EXHIBIT 10.13
BUILDING CONTRACT
THIS CONTRACT is made and entered into as of this Twenty-
fifth day of March 1998, by and between XXXXXXX XXXXXX
ASSOCIATES, INC., a Nevada Corporation (as General Contractor and
hereinafter referred to as "Contractor"), and Rio Properties,
Inc. d/b/a Rio Suite Hotel & Casino, a Nevada Limited Partnership
(hereinafter referred to as "Owner").
WITNESSETH:
WHEREAS, the Owner intends to construct the RIO NORTH
DEVELOPMENT at the Rio Suite Hotel & Casino, including Rio
Sitework, Convention Center, Expanded Spa, Villas, Xxxxx
Connector, West Utility Corridor, and Valet Parking Garage, being
hereinafter referred to as the Project (OUR PROJECT NOS. 61497,
61597, 61797, 61897, 62097, 62197 AND & 62297), and
WHEREAS, the Owner requests the Contractor to perform the
work and supply said materials and equipment necessary to
complete the Project, and
WHEREAS, the Contractor desires to perform said work and to
supply said materials and equipment,
NOW THEREFORE, in consideration of the mutual benefits
arising therefrom, and for other good and valuable consideration,
it is hereby agreed as follows.
ARTICLE 1
CONTRACT DOCUMENTS
(A) The documents constituting the Contract between the
Owner and the Contractor (and hereby collectively referred to as
the Contract or this Contract) consist of the following:
1. This Building Contract.
2. Xxxxxxx Xxxxxx Associates Rio North Development
Preliminary Magnitude Budget Estimate Revised
31 October 1997, attached hereto as Exhibit 'B'.
3. Project plans entitled: Preliminary Site Grading
Plans, Rio Palazzo Suites, Rio Convention
Center, Rio Valet Parking Garage, Xxxxx West
Connector and West Utility Corridor issued
through 15 October 1997 as prepared by Xxxxxxx
X. Xxxxxxx XX, Chtd., Architect.
(B) In the event of any conflict between or among any of
the terms or conditions of the documents constituting this
Contract, the following order shall be employed in resolving any
such conflict and in determining what terms or conditions will
govern:
1. This Building Contract, inclusive of Exhibit
'B'.
2. The Plans.
(C) This Contract constitutes the entire agreement
between the parties, and no modification of this contract shall
be valid or binding unless such modification is in writing duly
dated and signed by both parties. Neither Owner nor Contractor
shall be bound by prior terms, conditions, statements, or
representations, express or implied, oral or written, not
otherwise contained in this Contract.
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ARTICLE 2
CHANGES IN THE WORK
(A) The Owner may, by written instructions or drawings to
the Contractor which, in the reasonable opinion of the
Contractor, do not materially affect the type, design, nature or
scheduling of the Project, make changes in the abovementioned
plans and specifications, issue additional instructions, require
additional work, direct the omission of work previously shown or
ordered, or change work already incorporated into the Project,
and the provisions of this Contract shall apply to any and all
such changes with the same force and effect as though originally
embodied in this Contract.
(B) For changes which involve additional work or a
reduction in work as set forth in Paragraph (A) above, the
Guaranteed Maximum Cost as hereinafter set forth in Article 6
shall be increased or decreased by the Contractor in accordance
with the Contractor's estimate for said work, and the
Contractor's fee shall be appropriately adjusted. All changes in
the work must be authorized by a representative of Owner, who,
for the purposes of this Project, shall be
Xx. Xxxx Xxxx.
(C) However, Owner and Contractor specifically agree that
should a change be requested by Owner which, in the reasonable
opinion of the Contractor, would materially affect the type,
design, nature or schedule of the Project as a whole, the
Contractor reserves the right to renegotiate the terms of the
Contract.
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ARTICLE 3
CONTRACTOR'S DUTIES
(A) The Contractor agrees to provide all labor, materials
and equipment necessary for the proper completion of the Project
in a manner consistent with the requirements of the work to be
performed, subject only to the provisions of Article 18; and
during the course of construction, the Contractor agrees to
furnish its best skill and judgment in effecting this goal.
(B) The Contractor shall maintain at the site for the
Owner one (1) record copy of drawings, specifications, addenda,
change orders and other modifications.
(C) The Contractor shall, during the course of
construction, keep the premises free from accumulation of waste
materials or rubbish caused by its operations. Within a
reasonable period of time after substantial completion of the
Project, the Contractor shall remove its waste materials and
rubbish from and about the Project site as well as all tools,
construction equipment, machinery and surplus materials.
(D) The Contractor shall comply with all applicable laws,
ordinances, rules, codes, regulations and lawful orders of any
public authority relating to construction of the Project.
(E) Irrespective of Paragraph (D) above, it is the
responsibility of the Project Architect to use his best efforts
to make certain that the Project is designed in accordance with
applicable laws, ordinances, rules, statutes, building codes and
regulations. If the Contractor observes that the Project, or any
portion thereof, may be at variance therewith, the Contractor
shall notify the Architect, and any change shall be accomplished
by an appropriate modification as provided in Article 2.
(F) Any other duties as may be set forth in this Contract.
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ARTICLE 4
OWNER'S DUTIES
(A) The Owner shall, at the request of the Contractor,
prior to the time of execution of this Contract, furnish to the
Contractor and Contractor's Surety and Bonding Company acceptable
evidence that the Owner has made suitable financial arrangements
to fulfill its obligations under this Contract.
(B) The Owner shall furnish all surveys to the Architect
describing the physical characteristics, legal limitations and
utility locations for the site of the Project, and a legal
description of the site. A copy of the legal description shall
be attached to this Contract and marked as Exhibit A.
(C) The Owner shall secure and pay for necessary
approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or for
permanent changes in existing facilities.
(D) Information or services under the Owner's control
shall be furnished by the Owner with reasonable promptness so as
to avoid any delay in the orderly progress of the work.
(E) The Owner shall provide the Architect with those
facilities required by Article 5 (A) (3).
(F) Any other duties as may be set forth in this Contract.
(G) The Owner shall pay for and obtain all necessary
utility company extensions or service fees related to
this project; i.e., Xxxxx County Sanitation District,
Nevada Power Company, Sprint Telephone, Southwest Gas
Corporation, Las Vegas Valley Water District, etc.
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ARTICLE 5
ARCHITECT'S DUTIES
The Owner is informed that the Architect on this Project is
Xxxxxxx X. Xxxxxxx XX, who, in addition to being a licensed
Architect within the State of Nevada, is also a majority
stockholder and employee of Contractor. The Owner acknowledges
this relationship between Architect and Contractor on this
Project, and herein accepts in every respect this close
association between the two of them. In light of the special
relationship existing between the Architect and the Contractor,
the Owner agrees that in case of the termination of the
Architect, for whatever reason, at the option of the Contractor
the terms and conditions of this Contract will be renegotiated.
(A) The Architect will provide administration of the
Project as follows:
(1) The Architect shall advise and consult with the
Owner, and shall act on behalf of the Owner and Contractor to the
extent provided in this Contract.
(2) The Architect shall visit the site at intervals
appropriate to the stage of construction or as otherwise agreed
by the Architect in writing to become generally familiar with the
progress and quality of the work and to determine in general if
the work is proceeding in accordance with the Contract. 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 such on-site observations as an
Architect, the Architect shall keep the Owner informed of the
progress and quality of work. However, the Architect shall not
be responsible for the acts or omissions of the Contractor,
Subcontractors, or any other persons performing any of the work
in the Project, or for failure of any of them to carry out the
work in accordance with this Contract.
(3) The Architect shall at all times have access to
the work wherever it is in preparation or progress, and Owner
shall provide facilities for such access so that the Architect
may perform his functions under this Contract.
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(4) On written request of either the Owner or
Contractor, the Architect shall, with reasonable promptness,
render interpretations of the plans and specifications necessary
for the proper execution or progress of the work.
(5) The Architect's decisions in matters relating to
artistic effect shall be final if consistent with the intent of
this Contract.
(6) The Architect shall have authority to reject
work which does not conform to the requirements of this Contract
and the given standards of the industry; and whenever, in the
Architect's reasonable opinion, it is necessary to evaluate
conformity, the Architect will have authority to require special
inspection or testing of the work in accordance with the
provisions of this Contract, whether or not such work be then
fabricated, installed or completed.
(a) If inspection or testing of the work reveals
a material failure of the work to comply with the requirements of
the Contract and the standards of the industry, the Contractor
shall promptly correct any such deficient work, and the cost
involved in correcting that work shall be borne solely by the
Contractor. However, should the inspection or testing reveal
that the work has been in material compliance with the
requirements of the Contract and standards of the industry, then
the Owner shall bear any and all costs involved in the
inspection, testing, and correction of the work and an
appropriate change order shall be issued as provided in Article
2.
(b) If the law, rules, ordinances,
regulations or orders of any public authority having jurisdiction
require any portion of the work to be inspected, tested or
approved, the Contractor shall arrange for such inspections and
the Owner shall bear all the costs of such inspections, tests or
approval.
(7) The Architect shall review and approve or take
other appropriate action upon the Contractor's submittals such as
shop drawings, product data and samples, for conformance with the
design concept of the work, and with the information given in the
Contract. Such action shall be taken with reasonable promptness
so as to cause no delay in the Project. The Architect's approval
of a
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specific item shall not indicate approval of any assembly of
which the item is a component.
(8) Any other duties as may be set forth in this
Contract.
ARTICLE 6
CONTRACTOR'S FEE
In consideration of the Contractor's performance of its
obligations under this Contract, the Owner agrees to pay the
Contractor as compensation for its services all costs (as costs
are defined in Article 7) plus a fee equal to Seven (7%) percent
of the total cost of the Project. Costs shall be paid to the
Contractor at the time and in the manner set forth in Article 15.
In addition, the Contractor shall be paid ninety percent (90%) of
the proportional amount of its fee with each payment request made
by Contractor until such time that the work is fifty percent
(50%) complete. Thereafter the Contractor shall be paid One
Hundred Percent (100%) of the proportional amount of its fee with
each payment request. The balance of the fee shall be paid at
the time of final payment. The Contractor guarantees that the
maximum cost to the Owner for the completion of the Project,
which cost includes the Contractor's fee, shall not exceed ONE
HUNDRED FIFTY TWO MILLION, FIVE HUNDRED SIXTY FOUR THOUSAND, ONE
HUNDRED FIFTY THREE DOLLARS ($152,564,153.00). This amount,
however, is predicted upon the aforementioned original plans and
the scope of work as outlined in Xxxxxxx Xxxxxx Associates Rio
North Development Preliminary Magnitude Budget Estimates Revised
31 October 1997 (Exhibit B), and does not contemplate any changes
as may be requested by the Owner as provided for in Article 2.
As identified in Exhibit 'B', the above stated Contract
Amount includes a Project Contingency in the amount of SEVEN
MILLION DOLLARS ($7,000,000.00). It is understood that the
Contractor shall not utilize funds from this Project Contingency
without the review and approval of the Owner. It is also
understood that the above stated Contract Amount is based on
preliminary project drawings.
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Upon receipt of substantially complete project drawings and
specifications for each element of the project, the Contractor
shall procure pricing from subcontractors and suppliers and
prepare detailed cost estimates for the Owner's review. The
Contractor shall identify within these detailed cost estimates, a
Contingency Amount for each element of the project. The
Contractor shall at that time, request a draw from the Project
Contingency for that element of the project. Utilization of any
additional Project Contingency funds will require the review and
approval of the Owner.
ARTICLE 7
COSTS TO BE REIMBURSED
(A) The Owner agrees to reimburse the Contractor for all
costs incurred in the execution of the work. Such costs include,
but are not limited to, the following items:
ITEM I. Any and all costs of labor, including but not
limited to social security, unemployment insurance, old age
benefits, all applicable taxes, travel time, subsistence wherever
applicable, contributions to labor union benefits, such as health
and welfare, vacation, pension, etc. Weekly payrolls shall be
made up from daily time sheets and shall set forth the name,
classification, social security number, hours worked, travel
time, subsistence, rate of pay, gross amount, all deductions, and
net amount paid for each employee. The payroll sheet shall bear
a sequence number and dates indicating the payroll period.
Contractor is to pay when due all employee
labor tax contributions, all state, county and federal taxes, as
pertains to labor, and all contributions to labor union benefit
funds. Contractor shall submit on its payment request the
billing for aforementioned amounts.
ITEM II. The salary and expenses of one off-site
administrative employee who is to expend whatever time and energy
is required to see that the job is properly administered from the
home office. However, his services are not to be exclusive for
this Project. Services of additional off-site administrative
personnel
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are to be covered by the allowance of the salary of the
administrative employee and may not be added to the cost of the
job.
ITEM III. Any and all materials and supplies purchased
for the Project or required for execution of the work, including
temporary buildings and structures. Cost of materials shall
include all applicable taxes and costs of transportation of these
materials. Fuel or energy for vehicle and equipment shall be
included. All materials paid for, or reimbursed, by the Owner
shall become the property of the Owner.
ITEM IV. The amounts of all subcontracts, said amount
to include all subcontractor's costs and profits.
ITEM V. Premiums on all insurance or bonds required
and or maintained for the Project (see Article 10 and Article
17). Premiums shall be included as costs as to which markup
applies in determining Contractor's fee. The cost of General
Liability Insurance is a reimbursable cost. The rate for the
General Liability Insurance shall be a minimum of $7.50 per
$1,000 dollars of contract value. This rate is subject to
change. Cost to be reimbursed shall be actual cost incurred by
Contractor.
ITEM VI. Transportation, traveling expenses, including
meals and hotel expenses of the Contractor of its officers or
employees incurred in the discharge of duties connected with this
work.
ITEM VII. All expenses incurred for transportation to
and from the work of the personnel required for its prosecution
as pertaining to Article 7, Item VI.
ITEM VIII.Permit fees, plan check fees, royalties,
direct field surveying for construction purposes, county
inspectors, damages for infringement of patents and costs of
defending suits therefore, and for deposits lost for causes
other than the Contractor's negligence.
