
TOTAL ESTIMATE.....................$284,467.33
<PAGE> 13
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------------------------
ABCDEF MKW 01878 ISSUE DATE (MM/DD/YY)
CERTIFICATE OF INSURANCE / / 01/15/97
- -------------------------------------------------------------------------------------------------------------------------------
INSURANCE THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND
CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE
ANORSDALE INSURANCE POLICIES BELOW.
P.O. BOX 1672 --------------------------------------------------------------
EL CAJON, CA 92022 COMPANIES AFFORDING COVERAGE
--------------------------------------------------------------
COMPANY GOLDEN EAGLE INSURANCE
LETTER A
- -------------------------------------------------------------------------------------------------------------------------------
INSURED COMPANY HULL & COMPANY
LETTER B
COIT POWER INC. --------------------------------------------------------------
1209 2ND STREET COMPANY
EL CAJON, CA 92021 LETTER C
--------------------------------------------------------------
COMPANY
LETTER D
--------------------------------------------------------------
COMPANY
LETTER E
- -------------------------------------------------------------------------------------------------------------------------------
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY
PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH
THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL OF
THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- -------------------------------------------------------------------------------------------------------------------------------
CO POLICY EFFECTIVE POLICY EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE (MM/DD/YY) DATE (MM/DD/YY) LIMITS
- -------------------------------------------------------------------------------------------------------------------------------
B GENERAL LIABILITY F015SG411094 08/17/96 08/17/97 GENERAL AGGREGATE $2,000,000
X COMMERCIAL GENERAL LIABILITY ---------------------------------
CLAIMS MADE / / OCCUR. PRODUCTS-COMMON $1,000,000
OWNER'S & CONTRACTOR'S PROF. ---------------------------------
PERSONAL & ADV. INJURY $1,000,000
------------------------------- ---------------------------------
EACH OCCURRENCE $1,000,000
---------------------------------
FIRE DAMAGE $ 50,000
---------------------------------
MED. EXP. $ 1,000
- -------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED SINGLE
/ / ANY AUTO LIMIT $
/ / ALL OWNED AUTOS ---------------------------------
/ / SCHEDULED AUTOS BODILY INJURY
/ / OWNED AUTOS (PER PERSON) $
/ / NON-OWNED AUTOS ---------------------------------
/ / GARAGE LIABILITY BODILY INJURY
(PER ACCIDENT) $
---------------------------------
PROPERTY DAMAGE $
- -------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH OCCURRENCE $
/ / UMBRELLA FORM ---------------------------------
/ / OTHER THAN UMBRELLA FORM AGGREGATE $
- -------------------------------------------------------------------------------------------------------------------------------
A WORKERS COMPENSATION NWC32257902 09/06/96 09/06/97 STATUTORY LIMITS
AND ---------------------------------
EMPLOYERS' LIABILITY EACH ACCIDENT $1,000,000
---------------------------------
DECREASE POLICY LIMIT $1,000,000
---------------------------------
DECREASE EACH EMPLOYEE $1,000,000
- -------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATION ITEMS
COVERING WORK TO BE PERFORMED BY THE NAMED INSURED DURING THE POLICY TERM RE: KLA-MO-YA CASINO PHASE I 34333 HIGHWAY 97 NORTH
CHILOQUIN OREGON 97624
*30 DAY NOTICE OF CANCELLATION FOR NON-PAYMENT
- -------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIPTION POLICIES BE CANCELLED BEFORE THE EXPIRATION
KLAMATN TRIBES DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAKE 30 DAYS WRITTEN NOTICE
TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, NOT FAILURE TO MAIL SUCH NOTICE
P.O. BOX 936 SHALL IMPOSE NO QUALIFICATION OR LIABILITY OR ANY KIND UPON THE COMPANY, ITS
CHILOQUINI OR 97624 AGENT OR REPRESENTATIVES.
/s/ Louis J. Connell, Jr.
-------------------------------------------------------------------------------
AUTHORIZED REPRESENTATIVE
ACORD 25-5 (7/97) ACORD CORPORATION
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 14
ABCDEF CERTIFICATE OF INSURANCE MKW 01878 ISSUE DATE (MM/DD/YY)
01/15/97
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS
HANORSDALE INSURANCE UPON THE CERTIFICATE HOLDER. THIS
P.O. BOX 1672 CERTIFICATE DOES NOT AMEND, EXTEND OR
EL CAJON CA 92022 OR ALTER THE COVERAGE AFFORDED BY THE
POLICIES BELOW.
COMPANIES AFFORDING COVERAGE
INSURED COMPANY GOLDEN EAGLE INSURANCE
LETTER A
COIT POWER INC.
1209 2ND STREET COMPANY HULL & COMPANY
EL CAJON, CA 92021 LETTER B
COMPANY
LETTER C
COMPANY
LETTER D
COMPANY
LETTER E
- --------------------------------------------------------------------------------
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN
ISSUED TO THE INSURED NAME ABOVE FOR THE POLICY PERIOD INDICATED,
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY
PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT
TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN
MAY HAVE BEEN REDUCED BY PAID CLAIMS.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CO POLICY EFFECTIVE POLICY EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE (MM/DD/YY) DATE (MM/DD/YY) LIMITS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
B GENERAL LIABILITY F-155C411-04 08/17/96 08/17/97 GENERAL AGGREGATE $2,000,000
X COMMERCIAL GENERAL LIABILITY PRODUCTS $1,000,000
__ CLAIMS MADE __ OCCUR. PERSONAL & ADV. INJURY $1,000,000
OWNER'S & CONTRACTOR'S PROF. EACH OCCURRENCE $1,000,000
FIRE DAMAGE $ 50,000
---------------------------- MED. EXP. $ 1,000
- -------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY COMBINED, SINGLE
LIMIT $
__ ANY AUTO
__ ALL OWNED AUTOS (PER ACCIDENT) $
__ SCHEDULED AUTOS BODILY INJURY
__ OWNED AUTOS (PER ACCIDENT) $
__ NON-OWNED AUTOS PROPERTY DAMAGE $
__ GARAGE LIABILITY
- -------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY
__ UMBRELLA FORM EACH OCCURRENCE $
__ OTHER THAN UMBRELLA FORM AGGREGATE $
- -------------------------------------------------------------------------------------------------------------------------------
A WORKMEN'S COMPENSATION NWC32257902 09/06/96 09/06/97 STATUTORY LIMITS
AND EACH ACCIDENT $1,000,000
EMPLOYERS LIABILITY DISEASE POLICY LIMIT $1,000,000
DISEASE EACH EMPLOYEE $1,000,000
- -------------------------------------------------------------------------------------------------------------------------------
OTHER
</TABLE>
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
COVERING WORK TO BE PERFORMED BY THE NAMED INSURED DURING THE POLICY TERM
RE: KLA-MO-YA CASINO PHASE I 34333 HIGHWAY 97 NORTH CHILOQUIN OREGON 97624
30 DAYS NOTICE OF NON-PAYMENT OF PREMIUM
- --------------------------------------------------------------------------------
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES
INLAND CASINO CORP. BE CANCELLED BEFORE THE EXPIRATION DATE
4225 EXECUTIVE SQUARE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR
SUITE 1650 TO MAIL 30 DAYS WRITTEN NOTICE TO THE
LA JOLLA CA 92037 CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO
OBLIGATION OR LIABILITY OF ANY KIND UPON
THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
/s/ Louis J. Connell, Jr.
------------------------------------------
AUTHORIZED REPRESENTATIVE
ACORD 25-S (7/90) ACORD CORPORATION
<PAGE> 1
EXHIBIT 10.5
- -----------------------------------------------------------------------------
AIA DOCUMENT A401
STANDARD FORM OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document has been approved and endorsed by
the American Subcontractors Association and the Associated Specialty
Contractors, Inc.
- -------------------------------------------------------------------------------
AGREEMENT
made as of the Sixth (6) day of January in the year of
Nineteen Hundred and Ninety Seven
BETWEEN the Contractor: Inland Casino Corporation
(Name and Address) 4225 Executive Square, Suite 1650
La Jolla, CA 92037
and the Subcontractor: Bellet Construction
(Name and Address) P O Box 5167
Klamath Falls, Oregon 97601
The Contractor has made a contract for construction dated with
The Owner: Inland Casino Corporation
(Name and Address) 4225 Executive Square, Suite 1650
La Jolla, CA 97037
For the following Project: KLA-MO-YA Casino
(Name and Location) 34333 Highway 97 North
Chiloquin, Oregon 97624
which Contracts is hereinafter referred to as the Prime Contract and which
provides for the furnishing of labor, materials, equipment and services in
connection with the construction of the Project. A copy of the Prime Contract,
consisting of the Agreement Between Owner and Contractor (from which
compensation amounts may be deleted) and the other Contract Document enumerated
therein has been made available to the Subcontractor.
The Architect for the Project is: Gaming Environment Design, Inc.
(Name and Address) 1813 130th Ave NE, Suite 220
Bellevue, WA 98005
The Contract and the Subcontractor agree as set forth below.
- -------------------------------------------------------------------------------
Copyright 1915, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967, 1972, 1978,(c)
1987 by the American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006. Reproduction of the material herein or substantial
quotation of its provisions without written permission of the AIA violates the
copyright laws of the United States and will be subject to legal prosecution.
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
NINTH EDITION * AIA * copyright 1987 * THE AMERICAN A401-1987 1
INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.
15
<PAGE> 2
- -------------------------------------------------------------------------------
TERMS AND CONDITIONS OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
- -------------------------------------------------------------------------------
ARTICLE 1
THE SUBCONTRACT DOCUMENTS
1.1. The Subcontract Documents consist of (1) this Agreement; (2) the Prime
Contract, consisting of the Agreement between the Owner and Contractor and the
other Contract Documents enumerated therein, including Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of the Agreement between the
Owner and Contractor and Modifications issued subsequent to the execution of
the Agreement between the Owner and Contractor, whether before or after the
execution of this Agreement, and other Contract Documents, if any, listed in
the Owner-Contractor Agreement; (3) other documents listed in Article 16 of
this Agreement; and (4) Modifications to this Subcontract issued after
execution of this Agreement. These form the Subcontract, and are set fully a
part of the Subcontract as if attached to this Agreement or repeated herein.
The Subcontract represents the entire and integrated agreement between the
parties hereto and supersedes prior negotiations, representations or
agreements, either written or oral. An enumeration of the Subcontract
Documents, other than Modifications issued subsequent to the execution of this
Agreement, appears in Article 16.
1.2. The Subcontractor shall be furnished copies of the Subcontract
Documents upon request, but the Contractor may charge the Subcontractor for the
cost of reproduction.
ARTICLE 2
MUTUAL RIGHTS AND RESPONSIBILITIES
2.1. The Contractor and Subcontractor shall be mutually bound by the terms
of this Agreement and, to the extent that provisions of the Prime Contract
apply to the Work of the Subcontractor, the Contractor shall assume toward the
Subcontractor all obligations and responsibilities that the Owner, under the
Prime Contract, assumes toward the Contractor, and the Subcontractor shall
assume toward the Contractor all obligations and responsibilities which the
Contractor, under the Prime Contract, assumes toward the Owner and the
Architect. The Contractor shall have the benefit of all rights, remedies and
redress against the Subcontractor which the Owner, under the Prime Contract,
has against the Contractor, and the Subcontractor shall have the benefit of all
rights, remedies and redress against the Contractor which the Contractor, under
the Prime Contract, has against the Owner, insofar as applicable to this
Subcontract. Where a provision of the Prime Contract is inconsistent with a
provision of this Agreement, this Agreement shall govern.
2.2 The Contractor may require the Subcontractor to enter into agreements
with Sub-subcontractors performing portions of the Work of this Subcontract by
which the Subcontractor and the Sub-subcontractor are mutually bound, to the
extent of the Work to be performed by the Sub-subcontractor, assuming toward
each other all obligations and responsibilities which the Contractor and
Subcontractor assume toward each other and having the benefit of all rights,
remedies and redress each against the other which the Contractor and
Subcontractor have by virtue of the provisions of this Agreement.
ARTICLE 3
CONTRACTOR
3.1 SERVICES PROVIDED BY THE CONTRACTOR
3.1.1 The Contractor shall cooperate with the Subcontractor in scheduling and
performing the Contractor's Work to avoid conflicts or interference in the
Subcontractor's Work and shall expedite written responses to submittals made by
the Subcontractor in accordance with Paragraph 4.1 and Article 5. As soon as
practicable after execution of this Agreement, the Contractor shall provide the
Subcontractor copies of the Contractor's construction schedule and schedule of
submittals, together with such additional scheduling details as will enable the
Subcontractor to plan and perform the Subcontractor's Work properly. The
Subcontractor shall be notified promptly of subsequent changes in the
construction and submittal schedules and additional scheduling details.
3.1.2 The Contractor shall provide suitable areas for storage of the
Subcontractor's materials and equipment during the course of the Work.
Additional costs to the Subcontractor resulting from relocation of such
facilities at the direction of the Contractor, except as previously agreed
upon, shall be reimbursed by the Contractor.
3.1.3 Except as provided in Article 14, the Contractor's equipment will be
available to the Subcontractor only at the Contractor's discretion and on
mutually satisfactory terms.
3.2 COMMUNICATIONS
3.2.1 The Contractor shall promptly make available to the Subcontractor
information which affects this Subcontract and which becomes available to the
Contractor subsequent to execution of this Subcontract.
3.2.2 The Contractor shall not given instructions or order directly to
employees or workmen of the Subcontractor, except to persons designated as
authorized representatives of the Subcontractor.
3.2.3 The Contractor shall permit he Subcontractor to request directly from
the Architect information regarding the percentages of completion and the
amount certified on account of Work done by the Subcontractor.
3.2.4 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Contractor, a
subcontractor or anyone directly or indirectly employed by them (other than the
Subcontractor), the Contractor shall, prior to harmful exposure of the
Subcontractor's employees to such substance, give written notice of the
chemical composition thereof to the Subcontractor in sufficient detail and time
to permit the Subcontractor's compliance with such laws.
3.3 CLAIMS BY THE CONTRACTOR
3.3.1 Liquidated damages for delay, if provided for in Paragraph 9.3 of this
Agreement, shall be assessed against the Subcontractor only to the extent
caused by the Subcontractor, the Subcontractor's employees and agents,
Sub-subcontractors, suppliers or any person or entity for whose acts the
Subcon-
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 * ABBREVIATED OWNER CONTRACTOR AGREEMENT
NINTH EDITION * AIA * copyright 1987 * THE AMERICAN A401-1987 2
INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006
WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.
<PAGE> 3
tractor may be liable, and in no case for delays or causes arising outside the
scope of this Subcontract.
3.3.2 Except as may be indicated in this Agreement, the Contractor agrees
that no claim for payments for services rendered or materials and equipment
furnished by the Contractor to the Subcontractor shall be valid without prior
notice to the Subcontractor and unless written notice thereof is given by the
Contractor to the Subcontractor not later than the tenth day of the calendar
month following that in which the claim originated.
