Exhibit 10.11
[Letterhead of Xxxxxx Construction Company, Inc.]
September 23, 2002
VIA FAX
Xxxx Xxxxxx
President and CEO
Xxxxxx Construction Company, Inc.
0000 Xxxxxxx
Xxxxxx Xxxx, XX 00000
RE: Chukchansi Gold Resort & Casino
Dear Xxxx:
This letter sets forth the agreement between Cascade Entertainment
Group, LLC ("Canada") and Walton Construction Company, Inc. ("Walton") with
respect to certain disputes which have arisen among Xxxxxxx, Walton and the
Picayune Rancheria of Chukchansi Indians (the "Tribe") with respect to that
certain Agreement between Owner and Construction Manager dated July 26, 2002
("CM Agreement") by and between the Tribe and Walton. It is understood that
the terms and conditions set forth in Section A herein will be incorporated
into a mutually acceptable and definitive change order (the "Change Order")
following the execution of this letter agreement. Cascade is the Development
Manager of the Tribe under the CM Agreement. All items capitalized and not
defined herein shall have the meaning set forth in the CM Agreement.
This letter agreement is intended to be, and does constitute, a
binding and enforceable agreement.
A. The Change Order shall contain the following provisions:
1. The Project Schedule shall be revised to provide that the lobby
level, lower level of the Hotel and any mechanical and electrical systems of
the Hotel critical to the operation of the Casino shall be substantially
complete no later than June 25, 2003. Additionally, another floor of the Hotel
shall be delivered no later than July 21, 2003, with additional floors of the
Hotel to be delivered sequentially thereafter with substantial completion of
all floors no later than August 22, 2003. However, all Hotel exteriors visible
to the public shall be substantially complete (except as hereafter provided)
no later than June 25, 2003. It is expressly understood, however, that the
Project will remain under construction after June 25, 2003; that construction
workers and construction equipment shall continue to be present on the site;
and that Development Manager will provide complete cooperation in order to
avoid any unnecessary interference or delay to the construction operations.
While performing such construction after June 25, 2002, Walton will also avoid
any unnecessary interference with the Casino operations. Owner recognizes,
however, that Construction Manager will still have a manlift on the outside of
the hotel past the June 26th date. In addition, a reasonable staging area on
the parking lot
immediately adjacent to the manlift will be available to the Construction
Manager. Such area will accommodate all deliveries, dumpster locations
(minimum 2 each) and is currently estimated to be about 10,000 square feet and
generally square in nature. Access to the manlift shall be through the area
designated as future swimming pool. Owner also recognizes that at the manlift
location a vertical portion of the exterior building finish cannot be enclosed
until the manlift is removed. General condition costs from June 26, 2003 to
August 22, 2003 for the Hotel will be reimbursed at the hourly rates for
personnel under the Contract which shall not exceed in the aggregate $250,000.
The obligation of Walton to meet these revised dates is expressly conditioned
upon Xxxxxxx performing in full the obligations in Paragraph B.1, B.3 and A.11
and the representation in Paragraph B.2 being true, otherwise Walton will be
entitled to the additional time and money as provided in Paragraph 2. Cascade
and the owner represent that the occupancy permits required for the hotel, if
any, for substantial completion can be issued in a phased manner. However,
substantial completion dates shall not be contingent upon obtaining
certificates of occupancy to the extent such certificates are not delivered
solely due to the phasing of delivery of the Hotel floors.
2. If the Development Manager or Owner fails to timely fulfill all
obligations set forth in Paragraphs B.1, B.3, A.10 and A.11 or if the
representation in Paragraph B.2 proves to be false then the Owner shall not be
entitled to any damages of any kind for any delay caused by such even if
substantial completion occurs after June 25, 2003; instead, Walton shall be
paid $10,000 per day for each day of delay caused by such failure by Owner or
Development Manager.
3. Liquidated damages shall be $17,500 per day for each day
Substantial Completion is delayed beyond the Outside Completion Date for the
Casino and $5,000 per day for each day Substantial Completion is delayed
beyond the Outside Completion Date for the Hotel.
4. The "GMP By Component" attached hereto as Exhibit A is formally
made a part of the Contract in order to avoid any future misunderstanding
regarding the specifics of the obligations under the Contract.
5. Neither Development Manager nor Owner will preclude Walton from
proceeding with the bidding phases while the qualification of the proposed
bidders are reviewed, provided that Cascade shall not be required to accept or
open any bid from a subcontractor who has not been prequalified.
6. Recommendations concerning the best and lowest bidders to items of
work shall be promptly acted upon by Development Manager.