ITEM IX. Losses and expenses not compensated by
insurance or otherwise sustained by the Contractor in connection
with the work, provided they
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have resulted from causes other than the fault or negligence of
the Contractor. Such losses shall include settlements made with
the written consent and approval of the Owner. No such losses
shall be included in the cost fee, but if after a loss from fire,
flood or similar causes not due to the negligence of the
Contractor, Contractor be required to reconstruct damaged
portions of items, Contractor shall receive for its services a
fee in compliance with Article 6. Such work shall be considered
a change subject to the provision of Article 2, and the
guaranteed maximum cost shall be increased accordingly.
ITEM X. Minor expenses, such as telegrams, telephone
service, expressage, first aid supplies and similar xxxxx cash
items.
ITEM XI. Cost, including transportation and
maintenance, of hand tools not owned by workmen, canvas,
tarpaulins, polyethylene film, and items consumed in the
prosecution of the work. Items used but not consumed remain the
property of Contractor.
ITEM XII. Rentals of tools, vehicles, trucks,
compressors, cranes, hoists, equipment and all construction plant
parts thereof. It is intended that rental shall be charged on
all items required for use in construction of the Project.
Rentals shall be charged on equipment owned by the Contractor as
well as equipment owned by others. Rental rates shall be as
established by prevailing area rates.
ITEM XIII.Interest at a rate in accordance with
Article 15, Paragraph (A), and as can be determined on funds
which the Contractor must provide or borrow in the event that
payments are not made by the Owner on time as provided
hereinafter in Article 15.
ITEM XIV. All items and expenses necessary for
providing of a temporary office at the jobsite. Salaries of
personnel required to maintain the field office shall be
incorporated in the payroll under the provisions of Article 7,
Item I. Supplies for the office shall be provided under the
provisions of Article 7, Item III.
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ITEM XV. Costs incurred due to an emergency affecting
the safety of persons and property.
(B) Owner agrees to reimburse Contractor for all costs
incurred during or arising out of the course of construction,
even though xxxxxxxx for said costs may be submitted to the Owner
after the Contract has otherwise terminated, up to a maximum
period of 60 days after final payment.
ARTICLE 8
COSTS NOT TO BE REIMBURSED
The following are the only costs which the Contractor shall
not be permitted to include as job costs;
ITEM I. Salary of any person employee during the
execution of the work in the main home office, except the one
administrative employee for whom provision is made in article 7,
Item II.
ITEM II. Overhead expenses not expressly included in
Article 7.
ITEM III. Interest on capital employed, except that
provided for in Article 7, Item XIII.
ARTICLE 9
DISCOUNTS, REBATES, REFUNDS
All cash and trade discounts shall accrue to the Owner,
provided payments to the Contractor are timely made according to
the provisions of Article 15. Should any payments to the
Contractor be withheld or delayed for whatever reason, all cash
and trade discounts shall accrue to the Contractor. Should a
discount be disallowed by a supplier due to a delay in payment
from the Owner, the undiscounted amount shall be considered the
cost. Rebates, refunds and all returns from sale of surplus
material shall accrue to the Owner.
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ARTICLE 10
INSURANCE
(A) Property Insurance.
(1) The Owner shall purchase and maintain property
insurance on the entire work to the full insurable value thereof.
This insurance shall include the Owner, the Contractor,
Subcontractors, Sub-subcontractors, and Materialmen. The
insurance shall insure against the perils of fire, extended
coverage and also include "all risk" for physical loss not
limited to theft, earthquake and flood damages. If the Owner and
Contractor agree to waive any coverage's and a loss results from
this uninsured peril or lack of coverage, then the Owner shall be
solely responsible for any and all resulting damage and costs.
(a) The Owner shall file a copy of all policies
with the Contractor before an exposure to loss may occur. Said
policies to be in a form and content satisfactory to Contractor.
(b) If the Owner does not intend to purchase
insurance required by Paragraph (1) above, Owner shall inform the
Contractor in writing prior to the commencement of the work. The
Contractor may then effect such insurance, and the cost shall be
charged to the Owner as a reimbursable cost provided for in
Article 7.
(2) The Owner shall purchase and maintain such
insurance as will insure Owner against loss of use of Owner's
property and/or damage to existing property due to fire or other
hazards, however caused. This insurance shall include the Owner,
the Contractor, Subcontractors, Sub-subcontractors and
Materialmen. The Owner, for itself and on behalf of its
insurance company or companies, waives all rights of recovery or
causes of action against the Contractor for all damage and/or
loss or use of its property, including consequential losses, due
to fire and other hazards, however caused.
(3) The responsibility for payment of any deductible
under Paragraphs (1) and (2) above shall be borne exclusively by
the Owner.
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(4) All policies of insurance obtained under
Paragraphs (1) and (2) above shall be secured with recognized and
established insurance companies and no cancellation or
modification of any policy or policies shall be made by Owner
without thirty (30) days prior written notice to Contractor.
(B) Liability Insurance.
(1) The Owner shall be responsible for purchasing
and maintaining its own liability insurance, which shall include
such insurance as will protect the Owner against claims which
may arise from any operations under this Contract.
(2) The Contractor will provide the Owner with
certificates of insurance evidencing that the Contractor has
liability and automobile liability insurance, which insurance
cannot be canceled by or terminated or the coverage thereof
materially reduced, until the insurance company has attempted to
give thirty (30) days written notice thereof by Registered Mail
addressed to the Contractor and Owner. The Contractor shall
maintain:
(a) Public Liability:
Comprehensive General Liability Insurance
covering the Contractor, Owner and other indemnities, as their
interests may appear, as additional insured, with limits of
liability as follows: Bodily Injury and Property Damage: Not
less than Ten Million Dollars ($10,000,000.00) Combined Single
Limit.
(b) Workmen's Compensation:
Workmen's Compensation Insurance, in minimum
amounts as required by Law.
(c) Automobile Liability:
Automobile Liability and Property Damage
Insurance for all owned, non-owned and hired vehicles covering
the Contractor and the indemnities, as their interest may appear,
as additional insured, against liability for bodily injury and
death and for property damage with limits of liability of not
less than One Million Dollars ($1,000,000.00) Combined Single
Limit.
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(3) Owner agrees to defend, indemnify and hold
Contractor completely free and harmless from and against any and
all expenses, costs, including but not limited to court costs and
reasonable attorney's fees which arise out of or which in any way
relate to any claim or demand being asserted, or lawsuit arises
our of any operations affecting the Project. The agreement to
indemnify and hold the Contractor completely free and harmless
shall apply, save and except where it is legally established by a
Court of competent jurisdiction that the Contractor has itself
been principally negligent. This Paragraph (3) shall survive the
termination of this Contract.
(C) Boiler Insurance.
The Owner shall purchase and maintain boiler and
machinery insurance in an amount necessary to protect the Owner
and Contractor from any and all risks or loss. This insurance
shall include the Owner, the Contractor, Subcontractors, Sub-
subcontractors and Materialmen.
(D) Notification of Any Claim.
Should either party to this Contract suffer injury or
damage to person or property because of any act or omission of
the other party or any of its employees, agents or others for
whose acts either the Owner or Contractor is or may be legally
liable, any claim of injury or damage shall be made in writing to
such other party within a reasonable time after the first
observance of such injury or damage.
ARTICLE 11
SUBCONTRACTS
(A) The Contractor may subcontract all or any portion of
the work at its discretion, and the total price of any and all
such Subcontracts shall be a reimbursable cost as provided for in
Article 7.
(B) Contractor acknowledges that under limited
circumstances the Owner may request the Contractor to use one or
more Subcontractors of the Owner's choice. However, in
recognition of the special relationship that must exist between
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the Contractor and its Subcontractors, the Owner agrees that when
the Owner requests the use of any particular Subcontractor, the
Owner shall seek the advise and obtain the approval of the
Contractor. The Owner further agrees that should the Contractor
agree to use the Owner's Subcontractor, and should the price to
be charged by the Owner's Subcontractor exceed the price with the
Contractor otherwise intended to use, the difference in price
will be added to the Guaranteed Maximum Cost as provided for in
Article 6, and that the Contractor's fees will be increased
accordingly.
(C) Regardless of which Subcontractors may be used on the
Project, there shall be no contractual relationship between the
Owner and the Subcontractors, and the Contractor shall have full,
complete and absolute directing authority over performance of the
work by all Subcontractors.
(D) The organization of the specifications into divisions,
sections and articles, and the arrangement of drawings shall not
control the Contractor in dividing the work among Subcontractors,
or in establishing the extent of the work to be performed by any
trade.
ARTICLE 12
OWNER'S REPRESENTATIVE
During the course of construction, the Owner shall provide
an individual who will be available on a regular basis to consult
with the Contractor concerning all phases of the Project. This
individual shall be the Owner's Representative, and shall be
solely responsible for bringing any problems to the attention of
the Contractor, and for approving any matters for which the
Owner's approval is required or sought. This individual shall
have total familiarity with all aspects of the building process,
and will have authority to represent and bind the Owner in any
and all matters affecting the Owner's rights and responsibilities
under this Contract. For the purposes of this Project, the
Owner's Representative shall be Xx. Xxxx Xxxx. If for any reason
or at any time, this individual will not be available to the
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Contractor, then the Owner shall immediately designate another
individual to take his place and shall notify the Contractor of
such writing.
ARTICLE 13
TITLE OF THE WORK
The title to all work completed and in the course of
construction, and of all materials supplied, for which payment
has been made in full by Owner, shall be in the Owner.
ARTICLE 14
ACCOUNTING-INSPECTION AUDIT
The Contractor shall keep full and detailed accounts and
records of all costs. The Owner shall be afforded reasonable
access to the accounts and records of Contractor as reasonable
times for the purpose of inspecting, and where reasonably
requested by Owner, auditing the same.
However, neither the request for nor the conduct of any
audit shall be cause for failure of Owner to make timely payments
as provided herein. In any and all events, the Owner shall
request, conduct and close any monthly progress payment
accounting review within thirty (30) days after receipt of the
progress payment request. Any FINAL payment request audit shall
be conducted and closed within twenty-five (25) days after
receipt of the request for final payment so as not to delay final
payment including retention which shall be paid Contractor within
thirty (30) days after substantial completion of the Project, and
in no event, later than thirty-nine (39) days after the filing of
the Notice of Completion for the Project.
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ARTICLE 15
APPLICATION FOR PAYMENT
(A) The Contractor shall deliver to the Owner, on or about
the first day of each month, a request for payment on a form
substantially similar to that attached hereto as Exhibit C. The
Contractor shall include with this form an appropriate lien
release covering the work and materials enumerated in the payment
request. The Owner shall promptly approve the payment request so
that there will be no delay in processing of payment and shall,
save and except where a legitimate objection is raised as to a
particular item as provided in Paragraph (B) below, make payment
in full to the Contractor on or before the tenth (10th) day of
each month. Payments not made to the Contractor on or before the
tenth (10th) of the month shall bear interest at the then current
prime rate of interest plus 2% as that rate is established by
First Interstate Bank of Nevada. The inclusion of this interest
shall be in addition to any and all other rights and remedies
which the Contractor may have in the event of delinquent
payments.
(B) The Owner shall determine the amount owning to the
Contractor based on observations at the site and on evaluation of
the Contractor's request for payment. Should the Owner
disapprove an item in any payment request, payment for that
specific item may be withheld for a period not to exceed thirty
(30) days within which time it shall be adjudicated. However,
the balance requested in that payment request must be paid by the
Owner to the Contractor on or before the tenth (10th) day of the
month.
(C) The Contractor specifically reserves the right to
cease work should requested payments be unreasonably withheld or
delayed.
(D) Payments will be made by the Owner for materials or
equipment whether the same have been incorporated into the
Project or suitable stored on or off the site. Payments for said
materials and equipment will be conditioned only upon inspection
of the materials and equipment by the Contractor, and the
Contractor's verification that suitable insurance has been
secured.
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(E) If, after substantial completion of the work, final
completion thereof is materially delayed through no fault of the
Contractor or by issuance of change orders affecting final
completion, the Owner shall, upon application by the Contractor,
and without terminating the Contract, make payment of the balance
due for that portion of the work which has been fully completed.
(F) In the event of a lien or liens for material or labor
is filed against the property, the Owner may withhold from final
payment to Contractor an amount equal to the amount of the lien
plus a reasonable amount to meet the cost of possible litigation.
This amount shall be promptly released to the Contractor upon its
furnishing a bond in favor of the Owner and the lien claimant in
the amount of the lien and probable litigation costs, or upon the
Contractor furnishing the Owner a release of lien from the
claimant.
(G) Final payment shall be paid to the Contractor within
thirty (30) days after substantial completion, as defined in
Article 16, Paragraph (B) and in no event later than thirty-nine
(39) days after, the filing of the Notice of Completion for the
Project.
(H) The making of final payment shall constitute a waiver
of all claims by the Owner except those arising from (1)
unsettled liens, or (2) faulty or defective work appearing after
substantial completion and within the term of the warranty given
by the Contractor, under the terms of Article 19.
(I) A ten percent (10%) retention shall be withheld from
each application for payment for work performed until the work is
fifty percent (50%) complete. Thereafter no retention shall be
withheld. Retention shall be released upon Final Payment.
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ARTICLE 16
NOTICE OF COMPLETION
(A) The Owner shall promptly record a Notice of Completion
when the Project has been substantially completed. Substantial
completion is defined below in Paragraph (B). Final payment
shall be paid to the Contractor within thirty (30) days after
substantial completion, and in no event later than thirty-nine
(39) days after, the filing of Notice of Completion for the
Project.
(B) The date of substantial completion of the work, or any
designated portion thereof, is the date certified by the
Contractor when construction is sufficiently complete, in
accordance with the Contract, so the Owner can occupy or utilize
the Project or designated portion thereof for the use for which
it is intended.
ARTICLE 17
BOND
The Contractor shall endeavor to furnish a Contract
Performance Bond in an amount and form satisfactory to the Owner
at the Owner's expense should the Owner specifically request such
a bond. Should the Owner desire, the Contractor may pay for the
bond; however, in this event, the premium shall become a job cost
under the provision of Article 7, Item V, and the Guaranteed
Maximum Cost as set forth in Article 6, shall be increased
accordingly, treating this as a change subject to the provisions
of Article 2.