3.4 CONTRACTOR'S REMEDIES
3.4.1 If the Subcontractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within three working days after receipt
of written notice from the Contractor to commence and continue correction of
such default or neglect with diligence and promptness, the Contractor may, after
three days following receipt by the Subcontractor of an additional written
notice, and without prejudice to any other remedy the Contractor may have, make
good such deficiencies and may deduct the cost thereof from the payments then or
thereafter due the Subcontractor, provided, however, that if such action is
based upon faulty workmanship or materials and equipment, the Architect shall
first have determined that the workmanship or materials and equipment are not in
accordance with requirements of the Prime Contract.
ARTICLE 4
---------
SUBCONTRACTOR
4.1 EXECUTION AND PROGRESS OF THE WORK
4.1.1 The Subcontractor shall cooperate with the Contractor in scheduling and
performing the Subcontractor's work to avoid conflict, delay in or interference
with the Work of the Contractor, other subcontractors or Owner's own forces.
4.1.2 The Subcontractor shall promptly submit Shop Drawings, Product Data,
Samples and similar submittals required by the Subcontract Documents with
reasonable promptness and in such sequence as to cause no delay in the Work or
in the activities of the Contractor or other subcontractors.
4.1.3 The Subcontractor shall submit to the Contractor a schedule of values
allocated to the various permits of the Work of this Subcontract, aggregating
the Subcontract sum, made out in such detail as the contractor and
Subcontractor may agree upon or as required by the Owner, and supported by such
evidence as the contractor may direct. In applying for payment, the
subcontractor shall submit statements based upon this schedule.
4.1.4 The Subcontractor shall furnish to the Contractor periodic progress
reports on the Work of this subcontract as mutually agreed, including
information on the status of materials and equipment which may be in the course
of preparation or manufacture.
4.1.5 The Subcontractor agrees that the Architect will have the authority to
reject work which does not conform to the Prime Contract. The Architect's
decisions on matters relating to aesthetic effect shall be final if consistent
with the intent expressed in the Prime Contract.
4.1.6 The Subcontractor shall pay for materials, equipment and labor used in
connection with the performance of this Subcontract through the period covered
by previous payments received from the Contractor, and shall furnish
satisfactory evidence, when requested by the Contractor, to verify compliance
with the above requirements.
4.1.7 The Subcontractor shall take necessary precaution to protect properly
the Work of other subcontractors from damage caused by operations under this
Subcontract.
4.1.8 The Subcontractor shall cooperate with the Contractor, other
subcontractors and the Owner's own forces whose work might, interfere with the
Subcontractor's work. The subcontractor shall participate in the preparation of
coordinated drawings in areas of congestion, if required by the Prime contract,
specifically noting and advising the Contractor of potential conflicts between
the Work of the Subcontractor and that of the Contractor, other subcontractors
or the Owner's own forces.
4.2 LAWS, PERMITS, FEES AND NOTICES
4.2.1 The Subcontractor shall give notices and comply with laws, ordinances,
rules, regulations and orders of public authorities bearing on performance of
the Work of this Subcontract. The Subcontractor shall accrue and pay for
permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Subcontractor's work, the furnishing of which
is required of the Contractor by the Prime Contract.
4.2.2 The Subcontractor shall comply with Federal, state and local tax laws,
social security acts, unemployment compensation acts and workers' or workmen's
compensation acts insofar as applicable to the performance of this Subcontract.
4.3 SAFETY PRECAUTIONS AND PROCEDURES
4.3.1 The Subcontractor shall take reasonable safety precautions with respect
to performance of this Subcontract, shall comply with safety measures initiated
by the Contractor and with applicable laws, ordinances, rules, regulations and
orders of public authorities for the safety of persons or property in
accordance with the requirements of the Prime Contract. The Subcontractor shall
report to the Contractor within three days an injury to an employee or agent of
the Subcontractor which occurred at the site.
4.3.2 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Subcontractor,
the subcontractor's sub-subcontractor or anyone directly or indirectly employed
by them, the Subcontractor shall, prior to harmful exposure of any employees on
the site to such substance, give written notice of the chemical composition
thereof to the Contractor in sufficient detail and time to permit compliance
with such laws by the Contractor, other subcontractors and other employers on
the site.
4.3.3 In the event the Subcontractor encounters on the site material
reasonably believed to be asbestos or polychlorinated biphenyl (PCB) which has
not been rendered harmless, the Subcontractor shall immediately stop work in
the area affected and report the condition to the Contractor in writing. The
Work in the affected area shall resume in the absence of asbestos or
polychlorinated biphenyl (PCB), or when it has been rendered harmless, by
written agreement of the contractor and Subcontractor, or in accordance with
final determination by the Architect on which arbitration has not been
demanded, or by arbitration as provided in this Agreement. The Subcontractor
shall not be required pursuant to Article 5 to perform without consent any Work
relating to asbestos or polychlorinated biphenyl (PCB).
- -------------------------------------------------------------------------------
3 A401-1987 AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT
TWELFTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK
AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING:
Unlicensed photocopying violates U.S. copyright laws and
is subject to legal prosecution.
<PAGE> 4
4.3.4 To the fullest extent permitted by law, the Contractor shall indemnify and
hold harmless the Subcontractor, the Subcontractor's Sub-subcontractors, and
agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorneys' fees, arising out of or
resulting from performance of the Work in the affected area if in fact the
material is asbestos or polychlorinated biphenyl (PCB) and has not been rendered
harmless, provided that such claim, damages, or loss or expense is attributable
to bodily injury, sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself) including loss of use resulting
therefrom, but only to the extent caused in whole or in part by negligent acts
or omissions of the Contractor, Architect, Owner, anyone directly or indirectly
employed by any of them, or anyone for whose acts any of them may be liable,
regardless of whether or not such claim, damage, loss or expense is caused in
part by a party indemnified hereunder. Such obligation shall not be construed to
negate, abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Subparagraph 4.3.4.
4.4 CLEANING UP
4.4.1 The Subcontractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations performed under
this Subcontract. The Subcontractor shall not be held responsible for unclean
conditions caused by other contractors or subcontractors.
4.5 WARRANTY
4.5.1 The Subcontractor warrants to the Owner, Architect and Contractor that
materials and equipment furnished under this Subcontract will be of good quality
and new unless otherwise required or permitted by the Subcontract Documents,
that the Work of this Subcontract will be free from defects not inherent in the
quality required or permitted, and that the Work will conform with the
requirements of the Subcontract Documents. Work not conforming to these
requirements, including substitutions not properly approved and authorized may
be considered defective. The Subcontractor's warranty excludes remedy for damage
or defect caused by abuse modifications not executed by the Subcontractor,
improper or insufficient maintenance, improper operation, or normal wear and
tear under normal usage. This warranty shall be in addition to and not in
limitation of any other warranty or remedy required by law or by the Subcontract
Documents.
4.6 INDEMNIFICATION
4.6.1 To the fullest extent permitted by law, the Subcontractor shall indemnify
and hold harmless the Owner, Contractor, Architect, Architect's consultants, and
agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorney's fees, arising out of or
resulting from performance of the Subcontractor's Work under this Subcontract,
provided that such claim, damage, loss or expense is attributable to bodily
injury, sickness, disease or death, or to injury to or destruction of tangible
property (other than the Work itself) including loss of use resulting therefrom,
but only to the extent caused in whole or in part by negligent acts or
omissions of the Subcontractor, the Subcontractor's Sub-subcontractors, anyone
directly or indirectly employed by them or anyone for whose acts they may be
liable, regardless of whether or not such claim, damage, loss or expense is
caused in part by a party indemnified hereunder. Such obligation shall not be
construed to negate, abridge, or otherwise reduce other rights or obligations of
indemnity which would otherwise exist as to a party or person described in this
Paragraph 4.6.
4.6.2 In claims against any person or entity indemnified under this Paragraph
4.6 by an employee of the Subcontractor, the Subcontractor's Sub-subcontractors,
anyone directly or indirectly employed by them or anyone for whose acts they may
be liable, the indemnification obligation under this Paragraph 4.6 shall not be
limited by a limitation on amount or type of damages, compensation or benefits
payable by or for the Subcontractor or the Subcontractor's Sub-subcontractors
under workers' or workmen's compensation acts, disability benefit acts or other
employee benefit acts.
4.6.3 The obligations of the Subcontractor under this Paragraph 4.6 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders, designs
or specifications, or (2) the giving of or the failure to give directions or
instructions by the Architect, the Architect's consultants, and agents and
employees of any of them, provided such giving or failure to give is the primary
cause of the injury or damage.
4.7 REMEDIES FOR NONPAYMENT
4.7.1 If the Contractor does not pay the Subcontractor through no fault of the
Subcontractor, within seven days from the time payment should be made as
provided in this Agreement, the Subcontractor may, without prejudice to other
available remedies, upon seven additional days' written notice to the
Contractor, stop the Work of this Subcontract until payment of the amount owing
has been received. The Subcontract Sum shall, by appropriate adjustment, be
increased by the amount of the Subcontractor's reasonable costs of shutdown,
delay and start-up.
ARTICLE 5
CHANGES IN THE WORK
5.1 The Owner may make changes in the Work by issuing Modifications to the Prime
Contract. Upon receipt of such a Modification issued subsequent to the execution
of the Subcontract Agreement, the Contractor shall promptly notify the
Subcontractor of the Modification. Unless otherwise directed by the Contractor,
the Subcontractor shall not thereafter order materials or perform Work which
would be inconsistent with the changes made by the Modifications to the Prime
Contract.
5.2 The Subcontractor may be ordered in writing by the Contractor, without
invalidating this Subcontract, to make changes in the Work within the general
scope of this Subcontract consisting of additions, deletions or other revisions,
including those required by Modifications to the Prime Contract issued
subsequent to the execution of this Agreement, the Subcontract Sum and the
Subcontract Time being adjusted accordingly. The Subcontractor, prior to the
commencement of such changed or revised Work, shall submit promptly to the
Contractor written copies of a claim for adjustment to the Subcontract Sum and
Subcontract Time for such revised Work in a manner consistent with requirements
of the Subcontract Documents.
5.3 The Subcontractor shall make claims promptly to the Contractor for
additional cost, extensions of time and damages for delays or other causes in
accordance with the Subcontract
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 4
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 5
Documents. A claim which will affect or become part of a claim which the
Contractor is required to make under the Prime Contract within a specified time
period or in a specified manner shall be made in sufficient time to permit the
Contractor to satisfy the requirements of the Prime Contract. Such claims shall
be received by the Contractor not less than two working days preceding the time
by which the Contractor's claim must be made. Failure of the Subcontractor to
make such a timely claim shall bind the Subcontractor to the same consequences
as those to which the Contractor is bound.
ARTICLE 6
ARBITRATION
6.1 Any controversy or claim between the Contractor and the Subcontractor
arising out of or related to this Subcontract, or the breach thereof, shall be
settled by arbitration, which shall be conducted in the same manner and under
the same procedure as provided in the Prime Contract with respect to claims
between the Owner and the Contractor, except that a decision by the Architect
shall not be a condition precedent to arbitration. If the Prime Contract does
not provide for arbitration or fails to specify the manner and procedure for
arbitration, it shall be conducted in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise.
6.2 Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Subcontract shall include, by
consolidation or joinder or in any other manner, any person or entity not a
party in the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, (3) the interest or responsibility of such person or entity in the
matter is not insubstantial, and (4) such person or entity is not the Architect,
the Architect's employee, the Architect's consultant, or an employee or agent of
any of them. This agreement to arbitrate and any other written agreements to
arbitrate with an additional person or persons referred to herein shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
6.3 The Contract shall give the Subcontractor prompt written notice of any
demand received or made by the Contractor for arbitration if the dispute
involves or relates to the Work, materials, equipment, rights or
responsibilities of the Subcontractor. The Contractor shall consent to inclusion
of the Subcontractor in the arbitration proceeding whether by joinder,
consolidation or otherwise, if the Subcontractor requests in writing to be
included within ten days after receipt of the Contractor's notice.
6.4 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
6.5 This Article 6 shall not be deemed a limitation of rights or remedies which
the Subcontractor may have under Federal law, under state mechanics' lien laws,
or under applicable labor or material payment bonds unless such rights or
remedies are expressly waived by the Subcontractor.
ARTICLE 7
TERMINATION, SUSPENSION OR ASSIGNMENT
OF THE SUBCONTRACT
7.1 TERMINATION BY THE SUBCONTRACTOR
7.1.1 The Subcontractor may terminate the Subcontract for the same reasons and
under the same circumstances and procedures with respect to the Contractor as
the Contractor may terminate with respect to the Owner under the Prime Contract,
or for nonpayment of amounts due under this Subcontract for 60 days or longer.
In the event of such termination by the Subcontractor for any reason which is
not the fault of the Subcontractor, Sub-subcontractors or their agents or
employees or other persons performing portions of the Work under contract with
the Subcontractor, the Subcontractor shall be entitled to recover from the
Contractor payment for Work executed and for proven loss with respect to
materials, equipment, tools, and construction equipment and machinery, including
reasonable overhead, profit and damages.
7.2 TERMINATION BY THE CONTRACTOR
7.2.1 If the Subcontractor persistently or repeatedly fails or neglects to carry
out the Work in accordance with this Agreement and fails within seven days after
receipt of written notice to commence and continue correction of such default or
neglect with diligence and promptness, the Contractor may, after seven days
following receipt by the Subcontractor of an additional written notice and
without prejudice to any other remedy the Contractor may have, terminate the
Subcontract and finish the Subcontractor's Work by whatever method the
Contractor may deem expedient. If the unpaid balance of the Subcontract Sum
exceeds the expense of finishing the Subcontractor's Work, such excess shall be
paid to the Subcontractor, but if such expense exceeds such unpaid balance, the
Subcontractor shall pay the difference to the Contractor.
7.3 ASSIGNMENT OF THE SUBCONTRACT
7.3.1 In the event of termination of the Prime Contract by the Owner, the
Contractor may assign this Subcontract to the Owner, with the Owner's agreement,
subject to the provisions of the Prime Contract and to the prior rights of the
surety, if any, obligated under bonds relating to the Prime Contract. If the
Work of the Prime Contract has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.
7.3.2 The Subcontractor shall not assign the Work of this Subcontract without
the written consent of the Contract, nor subcontract the whole of this
Subcontract without the written consent of the Contractor, nor further
subcontract portions of this Subcontract without written notification to the
Contractor when such notification is requested by the Contractor.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 5
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 6
ARTICLE 8
THE WORK OF THIS SUBCONTRACT
8.1 The Subcontractor shall execute the following portion of the Work described
in the Subcontract Documents, including all labor, materials, equipment,
services and other items required to complete such portion of the Work, except
to the extent specifically indicated in the Subcontract Documents to be the
responsibility of others. (Insert a precise description of the work of this
Subcontract, referring where appropriate to numbers of Drawings, sections of
Specifications and pages of Addenda, modifications and accepted Alternates.)
Rough Grade, Spreading and compaction of rock, installation of storm system.