7. The term "promptly" as used in the CM Agreement with respect to
the Development Manager and Owner shall be deemed to mean "within three (3)
Business Days after receipt of all reasonably necessary information from the
Construction Manager."
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8. Until such time as the Owner Controlled Insurance Program shall be
completed, Walton and any Subcontractors shall only be required to provide
such insurance coverage as is reasonable and customary for construction
projects similar in type to the Project. At such time as the OCIP is
implemented, Walton and Subcontractors shall thereafter provide insurance in
accordance with the requirements of the OCIP. Walton shall be issued a Change
Order to compensate Walton and its subcontractors for such additional cost
incurred in providing such Insurance, with the amount approved in accordance
with the provisions of the CM Agreement.
9. On or before September 30, 2002, Owner shall provide the
tax-exempt procedure for purchasing materials. In addition, Owner shall
reimburse Walton for the amount of any sales taxes incurred for materials
purchased prior to the issuance of such tax-exempt procedures.
10. Cascade as Development Manager represents and warrants that it
will accomplish the following action so as not to delay the work:
(a) Finalize the Madera County Traffic Control Plan, subject to
Walton providing all required information on construction traffic.
(b) Obtain the CalTrans permit, subject to Walton providing all
required information on construction traffic.
(c) Secure the permit from the Water Quality Resource Board, or
demonstrate to the satisfaction of any applicable regulating entity
that none is required.
(d) Provide water resource design and additional well locations, or
demonstrate to the satisfaction of any applicable regulating entity
that none is required.
11. Cascade as Development Manager shall cause Xxxxxx & Brown to
issue final architectural plans for the Hotel and for the Casino and the
theming drawings pursuant to the drawing submittal schedule previously agreed
by Xxxxxx & Brown, Cascade and Walton modified as follows: 90% drawings will
be complete no later than October 4, 2002 for the Casino and Hotel except
interiors; the final Casino interior drawings shall be 97% complete no later
than November 21, 2002; and the final Hotel interior drawings shall be 97%
complete no later than December 21, 2002.
12. The pre-qualification requirement for Subcontractors shall be
eliminated (i) for subcontracts which are for an amount of less than 1% of the
Guaranteed Minimum Price and (ii) for nationally prominent vendors as
determined by Cascade in its reasonable discretion, such as from Trane,
American Standard, GB and United Technologies and other such companies.
13. Prior to engaging in any additional Work required by Development
Manager or Owner, Walton shall be entitled to request and receive reasonable
evidence
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satisfactory to Walton that Owner has sufficient funds available to pay Walton
for such additional work.
14. Walton on the one hand and Cascade and Owner on the other hand
shall mutually release one another from all claims with respect to the CM
Agreement arising on or before the date of the Change Order, including but not
limited to the matters raised in letters for Xxxx X'Xxxxxx or you to Xxxx
Xxxxx, dated September 13, 2002, September 19, 2002, September 20, 2002 and
September 22, 2002 or any other claims for additional compensation, change
orders or schedule delays that could have been included in such letters and
arising on or before the date of the Change Order, other than the obligation
of Cascade and the Owner for payment of sums incurred prior to such date and
for which Walton is entitled to reimbursement under the CM Agreement. Walton,
Cascade and Owner, however, shall not be released from any obligation to
timely perform the obligations contained in this agreement or the Change
Order, such rights of Walton, Cascade and the Tribe being expressly reserved.
Walton acknowledges it is not entitled to any additional sums resulting from
the suspension of Work or instances of delay through the date hereof. Xxxxxxx
and the Owner acknowledge that neither of them is entitled to any damages or
other sums resulting from the suspension of the work or claims of delay
through the date hereof.
15. Walton shall be required to execute the certificates and
agreements described in Section 11.3.6 of the CM Agreement only "so long as
the factual assertions of Construction Manager required therein shall be
true."
16. In addition to other fees and bonuses set forth in the CM
Agreement and this Amendment, Walton shall receive a bonus of $250,000 on the
Final Completion Date if Substantial Completion of all portions of the Project
required to be completed before June 25, 2003 (as modified above in Paragraph
1) occurs on or before June 25, 2003 and the Contract Sum payable by Cascade
does not exceed the Guaranteed Maximum Price. If the date for such Substantial
Completion would have been achieved but for delays caused solely by Owner or
Development Manager, Walton shall in such instance be entitled to receive such
$250,000 bonus as well as those remedies set forth in Paragraph 2 above, where
applicable.
17. Except as expressly modified in the Change Order, the CM
Agreement shall remain in full force and effect.