ARTICLE 18
PERIOD OF CONSTRUCTION
(A) The Contractor agrees to commence work hereunder
within five (5) work days after receipt of written notice from
the Owner to do so, to prosecute said work thereafter diligently
and continuously to completion and in any and all events to
substantially complete the Project in accordance with the
requirements of the Owner.
20
(B) The Owner and Contractor specifically acknowledge,
however, that there are circumstances beyond the reasonable
control of Contractor which may result in a delay of the Project.
Consequently, Owner and Contractor agree that if the Contractor
is delayed or impeded by any acts of the Owner or its agents or
those claiming under agreement from the Owner, or by acts of God
which Contractor could not have reasonably foreseen and provided
against, or by stormy, inclement, or severely cold weather, or by
strike, boycott, or like obstructive actions of employees, third
persons or labor organizations, or for any other cause beyond the
reasonable control of Contractor, the time within which the
Contractor has to complete the Project shall be appropriately
extended.
(C) Should concealed conditions encountered in the
performance of the work below the surface of the ground, or
should concealed or unknown conditions in an existing structure
be at variance with the conditions indicated by the Contract, or
should unknown physical conditions below the surface of the
ground or should concealed or unknown conditions in an existing
structure of an unusual nature, differing materially from those
ordinarily encountered and generally recognized as inherent in
work of the character provided for in this Contract be
encountered, the Contract Sum shall be equitably adjusted under
Article 2, upon claim made within a reasonable time after the
first observance of the condition.
(D) The period of time set forth in Paragraph (A) above
may be necessarily or appropriately extended by any change orders
effected pursuant to Article 2.
(E) The term "day" as used throughout this Contract shall
mean calendar day unless otherwise specifically designated.
ARTICLE 19
WARRANTIES
(A) The entire work is hereby warranted against defects in
materials and workmanship for a period of one (1) year from the
date of substantial completion of the Project or substantial
completion of any designated portion thereof. If, within
21
this one (1) year period, any of the work or materials or
equipment (for which approval has not been previously given in
writing by Owner) is proven to be defective and not in accordance
with the Contract, the Contractor shall, at its expense, correct
said defect promptly after receipt of a written notice from the
Owner to do so. The Owner shall give notice promptly after
discovery of any defective condition.
(B) The Contractor warrants to the Owner that all
equipment and materials furnished under this Contract will be new
unless otherwise specified or approved by the Owner.
(C) Articles, materials or methods specified by
proprietary name or by name of vendor or manufacturer will be
furnished or applied by Contractor, except only where equal
substitutions for articles, materials or methods are approved by
the Contractor for use in lieu thereof. In determining the
quality of substitute parts, materials or methods, availability
or procurement shall be a determining factor.
(D) The Contractor shall secure and furnish to the Owner
through the Architect, all applicable written guarantees and
warranties as may be called for by this Contract.
ARTICLE 20
ARBITRATION
(A) All disputes, claims or questions not resolved
informally by Owner and Contractor may be subject to arbitration.
If both Owner and Contractor agree that a particular dispute,
claim or question should be arbitrated, then arbitration shall be
effected as provided in Paragraph (B) below, and the decision
therefrom shall be binding on both parties. If, however, either
the Contractor and/or the Owner elect not to proceed by way of
arbitration, then either or both parties may resort to
appropriate Court action, with the prevailing party being
entitled to receive all reasonable attorneys' fees, Court costs,
and any and all other fees, expenses, and
22
costs arising out of or in any way incurred in the institution or
defense of that action.
(B) Should both the Owner and Contractor agree to
arbitration, the following procedures shall be employed:
(1) Notice of the demand for arbitration shall be
filed in writing with the other party to this Contract. This
demand shall be made within a reasonable time after the dispute
has risen, but in no case shall the demand be made later than the
time set in this Contract for final payment. Any demand received
after that time shall not be allowed.
(2) Owner and Contractor shall, within ten (10) days
of the written demand for arbitration, agree upon an arbitrator.
If within this said ten (10) day period the Owner and Contractor
are unable to agree upon a single arbitrator, then the Owner and
Contractor will, within three (3) additional days, each select an
arbitrator, and those two arbitrators will then select a third.
(3) At such time as the arbitrator (or all three
arbitrators) has been selected as provided in Paragraph (2)
above, the election to arbitrate shall become final and
irrevocable.
(4) Unless both Owner and Contractor specifically
agree in writing to the contrary, the arbitration hearing shall
be conducted and the decision rendered therefrom no more than
forty-five (45) days after the written demand for arbitration.
(5) The arbitrator, if he deems that the case
requires it, is authorized to award to the party whose contention
is sustained, such sums as he (or a majority of them) shall deem
proper to compensate the prevailing party for the time and
expense incident to the proceedings, including any and all
reasonable attorneys' fees expended, and, if the arbitration was
demanded without reasonable cause, he may also award damages for
delay. Unless Owner and Contractor specifically agree in writing
to the contrary, the arbitrator shall fix his own
23
compensation and shall assess costs and charges of the proceeding
upon either or both parties.
(6) The decision of the arbitrator shall be final,
save and except for the limited right of appeal as provided for
in the Nevada Revised Statutes. In the event the decision of the
arbitrator is appealed, reasonable attorneys' fees and Court
costs, as determined by a Court of competent jurisdiction, shall
be paid to the prevailing party.
(7) Unless Owner and Contractor otherwise agree in
writing to the contrary, the Contractor shall carry on the work
during any arbitration proceedings, and the Owner shall continue
to make timely payments to the Contractor in accordance with the
Contract.
ARTICLE 21
TERMINATION OF THE CONTRACT
(A) Termination by the Contractor.
(1) If the work is stopped for a period of thirty (30)
days under an order of any Court or other public authority having
jurisdiction, or as the result of an act of government, such as
declaration of a national emergency making materials unavailable
through no act or fault of the Contractor or a Subcontractor or
their agents or employees, or any other person performing any of
the work under a contract with the Contractor, or if the work
should be stopped for a period of thirty (30) days by the
Contractor because the Owner has not made payment as provided
herein, then the Contractor may, upon three (3) additional days'
written notice to the Owner, terminate this Contract and recover
from the Owner payment for all work executed, and for any proven
loss sustained upon any materials, equipment, tools, construction
equipment and machinery, including reasonable profit and damages
thereon.
24
(B) Termination by the Owner.
(1) If the Contractor is adjudged a bankrupt or makes
a general assignment for the benefit of creditors, or if a
receiver is appointed on account of the Contractor's insolvency,
or if the Contractor persistently and repeatedly refuses or
fails, except in cases for which an extension of time is provided
for in Article 18, to supply enough workmen or materials, or if
the Contractor persistently and repeatedly fails to make payment
to Subcontractors or for materials or labor, or persistently
disregards laws, ordinances, rules, regulations or orders of any
public authority having jurisdiction, or otherwise is guilty of a
substantial violation of the provisions of this Contract, then
the Owner may, without prejudice to any other rights or remedies
he may have, and after giving the Contractor and his surety, if
any, three (3) days' written notice, terminate the employment of
the Contractor and take possession of the site and all materials
for which the Owner has made payment in full.
(C) Any termination of this Contract, whether by
Contractor or Owner, shall be subject to the rights and remedies
available in Article 20.
ARTICLE 22
MISCELLANEOUS PROVISIONS
(None)
25
ARTICLE 23
NOTICES
Any and all notices, demands or requests required or
appropriate under this Contract shall be given in writing either
by personal delivery or by registered or certified mail, return
receipt requested, addressed to the following addresses:
To Contractor: XXXXXXX XXXXXX ASSOCIATES, INC.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
To Owner: RIO PROPERTIES, INC. d/b/a
RIO SUITE HOTEL & CASINO
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
When notice has been given by mail, it shall be deemed served the
date following deposit, postage prepaid in the United States
mail. The parties may change the place of notice by notifying
the other party as set forth herein.
ARTICLE 24
PARTIAL INVALIDITY
Should any term, condition, covenant or provision of this Contra
ct, or any application thereof, be held by a Court of competent
jurisdiction to be invalid, void or unenforceable, all
provisions, covenants or conditions of this Contract, and all
applications thereof, not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be
effected, impaired or invalidated thereby.
ARTICLE 25
SUCCESSORS IN INTEREST
Neither Owner nor Contractor may transfer or assign this
Contract, or any interest therein, without the prior written
permission of the other. However, this Contract shall insure to
be benefit of, and be binding upon, the successors, assigns
(where permitted) and representatives of both the Owner and
Contractor, and the Owner and Contractor covenant for themselves
and for their successors, assigns
26
and representatives, that they will fully perform on the terms
and conditions of this Contract.
ARTICLE 26
CAPTIONS AND PRONOUNS
The captions appearing at the commencement of the Articles hereof
are descriptive only and for convenience in reference to this
Contract, and in no way whatsoever define, limit or describe the
scope or intent of this Contract, or in any way affect this
Contract.
ARTICLE 27
CORPORATE AUTHORIZATION
The parties executing this Contract acknowledge and
represent that all corporate authorization has been obtained for
the execution of this Contract and for the compliance with each
and every term hereof.
27
ARTICLE 28
LEGAL SITUS
The terms and conditions of this Contract shall be
construed in accordance with and governed by the laws of the
State of Nevada, and the parties hereto acknowledge that the
Courts of this State shall have exclusive jurisdiction over any
action or proceeding brought under or by reason of this Contract.
IN WITNESS WHEREOF, the Contractor and Owner have executed
this contract as of the day and year first above written.
RIO PROPERTIES, INC. d/b/a XXXXXXX XXXXXX ASSOCIATES,
RIO SUITE HOTEL & CASINO INC.
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxx X. Xxxxx
Its Exec VP Its Vice President of
Operations
Nevada State Contractor's
License No. 39178
Attachments: Exhibit 'A' Legal Description
Exhibit 'B' Rio North Development Preliminary
Magnitude Budget Estimate Revised
31 October 1997
Exhibit 'C' Billing Format
28
EXHIBIT 'A'
(Legal Description)
[NOT INCLUDED]
29
EXHIBIT 'B'
(Rio North Development Preliminary Magnitude Budget
Estimate Revised 31 October 1997)
[NOT INCLUDED]
EXHIBIT 'C'
(Billing Format)
[NOT INCLUDED]
BUILDING CONTRACT
THIS CONTRACT is made and entered into as of this Twenty-
fifth day of March 1998, by and between XXXXXXX XXXXXX
ASSOCIATES, INC., a Nevada Corporation (as General Contractor and
hereinafter referred to as "Contractor"), and Rio Properties,
Inc. d/b/a Rio Suite Hotel & Casino, a Nevada Limited Partnership
(hereinafter referred to as "Owner").
WITNESSETH:
WHEREAS, the Owner intends to construct various LOWRISE
INTERIOR REMODELS at the Rio Suite Hotel & Casino, including the
Marketing Remodel, Shutters Restroom Relocation,
Reservation/Concierge Desk, High Limit Slot, High Limit Salon,
Martini Bar, 2nd Floor Poker Tournament, Mask Sushi Bar, Chinese
Restaurant, New Carpet Walkway, EDR Upgrades, Garage Lobby
Enhancements, Arcade Relocation, Copa Showroom Entry Remodel,
Village 2nd Floor Exhibit Space, Village Bar Pop-Up TV, Copa
Showroom Video Screen Replacement and Casino Video Wall
Relocation, being hereinafter referred to as the Project (OUR
PROJECT NOS. 87597, 60097, 60197, 60297, 60397, 60497, 60597,
60697, 60797, 60897, 60997, 61197, 61297, 61397, 61697, 62797 &
62997), and
WHEREAS, the Owner requests the Contractor to perform the
work and supply said materials and equipment necessary to
complete the Project, and
WHEREAS, the Contractor desires to perform said work and to
supply said materials and equipment,
NOW THEREFORE, in consideration of the mutual benefits
arising therefrom, and for other good and valuable consideration,
it is hereby agreed as follows.
ARTICLE 1
CONTRACT DOCUMENTS
(A) The documents constituting the Contract between the
Owner and the Contractor (and hereby collectively referred to as
the Contract or this Contract) consist of the following:
1. This Building Contract.
2. Xxxxxxx Xxxxxx Associates Preliminary
Magnitude Budget Estimates dated 15 October 1997,
attached hereto as Exhibit 'B'.
3. Project plans entitled: Marketing
Remodel, Shutters Restroom Relocation,
Reservation/Concierge Desk, High Limit Slot, High
Limit Salon, Martini Bar, 2nd Floor Poker
Tournament, Mask Sushi Bar, Chinese Restaurant,
New Carpet Walkway, EDR Upgrades, Garage Lobby
Enhancements, Arcade Relocation, Copa Showroom
Entry Remodel, Village 2nd Floor Exhibit Space,
Village Bar Pop-Up TV, Copa Showroom Video Screen
Replacement and Casino Video Wall Relocation
issued through 10 October 1997 as prepared by
Xxxxxxx X. Xxxxxxx XX, Chtd., Architect.
(B) In the event of any conflict between or among any of
the terms or conditions of the documents constituting this
Contract, the following order shall be employed in resolving any
such conflict and in determining what terms or conditions will
govern:
1. This Building Contract, inclusive of Exhibit 'B'.
2. The Plans.
(C) This Contract constitutes the entire agreement between
the parties, and no modification of this contract shall be valid
or binding unless such modification is in writing duly dated and
signed by both parties. Neither Owner nor Contractor shall be
bound by prior terms, conditions, statements, or
2
representations, express or implied, oral or written, not
otherwise contained in this Contract.
ARTICLE 2
CHANGES IN THE WORK
(A) The Owner may, by written instructions or drawings to
the Contractor which, in the reasonable opinion of the
Contractor, do not materially affect the type, design, nature or
scheduling of the Project, make changes in the abovementioned
plans and specifications, issue additional instructions, require
additional work, direct the omission of work previously shown or
ordered, or change work already incorporated into the Project,
and the provisions of this Contract shall apply to any and all
such changes with the same force and effect as though originally
embodied in this Contract.
(B) For changes which involve additional work or a
reduction in work as set forth in Paragraph (A) above, the
Guaranteed Maximum Cost as hereinafter set forth in Article 6
shall be increased or decreased by the Contractor in accordance
with the Contractor's estimate for said work, and the
Contractor's fee shall be appropriately adjusted. All changes in
the work must be authorized by a representative of Owner, who,
for the purposes of this Project, shall be
Xx. Xxxx Xxxx.