Design Development Drawing:
C-1 thru C-12 all dated 12-20-96
A1.0, A1.1, A1.2, A1.3, A2.0, A2.1, A3.0, A3.1, A4.0 A1.0 thru A1.3 & A3.0 are
dated 11-8-96, All others dated 12-2-96 S1 thru S3 dated 12-3-96 See attached
Bid.
ARTICLE 9
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
9.1 The Subcontractor's date of commencement is the date from which the Contract
Time of Paragraph 9.3 is measured; it shall be the date of this Agreement, as
first written above, unless a different date is stated below or provision is
made for the date to be fixed in a notice to proceed issued by the Contractor.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if appropriate, that the date will be fixed in a notice to proceed.)
1-6-97
9.2 Unless the date of commencement is established by a notice to proceed issued
by the Contractor, or the Contractor has commenced visible Work at the site
under the Prime Contract, the Subcontractor shall notify the Contractor in
writing not less than five days before commencing the Subcontractor's Work to
permit the timely filing of mortgages, mechanic's liens and other security
interests.
9.3 The Work of this Subcontract shall be substantially completed not later than
6-1-97. (Insert the calendar date or number of calendar days after the
Subcontractor's date of commencement. Also insert any requirements for earlier
Substantial Completion of certain portions of the Subcontractor's Work if not
stated elsewhere in the Subcontract Documents.)
NA
, subject to adjustments of this Subcontract Time as provided in the Subcontract
Documents. (Insert provisions, if any, for liquidated damages relating to
failure to complete on time.)
NA
9.4 Time is of the essence of this Subcontract.
9.5 No extension of time will be valid without the Contractor's written consent
after claim made by the Subcontractor in accordance with Paragraph 5.2.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 6
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 7
ARTICLE 10
SUBCONTRACT SUM
10.1 The Contractor shall pay the Subcontractor in current funds for perforance
of the Subcontractor the Subcontract Sum of Two Hundred Thirty Thousand & Six
dollars ($230,006.00), subject to additions and deductions as provided in the
Subcontract Documents.
10.2 The Subconstract Sum is based upon the following alternates, if any, which
are described in the Subcontract Documents and have been accepted by the Owner
and the contractors: (Insert the numbers or other identification of accepted
alternates.)
NA
10.3 Unit prices, if any, are as follows:
NA
ARTICLE 11
PROGRESS PAYMENTS
11.1 Based upon applications for progress payment submitted to the Contractor by
the Subcontractor, corresponding to Applications for Payment submitted by the
Contractor to the Architect, and Certificates for payment issued by the
Architect, the Contractor shall make progress payments on account of the
Subcontract Sum to the Subcontractor as provided below and elsewhere in the
Subcontract Documents.
11.2 The period covered by each application for payment shall be one calendar
month ending on the last day of the month, or as follows:
Invoices due the Twenty Fifth of the month to be paid on the fifth of the next
month.
11.3 Provided an application for payment is received by the Contractor not later
than the twenty fifth day of a month, the Contractor shall include the
Subcontractor's Work covered by that application in the next Application for
Payment which the Contractor is entitled to submit to the Architect. The
Contractor shall pay the Subcontractor each progress payment:
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 7
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 8
within three working days after the contractor receives payment from the Owner.
If the Architect does not issue a Certificate for Payment or the Contractor does
not receive payment for any case which is not the fault of the Subcontractor,
the Contractor shall pay the Subcontractor, on demand, a progress payment
computed as provided in Paragraph 11.7 and 11.8.
11.4 If an application of payment is received by the contractor after the
application date fixed above, the Subcontractor's Work covered by it shall be
included by the contractor in the next Application for Payment submitted to the
Architect.
11.5 Each application for payment shall be based upon the most recent schedule
of values submitted by the Subcontractor in accordance with the Subcontract
Documents. The schedule of values shall allocate the entire Subcontract Sum
among the various portions of the Subcontractor's Work and be prepared in such
form and supported by such data to substantiate its accuracy as the Contractor
may require. This schedule, unless objected to by the Contractor, shall be used
as a basis for reviewing the Subcontractor's applications for payment.
11.6 Applications for payment submitted by the Subcontractor shall indicate the
percentage of completion of each portion of the Subcontractor's Work as of the
end of the period covered by the application for payment.
11.7 Subject to the provisions of the Subcontract Documents, the amount of each
progress payment shall be computed as follows:
11.7.1 Take that portion of the Subcontract Sum properly allocable to
completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract Sum
allocated to that portion of the Subcontractor's Work in the schedule of values,
less that percentage actually retained, if any, from payments to the Contractor
on account of the Work of the Subcontractor. Pending final determination of cost
to the Contractor of charges in the Work which have been properly authorized by
Construction Charge Directive, amounts not in dispute may be included to the
same extent provided in the Prime Contract, even though the Subcontract Sum has
not yet been adjusted;
11.7.2 Add that portion of the Subcontract Sum properly allocable to materials
and equipment delivered and suitably stored at the site by the Subcontractor for
subsequent incorporation in the Subcontractor's Work or, if approved in advance
by the Owner, suitably stored off the site at a location agreed upon in writing,
less the same percentage retainage required by the Prime Contract to be applied
to such materials and equipment in the Contractor's Application for Payment;
11.7.3 Subtract the aggregate of previous payments made by the Contractor; and
11.7.4 Subtract amounts, if any, calculated under Subparagraph 11.7.1 or 11.7.2
which are related to Work of the Subcontractor for which the Architect has
withheld or nullified, in whole or in part, a Certificate of Payment for a cause
which is the fault of the Subcontractor.
11.8 SUBSTANTIAL COMPLETION
11.8.1 When the Subcontractor's Work or a designated portion thereof is
substantially complete and in accordance with the requirements of the Prime
Contract, the Contractor shall, upon application by the Subcontractor, make
prompt application for payment for such Work. Within 30 days following issuance
by the Architect of the Certificate for Payment covering such substantially
completed Work, the Contractor shall, to the full extent allowed in the Prime
Contract, make payment to the Subcontractor, deducting any portion of the funds
for the Subcontractor's Work withheld in accordance with the Certificate to
cover costs of items to to be completed or corrected by the Subcontractor. Such
payment to the Subcontractor shall be the completion of the entire Project. If
the Prime Contract does not allow for a full release of retainage, then such
payment shall be an amount which, when added to previous payments to the
Subcontractor, will reduce the retainage on the Subcontractor's substantially
completed Work to the same percentage of retainage as that on the Contractor's
Work covered by the Certificate.
ARTICLE 12
FINAL PAYMENT
12.1 Final payment, constituting the entire unpaid balance of the Subcontract
Sum, shall be made by the Contractor to the Subcontractor when the
Subcontractor's Work is fully performed in accordance with the requirements of
the Contract Documents, the Architect has issued a Certificate for Payment
covering the Subcontractor's completed Work and the Contractor has received
payment from the Owner. If, for any cause which is not the fault of the
Subcontractor, a Certificate for Payment is not issued or the Contractor does
not receive timely payment or does not pay the Subcontractor within three
working days after receipt of payment from the Owner, final payment to the
Subcontractor shall be made upon demand. (Insert provisions for entire final
payment to the Subcontractor if applicable)
NA
12.2 Before issuance of the final payment, the Subcontractor, if required, shall
submit evidence satisfactory to the Contractor that all payrolls, bills for
materials and equipment, and all known indebtedness connected with the
Subcontractor's Work have been satisfied.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 8
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 9
ARTICLE 13
INSURANCE AND BONDS
13.1 The Subcontractor shall purchase and maintain insurance of the following
types of coverage and limits of liability:
1,000,000.00 Insurance Coverage and Oregon State Contractors License
13.2 Coverages, whether written on an occurrence or claims-made basis, shall be
maintained without interruption from date of commencement of the Subcontractor's
Work until date of final payment and termination of any coverage required to be
maintained after final payment.
13.3 Certificates of insurance acceptable to the Contractor shall be filed with
the Contractor prior to commencement of the Subcontractor's Work. These
certificates and the insurance policies required by this Article 13 shall
contain a provision that coverages afforded under the policies will not be
cancelled or allowed to expire until at least 30 days' prior written notice has
been given to the Contractor. If any of the foregoing insurance coverages are
required to remain in force after final payment and are reasonably available, an
additional certificate evidencing continuation of such coverage shall be
submitted with the final application for payment as required in Article 12. If
any information concerning reduction of coverage is not furnished by the
insurer, it shall be furnished by the Subcontractor with reasonable promptness
according to the Subcontractor's information and belief.
13.4 The Contractor shall furnish to the Subcontractor satisfactory evidence of
insurance required of the Contractor under the Prime Contract.
13.5 WAIVERS OF SUBROGATION. The Contractor and Subcontractor waive all rights
against (1) each other and any of their Subcontractors, sub-subcontractors,
agents and employees, each of the other, and (2) the Owner, the Architect, the
Architect's consultants, separate contractors, and any of their subcontractors,
sub-subcontractors, agents and employees for damages caused by fire or other
perils to the extent covered by property insurance provided under the Prime
Contract or other property insurance applicable to the Work, except such rights
as they may have to proceeds of such insurance held by the Owner as fiduciary.
The Subcontractor shall require of the Subcontractor's Sub-subcontractors,
agents and employees, by the appropriate agreements, written where legally
required for validity, similar waivers in favor of other practices counteracted
herein. The policies shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person or entity
even though that person or entity would otherwise have a duty of
indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.
13.6 The Contractor shall promptly, upon request of the Subcontractor, furnish a
copy or permits a copy to be made of any bond covering payment of obligations
arising under the Subcontract.
13.7 PERFORMANCE BOND AND PAYMENT BOND:
(If the Subcontractor is to furnish bonds, insert the specific requirements
here.)
ARTICLE 14
TEMPORARY FACILITIES AND WORKING CONDITIONS
14.1 The Contractor shall furnish and make available to the Subcontractor the
following temporary facilities, equipment and services; these shall be furnished
at no cost to the Subcontractor unless otherwise indicated below:
14.2 Specific working conditions:
(Insert any applicable arrangements concerning working conditions and labor
matters for the Project.)
Compaction Testing not included
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 9
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 10
ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Subcontract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Subcontract
Documents.
15.2 Payments due and unpaid under this Subcontract shall bear interest from the
date payment is due at such rate as the parties may agree upon in writing or,
in the absence thereof, at the legal rate prevailing from time to time at the
place where the Project is located.
(Insert rate of interest agreed upon, if any)
NA
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local government credit laws and other regulations at the Owner's,
Contractor's and Subcontractor's principal place of business, the location of
the Project and development may affect the validity of this provision. Legal
advice should be obtained with respect to deletions or modifications, and
also regarding requirements such as written disclosures or waivers.)
ARTICLE 16
ENUMERATION OF SUBCONTRACT DOCUMENTS
16.1 The Subcontract Documents, except for Modifications issued after execution
of this Agreement, are enumerated as follows:
16.1.1 This executed Standard Form of Agreement Between Contractor and
Subcontractor, AIA Document A401, 1987 Edition;
16.1.2 The Prime Contract, consisting of the Agreement between the Owner and
Contractor dated as first entered above and the other Contract Documents
enumerated in the Owner-Contractor Agreement; Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, Addenda
and other documents enumerated therein;
16.1.3 The following Modifications to the Prime Contract, if any, issued
subsequent to the execution of the Owner-Contractor Agreement but prior to the
execution of this Agreement:
Modification Date
16.1.4 Other Documents, if any, forming part of the Subcontract Documents are as
follows:
(List any additional documents which are intended to form part of the
Subcontract Documents. Requests for proposal and the Subcontractor's bid or
proposal should be listed here only if intended to be part of the Subcontractor
Documents.)
This Agreement entered into as of the day and year first written above.
CONTRACTOR SUBCONTRACTOR
/s/ DUNCAN EDWARDS /s/ JAMES J. BELLET
- -------------------------------- --------------------------------
(Signature) Duncan Edwards (Signature)
Duncan Edwards Agent for Inland Casino Corp. James J. Bellet
- -------------------------------- --------------------------------
(Printed name and title) (Printed name and title)
AIA CAUTION: YOU SHOULD USE AN ORIGINAL AIA DOCUMENT WHICH HAS THIS CAUTION
PRINTED IN RED. AN ORIGINAL ASSURES THAT CHANGES WILL NOT BE OBSCURED AS
MAY OCCUR WHEN DOCUMENTS ARE REPRODUCED.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 10
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 11
BELLET CONSTRUCTION
P.O. BOX 5167 * KLAMATH FALLS, OREGON 97501
(541) 884-1750 * FAX (541) 884-532
KLA-MO-YA CASINO
CHILOQUIN, OREGON 97524
December 30, 1996
Proposal: Per 12/23/96 Request.
- -----------------------------------------------------------------------------
1. TRENCHING
A. Placement of Pipe.
Bid includes labor, equipment and material for excavation of
storm drain per plans. Includes rough excavation for manholes and catch
basins. Also includes drain pipe and placement. Rip rap, check dam, backfill
or disposal trenches are not included.
Duration 3 to 5 working days, (subject to material availability
and weather).
TOTAL $35,193.00
B. Catch Basins.
Bid includes labor, equipment and material for all manholes and
catch basins per schedule on C6, revised via fax 12-12-96. Also includes CB#8,
CB#9, and MH#4 oil/water separator not on schedule, but shown on plans. Work
includes finish excavation, base preparation and assembly - act of applicable
final drawings and specs made available by owner for our supplier. Backfill not
included.
Duration 7 to 11 working days, (subject to material availability
and weather).
TOTAL $25,474.00
C. Backfill.
Bid includes labor, equipment and material for backfill of
storm drain excavations, including man holes and water basins. Material to be
used in backfill would be existing soils on site. Imported backfill material is
not included. Rip rap, check dams, and flow dispersal trenches not included.
Compaction testing by others not included.
Duration 8 to 15 working days, (subject to weather).
TOTAL $10,120.00
<PAGE> 12
D. Review of Time Schedule
a. 3 to 5 working days
b. 7 to 11 working days
c. 5 to 15 working days
If all 3 areas awarded schedule could overlap and total days could
be reduced.
2. ROCK
A. Spreading And Compaction.
Bid includes labor, equipment and material to complete parking lot
rock placement per Detail 4-C9, 8" 3/4 minus rock base. Rock, sand, staking,
Layout, field staking, and blue tops not included and required. Compaction
testing not included.
Duration 15 working days, (subject to weather).
TOTAL $79,728.00
Thank you,
Mike Homfeldt,
Estimator
CCB #113331
<PAGE> 13
BELLET CONSTRUCTION
P.O. BOX 5167 - KLAMATH FALLS, OREGON 97601
(541) 884-1750 - FAX (541) 884-1532
December 20, 1996
KLA-MO-YA CASINO
CHILOQUIN, OR
PROPOSAL:
PHASE I
A. SEDIMENT POND
-------------
Bid to excavate for temporary sediment pond and install rock swales and rock
check dams in the pond. Includes emergency spillway. Bid assumes excess swales
dirt is deposited on site. No piping, control structures, ditching or check dams
outside of pond are in this bid. No surveying included. Duration -- 2 weeks to 1
month and mostly depends on the weather. Total Bid for Pond
$41,250.00
B. ROUGH GRADING READY FOR ROCK
----------------------------
Bid for rough grading includes all equipment, labor, overhead and profit. It
assumes all excess material will be disposed of onsite and all grading can be
with material from the site with no import of rock or dirt. Bid does not include
surveying. Duration -- 2 to 3 weeks but is weather dependent. Total for grading
$24,750.00
C. TEMPORARY DRAINAGE TO SEDIMENT POND
-----------------------------------
Bid includes equipment, labor, overhead and profit to construct a temporary
drainage swals as per plans.