X. Xxxxxxx and Walton hereby agree as follows:
1. Cascade shall deliver to Walton on or before September 24, 2002
evidence satisfactory to Walton and Kiewit that all funds necessary for
payment of the Contract Sum have been committed, subject to customary closing
conditions. So long as the conditions set forth in Paragraph B.3 and B.4 have
been satisfied in full Walton shall not have the right to suspend the work
under Section 3.1.1 of the CM Agreement; provided, that if such evidence is
not issued prior to September 24, 2002 or if the closing conditions are not
met and the Satisfaction Notice not issued for any reason by October 11, 2002
then Walton shall have the right to suspend the work until the Satisfaction
Notice is
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issued or other financial arrangements satisfactory to Walton and the
subcontractors are made.
2. Cascade warrants and represents that all conditions of the grading
permit have been satisfied that are necessary for Kiewit to promptly commence
its work and to complete it in an uninterrupted fashion.
3. On or before September 24, 2002, Cascade shall deposit $4,000,000
in an escrow account for the benefit of Kiewit and to induce Kiewit to begin
the site work and shall also deposit $450,000 for the benefit of Walton to
secure the payment of Pay Application No. 1 dated August 24, 2002. The escrow
agent shall be a national bank or national title company acceptable to
Cascade, Walton and Kiewit and the escrow agreement shall be in a form
satisfactory to Cascade, Walton and Kiewit.
4. Xxxxxxx shall prepare and execute on it own behalf a form of
Change Order identical in all material respects to the terms herein. Cascade
shall deliver the Change Order to Walton on or before September 24, 2002.
Walton shall execute such Change Order (provided the Change Order is
consistent with the terms of this agreement) within one (1) Business Day of
receipt. Upon receipt of the Change Order executed by Xxxxxx Xxxxxxx shall
deliver the Change Order for signature by the Tribe, along with Xxxxxxx's
recommendation that the Change Order be approved by the Tribe.
5. Walton shall terminate its suspension of the Work upon
verification from the escrow agent that Paragraph B.3 has been satisfied in
full and upon receipt of the executed Change Order from Cascade as provided in
Paragraph B.4 above, provided that if the Tribe fails to execute the Change
Order within seven (7) days of receipt of the Change Order from Xxxxxx Xxxxxx
may suspend the work until the Tribe has signed and delivered such Change
Order.
6. Walton will receive payment in full of its first pay application
of August 24, 2002 on or before September 25, 2002 as required by the CM
Agreement provided that Walton has first submitted to Cascade a conditional
lien waiver.
7. Xxxxxxx and Walton remain committed to the "Design to Budget"
principle for the Project.
8. Xxxxxxx shall set forth in writing the level of authority held by
Xxxxx Xxxxx and Xxxx Xxxxxxx as employees of the Development Manager as it
relates to the project.
9. With the approval of the contracting parties, Xxxxxxx shall
promptly provide to Walton a copy of the Xxxxxx & Xxxxx contract and the P&D
Consulting contract promptly after execution thereof to assist Walton in
understanding the Owner/Contractor service obligations. Cascade will redact
the monetary terms and any other proprietary or confidential terms from such
agreements. If one or both contracting parties do not agree to the release of
their document, Cascade will provide to Walton a summary of the key terms
relevant to Walton.
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The parties shall be entitled to seek specific performance of this
Amendment and any other appropriate equitable relief. The parties agree to the
expedited procedures set forth in 9.2.4 of the CM Agreement to resolve such a
request for specific performance. This letter agreement shall supercede all
prior correspondence and communications between Xxxxxxx and the Tribe on the
one hand, and Walton on the other hand, relating to disputes under the CM
Agreement.
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If the foregoing is acceptable, please indicate your acceptance by
executing this letter and returning the executed original to the undersigned
by telecopy at (000) 000-0000 and overnight courier.
Very truly yours,
/s/
Xxxxxxx Xxxxx
President & CEO, Cascade
Entertainment Group, LLC
ACKNOWLEDGED AND ACCEPTED:
WALTON CONSTRUCTION COMPANY, INC.
By: ______________
Its:
If the foregoing is acceptable, please indicate your acceptance by
executing this letter and returning the executed original to the undersigned
by telecopy at (000) 000-0000 and overnight courier.
Very truly yours,
Xxxxxxx Xxxxx
President & CEO, Cascade Entertainment
Group, LLC
ACKNOWLEDGED AND ACCEPTED:
WALTON CONSTRUCTION COMPANY, INC.
By: /s/
--------------------------
Its: CEO