(C) However, Owner and Contractor specifically agree that
should a change be requested by Owner which, in the reasonable
opinion of the Contractor, would materially affect the type,
design, nature or schedule of the Project as a whole, the
Contractor reserves the right to renegotiate the terms of the
Contract.
3
ARTICLE 3
CONTRACTOR'S DUTIES
(A) The Contractor agrees to provide all labor, materials
and equipment necessary for the proper completion of the Project
in a manner consistent with the requirements of the work to be
performed, subject only to the provisions of Article 18; and
during the course of construction, the Contractor agrees to
furnish its best skill and judgment in effecting this goal.
(B) The Contractor shall maintain at the site for the Owner
one (1) record copy of drawings, specifications, addenda, change
orders and other modifications.
(C) The Contractor shall, during the course of
construction, keep the premises free from accumulation of waste
materials or rubbish caused by its operations. Within a
reasonable period of time after substantial completion of the
Project, the Contractor shall remove its waste materials and
rubbish from and about the Project site as well as all tools,
construction equipment, machinery and surplus materials.
(D) The Contractor shall comply with all applicable laws,
ordinances, rules, codes, regulations and lawful orders of any
public authority relating to construction of the Project.
(E) Irrespective of Paragraph (D) above, it is the
responsibility of the Project Architect to use his best efforts
to make certain that the Project is designed in accordance with
applicable laws, ordinances, rules, statutes, building codes and
regulations. If the Contractor observes that the Project, or any
portion thereof, may be at variance therewith, the Contractor
shall notify the Architect, and any change shall be accomplished
by an appropriate modification as provided in Article 2.
(F) Any other duties as may be set forth in this Contract.
4
ARTICLE 4
OWNER'S DUTIES
(A) The Owner shall, at the request of the Contractor,
prior to the time of execution of this Contract, furnish to the
Contractor and Contractor's Surety and Bonding Company acceptable
evidence that the Owner has made suitable financial arrangements
to fulfill its obligations under this Contract.
(B) The Owner shall furnish all surveys to the Architect
describing the physical characteristics, legal limitations and
utility locations for the site of the Project, and a legal
description of the site. A copy of the legal description shall
be attached to this Contract and marked as Exhibit A.
(C) The Owner shall secure and pay for necessary approvals,
easements, assessments and charges required for the construction,
use or occupancy of permanent structures or for permanent changes
in existing facilities.
(D) Information or services under the Owner's control shall
be furnished by the Owner with reasonable promptness so as to
avoid any delay in the orderly progress of the work.
(E) The Owner shall provide the Architect with those
facilities required by Article 5 (A) (3).
(F) Any other duties as may be set forth in this Contract.
(G) The Owner shall pay for and obtain all necessary utility
company extensions or service fees related to this project; i.e.,
Xxxxx County Sanitation District, Nevada Power Company, Sprint
Telephone, Southwest Gas Corporation, Las Vegas Valley Water
District, etc.
5
ARTICLE 5
ARCHITECT'S DUTIES
The Owner is informed that the Architect on this Project is
Xxxxxxx X. Xxxxxxx XX, who, in addition to being a licensed
Architect within the State of Nevada, is also a majority
stockholder and employee of Contractor. The Owner acknowledges
this relationship between Architect and Contractor on this
Project, and herein accepts in every respect this close
association between the two of them. In light of the special
relationship existing between the Architect and the Contractor,
the Owner agrees that in case of the termination of the
Architect, for whatever reason, at the option of the Contractor
the terms and conditions of this Contract will be renegotiated.
(A) The Architect will provide administration of the
Project as follows:
(1) The Architect shall advise and consult with the
Owner, and shall act on behalf of the Owner and Contractor to the
extent provided in this Contract.
(2) The Architect shall visit the site at intervals
appropriate to the stage of construction or as otherwise agreed
by the Architect in writing to become generally familiar with the
progress and quality of the work and to determine in general if
the work is proceeding in accordance with the Contract. 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 such on-site observations as an
Architect, the Architect shall keep the Owner informed of the
progress and quality of work. However, the Architect shall not
be responsible for the acts or omissions of the Contractor,
Subcontractors, or any other persons performing any of the work
in the Project, or for failure of any of them to carry out the
work in accordance with this Contract.
(3) The Architect shall at all times have access to
the work wherever it is in preparation or progress, and Owner
shall provide facilities for such access so that the Architect
may perform his functions under this Contract.
6
(4) On written request of either the Owner or
Contractor, the Architect shall, with reasonable promptness,
render interpretations of the plans and specifications necessary
for the proper execution or progress of the work.
(5) The Architect's decisions in matters relating to
artistic effect shall be final if consistent with the intent of
this Contract.
(6) The Architect shall have authority to reject work
which does not conform to the requirements of this Contract and
the given standards of the industry; and whenever, in the
Architect's reasonable opinion, it is necessary to evaluate
conformity, the Architect will have authority to require special
inspection or testing of the work in accordance with the
provisions of this Contract, whether or not such work be then
fabricated, installed or completed.
(a) If inspection or testing of the work reveals
a material failure of the work to comply with the requirements of
the Contract and the standards of the industry, the Contractor
shall promptly correct any such deficient work, and the cost
involved in correcting that work shall be borne solely by the
Contractor. However, should the inspection or testing reveal
that the work has been in material compliance with the
requirements of the Contract and standards of the industry, then
the Owner shall bear any and all costs involved in the
inspection, testing, and correction of the work and an
appropriate change order shall be issued as provided in Article
2.
(b) If the law, rules, ordinances,
regulations or orders of any public authority having jurisdiction
require any portion of the work to be inspected, tested or
approved, the Contractor shall arrange for such inspections and
the Owner shall bear all the costs of such inspections, tests or
approval.
(7) The Architect shall review and approve or take
other appropriate action upon the Contractor's submittals such as
shop drawings, product data and samples, for conformance with the
design concept of the work, and with the information given in the
Contract. Such action shall be taken with reasonable promptness
so as to cause no delay in the Project. The Architect's approval
of a
7
specific item shall not indicate approval of any assembly of
which the item is a component.
(8) Any other duties as may be set forth in this
Contract.
ARTICLE 6
CONTRACTOR'S FEE
In consideration of the Contractor's performance of its
obligations under this Contract, the Owner agrees to pay the
Contractor as compensation for its services all costs (as costs
are defined in Article 7) plus a fee equal to Seven (7%) percent
of the total cost of the Project. Costs shall be paid to the
Contractor at the time and in the manner set forth in Article 15.
In addition, the Contractor shall be paid ninety percent (90%) of
the proportional amount of its fee with each payment request made
by Contractor until such time that the work is fifty percent
(50%) complete. Thereafter the Contractor shall be paid One
Hundred Percent (100%) of the proportional amount of its fee with
each payment request. The balance of the fee shall be paid at
the time of final payment. The Contractor guarantees that the
maximum cost to the Owner for the completion of the Project,
which cost includes the Contractor's fee, shall not exceed TWELVE
MILLION, THREE HUNDRED FOURTEEN THOUSAND, FOUR HUNDRED ONE
DOLLARS ($12,314,401.00). This amount, however, is predicted
upon the aforementioned original plans and the scope of work as
outlined in Xxxxxxx Xxxxxx Associates Preliminary Magnitude
Budget Estimates dated 15 October 1997 (Exhibit B), and does not
contemplate any changes as may be requested by the Owner as
provided for in Article 2.
8
ARTICLE 7
COSTS TO BE REIMBURSED
(A) The Owner agrees to reimburse the Contractor for all
costs incurred in the execution of the work. Such costs include,
but are not limited to, the following items:
ITEM I. Any and all costs of labor, including but not
limited to social security, unemployment insurance, old age
benefits, all applicable taxes, travel time, subsistence wherever
applicable, contributions to labor union benefits, such as health
and welfare, vacation, pension, etc. Weekly payrolls shall be
made up from daily time sheets and shall set forth the name,
classification, social security number, hours worked, travel
time, subsistence, rate of pay, gross amount, all deductions, and
net amount paid for each employee. The payroll sheet shall bear
a sequence number and dates indicating the payroll period.
Contractor is to pay when due all employee
labor tax contributions, all state, county and federal taxes, as
pertains to labor, and all contributions to labor union benefit
funds. Contractor shall submit on its payment request the
billing for aforementioned amounts.
ITEM II. The salary and expenses of one off-site
administrative employee who is to expend whatever time and energy
is required to see that the job is properly administered from the
home office. However, his services are not to be exclusive for
this Project. Services of additional off-site administrative
personnel are to be covered by the allowance of the salary of the
administrative employee and may not be added to the cost of the
job.
ITEM III. Any and all materials and supplies purchased
for the Project or required for execution of the work, including
temporary buildings and structures. Cost of materials shall
include all applicable taxes and costs of transportation of these
materials. Fuel or energy for vehicle and equipment shall be
included. All materials paid for, or reimbursed, by the Owner
shall become the property of the Owner.
9
ITEM IV. The amounts of all subcontracts, said amount
to include all subcontractor's costs and profits.
ITEM V. Premiums on all insurance or bonds required
and or maintained for the Project (see Article 10 and Article
17). Premiums shall be included as costs as to which markup
applies in determining Contractor's fee. The cost of General
Liability Insurance is a reimbursable cost. The rate for the
General Liability Insurance shall be a minimum of $7.50 per
$1,000 dollars of contract value. This rate is subject to
change. Cost to be reimbursed shall be actual cost incurred by
Contractor.
ITEM VI. Transportation, traveling expenses, including
meals and hotel expenses of the Contractor of its officers or
employees incurred in the discharge of duties connected with this
work.
ITEM VII. All expenses incurred for transportation to
and from the work of the personnel required for its prosecution
as pertaining to Article 7, Item VI.
ITEM VIII. Permit fees, plan check fees,
royalties, direct field surveying for construction purposes,
county inspectors, damages for infringement of patents and costs
of defending suits therefore, and for deposits lost for causes
other than the Contractor's negligence.
ITEM IX. Losses and expenses not compensated by
insurance or otherwise sustained by the Contractor in connection
with the work, provided they have resulted from causes other than
the fault or negligence of the Contractor. Such losses shall
include settlements made with the written consent and approval of
the Owner. No such losses shall be included in the cost fee, but
if after a loss from fire, flood or similar causes not due to the
negligence of the Contractor, Contractor be required to
reconstruct damaged portions of items, Contractor shall receive
for its services a fee in compliance with Article 6. Such work
shall be considered a change subject to the provision of Article
2, and the guaranteed maximum cost shall be increased
accordingly.
10
ITEM X. Minor expenses, such as telegrams, telephone
service, expressage, first aid supplies and similar xxxxx cash
items.
ITEM XI. Cost, including transportation and
maintenance, of hand tools not owned by workmen, canvas,
tarpaulins, polyethylene film, and items consumed in the
prosecution of the work. Items used but not consumed remain the
property of Contractor.
ITEM XII. Rentals of tools, vehicles, trucks,
compressors, cranes, hoists, equipment and all construction plant
parts thereof. It is intended that rental shall be charged on
all items required for use in construction of the Project.
Rentals shall be charged on equipment owned by the Contractor as
well as equipment owned by others. Rental rates shall be as
established by prevailing area rates.
ITEM XIII. Interest at a rate in accordance with
Article 15, Paragraph (A), and as can be determined on funds
which the Contractor must provide or borrow in the event that
payments are not made by the Owner on time as provided
hereinafter in Article 15.
ITEM XIV. All items and expenses necessary for
providing of a temporary office at the jobsite. Salaries of
personnel required to maintain the field office shall be
incorporated in the payroll under the provisions of Article 7,
Item I. Supplies for the office shall be provided under the
provisions of Article 7, Item III.
ITEM XV. Costs incurred due to an emergency affecting
the safety of persons and property.
(B) Owner agrees to reimburse Contractor for all costs
incurred during or arising out of the course of construction,
even though xxxxxxxx for said costs may be submitted to the Owner
after the Contract has otherwise terminated, up to a maximum
period of 60 days after final payment.
11
ARTICLE 8
COSTS NOT TO BE REIMBURSED
The following are the only costs which the Contractor shall
not be permitted to include as job costs;
ITEM I. Salary of any person employee during the
execution of the work in the main home office, except the one
administrative employee for whom provision is made in article 7,
Item II.
ITEM II. Overhead expenses not expressly included in
Article 7.
ITEM III. Interest on capital employed, except that
provided for in Article 7, Item XIII.
ARTICLE 9
DISCOUNTS, REBATES, REFUNDS
All cash and trade discounts shall accrue to the Owner,
provided payments to the Contractor are timely made according to
the provisions of Article 15. Should any payments to the
Contractor be withheld or delayed for whatever reason, all cash
and trade discounts shall accrue to the Contractor. Should a
discount be disallowed by a supplier due to a delay in payment
from the Owner, the undiscounted amount shall be considered the
cost. Rebates, refunds and all returns from sale of surplus
material shall accrue to the Owner.
ARTICLE 10
INSURANCE
(A) Property Insurance.
(1) The Owner shall purchase and maintain property
insurance on the entire work to the full insurable value thereof.
This insurance shall include the Owner, the Contractor,
Subcontractors, Sub-subcontractors, and Materialmen. The
insurance shall insure against the perils of fire, extended
coverage and also include "all risk" for physical loss not
limited to theft, earthquake and flood damages. If the Owner and
Contractor agree to waive any coverage's and a loss results from
12
this uninsured peril or lack of coverage, then the Owner shall be
solely responsible for any and all resulting damage and costs.
(a) The Owner shall file a copy of all policies
with the Contractor before an exposure to loss may occur. Said
policies to be in a form and content satisfactory to Contractor.
(b) If the Owner does not intend to purchase
insurance required by Paragraph (1) above, Owner shall inform the
Contractor in writing prior to the commencement of the work. The
Contractor may then effect such insurance, and the cost shall be
charged to the Owner as a reimbursable cost provided for in
Article 7.