Duration -- 4 days.
Total bid $ 5,800.00
<PAGE> 14
D. 1250 LINEAL FEET OF CONTROL BARRIER
Bid includes material, equipment, labor, overhead and profit to construct
control barrier out of straw bales.
Duration -- 3 to 4 days.
Total Bid $ 3,750.00
E. CONSTRUCT ROCK ROADWAY FROM HIGHWAY 97 TO CASINO
Bid includes 3,000 tons of rock, grading, labor and equipment to spread and
compact. No geo-textile is figured but may be necessary. This is not enough rock
to cover all of Phase I arm, but will create a road to the Casino no
construction can begin.
Total Bid $32,500.00
Total $258,565
Cut (28,569)
--------
1/3/97 Revised $230,006
3:00
Per phone conversation
Per matters of 12/30 and 12/20
Approved
/s/ Duncan Edwards
1-4-97
Total 4 pages
$230,006
<PAGE> 15
BELLET CONSTRUCTION
P.O. BOX 5167 - KLAMATH FALLS, OREGON 97601
(541) 884-1750 - FAX (541) 884-1532
KLA-MO-YA CASINO
CHILOQUIN, OREGON 97624
JANUARY 17, 1997
ATTN: LES DAWSON
RE: UPDATED SCHEDULE OF VALVES
- --------------------------------------------------------------------------------
1. TRENCHING
A. PLACEMENT OF PIPE 27,304.00
B. CATCH BASINS 25,460.00
C. BACKFILL 10,120.00
2. ROCK
A. SPREADING AND COMPACTION 71,084.00
A. SEDIMENT POND 34,616.00
B. ROUGH GRADE - PREP FOR ROCK 22,700.00
C. TEMPORARY DRAINAGE TO POND 5,800.00
D. SEDIMENT CONTROL BARRIER 3,750.00
E. TRAVEL LANE 29,172.00
----------
TOTAL 230,006.00
THANK YOU,
MIKE HOMFELDT,
ESTIMATOR
CCB #113331
<PAGE> 1
[AMERICAN INSTITUTE OF ARCHITECT LETTERHEAD]
EXHIBIT 10.6
- -------------------------------------------------------------------------------
AIA Document A401
STANDARD FORM OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY
IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document has been approved and endorsed by
the American Subcontractors Association
and the Associated Specialty Contractors, Inc.
- -------------------------------------------------------------------------------
AGREEMENT
made as of the Sixth (6) day of January in the year of Nineteen Hundred and
Ninety Seven
BETWEEN the Contractor: Inland Casino Corporation
(Name and Address) 4225 Executive Square, Suite 1650
La Jolla, CA 92037
and the Subcontractor: L. J. Barney and Sons
(Name and Address) 7304 Reeder Road
Klamath Falls, Oregon 97603
The Contractor has made a contract for construction dated with
The Owner:
(Name and Address) Inland Casino Corporation
4225 Executive Square, Suite 1650
La Jolla, CA 92037
For the following Project: KLA-MO-YA Casino
(Name and Location) 34333 Highway 97 North
Chiloquin, Oregon 97624
which Contract is hereinafter referred to as the Prime Contract and which
provides for the furnishing of labor, materials, equipment and services in
connection with the construction of the Project. A copy of the Prime Contract,
consisting of the Agreement Between Owner and Contractor (from which
compensation amounts may be deleted) and the other Contract Documents
enumerated therein has been made available to the Subcontractor.
The Architect for the Project is:
(Name and Address) Gaming Environment Design, Inc.
1813 130th Ave NE, Suite 220
Bellevue, WA 98005
The Contractor and the Subcontractor agree as set forth below.
- -------------------------------------------------------------------------------
Copyright 1915, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967, 1972, 1978,
(c)1987 by the American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006. Reproduction of the material herein or substantial
quotation of its provisions without written permission of the AIA violates the
copyright laws of the United States and will be subject to legal prosecution,
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT
TWELFTH EDITION o AIA(R) o (c)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 2
TERMS AND CONDITIONS OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
ARTICLE 1
THE SUBCONTRACT DOCUMENTS
1.1. The Subcontract Documents consist of (1) this Agreement; (2) the Prime
Contract, consisting of the Agreement between the Owner and Contractor and the
other Contract Documents enumerated therein, including Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of the Agreement between the
Owner and Contractor and Modifications issued subsequent to the execution of the
Agreement between the Owner and Contractor, whether before or after the
execution of this Agreement, and other Contract Documents, if any, listed in
the Owner-Contractor Agreement (3) other documents listed in Article 16 of this
Agreement; and (4) Modifications to this Subcontract issued after execution of
this Agreement. These form the Subcontract, and are as fully a part of the
Subcontract as if attached to this Agreement or repeated herein. The
Subcontract represents the entire and integrated agreement between the parties
hereto and supersedes prior negotiations, representations or agreements, either
written or oral. An enumeration of the Subcontract Documents, other than
Modifications issued subsequent to the execution of this Agreement, appears in
Article 16.
1.2 The Subcontractor shall be furnished copies of the Subcontract Documents
upon request, but the Contractor may charge the Subcontractor for the cost of
reproduction.
ARTICLE 2
MUTUAL RIGHTS AND RESPONSIBILITIES
2.1 The Contractor and Subcontractor shall be mutually bound by the terms of
this Agreement and, to the extent that provisions of the Prime Contract apply
to the Work of the Subcontractor, the Contractor shall assume toward the
Subcontractor all obligations and responsibilities that the Owner, under the
Prime Contract, assumes toward the Contractor, and the Subcontractor shall
assume toward the Contractor all obligations and responsibilities which the
Contractor, under the Prime Contract, assumes toward the Owner and the
Architect. The Contractor shall have the benefit of all rights, remedies and
redress against the Subcontractor which the Owner, under the Prime Contract,
has against the Contractor, and the Subcontractor shall have the benefit of all
rights, remedies and redress against the Contractor which the Contractor, under
the Prime Contract, has against the Owner, insofar as applicable to this
Subcontract. Where a provision of the Prime Contract is inconsistent with a
provision of this Agreement, this Agreement shall govern.
2.2 The Contractor may require the Subcontractor to enter into agreements with
Sub-subcontractors performing portions of the Work of this Subcontract by which
the Subcontractor and the Sub-subcontractor are mutually bound, to the extent
of the Work to be performed by the Sub-subcontractor, assuming toward each
other all obligations and responsibilities which the Contractor and
Subcontractor assume toward each other and having the benefit of all rights,
remedies and redress each against the other which the Contractor and
Subcontractor have by virtue of the provisions of this Agreement.
ARTICLE 3
CONTRACTOR
3.1 SERVICES PROVIDED BY THE CONTRACTOR
3.1.1 The Contractor shall cooperate with the Subcontractor in scheduling and
performing the Contractor's Work to avoid conflicts of interference in the
Subcontractor's Work and shall expedite written responses to submittals made by
the Subcontractor in accordance with Paragraph 4.1 and Article 5. As soon as
practicable after execution of this Agreement, the Contractor shall provide the
Subcontractor copies of the Contractor's construction schedule and schedule of
submittals, together with such additional scheduling details as will enable the
Subcontractor to plan and perform the Subcontractor's Work properly. The
Subcontractor shall be notified promptly of subsequent changes in the
construction and submittal schedules and additional scheduling details.
3.1.2 The Contractor shall provide suitable areas for storage of the
Subcontractor's materials and equipment during the course of the Work.
Additional costs to the Subcontractor resulting from relocation of such
facilities at the direction of the Contractor, except as previously agreed
upon, shall be reimbursed by the Contractor.
3.1.3 Except as provided in Article 14, the Contractor's equipment will be
available to the Subcontractor only at the Contractor's discretion and on
mutually satisfactory terms.
3.2 COMMUNICATIONS
3.2.1 The Contractor shall promptly make available to the Subcontractor
information which affects this Subcontract and which becomes available to the
Contractor subsequent to execution of this Subcontract.
3.2.2 The Contractor shall not give instructions or orders directly to
employees or workmen of the Subcontractor, except to persons designated as
authorized representatives of the Subcontractor.
3.2.3 The Contractor shall permit the Subcontractor to request directly from
the Architect information regarding the percentages of completion and the
amount certified on account of Work done by the Subcontractor.
3.2.4 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Contractor, a
subcontractor or anyone directly or indirectly employed by them (other than the
Subcontractor), the Contractor shall, prior to harmful exposure of the
Subcontractor's employees to such substance, give written notice of the
chemical composition thereof to the Subcontractor in sufficient detail and time
to permit the Subcontractor's compliance with such laws.
3.3 CLAIMS BY THE CONTRACTOR
3.3.1 Liquidated damages for delay, if provided for in Paragraph 9.3 of this
Agreement, shall be assessed against the Subcontractor only to the extent
caused by the Subcontractor, the Subcontractor's employees and agents.
Sub-subcontractors, suppliers or any person or entity for whose acts the Subcon-
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 2
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 3
tractor may be liable, and in no case for delays or causes arising outside the
scope of this Subcontract.
3.3.2 Except as may be indicated in this Agreement, the Contractor agrees
that no claim for payments for services rendered or materials and equipment
furnished by the Contractor to the Subcontractor shall be valid without prior
notice to the Subcontractor and unless written notice thereof is given by the
Contractor to the Subcontractor not later than the tenth day of the calendar
month following that in which the claim originated.
3.4 CONTRACTOR'S REMEDIES
3.4.1 If the Subcontractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within three working days after receipt
of written notice from the Contractor to commence and continue correction of
such default or neglect with diligence and promptness, the Contractor may, after
three days following receipt by the Subcontractor of an additional written
notice, and without prejudice to any other remedy the Contractor may have, make
good such deficiencies and may deduct the cost thereof from the payments then or
thereafter due the Subcontractor, provided, however, that if such action is
based upon faulty workmanship or materials and equipment, the Architect shall
first have determined that the workmanship or materials and equipment are not in
accordance with requirements of the Prime Contract.
ARTICLE 4
---------
SUBCONTRACTOR
4.1 EXECUTION AND PROGRESS OF THE WORK
4.1.1 The Subcontractor shall cooperate with the Contractor in scheduling and
performing the Subcontractor's work to avoid conflict, delay in or interference
with the Work of the Contractor, other subcontractors or Owner's own forces.
4.1.2 The Subcontractor shall promptly submit Shop Drawings, Product Data,
Samples and similar submittals required by the Subcontract Documents with
reasonable promptness and in such sequence as to cause no delay in the Work or
in the activities of the Contractor or other subcontractors.
4.1.3 The Subcontractor shall submit to the Contractor a schedule of values
allocated to the various permits of the Work of this Subcontract, aggregating
the Subcontract sum, made out in such detail as the contractor and
Subcontractor may agree upon or as required by the Owner, and supported by such
evidence as the contractor may direct. In applying for payment, the
subcontractor shall submit statements based upon this schedule.
4.1.4 The Subcontractor shall furnish to the Contractor periodic progress
reports on the Work of this subcontract as mutually agreed, including
information on the status of materials and equipment which may be in the course
of preparation or manufacture.
4.1.5 The Subcontractor agrees that the Architect will have the authority to
reject work which does not conform to the Prime Contract. The Architect's
decisions on matters relating to aesthetic effect shall be final if consistent
with the intent expressed in the Prime Contract.
4.1.6 The Subcontractor shall pay for materials, equipment and labor used in
connection with the performance of this Subcontract through the period covered
by previous payments received from the Contractor, and shall furnish
satisfactory evidence, when requested by the Contractor, to verify compliance
with the above requirements.
4.1.7 The Subcontractor shall take necessary precaution to protect properly
the Work of other subcontractors from damage caused by operations under this
Subcontract.
4.1.8 The Subcontractor shall cooperate with the Contractor, other
subcontractors and the Owner's own forces whose work might, interfere with the
Subcontractor's work. The subcontractor shall participate in the preparation of
coordinated drawings in areas of congestion, if required by the Prime contract,
specifically noting and advising the Contractor of potential conflicts between
the Work of the Subcontractor and that of the Contractor, other subcontractors
or the Owner's own forces.
4.2 LAWS, PERMITS, FEES AND NOTICES
4.2.1 The Subcontractor shall give notices and comply with laws, ordinances,
rules, regulations and orders of public authorities bearing on performance of
the Work of this Subcontract. The Subcontractor shall accrue and pay for
permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Subcontractor's work, the furnishing of which
is required of the Contractor by the Prime Contract.
4.2.2 The Subcontractor shall comply with Federal, state and local tax laws,
social security acts, unemployment compensation acts and workers' or workmen's
compensation acts insofar as applicable to the performance of this Subcontract.
4.3 SAFETY PRECAUTIONS AND PROCEDURES
4.3.1 The Subcontractor shall take reasonable safety precautions with respect
to performance of this Subcontract, shall comply with safety measures initiated
by the Contractor and with applicable laws, ordinances, rules, regulations and
orders of public authorities for the safety of persons or property in
accordance with the requirements of the Prime Contract. The Subcontractor shall
report to the Contractor within three days an injury to an employee or agent of
the Subcontractor which occurred at the site.
4.3.2 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Subcontractor,
the subcontractor's sub-subcontractor or anyone directly or indirectly employed
by them, the Subcontractor shall, prior to harmful exposure of any employees on
the site to such substance, give written notice of the chemical composition
thereof to the Contractor in sufficient detail and time to permit compliance
with such laws by the Contractor, other subcontractors and other employers on
the site.
4.3.3 In the event the Subcontractor encounters on the site material
reasonably believed to be asbestos or polychlorinated biphenyl (PCB) which has
not been rendered harmless, the Subcontractor shall immediately stop work in
the area affected and report the condition to the Contractor in writing. The
Work in the affected area shall resume in the absence of asbestos or
polychlorinated biphenyl (PCB), or when it has been rendered harmless, by
written agreement of the contractor and Subcontractor, or in accordance with
final determination by the Architect on which arbitration has not been
demanded, or by arbitration as provided in this Agreement. The Subcontractor
shall not be required pursuant to Article 5 to perform without consent any Work
relating to asbestos or polychlorinated biphenyl (PCB).
- -------------------------------------------------------------------------------
3 A401-1987 AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT
TWELFTH EDITION - AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK
AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING:
Unlicensed photocopying violates U.S. copyright laws and
is subject to legal prosecution.