(2) The Owner shall purchase and maintain such
insurance as will insure Owner against loss of use of Owner's
property and/or damage to existing property due to fire or other
hazards, however caused. This insurance shall include the Owner,
the Contractor, Subcontractors, Sub-subcontractors and
Materialmen. The Owner, for itself and on behalf of its
insurance company or companies, waives all rights of recovery or
causes of action against the Contractor for all damage and/or
loss or use of its property, including consequential losses, due
to fire and other hazards, however caused.
(3) The responsibility for payment of any deductible
under Paragraphs (1) and (2) above shall be borne exclusively by
the Owner.
(4) All policies of insurance obtained under
Paragraphs (1) and (2) above shall be secured with recognized and
established insurance companies and no cancellation or
modification of any policy or policies shall be made by Owner
without thirty (30) days prior written notice to Contractor.
(B) Liability Insurance.
(1) The Owner shall be responsible for purchasing and
maintaining its own liability insurance, which shall include such
insurance as will protect the Owner against claims which may
arise from any operations under this Contract.
13
(2) The Contractor will provide the Owner with certificates
of insurance evidencing that the Contractor has liability and
automobile liability insurance, which insurance cannot be
canceled by or terminated or the coverage thereof materially
reduced, until the insurance company has attempted to give thirty
(30) days written notice thereof by Registered Mail addressed to
the Contractor and Owner. The Contractor shall maintain:
(a) Public Liability:
Comprehensive General Liability Insurance
covering the Contractor, Owner and other indemnities, as their
interests may appear, as additional insured, with limits of
liability as follows: Bodily Injury and Property Damage: Not
less than Ten Million Dollars ($10,000,000.00) Combined Single
Limit.
(b) Workmen's Compensation:
Workmen's Compensation Insurance, in minimum
amounts as required by Law.
(c) Automobile Liability:
Automobile Liability and Property Damage
Insurance for all owned, non-owned and hired vehicles covering
the Contractor and the indemnities, as their interest may appear,
as additional insured, against liability for bodily injury and
death and for property damage with limits of liability of not
less than One Million Dollars ($1,000,000.00) Combined Single
Limit.
(3) Owner agrees to defend, indemnify and hold
Contractor completely free and harmless from and against any and
all expenses, costs, including but not limited to court costs and
reasonable attorney's fees which arise out of or which in any way
relate to any claim or demand being asserted, or lawsuit arises
our of any operations affecting the Project. The agreement to
indemnify and hold the Contractor completely free and harmless
shall apply, save and except where it is legally established by a
Court of competent jurisdiction that the
14
Contractor has itself been principally negligent. This Paragraph
(3) shall survive the termination of this Contract.
(C) Boiler Insurance.
The Owner shall purchase and maintain boiler and
machinery insurance in an amount necessary to protect the Owner
and Contractor from any and all risks or loss. This insurance
shall include the Owner, the Contractor, Subcontractors, Sub-
subcontractors and Materialmen.
(D) Notification of Any Claim.
Should either party to this Contract suffer injury or
damage to person or property because of any act or omission of
the other party or any of its employees, agents or others for
whose acts either the Owner or Contractor is or may be legally
liable, any claim of injury or damage shall be made in writing to
such other party within a reasonable time after the first
observance of such injury or damage.
ARTICLE 11
SUBCONTRACTS
(A) The Contractor may subcontract all or any portion of
the work at its discretion, and the total price of any and all
such Subcontracts shall be a reimbursable cost as provided for in
Article 7.
(B) Contractor acknowledges that under limited
circumstances the Owner may request the Contractor to use one or
more Subcontractors of the Owner's choice. However, in
recognition of the special relationship that must exist between
the Contractor and its Subcontractors, the Owner agrees that when
the Owner requests the use of any particular Subcontractor, the
Owner shall seek the advise and obtain the approval of the
Contractor. The Owner further agrees that should the Contractor
agree to use the Owner's Subcontractor, and should the price to
be charged by the Owner's Subcontractor exceed the price with the
Contractor otherwise intended to use, the difference in price
will be added to the Guaranteed
15
Maximum Cost as provided for in Article 6, and that the
Contractor's fees will be increased accordingly.
(C) Regardless of which Subcontractors may be used on the
Project, there shall be no contractual relationship between the
Owner and the Subcontractors, and the Contractor shall have full,
complete and absolute directing authority over performance of the
work by all Subcontractors.
(D) The organization of the specifications into divisions,
sections and articles, and the arrangement of drawings shall not
control the Contractor in dividing the work among Subcontractors,
or in establishing the extent of the work to be performed by any
trade.
ARTICLE 12
OWNER'S REPRESENTATIVE
During the course of construction, the Owner shall provide
an individual who will be available on a regular basis to consult
with the Contractor concerning all phases of the Project. This
individual shall be the Owner's Representative, and shall be
solely responsible for bringing any problems to the attention of
the Contractor, and for approving any matters for which the
Owner's approval is required or sought. This individual shall
have total familiarity with all aspects of the building process,
and will have authority to represent and bind the Owner in any
and all matters affecting the Owner's rights and responsibilities
under this Contract. For the purposes of this Project, the
Owner's Representative shall be Xx. Xxxx Xxxx. If for any reason
or at any time, this individual will not be available to the
Contractor, then the Owner shall immediately designate another
individual to take his place and shall notify the Contractor of
such writing.
16
ARTICLE 13
TITLE OF THE WORK
The title to all work completed and in the course of
construction, and of all materials supplied, for which payment
has been made in full by Owner, shall be in the Owner.
ARTICLE 14
ACCOUNTING-INSPECTION AUDIT
The Contractor shall keep full and detailed accounts and
records of all costs. The Owner shall be afforded reasonable
access to the accounts and records of Contractor as reasonable
times for the purpose of inspecting, and where reasonably
requested by Owner, auditing the same.
However, neither the request for nor the conduct of any
audit shall be cause for failure of Owner to make timely payments
as provided herein. In any and all events, the Owner shall
request, conduct and close any monthly progress payment
accounting review within thirty (30) days after receipt of the
progress payment request. Any FINAL payment request audit shall
be conducted and closed within twenty-five (25) days after
receipt of the request for final payment so as not to delay final
payment including retention which shall be paid Contractor within
thirty (30) days after substantial completion of the Project, and
in no event, later than thirty-nine (39) days after the filing of
the Notice of Completion for the Project.
ARTICLE 15
APPLICATION FOR PAYMENT
(A) The Contractor shall deliver to the Owner, on or about
the first day of each month, a request for payment on a form
substantially similar to that attached hereto as Exhibit C. The
Contractor shall include with this form an appropriate lien
release covering the work and materials enumerated in the payment
request. The Owner shall promptly approve the payment request so
that there will be no delay in processing of payment and shall,
save and except where a legitimate objection is
17
raised as to a particular item as provided in Paragraph (B)
below, make payment in full to the Contractor on or before the
tenth (10th) day of each month. Payments not made to the
Contractor on or before the tenth (10th) of the month shall bear
interest at the then current prime rate of interest plus 2% as
that rate is established by First Interstate Bank of Nevada. The
inclusion of this interest shall be in addition to any and all
other rights and remedies which the Contractor may have in the
event of delinquent payments.
(B) The Owner shall determine the amount owning to the
Contractor based on observations at the site and on evaluation of
the Contractor's request for payment. Should the Owner
disapprove an item in any payment request, payment for that
specific item may be withheld for a period not to exceed thirty
(30) days within which time it shall be adjudicated. However,
the balance requested in that payment request must be paid by the
Owner to the Contractor on or before the tenth (10th) day of the
month.
(C) The Contractor specifically reserves the right to cease
work should requested payments be unreasonably withheld or
delayed.
(D) Payments will be made by the Owner for materials or
equipment whether the same have been incorporated into the
Project or suitable stored on or off the site. Payments for said
materials and equipment will be conditioned only upon inspection
of the materials and equipment by the Contractor, and the
Contractor's verification that suitable insurance has been
secured.
(E) If, after substantial completion of the work, final
completion thereof is materially delayed through no fault of the
Contractor or by issuance of change orders affecting final
completion, the Owner shall, upon application by the Contractor,
and without terminating the Contract, make payment of the balance
due for that portion of the work which has been fully completed.
(F) In the event of a lien or liens for material or labor
is filed against the property, the Owner may withhold from final
payment to Contractor an amount equal to the amount of the lien
plus a reasonable amount to meet the cost of
18
possible litigation. This amount shall be promptly released to
the Contractor upon its furnishing a bond in favor of the Owner
and the lien claimant in the amount of the lien and probable
litigation costs, or upon the Contractor furnishing the Owner a
release of lien from the claimant.
(G) Final payment shall be paid to the Contractor within
thirty (30) days after substantial completion, as defined in
Article 16, Paragraph (B) and in no event later than thirty-nine
(39) days after, the filing of the Notice of Completion for the
Project.
(H) The making of final payment shall constitute a waiver
of all claims by the Owner except those arising from (1)
unsettled liens, or (2) faulty or defective work appearing after
substantial completion and within the term of the warranty given
by the Contractor, under the terms of Article 19.
(I) A ten percent (10%) retention shall be withheld from
each application for payment for work performed until the work is
fifty percent (50%) complete. Thereafter no retention shall be
withheld. Retention shall be released upon Final Payment.
ARTICLE 16
NOTICE OF COMPLETION
(A) The Owner shall promptly record a Notice of Completion
when the Project has been substantially completed. Substantial
completion is defined below in Paragraph (B). Final payment
shall be paid to the Contractor within thirty (30) days after
substantial completion, and in no event later than thirty-nine
(39) days after, the filing of Notice of Completion for the
Project.
(B) The date of substantial completion of the work, or any
designated portion thereof, is the date certified by the
Contractor when construction is sufficiently complete, in
accordance with the Contract, so the Owner can occupy or utilize
the Project or designated portion thereof for the use for which
it is intended.
19
ARTICLE 17
BOND
The Contractor shall endeavor to furnish a Contract
Performance Bond in an amount and form satisfactory to the Owner
at the Owner's expense should the Owner specifically request such
a bond. Should the Owner desire, the Contractor may pay for the
bond; however, in this event, the premium shall become a job cost
under the provision of Article 7, Item V, and the Guaranteed
Maximum Cost as set forth in Article 6, shall be increased
accordingly, treating this as a change subject to the provisions
of Article 2.
ARTICLE 18
PERIOD OF CONSTRUCTION
(A) The Contractor agrees to commence work hereunder within
five (5) work days after receipt of written notice from the Owner
to do so, to prosecute said work thereafter diligently and
continuously to completion and in any and all events to
substantially complete the Project in accordance with the
requirements of the Owner.
(B) The Owner and Contractor specifically acknowledge,
however, that there are circumstances beyond the reasonable
control of Contractor which may result in a delay of the Project.
Consequently, Owner and Contractor agree that if the Contractor
is delayed or impeded by any acts of the Owner or its agents or
those claiming under agreement from the Owner, or by acts of God
which Contractor could not have reasonably foreseen and provided
against, or by stormy, inclement, or severely cold weather, or by
strike, boycott, or like obstructive actions of employees, third
persons or labor organizations, or for any other cause beyond the
reasonable control of Contractor, the time within which the
Contractor has to complete the Project shall be appropriately
extended.
(C) Should concealed conditions encountered in the
performance of the work below the surface of the ground, or
should concealed or unknown conditions
20
in an existing structure be at variance with the conditions
indicated by the Contract, or should unknown physical conditions
below the surface of the ground or should concealed or unknown
conditions in an existing structure of an unusual nature,
differing materially from those ordinarily encountered and
generally recognized as inherent in work of the character
provided for in this Contract be encountered, the Contract Sum
shall be equitably adjusted under Article 2, upon claim made
within a reasonable time after the first observance of the
condition.
(D) The period of time set forth in Paragraph (A) above may
be necessarily or appropriately extended by any change orders
effected pursuant to Article 2.
(E) The term "day" as used throughout this Contract shall
mean calendar day unless otherwise specifically designated.
ARTICLE 19
WARRANTIES
(A) The entire work is hereby warranted against defects in
materials and workmanship for a period of one (1) year from the
date of substantial completion of the Project or substantial
completion of any designated portion thereof. If, within this
one (1) year period, any of the work or materials or equipment
(for which approval has not been previously given in writing by
Owner) is proven to be defective and not in accordance with the
Contract, the Contractor shall, at its expense, correct said
defect promptly after receipt of a written notice from the Owner
to do so. The Owner shall give notice promptly after discovery
of any defective condition.
(B) The Contractor warrants to the Owner that all equipment
and materials furnished under this Contract will be new unless
otherwise specified or approved by the Owner.
(C) Articles, materials or methods specified by proprietary
name or by name of vendor or manufacturer will be furnished or
applied by Contractor, except only where equal substitutions for
articles, materials or methods are approved by
21
the Contractor for use in lieu thereof. In determining the
quality of substitute parts, materials or methods, availability
or procurement shall be a determining factor.
(D) The Contractor shall secure and furnish to the Owner
through the Architect, all applicable written guarantees and
warranties as may be called for by this Contract.
ARTICLE 20
ARBITRATION
(A) All disputes, claims or questions not resolved
informally by Owner and Contractor may be subject to arbitration.
If both Owner and Contractor agree that a particular dispute,
claim or question should be arbitrated, then arbitration shall be
effected as provided in Paragraph (B) below, and the decision
therefrom shall be binding on both parties. If, however, either
the Contractor and/or the Owner elect not to proceed by way of
arbitration, then either or both parties may resort to
appropriate Court action, with the prevailing party being
entitled to receive all reasonable attorneys' fees, Court costs,
and any and all other fees, expenses, and costs arising out of or
in any way incurred in the institution or defense of that action.
(B) Should both the Owner and Contractor agree to
arbitration, the following procedures shall be employed:
(1) Notice of the demand for arbitration shall be
filed in writing with the other party to this Contract. This
demand shall be made within a reasonable time after the dispute
has risen, but in no case shall the demand be made later than the
time set in this Contract for final payment. Any demand received
after that time shall not be allowed.
(2) Owner and Contractor shall, within ten (10) days
of the written demand for arbitration, agree upon an arbitrator.
If within this said ten (10) day period the Owner and Contractor
are unable to agree upon a single arbitrator, then
22
the Owner and Contractor will, within three (3) additional days,
each select an arbitrator, and those two arbitrators will then
select a third.
(3) At such time as the arbitrator (or all three
arbitrators) has been selected as provided in Paragraph (2)
above, the election to arbitrate shall become final and
irrevocable.
(4) Unless both Owner and Contractor specifically
agree in writing to the contrary, the arbitration hearing shall
be conducted and the decision rendered therefrom no more than
forty-five (45) days after the written demand for arbitration.
(5) The arbitrator, if he deems that the case requires
it, is authorized to award to the party whose contention is
sustained, such sums as he (or a majority of them) shall deem
proper to compensate the prevailing party for the time and
expense incident to the proceedings, including any and all
reasonable attorneys' fees expended, and, if the arbitration was
demanded without reasonable cause, he may also award damages for
delay. Unless Owner and Contractor specifically agree in writing
to the contrary, the arbitrator shall fix his own compensation
and shall assess costs and charges of the proceeding upon either
or both parties.
(6) The decision of the arbitrator shall be final,
save and except for the limited right of appeal as provided for
in the Nevada Revised Statutes. In the event the decision of the
arbitrator is appealed, reasonable attorneys' fees and Court
costs, as determined by a Court of competent jurisdiction, shall
be paid to the prevailing party.
(7) Unless Owner and Contractor otherwise agree in
writing to the contrary, the Contractor shall carry on the work
during any arbitration proceedings, and the Owner shall continue
to make timely payments to the Contractor in accordance with the
Contract.
23
ARTICLE 21
TERMINATION OF THE CONTRACT
(A) Termination by the Contractor.
(1) If the work is stopped for a period of thirty (30)
days under an order of any Court or other public authority having
jurisdiction, or as the result of an act of government, such as
declaration of a national emergency making materials unavailable
through no act or fault of the Contractor or a Subcontractor or
their agents or employees, or any other person performing any of
the work under a contract with the Contractor, or if the work
should be stopped for a period of thirty (30) days by the
Contractor because the Owner has not made payment as provided
herein, then the Contractor may, upon three (3) additional days'
written notice to the Owner, terminate this Contract and recover
from the Owner payment for all work executed, and for any proven
loss sustained upon any materials, equipment, tools, construction
equipment and machinery, including reasonable profit and damages
thereon.
(B) Termination by the Owner.
(1) If the Contractor is adjudged a bankrupt or makes
a general assignment for the benefit of creditors, or if a
receiver is appointed on account of the Contractor's insolvency,
or if the Contractor persistently and repeatedly refuses or
fails, except in cases for which an extension of time is provided
for in Article 18, to supply enough workmen or materials, or if
the Contractor persistently and repeatedly fails to make payment
to Subcontractors or for materials or labor, or persistently
disregards laws, ordinances, rules, regulations or orders of any
public authority having jurisdiction, or otherwise is guilty of a
substantial violation of the provisions of this Contract, then
the Owner may, without prejudice to any other rights or remedies
he may have, and after giving the Contractor and his surety, if
any, three (3) days' written notice, terminate the employment of
the Contractor and take possession of the site and all materials
for which the Owner has made payment in full.
24
(C) Any termination of this Contract, whether by Contractor
or Owner, shall be subject to the rights and remedies available
in Article 20.
ARTICLE 22
MISCELLANEOUS PROVISIONS
(None)
ARTICLE 23
NOTICES
Any and all notices, demands or requests required or
appropriate under this Contract shall be given in writing either
by personal delivery or by registered or certified mail, return
receipt requested, addressed to the following addresses:
To Contractor: XXXXXXX XXXXXX ASSOCIATES, INC.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
To Owner: RIO PROPERTIES, INC. d/b/a
RIO SUITE HOTEL & CASINO
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
When notice has been given by mail, it shall be deemed served the
date following deposit, postage prepaid in the United States
mail. The parties may change the place of notice by notifying
the other party as set forth herein.
ARTICLE 24
PARTIAL INVALIDITY
Should any term, condition, covenant or provision of this Contra
ct, or any application thereof, be held by a Court of competent
jurisdiction to be invalid, void or unenforceable, all
provisions, covenants or conditions of this Contract, and all
applications thereof, not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be
effected, impaired or invalidated thereby.
25
ARTICLE 25
SUCCESSORS IN INTEREST
Neither Owner nor Contractor may transfer or assign this
Contract, or any interest therein, without the prior written
permission of the other. However, this Contract shall insure to
be benefit of, and be binding upon, the successors, assigns
(where permitted) and representatives of both the Owner and
Contractor, and the Owner and Contractor covenant for themselves
and for their successors, assigns and representatives, that they
will fully perform on the terms and conditions of this Contract.
ARTICLE 26
CAPTIONS AND PRONOUNS
The captions appearing at the commencement of the Articles hereof
are descriptive only and for convenience in reference to this
Contract, and in no way whatsoever define, limit or describe the
scope or intent of this Contract, or in any way affect this
Contract.
ARTICLE 27
CORPORATE AUTHORIZATION
The parties executing this Contract acknowledge and
represent that all corporate authorization has been obtained for
the execution of this Contract and for the compliance with each
and every term hereof.
26
ARTICLE 28
LEGAL SITUS
The terms and conditions of this Contract shall be construed
in accordance with and governed by the laws of the State of
Nevada, and the parties hereto acknowledge that the Courts of
this State shall have exclusive jurisdiction over any action or
proceeding brought under or by reason of this Contract.
IN WITNESS WHEREOF, the Contractor and Owner have executed
this contract as of the day and year first above written.
RIO PROPERTIES, INC. d/b/a XXXXXXX XXXXXX ASSOCIATES,
INC.
RIO SUITE HOTEL & CASINO
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxx X. Xxxxx
Its Exec VP Its Vice President of Operations
Nevada State Contractor's
License No. 39178
Attachments: Exhibit 'A' Legal Description
Exhibit 'B' Preliminary Magnitude Budget Estimates
dated 10/15/97
Exhibit 'C' Billing Format
Exhibit 'D' Exclusion List
27
EXHIBIT 'A'
(Legal Description)
[NOT INCLUDED]
28
EXHIBIT 'B'
RIO LOWRISE INTERIOR REMODEL PROJECTS (1997)
PRIMARY MAGNITUDE BUDGET ESTIMATE
[NOT INCLUDED]
EXHIBIT 'C'
FORM OF APPLICATION AND CERTIFICATE FOR PAYMENT
[NOT INCLUDED]
EXHIBIT 'D'
LOWRISE REMODEL PROJECTS
EXCLUSION LIST
[NOT INCLUDED]
BUILDING CONTRACT
THIS CONTRACT is made and entered into as of this Twenty-
fifth day of March 1998, by and between XXXXXXX XXXXXX
ASSOCIATES, INC., a Nevada Corporation (as General Contractor and
hereinafter referred to as "Contractor"), and Rio Properties,
Inc. d/b/a Rio Suite Hotel & Casino, a Nevada Limited Partnership
(hereinafter referred to as "Owner").
WITNESSETH:
WHEREAS, the Owner intends to construct various TOWER
INTERIOR REMODELS at the Rio Suite Hotel & Casino, including the
2-Story Penthouse Refurbishment, Masquerade Suite Upgrades, 39th
Floor Suite Upgrades, 50/51st Floor Suite Upgrades, 20th Floor
Suites Remodel, 20th Floor Corridor/Concierge Area, 20th
Additional One-Bedroom Suite, 20th Floor Entourage Rooms, 20th
Floor Standard Suite Upgrade, 39th Floor Concierge Area (Spa Room
Conversion) and 39th Floor Corridor Upgrade, being hereinafter
referred to as the Project (OUR PROJECT NOS. 88497, 88197, 61097
& 62897), and
WHEREAS, the Owner requests the Contractor to perform the
work and supply said materials and equipment necessary to
complete the Project, and
WHEREAS, the Contractor desires to perform said work and to
supply said materials and equipment,
NOW THEREFORE, in consideration of the mutual benefits
arising therefrom, and for other good and valuable consideration,
it is hereby agreed as follows.
ARTICLE 1
CONTRACT DOCUMENTS
(A) The documents constituting the Contract between the
Owner and the Contractor (and hereby collectively referred to as
the Contract or this Contract) consist of the following:
1. This Building Contract.
2. Xxxxxxx Xxxxxx Associates Preliminary Magnitude
Budget Estimates dated 15 October 1997,
attached hereto as Exhibit 'B'.
3. Project plans entitled: 2-Story Penthouse
Refurbishment, Masquerade Suite Upgrades, 39th
Floor Suite Upgrades, 50/51st Floor Suite
Upgrades, 20th Floor Suites Remodel, 20th
Floor Corridor/Concierge Area, 20th Additional
One-Bedroom Suite, 20th Floor Entourage Rooms,
20th Floor Standard Suite Upgrade, 39th Floor
Concierge Area (Spa Room Conversion) and 39th
Floor Corridor Upgrade issued through 10 October
1997 as prepared by Xxxxxxx X. Xxxxxxx XX,
Chtd., Architect.
(B) In the event of any conflict between or among any of
the terms or conditions of the documents constituting this
Contract, the following order shall be employed in resolving any
such conflict and in determining what terms or conditions will
govern:
1. This Building Contract, inclusive of Exhibit 'B'.
2. The Plans.
(C) This Contract constitutes the entire agreement
between the parties, and no modification of this contract shall
be valid or binding unless such modification is in writing duly
dated and signed by both parties. Neither Owner nor Contractor
shall be bound by prior terms, conditions, statements, or
representations, express or implied, oral or written, not
otherwise contained in this Contract.
2
ARTICLE 2
CHANGES IN THE WORK
(A) The Owner may, by written instructions or drawings to
the Contractor which, in the reasonable opinion of the
Contractor, do not materially affect the type, design, nature or
scheduling of the Project, make changes in the abovementioned
plans and specifications, issue additional instructions, require
additional work, direct the omission of work previously shown or
ordered, or change work already incorporated into the Project,
and the provisions of this Contract shall apply to any and all
such changes with the same force and effect as though originally
embodied in this Contract.
(B) For changes which involve additional work or a
reduction in work as set forth in Paragraph (A) above, the
Guaranteed Maximum Cost as hereinafter set forth in Article 6
shall be increased or decreased by the Contractor in accordance
with the Contractor's estimate for said work, and the
Contractor's fee shall be appropriately adjusted. All changes in
the work must be authorized by a representative of Owner, who,
for the purposes of this Project, shall be
Xx. Xxxx Xxxx.
(C) However, Owner and Contractor specifically agree that
should a change be requested by Owner which, in the reasonable
opinion of the Contractor, would materially affect the type,
design, nature or schedule of the Project as a whole, the
Contractor reserves the right to renegotiate the terms of the
Contract.
3
ARTICLE 3
CONTRACTOR'S DUTIES
(A) The Contractor agrees to provide all labor, materials
and equipment necessary for the proper completion of the Project
in a manner consistent with the requirements of the work to be
performed, subject only to the provisions of Article 18; and
during the course of construction, the Contractor agrees to
furnish its best skill and judgment in effecting this goal.
(B) The Contractor shall maintain at the site for the
Owner one (1) record copy of drawings, specifications, addenda,
change orders and other modifications.
(C) The Contractor shall, during the course of
construction, keep the premises free from accumulation of waste
materials or rubbish caused by its operations. Within a
reasonable period of time after substantial completion of the
Project, the Contractor shall remove its waste materials and
rubbish from and about the Project site as well as all tools,
construction equipment, machinery and surplus materials.
(D) The Contractor shall comply with all applicable laws,
ordinances, rules, codes, regulations and lawful orders of any
public authority relating to construction of the Project.
(E) Irrespective of Paragraph (D) above, it is the
responsibility of the Project Architect to use his best efforts
to make certain that the Project is designed in accordance with
applicable laws, ordinances, rules, statutes, building codes and
regulations. If the Contractor observes that the Project, or any
portion thereof, may be at variance therewith, the Contractor
shall notify the Architect, and any change shall be accomplished
by an appropriate modification as provided in Article 2.
(F) Any other duties as may be set forth in this
Contract.
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ARTICLE 4
OWNER'S DUTIES
(A) The Owner shall, at the request of the Contractor,
prior to the time of execution of this Contract, furnish to the
Contractor and Contractor's Surety and Bonding Company acceptable
evidence that the Owner has made suitable financial arrangements
to fulfill its obligations under this Contract.
(B) The Owner shall furnish all surveys to the Architect
describing the physical characteristics, legal limitations and
utility locations for the site of the Project, and a legal
description of the site. A copy of the legal description shall
be attached to this Contract and marked as Exhibit A.
(C) The Owner shall secure and pay for necessary
approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or for
permanent changes in existing facilities.
(D) Information or services under the Owner's control
shall be furnished by the Owner with reasonable promptness so as
to avoid any delay in the orderly progress of the work.
(E) The Owner shall provide the Architect with those
facilities required by Article 5 (A) (3).
(F) Any other duties as may be set forth in this
Contract.
(G) The Owner shall pay for and obtain all necessary
utility company extensions or service fees related to
this project; i.e., Xxxxx County Sanitation District,
Nevada Power Company, Sprint Telephone, Southwest Gas
Corporation, Las Vegas Valley Water District, etc.
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ARTICLE 5
ARCHITECT'S DUTIES
The Owner is informed that the Architect on this Project is
Xxxxxxx X. Xxxxxxx XX, who, in addition to being a licensed
Architect within the State of Nevada, is also a majority
stockholder and employee of Contractor. The Owner acknowledges
this relationship between Architect and Contractor on this
Project, and herein accepts in every respect this close
association between the two of them. In light of the special
relationship existing between the Architect and the Contractor,
the Owner agrees that in case of the termination of the
Architect, for whatever reason, at the option of the Contractor
the terms and conditions of this Contract will be renegotiated.
(A) The Architect will provide administration of the
Project as follows:
(1) The Architect shall advise and consult with the
Owner, and shall act on behalf of the Owner and Contractor to the
extent provided in this Contract.