<PAGE> 4
4.3.4 To the fullest extend permitted by law, the Contractor shall indemnify
and hold harmless the Subcontractor, the Subcontractor's Sub-subcontractors,
and agents and employees of any of them from and against claims, damages,
losses and expenses, including but not limited to attorneys' fees, arising out
of or resulting from performance of the Work in the affected area if in fact
the material is asbestos or polychlorinated biphenyl (PCB) and has not been
rendered harmless, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Contractor, Architect, Owner, anyone
directly or indirectly employed by any of them, or anyone for whose acts any of
them may be liable, regardless of whether or not such claim, damage, loss or
expense is caused in part by a party indemnified hereunder. Such obligation
shall not be construed to negate, abridge, or reduce other rights or
obligations of indemnity which would otherwise exist as to a party or person
described in this Subparagraph 4.3.4.
4.4 CLEANING UP
4.4.1 The Subcontractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations performed under
this Subcontract. The Subcontractor shall not be held responsible for unclean
conditions caused by other contractors or subcontractors.
4.5 WARRANTY
4.5.1 The Subcontractor warrants to the Owner, Architect and Contractor that
materials and equipment furnished under this Subcontract will be of good
quality and new unless otherwise required or permitted by the Subcontract
Documents, that the Work of this Subcontract will be free from defects not
inherent in the quality required or permitted, and that the Work will conform
with the requirements of the Subcontract Documents. Work not conforming to
these requirements, including substitutions not properly approved and
authorized, may be considered defective. The Subcontractor's warranty excludes
remedy for damage or defect caused by abuse, modifications not executed by the
Subcontractor, improper or insufficient maintenance, improper operation, or
normal wear and tear under normal usage. This warranty shall be in addition to
and not in limitation of any other warranty or remedy required by law or by the
Subcontract Documents.
4.6 INDEMNIFICATION
4.6.1 To the fullest extent permitted by law, the Subcontractor shall
indemnify and hold harmless the Owner, Contractor, Architect, Architect's
consultants, and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorney's fees,
arising out of or resulting from performance of the Subcontractor's Work under
this Subcontract, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Subcontractor, the Subcontractor's
Sub-subcontractors, anyone directly or indirectly employed by them or anyone
for whose acts they may be liable, regardless of whether or not such claim,
damage, loss or expense is caused in part by a party indemnified hereunder.
Such obligation shall not be construed to negate, abridge, or otherwise reduce
other rights or obligations of indemnity which would otherwise exist as to a
party or person described in this Paragraph 4.6.
4.6.2 In claims against any person or entity indemnified under this Paragraph
4.6 by an employee of the Subcontractor, the Subcontractor's
Sub-subcontractors, anyone directly or indirectly employed by them or anyone
for whose acts they may be liable, the indemnification obligation under this
Paragraph 4.6 shall not be limited by a limitation on amount or type of
damages, compensation or benefits payable by or for the Subcontractor or the
Subcontractor's Sub-subcontractors under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.
4.6.3 The obligations of the Subcontractor under this Paragraph 4.6 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders, designs
or specifications, or (2) the giving of or the failure to give directions or
instructions by the Architect, the Architect's consultants, and agents and
employees of any of them, provided such giving or failure to give is the
primary cause of the injury or damage.
4.7 REMEDIES FOR NONPAYMENT
4.7.1 If the Contractor does not pay the Subcontractor through no fault of the
Subcontractor, within seven days from the time payment should be made as
provided in this Agreement, the Subcontractor may, without prejudice to other
available remedies, upon seven additional days' written notice to the
Contractor, stop the Work of this Subcontract until payment of the amount owing
has been received. The Subcontract Sum shall, by appropriate adjustment, be
increased by the amount of the Subcontractor's reasonable costs of shutdown,
delay and start-up.
ARTICLE 5
CHANGES IN THE WORK
5.1 The Owner may make changes in the Work by issuing Modifications to the
Prime Contract. Upon receipt of such a Modification issued subsequent to the
execution of the Subcontract Agreement, the Contractor shall promptly notify
the Subcontractor of the Modification. Unless otherwise directed by the
Contractor, the Subcontractor shall not thereafter order materials or perform
Work which would be inconsistent with the changes made by the Modifications to
the Prime Contract.
5.2 The Subcontractor may be ordered in writing by the Contractor, without
invalidating this Subcontract, to make changes in the Work within the general
scope of this Subcontract consisting of additions, deletions or other
revisions, including those required by Modifications in the Prime Contract
issued subsequent to the execution of this Agreement, the Subcontract Sum and
the Subcontract Time being adjusted accordingly. The Subcontractor, prior to
the commencement of such changed or revised Work, shall submit promptly to the
Contractor written copies of a claim for adjustment to the Subcontract Sum and
Subcontract Time for such revised Work in a manner consistent with requirements
of the Subcontract Documents.
5.3 The Subcontractor shall make claims promptly to the Contractor for
additional cost, extensions of time and damages for delays or other causes in
accordance with the Subcontract
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 4
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 5
Documents. A claim which will affect or become part of a claim which the
Contractor is required to make under the Prime Contract within a specified time
period or in a specified manner shall be made in sufficient time to permit the
Contractor to satisfy the requirements of the Prime Contract. Such claims shall
be received by the Contractor not less than two working days preceding the time
by which the Contractor's claim must be made. Failure of the Subcontractor to
make such a timely claim shall bind the Subcontractor to the same consequences
as those to which the Contractor is bound.
ARTICLE 6
ARBITRATION
6.1 Any controversy or claim between the Contractor and the Subcontractor
arising out of or related to this Subcontract, or the breach thereof, shall be
settled by arbitration, which shall be conducted in the same manner and under
the same procedure as provided in the Prime Contract with respect to claims
between the Owner and the Contractor, except that a decision by the Architect
shall not be a condition precedent to arbitration. If the Prime Contract does
not provide for arbitration or fails to specify the manner and procedure for
arbitration, it shall be conducted in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise.
6.2 Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Subcontract shall include, by
consolidation or joinder or in any other manner, any person or entity not a
party in the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, (3) the interest or responsibility of such person or entity in the
matter is not insubstantial, and (4) such person or entity is not the Architect,
the Architect's employee, the Architect's consultant, or an employee or agent of
any of them. This agreement to arbitrate and any other written agreements to
arbitrate with an additional person or persons referred to herein shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
6.3 The Contract shall give the Subcontractor prompt written notice of any
demand received or made by the Contractor for arbitration if the dispute
involves or relates to the Work, materials, equipment, rights or
responsibilities of the Subcontractor. The Contractor shall consent to inclusion
of the Subcontractor in the arbitration proceeding whether by joinder,
consolidation or otherwise, if the Subcontractor requests in writing to be
included within ten days after receipt of the Contractor's notice.
6.4 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
6.5 This Article 6 shall not be deemed a limitation of rights or remedies which
the Subcontractor may have under Federal law, under state mechanics' lien laws,
or under applicable labor or material payment bonds unless such rights or
remedies are expressly waived by the Subcontractor.
ARTICLE 7
TERMINATION, SUSPENSION OR ASSIGNMENT
OF THE SUBCONTRACT
7.1 TERMINATION BY THE SUBCONTRACTOR
7.1.1 The Subcontractor may terminate the Subcontract for the same reasons and
under the same circumstances and procedures with respect to the Contractor as
the Contractor may terminate with respect to the Owner under the Prime Contract,
or for nonpayment of amounts due under this Subcontract for 60 days or longer.
In the event of such termination by the Subcontractor for any reason which is
not the fault of the Subcontractor, Sub-subcontractors or their agents or
employees or other persons performing portions of the Work under contract with
the Subcontractor, the Subcontractor shall be entitled to recover from the
Contractor payment for Work executed and for proven loss with respect to
materials, equipment, tools, and construction equipment and machinery, including
reasonable overhead, profit and damages.
7.2 TERMINATION BY THE CONTRACTOR
7.2.1 If the Subcontractor persistently or repeatedly fails or neglects to carry
out the Work in accordance with this Agreement and fails within seven days after
receipt of written notice to commence and continue correction of such default or
neglect with diligence and promptness, the Contractor may, after seven days
following receipt by the Subcontractor of an additional written notice and
without prejudice to any other remedy the Contractor may have, terminate the
Subcontract and finish the Subcontractor's Work by whatever method the
Contractor may deem expedient. If the unpaid balance of the Subcontract Sum
exceeds the expense of finishing the Subcontractor's Work, such excess shall be
paid to the Subcontractor, but if such expense exceeds such unpaid balance, the
Subcontractor shall pay the difference to the Contractor.
7.3 ASSIGNMENT OF THE SUBCONTRACT
7.3.1 In the event of termination of the Prime Contract by the Owner, the
Contractor may assign this Subcontract to the Owner, with the Owner's agreement,
subject to the provisions of the Prime Contract and to the prior rights of the
surety, if any, obligated under bonds relating to the Prime Contract. If the
Work of the Prime Contract has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.
7.3.2 The Subcontractor shall not assign the Work of this Subcontract without
the written consent of the Contract, nor subcontract the whole of this
Subcontract without the written consent of the Contractor, nor further
subcontract portions of this Subcontract without written notification to the
Contractor when such notification is requested by the Contractor.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 A401-1987 5
THE AMERICAN INSTITUTE OF ARCHITECTS,
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT TO
LEGAL PROSECUTION.
<PAGE> 6
ARTICLE 8
---------
THE WORK OF THIS SUBCONTRACT
8.1 The Subcontractor shall execute the following portion of the Work
described in the Subcontract Documents, including all labor, materials,
equipment, services and other terms required to complete such portion of the
Work, except to the extent specifically indicated in the Subcontract Documents
to be the responsibility of others:
(Insert a precise description of the Work of this Subcontract, referring where
appropriate in numbers of Drawings, sections of Specifications and pages of
Addenda, Modifications and accepted Allowances)
Execavate 178' x 92' pad and bring in rock base and sand.
Excate and pour footing, foundation, piers and tension ties
as per plans. Pour concrete slab per plans and provide frost
protection.
Design Development plans: C-1 thru C-12 all dated 12-20-96,
A1.0, A1.1, A1.2, A1.3, A2.0, A2.1, A3.0, A3.1, A3.2, A4.0, A1.0
thru 1.3 and A3.0 are dated 11-8-96 all others dated 12-2-96
S1 thru S3 dated 12-3-96
See attached bid
ARTICLE 9
---------
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
9.1 The Subcontractor's date of commencement is the date from which the
Contract Time of Paragraph 9.3 is measured; it shall be the date of this
Agremeent, as first written above, unless a different date is stated below or
provision is made for the date to be fixed in a notice to proceed issued by the
Contractor.
(Insert the date of commencement if it differs from the date of this Agreement,
if applicable, note when the date will be fixed in a notice to proceed.)
1-10-97
9.2 Unless the date of commencement is established by a notice to proceed
issued by the Contractor, or the Contractor has commenced visible Work at the
site under the Prime Contract, the Subcontractor shall notify the Contractor in
writing not less than five days before commencing the Subcontractor's Work to
permit the timely filing of mortgages, mechanic's liens and other security
interests.
9.3 The Work of this Subcontractor shall be substantially completed not
later than 2-20-97.
(Insert the calendar date of number of calendar days after the Subcontractor's
date of commencement. Also insert any requirements for earlier Subcontractor
Completion of certain portions of the Subcontractor's Work, if not stated
anywhere in the Subcontractor's Documents)
, subject to adjustments of this Subcontractor Time as provided in the
Subcontractor Documents.
(Insert procedures, if any, for liquidated damages relating to failure to
complete on time.)
NA
9.4 Time is of the essence of this Subcontract.
9.5 No extension of time will be valid without the Contractor's written
consent after claim made by the Subcontractor in accordance with Paragraph 5.2.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 6
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 7
ARTICLE 10
----------
SUBCONTRACT SUM
10.1 The Contractor shall pay the Subcontractor in current funds for
performance of the Subcontract the Subcontract Sum of Ninety One Thousand Two
Hundred Dollars ($91,200.00), subject to additions and deductions as provided
in the Subcontract Documents.
10.2 The Subcontract Sum is based upon the following alternates, if any,
which are described in the Subcontract Documents and have been accepted by the
Owner and the Contractor:
(insert the numbers or other identification of accepted alternates.)
N A
10.3 Unit prices, if any, are as follows:
N A
ARTICLE 11
----------
PROGRESS PAYMENTS
11.1 Based upon applications for payment submitted to the Contractor by the
Subcontractor, corresponding to Applications for Payment submitted by the
Contractor to the Architect, and Certificates for Payment issued by the
Architect, the Contractor shall make progress payments on account of the
Subcontract Sum to the Subcontractor as provided below and elsewhere in the
Subcontract Documents.
11.2 The period covered by each application for payment shall be one
calendar month ending on the last day of the month, or as follows:
Twenty fifth of the month to be paid on the fifth of the next
month
11.3 Provided an application for payment is received by the Contractor not
later than the twenty five day of a month, the Contractor shall include the
Subcontractor's Work covered by that application in the next Application for
Payment which the Contractor is entitled to submit to the Architect. The
Contractor shall pay the Subcontractor each progress payment
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 7
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 8
within three working days after the Contractor receives payment from the Owner,
if the Architect does not issue a Certificate for Payment or the Contractor does
not receive payment for any cause which is not the fault of the Subcontractor,
the Contractor shall pay the Subcontractor, on demand, a progress payment
computed as provided in Paragraphs 11.7 and 11.8.
11.4 If an application for payment is received by the Contractor after the
application date fixed above, the subcontractor's Work covered by it shall be
included by the Contractor in the next Application for Payment submitted to
the Architect.
11.5 Each application for payment shall be based upon the most recent
schedule of values submitted by the Subcontractor in accordance with the
Subcontract Documents. The schedule or values shall allocate the entire
Subcontract Sum among the various portions of the Subcontractor's Work and be
prepared in such form and supported by such data to substantiate its accuracy as
the Contractor may require. This schedule, unless objected to by Contractor,
shall be used as a basis for reviewing the Subcontractor's applications for
payment.
11.6 Applications for payment submitted by the Subcontractor shall indicate
the percentage of completion of each portion of the Subcontractor's Work as of
the end of the period covered by the application for payment.
11.7 Subject to the provisions of the Subcontract Documents, the amount of
each progress payment shall be computed as follows:
11.7.1 Take that portion of the Subcontract Sum properly allocable to
completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract Sum
allocated to that portion of the Subcontractor's Work in the schedule of
values, less that percentage actually retained, if any, from payments to the
Contractor on account of the Work of the Subcontractor. Pending final
determination of cost to the Contractor of changes in the Work which have been
properly authorized by Construction Change Directive, amounts not in dispute
may be included to the same extent provided in the Prime Contract, even though
the Subcontract Sum has not yet been adjusted.
11.7.2 Add that portion of the Subcontract Sum properly allocable to
materials and equipment delivered and suitably stored at the site by the
Subcontractor for subsequent incorporation in the Subcontractor's Work or, if
approved in advance by the Owner, suitably stored off the site at a location
agreed upon in writing, less the same percentage retainage required by the
Prime Contract to be applied to such materials and equipment in the
Contractor's Application for Payment;
11.7.3 Subtract the aggregate of previous payments made by the Contractor; and
11.7.4 Subtract amounts, if any, calculated under Subparagraph 11.7.1 or
11.7.2 which are related to Work of the Subcontractor for which the Architect
has withheld or nullified, in whole or in part, a Certificate of Payment for a
cause which is the fault of the Subcontractor.
11.8 SUBSTANTIAL COMPLETION
11.8.1 When the Subcontractor's Work or a designated portion thereof is
substantially complete and in accordance with the requirements of the Prime
Contract, the Contractor shall, upon application by the Subcontractor, make
prompt application for payment for such Work. Within 30 days following issuance
by the Architect of the Certificate for Payment covering such substantially
completed Work, the Contractor shall, to the full extent allowed in the Prime
Contract, make payment to the Subcontractor, deducting any portion of the funds
for the Subcontractor's Work withheld in accordance with the Certificate to
cover costs of items to be completed or corrected by the Subcontractor. Such
payment to the Subcontractor shall be the entire unpaid balance of the
Subcontract Sum if a full release of retainage is allowed under the Prime
Contract for the Subcontractor's Work prior to the completion of the entire
Project, if the Prime Contract does not allow for a full release of retainage,
then such payment shall be an amount which, when added to previous payments to
the Subcontractor, will reduce the retainage on the Subcontractor's
substantially completed Work to the same percentage of retainage as that on
the Contractor's Work covered by the Certificate.
ARTICLE 12
FINAL PAYMENT
12.1 Final payment, constituting the entire unpaid balance of the Subcontract
Sum, shall be made by the Contractor to the Subcontractor when the
Subcontractor's Work is fully performed in accordance with the requirements of
the Contract Documents, the Architect has issued a Certificate for Payment
covering the Subcontractor's completed Work and the contractor has received
payment from the Owner. If, for any cause which is not the fault of the
Subcontractor, a Certificate for Payment is not issued or the Contractor does
not receive timely payment or does not pay the Subcontractor within three
working days after receipt of payment from the Owner, final payment to the
Subcontractor shall be made upon demand.
(Include provisions for earlier final payment to the Subcontractor, if
applicable)
NA
12.2 Before issuance of the final payment, the Subcontractor, if required,
shall submit evidence satisfactory to the Contractor that all payrolls, bills
for materials and equipment, and all known indebtedness connected with the
Subcontractor's Work have been satisfied.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 8
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 9
ARTICLE 13
INSURANCE AND BONDS
13.1 The Subcontractor shall purchase and maintain insurance of the following
types of coverage and limits of liability:
1,000,000.00 (one million) Insurance Coverage and Oregon Contractors License
13.2 Coverages, whether written on an occurrence or claims-made basis, shall
be maintained without interruption from date of commencement of the
Subcontractor's Work until date of final payment and termination of any
coverage required to be maintained after final payment.
13.3 Certificates of insurance acceptable to the Contractor shall be filed
with the Contractor prior to commencement of the Subcontractor's Work. These
certificates and the insurance policies required by this Article 13 shall
contain a provision that coverages afforded under the policies will not be
cancelled or allowed to expire until at least 30 days' prior written notice has
been given to the Contractor. If any of the foregoing insurance coverages are
required to remain in force after final payment and are reasonably available,
an additional certificate evidencing continuation of such coverage shall be
submitted with the final application for payment as required in Article 12. If
any information concerning reduction of coverage is not furnished by the
insurer, it shall be furnished by the Subcontractor with reasonable promptness
according to the Subcontractor's information and belief.
13.4 The Contractor shall furnish to the Subcontractor satisfactory evidence
of insurance required of the Contractor under the prime Contract.
13.5 Waivers of Subrogation. The Contractor and Subcontractor waive all
rights against (1) each other and any of their Subcontractors,
Sub-subcontractors, agents and employees, each of the other, and (2) the Owner,
the Architect, the Architect's consultants, separate contractors, and any of
their subcontractors, sub-subcontractors, agents and employees for damages
caused by fire or other perils to the extent covered by property insurance
provided under the Prime Contract or other property insurance applicable to the
Work, except such rights as they may have to proceeds of such insurance held by
the Owner as fiduciary. The Subcontractor shall require of the Subcontractor's
Sub-subcontractors, agents and employees, by appropriate agreements, written
where legally required for validity, similar waivers in favor of other parties
enumerated herein. The policies shall provide such waivers of subrogation by
endorsement or otherwise. A waiver of subrogation shall be effective as to a
person or entity even though that person or entity would otherwise have a duty
of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an
insurable interest in the property damaged.
13.6 The Contractor shall promptly, upon request of the Subcontractor, furnish
a copy or permit a copy to be made of any bond covering payment of obligations
arising under the Subcontract.
13.7 Performance Bond and Payment Bond:
(If the Subcontractor is to furnish bonds, insert the specific requirements
here.)
ARTICLE 14
TEMPORARY FACILITIES AND WORKING CONDITIONS
14.1 The Contractor shall furnish and make available to the Subcontractor the
following temporary facilities, equipment and services; these shall be furnished
at no cost to the Subcontractor unless otherwise indicated below:
14.2 Specific working conditions:
(Insert any applicable arrangements concerning working conditions and labor
matters for the Project.)
All Excavated material to be left on site and Contractor to provide power and
accessibility around site.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 9
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 10
ARTICLE 15
----------
MISCELLANEOUS PROVISIONS
15.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Subcontract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Subcontract
Documents.
15.2 Payments due and unpaid under this Subcontract shall bear interest from
the date payment is due at such rate as the parties may agree upon in writing
or, in the absence thereof, at the legal rate prevailing from time to time at
the place where the Project is located.
(Insert rate of interest agreed upon, if any.)
N A
(Usury laws and requirements under the Federal Trust or Lending Act, similar
state and local Consumer credit laws and other regulations at the Owner's,
Contractor's and Subcontractor's principal places of business, the location of
the Project and elsewhere may affect the validity of this provision. Legal
advice should be obtained with respect to deletions or modifications, and also
regarding requirements such as written discounts or waivers.)
ARTICLE 16
----------
ENUMERATION OF SUBCONTRACT DOCUMENTS
16.1 The Subcontract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows:
16.1.1 This executed Standard Form of Agreement Between Contractor and
Subcontractor, AIA Document A401, 1987 Edition;
16.1.2 The Prime Contract, consisting of the Agreement between the Owner and
Contractor dated as first entered above and the other Contract Documents
enumerated in the Owner-Contractor Agreement; Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda and other documents enumerated therein;
16.1.3 The following Modifications to the Prime Contract, if any, issued
subsequent to the execution of the Owner-Contractor Agreement but prior to the
execution of this Agreement:
Modification Date
16.1.4 Other Documents, if any, forming part of the Subcontract Documents are
as follows:
This Agreement entered into as of the day and year first written above.
CONTRACTOR SUBCONTRACTOR
/s/ DUNCAN EDWARDS /s/ L. J. BARNEY
- ------------------------------- -------------------------------
(Signature) Duncan Edwards (Signature) L. J. Barney
Duncan Edwards, Agent for: /s/ Lyle J. Barney, Owner
- ------------------------------- -------------------------------
(Printed name and title) (Printed name and title)
INLAND CASINO CORP.
CAUTION: You should use an original AIA document which has this caution
AIA printed in red. An original assures that changes will not be obscured
as may occur when documents are reproduced.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 o CONTRACTOR-SUBCONTRACTOR AGREEMENT o A401-1987 10
TWELFTH EDITION o AIA(R) o (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1755 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO LEGAL PROSECUTION.
<PAGE> 1
[AMERICAN INSTITUTE OF ARCHITECTS LETTERHEAD]
EXHIBIT 10.7
- --------------------------------------------------------------------------------
AIA DOCUMENT A401
STANDARD FORM OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document has been approved and endorsed by
the American Subcontractors Association and the
Associated Specialty Contractors, Inc.
- --------------------------------------------------------------------------------
AGREEMENT
made as of the 22 Twenty Two day of January in the year of Nineteen Hundred and
Ninety Seven
BETWEEN the Contractor:
(Name and Address) Inland Casino Corporation
4225 Executive Square, Suite 1650
La Jolla, CA 92037
and the Subcontractor:
(Name and Address) Powley Plumbing Inc.
515 Market Street
Klamath Falls, Oregon 97601-6250
The Contractor has made a contract for construction dated with
The Owner: Klamath Confederate Tribes
(Name and Address) PO Box 436
Chiloquin, Oregon 97624
For the following Project:
(Name and Location) KLA-MO-YA Casino
34333 Highway 97 North
Chiloquin, Oregon 97624
which Contract is hereinafter referred to as the Prime Contract and which
provides for the furnishing of labor, materials, equipment and services in
connection with the construction of the Project. A copy of the Prime Contract,
consisting of the Agreement Between Owner and Contractor (from which
compensation amounts may be deleted) and the other Contract Documents
enumerated therein has been made available to the Subcontractor.
The Architect for the Project is:
(Name and Address) Gaming Environment Design Inc.
1813 130th Ave NE, suite 220
Bellevue, WA 98005
The Contractor and the Subcontractor agree as set forth below.
- --------------------------------------------------------------------------------
Copyright 1915, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967, 1972, 1978,
(C)1987 by the American Institute of Architects, 1735 New York Avenue,
N.W., Washington, D.C. 20006. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the
AIA violates the copyright laws of the United States and will be subject to
legal prosecution.
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 A401-1987
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 2
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF AGREEMENT
BETWEEN CONTRACTOR AND SUBCONTRACTOR
- --------------------------------------------------------------------------------
ARTICLE 1
---------
THE SUBCONTRACT DOCUMENTS
1.1 The Subcontract Documents consist of (1) this Agreement; (2) the Prime
Contract, consisting of the Agreement between the Owner and Contractor and the
other Contract Documents enumerated therein, including Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of the Agreement between the
Owner and Contractor and Modifications issued subsequent to the execution of the
Agreement between the Owner and Contractor, whether before or after the
execution of this Agreement, and other Contract Documents, if any, listed in the
Owner-Contractor Agreement; (3) other documents listed in Article 16 of this
Agreement; and (4) Modifications to this Subcontract issued after execution of
this Agreement. These form the Subcontract, and are as fully a part of the
Subcontract as if attached to this Agreement or repeated herein. The Subcontract
represents the entire and integrated agreement between the parties hereto and
supersedes prior negotiations, representations or agreements, either written or
oral. An enumeration of the Subcontract Documents, other than Modifications
issued subsequent to the execution of this Agreement, appears in Article 16.
1.2 The Subcontractor shall be furnished copies of the Subcontract
Documents upon request, but the Contractor may charge the Subcontractor for the
cost of reproduction.
ARTICLE 2
---------
MUTUAL RIGHTS AND RESPONSIBILITIES
2.1 The Contractor and Subcontractor shall be mutually bound by the terms of
this Agreement and, to the extent that provisions of the Prime Contract apply to
the Work of the Subcontractor, the Contractor shall assume toward the
Subcontractor all obligations and responsibilities that the Owner, under the
Prime Contract, assumes toward the Contractor, and the Subcontractor shall
assume toward the Contractor all obligations and responsibilities which the
Contractor, under the Prime Contract, assumes toward the Owner and the
Architect. The Contractor shall have the benefit of all rights, remedies and
redress against the Subcontractor which the Owner, under the Prime Contract, has
against the Contractor, and the Subcontractor shall have the benefit of all
rights, remedies and redress against the Contractor which the Contractor, under
the Prime Contract, has against the Owner, insofar as applicable to this
Subcontract. Where a provision of the Prime Contract is inconsistent with a
provision of this Agreement, this Agreement shall govern.
2.2 The Contractor may require the Subcontractor to enter into agreements
with Sub-subcontractors performing portions of the Work of this Subcontract by
which the Subcontractor and the Sub-subcontractor are mutually bound, to the
extent of the Work to be performed by the Sub-subcontractor, assuming toward
each other all obligations and responsibilities which the Contractor and
Subcontractor assume toward each other and having the benefit of all rights,
remedies and redress each against the other which the Contractor and
Subcontractor have by virtue of the provisions of this Agreement.
ARTICLE 3
---------
CONTRACTOR
3.1 SERVICES PROVIDED BY THE CONTRACTOR
3.1.1 The Contractor shall cooperate with the Subcontractor in scheduling and
performing the Contractor's Work to avoid conflicts or interference in the
Subcontractor's Work and shall expedite written responses to submittals made by
the Subcontractor in accordance with Paragraph 4.1 and Article 5. As soon as
practicable after execution of this Agreement, the Contractor shall provide the
Subcontractor copies of the Contractor's construction schedule and schedule of
submittals, together with such additional scheduling details as will enable the
Subcontractor to plan and perform the Subcontractor's Work properly. The
Subcontractor shall be notified promptly of subsequent changes in the
construction and submittal schedules and additional scheduling details.
3.1.2 The Contractor shall provide suitable areas for storage of the
Subcontractor's materials and equipment during the course of the Work.
Additional costs to the Subcontractor resulting from relocation of such
facilities at the direction of the Contractor, except as previously agreed
upon, shall be reimbursed by the Contractor.
3.1.3 Except as provided in Article 14, the Contractor's equipment will be
available to the Subcontractor only at the Contractor's discretion and on
mutually satisfactory terms.
3.2 COMMUNICATIONS
3.2.1 The Contractor shall promptly make available to the Subcontractor
information which affects this Subcontract and which becomes available to the
Contractor subsequent to execution of this Subcontract.
3.2.2 The Contractor shall not give instructions or orders directly to
employees or workmen of the Subcontractor, except to persons designated as
authorized representatives of the Subcontractor.
3.2.3 The Contractor shall permit the Subcontractor to request directly from
the Architect information regarding the percentages of completion and the
amount certified on account of Work done by the Subcontractor.
3.2.4 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Contractor, a
subcontractor or anyone directly or indirectly employed by them (other than the
Subcontractor), the Contractor shall, prior to harmful exposure of the
Subcontractor's employees to such substance, give written notice of the
chemical composition thereof to the Subcontractor in sufficient detail and time
to permit the Subcontractor's compliance with such laws.
3.3 CLAIMS BY THE CONTRACTOR
3.3.1 Liquidated damages for delay, if provided for in Paragraph 9.3 of this
Agreement, shall be assessed against the Subcontractor only to the extent
caused by the Subcontractor, the Subcontractor's employees and agents,
Sub-contractors, suppliers or any person or entity for whose acts the Subcon-
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 A401-1987 2
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 3
tractor may be liable, and in no case for delays or causes arising outside the
scope of this Subcontract.
3.3.2 Except as may be indicated in this Agreement, the Contractor agrees
that no claim for payment for services rendered or materials and equipment
furnished by the Contractor to the Subcontractor shall be valid without prior
notice to the Subcontractor and unless written notice thereof is given by the
Contractor to the Subcontractor not later than the tenth day of the calendar
month following that in which the claim originated.
3.4 CONTRACTOR'S REMEDIES
3.4.1 If the Subcontractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within three working days after receipt
of written notice from the Contractor to commence and continue correction of
such default or neglect with diligence and promptness, the Contractor may, after
three days following receipt by the Subcontractor of an additional written
notice, and without prejudice to any other remedy the Contractor may have, make
good such deficiencies and may deduct the cost thereof from the payments then or
thereafter due the Subcontractor, provided, however, that if such action is
based upon faulty workmanship or materials and equipment, the Architect shall
first have determined that the workmanship or materials and equipment are not in
accordance with requirements of the Prime Contract.