(2) The Architect shall visit the site at intervals
appropriate to the stage of construction or as otherwise agreed
by the Architect in writing to become generally familiar with the
progress and quality of the work and to determine in general if
the work is proceeding in accordance with the Contract. 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 such on-site observations as an
Architect, the Architect shall keep the Owner informed of the
progress and quality of work. However, the Architect shall not
be responsible for the acts or omissions of the Contractor,
Subcontractors, or any other persons performing any of the work
in the Project, or for failure of any of them to carry out the
work in accordance with this Contract.
(3) The Architect shall at all times have access to
the work wherever it is in preparation or progress, and Owner
shall provide facilities for such access so that the Architect
may perform his functions under this Contract.
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(4) On written request of either the Owner or
Contractor, the Architect shall, with reasonable promptness,
render interpretations of the plans and specifications necessary
for the proper execution or progress of the work.
(5) The Architect's decisions in matters relating to
artistic effect shall be final if consistent with the intent of
this Contract.
(6) The Architect shall have authority to reject work
which does not conform to the requirements of this Contract and
the given standards of the industry; and whenever, in the
Architect's reasonable opinion, it is necessary to evaluate
conformity, the Architect will have authority to require special
inspection or testing of the work in accordance with the
provisions of this Contract, whether or not such work be then
fabricated, installed or completed.
(a) If inspection or testing of the work reveals
a material failure of the work to comply with the requirements of
the Contract and the standards of the industry, the Contractor
shall promptly correct any such deficient work, and the cost
involved in correcting that work shall be borne solely by the
Contractor. However, should the inspection or testing reveal
that the work has been in material compliance with the
requirements of the Contract and standards of the industry, then
the Owner shall bear any and all costs involved in the
inspection, testing, and correction of the work and an
appropriate change order shall be issued as provided in Article
2.
(b) If the law, rules, ordinances,
regulations or orders of any public authority having jurisdiction
require any portion of the work to be inspected, tested or
approved, the Contractor shall arrange for such inspections and
the Owner shall bear all the costs of such inspections, tests or
approval.
(7) The Architect shall review and approve or take
other appropriate action upon the Contractor's submittals such as
shop drawings, product data and samples, for conformance with the
design concept of the work, and with the information given in the
Contract. Such action shall be taken with reasonable promptness
so as to cause no delay in the Project. The Architect's approval
of a
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specific item shall not indicate approval of any assembly of
which the item is a component.
(8) Any other duties as may be set forth in this
Contract.
ARTICLE 6
CONTRACTOR'S FEE
In consideration of the Contractor's performance of its
obligations under this Contract, the Owner agrees to pay the
Contractor as compensation for its services all costs (as costs
are defined in Article 7) plus a fee equal to Seven (7%) percent
of the total cost of the Project. Costs shall be paid to the
Contractor at the time and in the manner set forth in Article 15.
In addition, the Contractor shall be paid ninety percent (90%) of
the proportional amount of its fee with each payment request made
by Contractor until such time that the work is fifty percent
(50%) complete. Thereafter the Contractor shall be paid One
Hundred Percent (100%) of the proportional amount of its fee with
each payment request. The balance of the fee shall be paid at
the time of final payment. The Contractor guarantees that the
maximum cost to the Owner for the completion of the Project,
which cost includes the Contractor's fee, shall not exceed SEVEN
MILLION, ONE HUNDRED SIXTY SEVEN THOUSAND, ONE HUNDRED TWENTY
FIVE DOLLARS ($7,167,125.00). This amount, however, is predicted
upon the aforementioned original plans and the scope of work as
outlined in Xxxxxxx Xxxxxx Associates Preliminary Magnitude
Budget Estimates dated 15 October 1997 (Exhibit B), and does not
contemplate any changes as may be requested by the Owner as
provided for in Article 2.
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ARTICLE 7
COSTS TO BE REIMBURSED
(A) The Owner agrees to reimburse the Contractor for all
costs incurred in the execution of the work. Such costs include,
but are not limited to, the following items:
ITEM I. Any and all costs of labor, including but
not limited to social security, unemployment insurance, old age
benefits, all applicable taxes, travel time, subsistence wherever
applicable, contributions to labor union benefits, such as health
and welfare, vacation, pension, etc. Weekly payrolls shall be
made up from daily time sheets and shall set forth the name,
classification, social security number, hours worked, travel
time, subsistence, rate of pay, gross amount, all deductions, and
net amount paid for each employee. The payroll sheet shall bear
a sequence number and dates indicating the payroll period.
Contractor is to pay when due all employee
labor tax contributions, all state, county and federal taxes, as
pertains to labor, and all contributions to labor union benefit
funds. Contractor shall submit on its payment request the
billing for aforementioned amounts.
ITEM II. The salary and expenses of one off-site
administrative employee who is to expend whatever time and energy
is required to see that the job is properly administered from the
home office. However, his services are not to be exclusive for
this Project. Services of additional off-site administrative
personnel are to be covered by the allowance of the salary of the
administrative employee and may not be added to the cost of the
job.
ITEM III. Any and all materials and supplies
purchased for the Project or required for execution of the work,
including temporary buildings and structures. Cost of materials
shall include all applicable taxes and costs of transportation of
these materials. Fuel or energy for vehicle and equipment shall
be included. All materials paid for, or reimbursed, by the Owner
shall become the property of the Owner.
9
ITEM IV. The amounts of all subcontracts, said
amount to include all subcontractor's costs and profits.
ITEM V. Premiums on all insurance or bonds required
and or maintained for the Project (see Article 10 and Article
17). Premiums shall be included as costs as to which markup
applies in determining Contractor's fee. The cost of General
Liability Insurance is a reimbursable cost. The rate for the
General Liability Insurance shall be a minimum of $7.50 per
$1,000 dollars of contract value. This rate is subject to
change. Cost to be reimbursed shall be actual cost incurred by
Contractor.
ITEM VI. Transportation, traveling expenses,
including meals and hotel expenses of the Contractor of its
officers or employees incurred in the discharge of duties
connected with this work.
ITEM VII. All expenses incurred for transportation
to and from the work of the personnel required for its
prosecution as pertaining to Article 7, Item VI.
ITEM VIII. Permit fees, plan check fees,
royalties, direct field surveying for construction purposes,
county inspectors, damages for infringement of patents and costs
of defending suits therefore, and for deposits lost for causes
other than the Contractor's negligence.
ITEM IX. Losses and expenses not compensated by
insurance or otherwise sustained by the Contractor in connection
with the work, provided they have resulted from causes other than
the fault or negligence of the Contractor. Such losses shall
include settlements made with the written consent and approval of
the Owner. No such losses shall be included in the cost fee, but
if after a loss from fire, flood or similar causes not due to the
negligence of the Contractor, Contractor be required to
reconstruct damaged portions of items, Contractor shall receive
for its services a fee in compliance with Article 6. Such work
shall be considered a change subject to the provision of Article
2, and the guaranteed maximum cost shall be increased
accordingly.
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ITEM X. Minor expenses, such as telegrams,
telephone service, expressage, first aid supplies and similar
xxxxx cash items.
ITEM XI. Cost, including transportation and
maintenance, of hand tools not owned by workmen, canvas,
tarpaulins, polyethylene film, and items consumed in the
prosecution of the work. Items used but not consumed remain the
property of Contractor.
ITEM XII. Rentals of tools, vehicles,
trucks, compressors, cranes, hoists, equipment and all
construction plant parts thereof. It is intended that rental
shall be charged on all items required for use in construction
of the Project. Rentals shall be charged on equipment owned by
the Contractor as well as equipment owned by others. Rental
rates shall be as established by prevailing area rates.
ITEM XIII.Interest at a rate in accordance with
Article 15, Paragraph (A), and as can be determined on funds
which the Contractor must provide or borrow in the event that
payments are not made by the Owner on time as provided
hereinafter in Article 15.
ITEM XIV. All items and expenses necessary for
providing of a temporary office at the jobsite. Salaries of
personnel required to maintain the field office shall be
incorporated in the payroll under the provisions of Article 7,
Item I. Supplies for the office shall be provided under the
provisions of Article 7, Item III.
ITEM XV. Costs incurred due to an emergency
affecting the safety of persons and property.
(B) Owner agrees to reimburse Contractor for all costs
incurred during or arising out of the course of construction,
even though xxxxxxxx for said costs may be submitted to the Owner
after the Contract has otherwise terminated, up to a maximum
period of 60 days after final payment.
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ARTICLE 8
COSTS NOT TO BE REIMBURSED
The following are the only costs which the Contractor shall
not be permitted to include as job costs;
ITEM I. Salary of any person employee during the
execution of the work in the main home office, except the one
administrative employee for whom provision is made in article 7,
Item II.
ITEM II. Overhead expenses not expressly included
in Article 7.
ITEM III. Interest on capital employed, except that
provided for in Article 7, Item XIII.
ARTICLE 9
DISCOUNTS, REBATES, REFUNDS
All cash and trade discounts shall accrue to the Owner,
provided payments to the Contractor are timely made according to
the provisions of Article 15. Should any payments to the
Contractor be withheld or delayed for whatever reason, all cash
and trade discounts shall accrue to the Contractor. Should a
discount be disallowed by a supplier due to a delay in payment
from the Owner, the undiscounted amount shall be considered the
cost. Rebates, refunds and all returns from sale of surplus
material shall accrue to the Owner.
ARTICLE 10
INSURANCE
(A) Property Insurance.
(1) The Owner shall purchase and maintain property
insurance on the entire work to the full insurable value thereof.
This insurance shall include the Owner, the Contractor,
Subcontractors, Sub-subcontractors, and Materialmen. The
insurance shall insure against the perils of fire, extended
coverage and also include "all risk" for physical loss not
limited to theft, earthquake and flood damages. If the Owner and
Contractor agree to waive any coverage's and a loss results from
12
this uninsured peril or lack of coverage, then the Owner shall be
solely responsible for any and all resulting damage and costs.
(a) The Owner shall file a copy of all policies
with the Contractor before an exposure to loss may occur. Said
policies to be in a form and content satisfactory to Contractor.
(b) If the Owner does not intend to purchase
insurance required by Paragraph (1) above, Owner shall inform the
Contractor in writing prior to the commencement of the work. The
Contractor may then effect such insurance, and the cost shall be
charged to the Owner as a reimbursable cost provided for in
Article 7.
(2) The Owner shall purchase and maintain such
insurance as will insure Owner against loss of use of Owner's
property and/or damage to existing property due to fire or other
hazards, however caused. This insurance shall include the Owner,
the Contractor, Subcontractors, Sub-subcontractors and
Materialmen. The Owner, for itself and on behalf of its
insurance company or companies, waives all rights of recovery or
causes of action against the Contractor for all damage and/or
loss or use of its property, including consequential losses, due
to fire and other hazards, however caused.
(3) The responsibility for payment of any deductible
under Paragraphs (1) and (2) above shall be borne exclusively by
the Owner.
(4) All policies of insurance obtained under
Paragraphs (1) and (2) above shall be secured with recognized and
established insurance companies and no cancellation or
modification of any policy or policies shall be made by Owner
without thirty (30) days prior written notice to Contractor.
(B) Liability Insurance.
(1) The Owner shall be responsible for purchasing
and maintaining its own liability insurance, which shall include
such insurance as will protect the Owner against claims which
may arise from any operations under this Contract.
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(2) The Contractor will provide the Owner with
certificates of insurance evidencing that the Contractor has
liability and automobile liability insurance, which insurance
cannot be canceled by or terminated or the coverage thereof
materially reduced, until the insurance company has attempted to
give thirty (30) days written notice thereof by Registered Mail
addressed to the Contractor and Owner. The Contractor shall
maintain:
(a) Public Liability:
Comprehensive General Liability Insurance
covering the Contractor, Owner and other indemnities, as their
interests may appear, as additional insured, with limits of
liability as follows: Bodily Injury and Property Damage: Not
less than Ten Million Dollars ($10,000,000.00) Combined Single
Limit.
(b) Workmen's Compensation:
Workmen's Compensation Insurance, in minimum
amounts as required by Law.
(c) Automobile Liability:
Automobile Liability and Property Damage
Insurance for all owned, non-owned and hired vehicles covering
the Contractor and the indemnities, as their interest may appear,
as additional insured, against liability for bodily injury and
death and for property damage with limits of liability of not
less than One Million Dollars ($1,000,000.00) Combined Single
Limit.
(3) Owner agrees to defend, indemnify and hold
Contractor completely free and harmless from and against any and
all expenses, costs, including but not limited to court costs and
reasonable attorney's fees which arise out of or which in any way
relate to any claim or demand being asserted, or lawsuit arises
our of any operations affecting the Project. The agreement to
indemnify and hold the Contractor completely free and harmless
shall apply, save and except where it is legally established by a
Court of competent jurisdiction that the
14
Contractor has itself been principally negligent. This Paragraph
(3) shall survive the termination of this Contract.
(C) Boiler Insurance.
The Owner shall purchase and maintain boiler and
machinery insurance in an amount necessary to protect the Owner
and Contractor from any and all risks or loss. This insurance
shall include the Owner, the Contractor, Subcontractors, Sub-
subcontractors and Materialmen.
(D) Notification of Any Claim.
Should either party to this Contract suffer injury or
damage to person or property because of any act or omission of
the other party or any of its employees, agents or others for
whose acts either the Owner or Contractor is or may be legally
liable, any claim of injury or damage shall be made in writing to
such other party within a reasonable time after the first
observance of such injury or damage.
ARTICLE 11
SUBCONTRACTS
(A) The Contractor may subcontract all or any portion of
the work at its discretion, and the total price of any and all
such Subcontracts shall be a reimbursable cost as provided for in
Article 7.
(B) Contractor acknowledges that under limited
circumstances the Owner may request the Contractor to use one or
more Subcontractors of the Owner's choice. However, in
recognition of the special relationship that must exist between
the Contractor and its Subcontractors, the Owner agrees that when
the Owner requests the use of any particular Subcontractor, the
Owner shall seek the advise and obtain the approval of the
Contractor. The Owner further agrees that should the Contractor
agree to use the Owner's Subcontractor, and should the price to
be charged by the Owner's Subcontractor exceed the price with the
Contractor otherwise intended to use, the difference in price
will be added to the Guaranteed
15
Maximum Cost as provided for in Article 6, and that the
Contractor's fees will be increased accordingly.