ARTICLE 4
---------
SUBCONTRACTOR
4.1 EXECUTION AND PROGRESS OF THE WORK
4.1.1 The Subcontractor shall cooperate with the Contractor in scheduling and
performing the Subcontractor's Work to avoid conflict, delay in or interference
with the Work of the Contractor, other subcontractors or Owner's own forces.
4.1.2 The Subcontractor shall promptly submit Shop Drawings, Product Data,
Samples and similar submittals required by the Subcontract Documents with
reasonable promptness and in such sequence as to cause no delay in the Work or
in the activities of the Contractor or other subcontractors.
4.1.3 The Subcontractor shall submit to the Contractor a schedule of values
allocated to the various parts of the Work of this Subcontract, aggregating the
Subcontract Sum, made out in such detail as the Contractor and Subcontractor
may agree upon or as required by the Owner, and supported by such evidence as
the Contractor may direct. In applying for payment, the Subcontractor shall
submit statements based upon this schedule.
4.1.4 The Subcontractor shall furnish to the Contractor periodic progress
reports on the Work of this Subcontract as mutually agreed, including
information on the status of materials and equipment which may be in the course
of preparation or manufacture.
4.1.5 The Subcontractor agrees that the Architect will have the authority to
reject Work which does not conform to the Prime Contract. The Architect's
decisions on matters relating to aesthetic effect shall be final if consistent
with the intent expressed in the Prime Contract.
4.1.6 The Subcontractor shall pay for materials, equipment and labor used in
connection with the performance of this Subcontract through the period covered
by previous payments received from the Contractor, and shall furnish
satisfactory evidence, when requested by the Contractor, to verify compliance
with the above requirements.
4.1.7 The Subcontractor shall take necessary precautions to protect properly
the Work of other subcontractors from damage caused by operations under this
Subcontract.
4.1.8 The Subcontractor shall cooperate with the Contractor, other
subcontractors and the Owner's own forces whose Work might interfere with the
Subcontractor's Work. The Subcontractor shall participate in the preparation of
coordinated drawings in areas of congestion, if required by the Prime Contract,
specifically noting and advising the Contractor of potential conflicts between
the Work of the Subcontractor and that of the Contractor, other subcontractors
or the Owner's own forces.
4.2 LAWS, PERMITS, FEES AND NOTICES
4.2.1 The Subcontractor shall give notices and comply with laws, ordinances,
rules, regulations and orders of public authorities bearing on performance of
the Work of this Subcontract. The Subcontractor shall secure and pay for
permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Subcontractor's Work, the furnishing of which
is required of the Contractor by the Prime Contract.
4.2.2 The Subcontractor shall comply with Federal, state and local tax laws,
social security acts, unemployment compensation acts and workers' or workmen's
compensation acts insofar as applicable to the performance of this Subcontract.
4.3 SAFETY PRECAUTIONS AND PROCEDURES
4.3.1 The Subcontractor shall take reasonable safety precautions with respect
to performance of this Subcontract, shall comply with safety measures initiated
by the Contractor and with applicable laws, ordinances, rules, regulations and
orders of public authorities for the safety of persons or property in
accordance with the requirements of the Prime Contract. The Subcontractor shall
report to the Contractor within three days an injury to an employee or agent of
the Subcontractor which occurred at the site.
4.3.2 If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Subcontractor,
the Subcontractor's Sub-subcontractors or anyone directly or indirectly
employed by them, the Subcontractor shall, prior to harmful exposure of any
employees on the site to such substance, give written notice of the chemical
composition thereof to the Contractor in sufficient detail and time to permit
compliance with such laws by the Contractor, other subcontractors and other
employers on the site.
4.3.3 In the event the Subcontractor encounters on the site material
reasonably believed to be asbestos or polychlorinated biphenyl (PCB) which has
not been rendered harmless, the Subcontractor shall immediately stop Work in the
area affected and report the condition to the Contractor in writing. The Work in
the affected area shall resume in the absence of asbestos or polychlorinated
biphenyl (PCB), or when it has been rendered harmless, by written agreement of
the Contractor and Subcontractor, or in accordance with final determination by
the Architect on which arbitration has not been demanded or by arbitration as
provided in this Agreement. The Subcontractor shall not be required pursuant to
Article 5 to perform without consent any Work relating to asbestos or
polychlorinated biphenyl (PCB).
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 A401-1987 3
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 4
4.3.4 To the fullest extent permitted by law, the Contractor shall indemnify
and hold harmless the Subcontractor, the Subcontractor's Sub-contractors, and
agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorneys' fees, arising out of or
resulting from performance of the Work in the affected area if in fact the
material is asbestos or polychlorinated biphenyl (PCB) and has not been rendered
harmless, provided that such claim, damage, loss or expense is attributable to
bodily injury, sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself) including loss of use resulting
therefrom, but only to the extent caused in whole or in part by negligent acts
or omissions of the Contractor, Architect, Owner, anyone directly or indirectly
employed by any of them, or anyone for whose acts any of them may be liable,
regardless of whether or not such claim, damage, loss or expense is caused in
part by a party indemnified hereunder. Such obligation shall not be construed to
negate, abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Subparagraph 4.3.4.
4.4 CLEANING UP
4.4.1 The Subcontractor shall keep the premises and surrounding area free
from accumulation of waste materials or rubbish caused by operations performed
under this Subcontract. The Subcontractor shall not be held responsible for
unclean conditions caused by other contractors or subcontractors.
4.5 WARRANTY
4.5.1 The Subcontractor warrants to the Owner, Architect and Contractor that
materials and equipment furnished under this Subcontract will be of good
quality and new unless otherwise required or permitted by the Subcontract
Documents, that the Work of this Subcontract will be free from defects not
inherent in the quality required or permitted, and that the Work will conform
with the requirements of the Subcontract Documents. Work not conforming to
these requirements, including substitutions not properly approved and
authorized, may be considered defective. The Subcontractor's warranty excludes
remedy for damage or defect caused by abuse, modifications not executed by the
Subcontractor, improper or insufficient maintenance, improper operation, or
normal wear and tear under normal usage. This warranty shall be in addition to
and not in limitation of any other warranty or remedy required by law or by the
Subcontract Documents.
4.6 INDEMNIFICATION
4.6.1 To the fullest extent permitted by law, the Subcontractor shall
indemnify and hold harmless the Owner, Contractor, Architect, Architect's
consultants, and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorney's fees,
arising out of or resulting from performance of the Subcontractor's Work under
this Subcontract, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Subcontractor, the Subcontractor's
Sub-contractors, anyone directly or indirectly employed by them or anyone for
whose acts they may be liable, regardless of whether or not such claim, damage,
loss or expense is caused in part by a party indemnified hereunder. Such
obligation shall not be construed to negate, abridge, or otherwise reduce other
rights or obligations of indemnity which would otherwise exist as to a party or
person described in this Paragraph 4.6.
4.6.2 In claims against any person or entity indemnified under this Paragraph
4.6 by an employee of the Subcontractor, the Subcontractor's
Sub-subcontractors, anyone directly or indirectly employed by them or anyone
for whose acts they may be liable, the indemnification obligation, under the
Paragraph 4.6 shall not be limited by a limitation on amount or type of
damages, compensation or benefits payable by or for the Subcontractor or the
Subcontractor's Sub-subcontractors under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.
4.6.3 The obligations of the Subcontractor under this Paragraph 4.6 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders, designs
or specifications, or (2) the giving of or the failure to give directions or
instructions by the Architect, the Architect's consultants, and agents and
employees of any of them, provided such giving or failure to give is the
primary cause of the injury or damage.
4.7 REMEDIES FOR NONPAYMENT
4.7.1 If the Contractor does not pay the Subcontractor through no fault of
the Subcontractor, within seven days from the time payment should be made as
provided in this Agreement, the Subcontractor may, without prejudice to other
available remedies, upon seven additional days' written notice to the
Contractor, stop the Work of this Subcontract until payment of the amount owing
has been received. The Subcontract Sum shall, by appropriate adjustment, be
increased by the amount of the Subcontractor's reasonable costs of shutdown,
delay and start-up.
ARTICLE 5
CHANGES IN THE WORK
5.1 The Owner may make changes in the Work by issuing Modifications to the
Prime Contract. Upon receipt of such a Modification issued subsequent to the
execution of the Subcontract Agreement, the Contractor shall promptly notify
the Subcontractor of the Modification. Unless otherwise directed by the
Contractor, the Subcontractor shall not thereafter order materials or perform
Work which would be inconsistent with the changes made by the Modifications to
the Prime Contract.
5.2 The Subcontractor may be ordered in writing by the Contractor, without
invalidating this Subcontract, to make changes in the Work within the general
scope of this Subcontract consisting of additions, deletions or other
revisions, including those required by Modifications to the Prime Contract
issued subsequent to the execution of this Agreement, the Subcontract Sum and
the Subcontract Time being adjusted accordingly. The Subcontractor, prior to
the commencement of such changed or revised Work, shall submit promptly to the
Contractor written copies of a claim for adjustment to the Subcontract Sum and
Subcontract Time for such revised Work in a manner consistent with requirements
of the Subcontract Documents.
5.3 The Subcontractor shall make claims promptly to the Contractor for
additional cost, extensions of time and damages for delays or other causes in
accordance with the Subcontract
- --------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006 A401-1987 4
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
TO LEGAL PROSECUTION.
<PAGE> 5
Documents. A claim which will affect or become part of a claim which the
Contractor is required to make under the Prime Contract within a specified time
period or in a specified manner shall be made in sufficient time to permit the
Contractor to satisfy the requirements of the Prime Contract. Such claims shall
be received by the Contractor not less than two working days preceding the time
by which the Contractor's claim must be made. Failure of the Subcontractor to
make such a timely claim shall bind the Subcontractor to the same consequences
as those to which the Contractor is bound.
ARTICLE 6
ARBITRATION
6.1 Any controversy or claim between the Contractor and the Subcontractor
arising out of or related to this Subcontract, or the breach thereof, shall be
settled by arbitration, which shall be conducted in the same manner and under
the same procedure as provided in the Prime Contract with respect to claims
between the Owner and the Contractor, except that a decision by the Architect
shall not be a condition precedent to arbitration. If the Prime Contract does
not provide for arbitration or fails to specify the manner and procedure for
arbitration, it shall be conducted in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise.
6.2 Except by written consent of the person or entity sought to be jointed,
no arbitration arising out of or relating to the Subcontract shall include, by
consolidation or joinder or in any other manner, any person or entity not a
party to the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, (3) the interest or responsibility of such person or entity in the
matter is not insubstantial, and (4) such person or entity is not the Architect,
the Architect's employee, the Architect's consultant, or an employee or agent of
any of them. This agreement to arbitrate and any other written agreement to
arbitrate with an additional person or persons referred to herein shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.
6.3 The Contractor shall give the Subcontractor prompt written notice of any
demand received or made by the Contractor for arbitration if the dispute
involves or relates to the Work, materials, equipment, rights or
responsibilities of the Subcontractor. The Contractor shall consent to inclusion
of the Subcontractor in the arbitration proceeding whether by joinder,
consolidation or otherwise, if the Subcontractor requests in writing to be
included within ten days after receipt of the Contractor's notice.
6.4 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
6.5 This Article 6 shall not be deemed a limitation of rights or remedies
which the Subcontractor may have under Federal law, under state mechanics' lien
laws, or under applicable labor or material payment bonds unless such rights or
remedies are expressly waived by the Subcontractor.
ARTICLE 7
TERMINATION, SUSPENSION OR ASSIGNMENT OF THE SUBCONTRACT
7.1 TERMINATION BY THE SUBCONTRACTOR
7.1.1 The Subcontractor may terminate the Subcontract for the same reasons and
under the same circumstances and procedures with respect to the Contractor as
the Contractor may terminate with respect to the Owner under the Prime Contract,
or for nonpayment of amounts due under this Subcontract for 60 days or longer.
In the event of such termination by the Subcontractor for any reason which is
not the fault of the Subcontract, Sub-subcontractors or their agents or
employees or other persons performing portions of the Work under contract with
the Subcontractor, the Subcontractor shall be entitled to recover from the
Contractor payment for Work executed and for proven loss with respect to
materials, equipment, tools, and construction equipment and machinery, including
reasonable overhead, profit and damages.
7.2 TERMINATION BY THE CONTRACTOR
7.2.1 If the Subcontractor persistently or repeatedly fails or neglects to
carry out the Work in accordance with the Subcontract Documents or otherwise to
perform in accordance with this Agreement and fails within seven days after
receipt of written notice to commence and continue correction of such default or
neglect with diligence and promptness, the Contractor may, after seven days
following receipt by the Subcontractor of an additional written notice and
without prejudice to any other remedy the Contractor may have, terminate the
Subcontract and finish the Subcontractor's Work by whatever method the
Contractor may deem expedient. If the unpaid balance of the Subcontract Sum
exceeds the expense of finishing the Subcontractor's Work, such excess shall be
paid to the Subcontractor, but if such expense exceeds such unpaid balance, the
Subcontractor shall pay the difference to the Contractor.
7.3 ASSIGNMENT OF THE SUBCONTRACT
7.3.1 In the event of termination of the Prime Contract by the Owner, the
Contractor may assign this Subcontract to the Owner, with the Owner's agreement,
subject to the provisions of the Prime Contract and to the prior rights of the
surety, if any, obligated under bonds relating to the Prime Contract. If the
Work of the Prime Contract has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.
7.3.2 The Subcontractor shall not assign the Work of this Subcontract without
the written consent of the Contractor, nor subcontract the whole of this
Subcontract without the written consent of the Contractor, nor further
subcontract portions of this Subcontract without written notification to the
Contractor when such notification is requested by the Contractor.
- --------------------------------------------------------------------------------
5 A401-1987 AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA - (c) 1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE,
N.W., WASHINGTON, D.C. 20006
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
IS SUBJECT TO PROSECUTION.
<PAGE> 6
ARTICLE 8
---------
THE WORK OF THIS SUBCONTRACT
8.1 The Subcontractor shall execute the following portion of the Work
described in the Subcontract Documents, including all labor, materials,
equipment, services and other items required to complete such portion of the
Work, except to the extent specifically indicated in the Subcontract documents
to be the responsibility of others:
(Insert a precise description of the Work of this Subcontract, referring where
appropriate to numbers of Drawings, sections of Specifications and pages of
Addenda, Modifications and accepted Alternates.)
Design - TPLD
Occupancy Load 954 people, 16,020 SF with a Kitchen for buffet dining
and a deli.
Design Development Drawings
C-1 through C-12,
A1.0-A1.3, A2.0-A2.1, A3.0 through A3.2, A4.0 dated 12-3-96 & 11-8-96
S-1-S3 dated 12-3-96
K-1 through K-9 dated 12-16-96
See attached proposal
ARTICLE 9
---------
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
9.1 The Subcontractor's date of commencement is the date from which the
Contract Time of Paragraph 9.3 is measured; it shall be the date of this
Agreement, as first written above, unless a different date is stated below or
provision is made for the date to be fixed in a notice to proceed issued by the
Contractor.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)
JANUARY 22, 1997
9.2 Unless the date of commencement is established by a notice to proceed
issued by the Contractor, or the contract has commenced visible Work at the
site under the Prime Contract, the Subcontractor shall notify the Contractor in
writing not less than five days before commencing the Subcontractor's Work to
permit the timely filing of mortgages, mechanic's liens and other security
interests.
9.3 The work of this Subcontract shall be substantially completed not later
than JUNE 1, 1997
(Insert the calendar date or number of calendar days after the Subcontractor's
date of commencement. Also insert any requirements for earlier Substantial
Completion of certain portions of the Subcontractor's Work, if not stated
elsewhere in the Subcontract Documents.)
, subject to adjustments of this Subcontract Time as provided in the
Subcontract Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)
NA
9.4 Time is of the essence of this Subcontract.
9.5 No extension of time will be valid without the Contractor's written
consent after claim made by the subcontractor in accordance with Paragraph 5.2
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 6
<PAGE> 7
ARTICLE 10
----------
SUBCONTRACT SUM
10.1 The Contractor shall pay the Subcontractor in current funds for
performance of the Subcontract the Subcontract Sum of Sixty-eight thousand nine
hundred eighty-five dollars ($69,985.00), subject to additions and deductions as
provided in the Subcontract Documents.
10.2 The Subcontract Sum is based upon the following alternates, if any,
which are described in the Subcontract Documents and have been accepted by the
Owner and the Contractor:
(Insert the numbers or other identification of accepted alternates.)
NA
10.3 Unit prices, if any, are as follows:
NA
ARTICLE 11
----------
PROGRESS PAYMENTS
11.1 Based upon applications for payment submitted to the Contractor by the
Subcontractor, corresponding to Applications for Payment submitted by the
Contractor to the Architect, and Certificates for Payment issued by the
Architect, the Contractor shall make progress payments on account of the
Subcontract Sum to the Subcontractor as provided below and elsewhere in the
Subcontract Documents.
11.2 The period covered by each application for payment shall be one
calendar month ending on the last day of the month, or as follows:
Invoices due upon the twenty fifth of the month, payment on the tenth
of the next month
11.3 Provided an application for payment is received by the Contractor not
later than the twenty fifty day of the month, the Contractor shall include the
Subcontractor's Work covered by that application in the next Application for
Payment which the Contractor is entitled to submit to the Architect. The
Contractor shall pay the Subcontractor each progress payment
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 7
<PAGE> 8
within three working days after the Contractor receives payment from the Owner.
If the Architect does not issue a Certificate for Payment or the Contractor
does not receive payment for any cause which is not the fault of the
Subcontractor, the Contractor shall pay the Subcontractor, on demand, a
progress payment computed as provided in Paragraphs 11.7 and 11.8.
11.4 If an application for payment is received by the Contractor after the
application date fixed above, the Subcontractor's work covered by it shall be
included by the Contractor in the next Application for Payment submitted to the
Architect.
11.5 Each application for payment shall be based upon the most recent
schedule of values submitted by the Subcontractor in accordance with the
Subcontract Documents. The schedule of values shall allocate the entire
Subcontract Sum among the various portions of the Subcontractor's Work and be
prepared in such form and supported by such data to substantiate its accuracy
as the Contractor may require. This schedule, unless objected to by the
Contractor, shall be used as a basis for reviewing the Subcontractor's
applications for payment.
11.6 Applications for payment submitted by the Subcontractor shall indicate
the percentage of completion of each portion of the Subcontractor's Work as of
the end of the period covered by the application for payment.
11.7 Subject to the provisions of the Subcontract Documents, the amount of
each progress payment shall be computed as follows:
11.7.1 Take that portion of the Subcontract Sum properly allocable to
completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract Sum
allocated to that portion of the Subcontractor's Work in the schedule of
values, less that percentage actually retained, if any, from payments to the
Contractor on account of the Work of the Subcontractor. Pending final
determination of cost to the Contractor of changes in the Work which have been
properly authorized by Construction Change Directive, amounts not in dispute
may be included to the same extent provided in the Prime Contract, even though
the Subcontract Sum has not yet been adjusted;
11.7.2 Add that portion of the Subcontract Sum properly allocable to materials
and equipment delivered and suitably stored at the site by the Subcontractor for
subsequent incorporation in the Subcontractor's Work or, if approved in advance
by the Owner, suitably stored off the site at a location agreed upon in writing,
less the same percentage retainage required by the Prime Contract to be applied
to such materials and equipment in the Contractor's Application for Payment;
11.7.3 Subtract the aggregate of previous payments made by the Contractor; and
11.7.4 Subtract amounts, if any, calculated under Subparagraph 11.7.1 or
11.7.2 which are related to Work of the Subcontractor for which the Architect
has withheld or nullified, in whole or in part, a Certificate of Payment for a
cause which is the fault of the Subcontractor.
11.8 SUBSTANTIAL COMPLETION
11.8.1 When the Subcontractor's Work or a designated portion thereof is
substantially complete and in accordance with the requirements of the Prime
Contract, the Contractor shall, upon application by the Subcontractor, make
prompt application for payment for such Work. Within 30 days following issuance
by the Architect of the Certificate for Payment covering such substantially
completed Work, the Contractor shall, to the full extent allowed in the Prime
Contract, make payment to the Subcontractor, deducting any portion of the funds
for the Subcontractor's Work withheld in accordance with the Certificate to
cover costs of items to be completed or corrected by the Subcontractor. Such
payment to the Subcontractor shall be the entire unpaid balance of the
Subcontract Sum if a full release of retainage is allowed under the Prime
Contract for the Subcontractor's Work prior to the completion of the entire
Project. If the Prime Contract does not allow for a full release of retainage,
then such payment shall be an amount which, when added to previous payments to
the Subcontractor, will reduce the retainage on the Subcontractor's
substantially completed Work to the same percentage of retainage as that on the
Contractor's Work covered by the Certificate.
ARTICLE 12
----------
FINAL PAYMENT
12.1 Final payment, constituting the entire unpaid balance of the
Subcontract Sum, shall be made by the Contractor to the Subcontractor when the
Subcontractor's Work is fully performed in accordance with the requirements of
the Contract Documents, the Architect has issued a Certificate for Payment
covering the Subcontractor's completed Work and the Contractor has received
payment from the Owner. If, for any cause which is not the fault of the
Subcontractor, a Certificate for Payment is not issued or the Contractor does
not receive timely payment or does not pay the subcontractor within three
working days after receipt of payment from the Owner, final payment to the
Subcontractor shall be made upon demand.
(Insert provisions for earlier final payment to the Subcontractor, if
applicable.)
NA
12.2 Before issuance of the final payment, the Subcontractor, if required,
shall submit evidence satisfactory to the Contractor that all payrolls, bills
for materials and equipment, and all known indebtedness connected with the
Subcontractor's work have been satisfied.
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 8
<PAGE> 9
ARTICLE 13
----------
INSURANCE AND BONDS
13.1 The Subcontractor shall purchase and maintain insurance of the
following types of coverage and limits of liability:
1,000,000 Insurance Coverage
Oregon State Contractors License
13.2 Coverages, whether written or an occurrence or claims-made basis, shall
be maintained without interruption from date of commencement of the
Subcontractor's Work until date of final payment and termination of any
coverage required to be maintained after final payment.
13.3 Certificates of insurance acceptable to the Contractor shall be filed
with the Contractor prior to commencement of the Subcontractor's Work. These
certificates and the insurance policies required by this Article 13 shall
contain a provision that coverages afforded under the policies will not be
cancelled or allowed to expire until at least 30 days' prior written notice has
been given to the Contractor. If any of the foregoing insurance coverages are
required to remain in force after final payment and are reasonably available,
an additional certificate evidencing continuation of such coverage shall be
submitted with the final application for payment as required in Article 12. If
any information concerning reduction of coverage is not furnished by the
insurer, it shall be furnished by the Subcontractor with reasonable promptness
according to the Subcontractor's information and belief.
13.4 The Contractor shall furnish to the Subcontractor satisfactory evidence
of insurance required of the Contractor under the Prime Contract.
13.5 Waivers of Subrogation. The Contractor and Subcontractor waive all
rights against (1) each other and any of their Subcontractors,
Sub-subcontractors, agents and employees, each of the other, and (2) the Owner,
the Architect, the Architect's consultants, separate contractors, and any of
their subcontractors, sub-subcontractors, agents and employees for damages
caused by fire or other perils to the extent covered by property insurance
provided under the Prime Contract or other property insurance applicable to the
Work, except such rights as they may have to proceeds of such insurance held by
the Owner as fiduciary. The Subcontractor shall require of the Subcontractor's
Sub-subcontractors, agents and employees, by appropriate agreements, written
where legally required for validity, similar waivers in favor of other parties
enumerated herein. The policies shall provide such waivers of subrogation by
endorsement or otherwise. A waiver of subrogation shall be effective as to a
person or entity even though that person or entity would otherwise have a duty
of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an
insurable interest in the property damaged.
13.6 The Contractor shall promptly, upon request of the Subcontractor,
furnish a copy or permit a copy to be made of any bond covering payment or
obligations arising under the Subcontract.
13.7 Performance Bond and Payment Bond:
(If the Subcontractor is to furnish bonds, insert the specific requirements
here.)
ARTICLE 14
----------
TEMPORARY FACILITIES AND WORKING CONDITIONS
14.1 The Contractor shall furnish and make available to the Subcontractor
the following temporary facilities, equipment and services; these shall be
furnished at no cost to the Subcontractor unless otherwise indicated below:
NA
14.2 Specific working conditions:
(Insert any applicable arrangements concerning working conditions and labor
matters for the Project.)
NA
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 9
<PAGE> 10
ARTICLE 15
----------
MISCELLANEOUS PROVISIONS
15.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Subcontract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Subcontract
Documents.
15.2 Payments due and unpaid under this Subcontract shall bear interest from
the date payment is due at such rate as the parties may agree upon in writing
or, in the absence thereof, at the legal rate prevailing from time to time at
the place where the Project is located.
(Insert rate of interest agreed upon, if any.)
N/A
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations of the Owner's
Contractor's and Subcontractor's principal places of business, the location of
the Project and elsewhere may affect the validity of this provision. Legal
advice should be obtained with respect to deletions or modifications, and also
regarding requirements such as written discounts or waivers.)
ARTICLE 16
----------
ENUMERATION OF SUBCONTRACT DOCUMENTS
16.1 The Subcontract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows:
16.l.1 This executed Standard Form of Agreement Between Contractor and
Subcontractor, AlA Document A401, 1987 Edition;
16.1.2 The Prime Contract, consisting of the Agreement between the Owner and
Contractor dated as first entered above and the other Contract Documents
enumerated in the Owner-Contractor Agreement; Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda and other documents enumerated therein;
16.1.3 The following Modifications to the Prime Contract, if any, issued
subsequent to the execution of the Owner-Contractor Agreement but prior to the
execution of this Agreement:
Modification Date
N/A
16.1.4 Other Documents, if any, forming part of the Subcontract Documents are
as follows:
(List any additional documents which are intended to form part of the
Subcontract Documents. Requests for proposal and the Subcontractor's bid or
proposal should be listed here only if intended to be part of the Subcontract
Documents).
This Agreement entered into as of the day and year first written above.
CONTRACTOR SUBCONTRACTOR
/s/ DUNCAN EDWARDS /s/ TOM L. POWLEY
- ------------------------------------- ------------------------------------
(Signature) Duncan Edwards (Signature)
DUNCAN EDWARDS, agent for I.C.C. TOM L. POWLEY, Owner-President
- ------------------------------------- ------------------------------------
(Printed name and title) (Printed name and title)
1-22-97
- -------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION -
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
A401-1987 10
<PAGE> 11
[POWLEY PLUMBING, INC. LETTERHEAD]
SUBCONTRACTOR PROPOSAL OR LIC #71735
CA LIC #622815
CITY LIC #888
Date: JANUARY 17, 1997
Submitted to: Job Name/Location:
UNITED MECHANICAL KLA-MO-YA CASINO
We propose to furnish material and labor as outlined in the specifications
below:
o DOMESTIC PLUMBING
o LP GAS PIPING FOR HEATING AND RESTAURANT
o RESTAURANT PLUMBING
o EXCAVATION
o PIPE INSULATION
INCLUDES:
PLUMBING, GAS PIPING, RESTAURANT PLUMBING WITH CONNECTIONS TO OWNER
SUPPLIED EQUIPMENT, PIPE INSULATION, 5' OUT SEWER AND WATER, SEPARATE
GREASE TRAP LINE FOR FUTURE GREASE INTERCEPTOR TO BE LOCATED OUTSIDE,
EXCAVATION AND COMPACTION WITH NATIVE BACKFILL, 5' OUT LP GAS, 6" SODA
POP CONDUITS, 100 GALLON WATER HEATER WITH 2 TEMPERATURE SYSTEM.
EXCLUDES:
PERMITS, FEES, DAVIS-BACON ACT, IMPORTED SELECT BACKFILL, CONDENSATE
DRAINS.
We propose to furnish material and labor in complete accordance with these
specifications for the base sum of: $68,985.00
ALTERNATE #1 -- USE FLUSHOMETER TOILETS:
$1370.00
Payments to be made on the tenth of the month following progress billings.
All material is guaranteed to be as specified. All work will be completed in a
workmanlike manner according to standard practices. Any alteration or deviation
from above specifications involving extra costs will be executed only upon
written orders and will become an extra charge over and above the proposal. All
agreements contingent upon strikes, accidents or delays beyond our control.
Owner to carry necessary insurance. Our workers are fully covered by Workers
Compensation Insurance.
Authorized signature /s/ Bob Mest and /s/ TOM POWLEY Powley Plumbing Inc.
-------------------------------
The above prices, specifications and conditions are satisfactory and are hereby
accepted. You are authorized to do the work as specified. Payment will be made
as outlined above.
Acceptance of Proposal: /s/ DUNCAN EDWARDS
----------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1996
<CASH> 3,492,340
<SECURITIES> 0
<RECEIVABLES> 1,602,983
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,224,957
<PP&E> 244,222
<DEPRECIATION> 61,026
<TOTAL-ASSETS> 14,234,316
<CURRENT-LIABILITIES> 4,639,134
<BONDS> 4,120,054
0
0
<COMMON> 3,855
<OTHER-SE> 5,471,273
<TOTAL-LIABILITY-AND-EQUITY> 14,234,316
<SALES> 7,758,317
<TOTAL-REVENUES> 7,758,317
<CGS> 0
<TOTAL-COSTS> 5,306,714
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 379,241
<INTEREST-EXPENSE> 119,000
<INCOME-PRETAX> 2,466,100
<INCOME-TAX> 1,117,000
<INCOME-CONTINUING> 1,349,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,349,100
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