(C) Regardless of which Subcontractors may be used on the
Project, there shall be no contractual relationship between the
Owner and the Subcontractors, and the Contractor shall have full,
complete and absolute directing authority over performance of the
work by all Subcontractors.
(D) The organization of the specifications into divisions,
sections and articles, and the arrangement of drawings shall not
control the Contractor in dividing the work among Subcontractors,
or in establishing the extent of the work to be performed by any
trade.
ARTICLE 12
OWNER'S REPRESENTATIVE
During the course of construction, the Owner shall provide
an individual who will be available on a regular basis to consult
with the Contractor concerning all phases of the Project. This
individual shall be the Owner's Representative, and shall be
solely responsible for bringing any problems to the attention of
the Contractor, and for approving any matters for which the
Owner's approval is required or sought. This individual shall
have total familiarity with all aspects of the building process,
and will have authority to represent and bind the Owner in any
and all matters affecting the Owner's rights and responsibilities
under this Contract. For the purposes of this Project, the
Owner's Representative shall be Xx. Xxxx Xxxx. If for any reason
or at any time, this individual will not be available to the
Contractor, then the Owner shall immediately designate another
individual to take his place and shall notify the Contractor of
such writing.
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ARTICLE 13
TITLE OF THE WORK
The title to all work completed and in the course of
construction, and of all materials supplied, for which payment
has been made in full by Owner, shall be in the Owner.
ARTICLE 14
ACCOUNTING-INSPECTION AUDIT
The Contractor shall keep full and detailed accounts and
records of all costs. The Owner shall be afforded reasonable
access to the accounts and records of Contractor as reasonable
times for the purpose of inspecting, and where reasonably
requested by Owner, auditing the same.
However, neither the request for nor the conduct of any
audit shall be cause for failure of Owner to make timely payments
as provided herein. In any and all events, the Owner shall
request, conduct and close any monthly progress payment
accounting review within thirty (30) days after receipt of the
progress payment request. Any FINAL payment request audit shall
be conducted and closed within twenty-five (25) days after
receipt of the request for final payment so as not to delay final
payment including retention which shall be paid Contractor within
thirty (30) days after substantial completion of the Project, and
in no event, later than thirty-nine (39) days after the filing of
the Notice of Completion for the Project.
ARTICLE 15
APPLICATION FOR PAYMENT
(A) The Contractor shall deliver to the Owner, on or about
the first day of each month, a request for payment on a form
substantially similar to that attached hereto as Exhibit C. The
Contractor shall include with this form an appropriate lien
release covering the work and materials enumerated in the payment
request. The Owner shall promptly approve the payment request so
that there will be no delay in processing of payment and shall,
save and except where a legitimate objection is
17
raised as to a particular item as provided in Paragraph (B)
below, make payment in full to the Contractor on or before the
tenth (10th) day of each month. Payments not made to the
Contractor on or before the tenth (10th) of the month shall bear
interest at the then current prime rate of interest plus 2% as
that rate is established by First Interstate Bank of Nevada. The
inclusion of this interest shall be in addition to any and all
other rights and remedies which the Contractor may have in the
event of delinquent payments.
(B) The Owner shall determine the amount owning to the
Contractor based on observations at the site and on evaluation of
the Contractor's request for payment. Should the Owner
disapprove an item in any payment request, payment for that
specific item may be withheld for a period not to exceed thirty
(30) days within which time it shall be adjudicated. However,
the balance requested in that payment request must be paid by the
Owner to the Contractor on or before the tenth (10th) day of the
month.
(C) The Contractor specifically reserves the right to
cease work should requested payments be unreasonably withheld or
delayed.
(D) Payments will be made by the Owner for materials or
equipment whether the same have been incorporated into the
Project or suitable stored on or off the site. Payments for said
materials and equipment will be conditioned only upon inspection
of the materials and equipment by the Contractor, and the
Contractor's verification that suitable insurance has been
secured.
(E) If, after substantial completion of the work, final
completion thereof is materially delayed through no fault of the
Contractor or by issuance of change orders affecting final
completion, the Owner shall, upon application by the Contractor,
and without terminating the Contract, make payment of the balance
due for that portion of the work which has been fully completed.
(F) In the event of a lien or liens for material or labor
is filed against the property, the Owner may withhold from final
payment to Contractor an amount equal to the amount of the lien
plus a reasonable amount to meet the cost of
18
possible litigation. This amount shall be promptly released to
the Contractor upon its furnishing a bond in favor of the Owner
and the lien claimant in the amount of the lien and probable
litigation costs, or upon the Contractor furnishing the Owner a
release of lien from the claimant.
(G) Final payment shall be paid to the Contractor within
thirty (30) days after substantial completion, as defined in
Article 16, Paragraph (B) and in no event later than thirty-nine
(39) days after, the filing of the Notice of Completion for the
Project.
(H) The making of final payment shall constitute a waiver
of all claims by the Owner except those arising from (1)
unsettled liens, or (2) faulty or defective work appearing after
substantial completion and within the term of the warranty given
by the Contractor, under the terms of Article 19.
(I) A ten percent (10%) retention shall be withheld from
each application for payment for work performed until the work is
fifty percent (50%) complete. Thereafter no retention shall be
withheld. Retention shall be released upon Final Payment.
ARTICLE 16
NOTICE OF COMPLETION
(A) The Owner shall promptly record a Notice of Completion
when the Project has been substantially completed. Substantial
completion is defined below in Paragraph (B). Final payment
shall be paid to the Contractor within thirty (30) days after
substantial completion, and in no event later than thirty-nine
(39) days after, the filing of Notice of Completion for the
Project.
(B) The date of substantial completion of the work, or any
designated portion thereof, is the date certified by the
Contractor when construction is sufficiently complete, in
accordance with the Contract, so the Owner can occupy or utilize
the Project or designated portion thereof for the use for which
it is intended.
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ARTICLE 17
BOND
The Contractor shall endeavor to furnish a Contract
Performance Bond in an amount and form satisfactory to the Owner
at the Owner's expense should the Owner specifically request such
a bond. Should the Owner desire, the Contractor may pay for the
bond; however, in this event, the premium shall become a job cost
under the provision of Article 7, Item V, and the Guaranteed
Maximum Cost as set forth in Article 6, shall be increased
accordingly, treating this as a change subject to the provisions
of Article 2.
ARTICLE 18
PERIOD OF CONSTRUCTION
(A) The Contractor agrees to commence work hereunder
within five (5) work days after receipt of written notice from
the Owner to do so, to prosecute said work thereafter diligently
and continuously to completion and in any and all events to
substantially complete the Project in accordance with the
requirements of the Owner.
(B) The Owner and Contractor specifically acknowledge,
however, that there are circumstances beyond the reasonable
control of Contractor which may result in a delay of the Project.
Consequently, Owner and Contractor agree that if the Contractor
is delayed or impeded by any acts of the Owner or its agents or
those claiming under agreement from the Owner, or by acts of God
which Contractor could not have reasonably foreseen and provided
against, or by stormy, inclement, or severely cold weather, or by
strike, boycott, or like obstructive actions of employees, third
persons or labor organizations, or for any other cause beyond the
reasonable control of Contractor, the time within which the
Contractor has to complete the Project shall be appropriately
extended.
(C) Should concealed conditions encountered in the
performance of the work below the surface of the ground, or
should concealed or unknown conditions
20
in an existing structure be at variance with the conditions
indicated by the Contract, or should unknown physical conditions
below the surface of the ground or should concealed or unknown
conditions in an existing structure of an unusual nature,
differing materially from those ordinarily encountered and
generally recognized as inherent in work of the character
provided for in this Contract be encountered, the Contract Sum
shall be equitably adjusted under Article 2, upon claim made
within a reasonable time after the first observance of the
condition.
(D) The period of time set forth in Paragraph (A) above
may be necessarily or appropriately extended by any change orders
effected pursuant to Article 2.
(E) The term "day" as used throughout this Contract shall
mean calendar day unless otherwise specifically designated.
ARTICLE 19
WARRANTIES
(A) The entire work is hereby warranted against defects in
materials and workmanship for a period of one (1) year from the
date of substantial completion of the Project or substantial
completion of any designated portion thereof. If, within this
one (1) year period, any of the work or materials or equipment
(for which approval has not been previously given in writing by
Owner) is proven to be defective and not in accordance with the
Contract, the Contractor shall, at its expense, correct said
defect promptly after receipt of a written notice from the Owner
to do so. The Owner shall give notice promptly after discovery
of any defective condition.
(B) The Contractor warrants to the Owner that all
equipment and materials furnished under this Contract will be new
unless otherwise specified or approved by the Owner.
(C) Articles, materials or methods specified by
proprietary name or by name of vendor or manufacturer will be
furnished or applied by Contractor, except only where equal
substitutions for articles, materials or methods are approved by
21
the Contractor for use in lieu thereof. In determining the
quality of substitute parts, materials or methods, availability
or procurement shall be a determining factor.
(D) The Contractor shall secure and furnish to the Owner
through the Architect, all applicable written guarantees and
warranties as may be called for by this Contract.
ARTICLE 20
ARBITRATION
(A) All disputes, claims or questions not resolved
informally by Owner and Contractor may be subject to arbitration.
If both Owner and Contractor agree that a particular dispute,
claim or question should be arbitrated, then arbitration shall be
effected as provided in Paragraph (B) below, and the decision
therefrom shall be binding on both parties. If, however, either
the Contractor and/or the Owner elect not to proceed by way of
arbitration, then either or both parties may resort to
appropriate Court action, with the prevailing party being
entitled to receive all reasonable attorneys' fees, Court costs,
and any and all other fees, expenses, and costs arising out of or
in any way incurred in the institution or defense of that action.
(B) Should both the Owner and Contractor agree to
arbitration, the following procedures shall be employed:
(1) Notice of the demand for arbitration shall be
filed in writing with the other party to this Contract. This
demand shall be made within a reasonable time after the dispute
has risen, but in no case shall the demand be made later than the
time set in this Contract for final payment. Any demand received
after that time shall not be allowed.
(2) Owner and Contractor shall, within ten (10) days
of the written demand for arbitration, agree upon an arbitrator.
If within this said ten (10) day period the Owner and Contractor
are unable to agree upon a single arbitrator, then
22
the Owner and Contractor will, within three (3) additional days,
each select an arbitrator, and those two arbitrators will then
select a third.
(3) At such time as the arbitrator (or all three
arbitrators) has been selected as provided in Paragraph (2)
above, the election to arbitrate shall become final and
irrevocable.
(4) Unless both Owner and Contractor specifically
agree in writing to the contrary, the arbitration hearing shall
be conducted and the decision rendered therefrom no more than
forty-five (45) days after the written demand for arbitration.
(5) The arbitrator, if he deems that the case
requires it, is authorized to award to the party whose contention
is sustained, such sums as he (or a majority of them) shall deem
proper to compensate the prevailing party for the time and
expense incident to the proceedings, including any and all
reasonable attorneys' fees expended, and, if the arbitration was
demanded without reasonable cause, he may also award damages for
delay. Unless Owner and Contractor specifically agree in writing
to the contrary, the arbitrator shall fix his own compensation
and shall assess costs and charges of the proceeding upon either
or both parties.
(6) The decision of the arbitrator shall be final,
save and except for the limited right of appeal as provided for
in the Nevada Revised Statutes. In the event the decision of the
arbitrator is appealed, reasonable attorneys' fees and Court
costs, as determined by a Court of competent jurisdiction, shall
be paid to the prevailing party.
(7) Unless Owner and Contractor otherwise agree in
writing to the contrary, the Contractor shall carry on the work
during any arbitration proceedings, and the Owner shall continue
to make timely payments to the Contractor in accordance with the
Contract.
23
ARTICLE 21
TERMINATION OF THE CONTRACT
(A) Termination by the Contractor.
(1) If the work is stopped for a period of thirty (30)
days under an order of any Court or other public authority having
jurisdiction, or as the result of an act of government, such as
declaration of a national emergency making materials unavailable
through no act or fault of the Contractor or a Subcontractor or
their agents or employees, or any other person performing any of
the work under a contract with the Contractor, or if the work
should be stopped for a period of thirty (30) days by the
Contractor because the Owner has not made payment as provided
herein, then the Contractor may, upon three (3) additional days'
written notice to the Owner, terminate this Contract and recover
from the Owner payment for all work executed, and for any proven
loss sustained upon any materials, equipment, tools, construction
equipment and machinery, including reasonable profit and damages
thereon.
(B) Termination by the Owner.
(1) If the Contractor is adjudged a bankrupt or makes
a general assignment for the benefit of creditors, or if a
receiver is appointed on account of the Contractor's insolvency,
or if the Contractor persistently and repeatedly refuses or
fails, except in cases for which an extension of time is provided
for in Article 18, to supply enough workmen or materials, or if
the Contractor persistently and repeatedly fails to make payment
to Subcontractors or for materials or labor, or persistently
disregards laws, ordinances, rules, regulations or orders of any
public authority having jurisdiction, or otherwise is guilty of a
substantial violation of the provisions of this Contract, then
the Owner may, without prejudice to any other rights or remedies
he may have, and after giving the Contractor and his surety, if
any, three (3) days' written notice, terminate the employment of
the Contractor and take possession of the site and all materials
for which the Owner has made payment in full.
24
(C) Any termination of this Contract, whether by Contractor
or Owner, shall be subject to the rights and remedies available
in Article 20.
ARTICLE 22
MISCELLANEOUS PROVISIONS
(None)
ARTICLE 23
NOTICES
Any and all notices, demands or requests required or
appropriate under this Contract shall be given in writing either
by personal delivery or by registered or certified mail, return
receipt requested, addressed to the following addresses:
To Contractor: XXXXXXX XXXXXX ASSOCIATES, INC.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
To Owner: RIO PROPERTIES, INC. d/b/a
RIO SUITE HOTEL & CASINO
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
When notice has been given by mail, it shall be deemed served the
date following deposit, postage prepaid in the United States
mail. The parties may change the place of notice by notifying
the other party as set forth herein.
ARTICLE 24
PARTIAL INVALIDITY
Should any term, condition, covenant or provision of this Contra
ct, or any application thereof, be held by a Court of competent
jurisdiction to be invalid, void or unenforceable, all
provisions, covenants or conditions of this Contract, and all
applications thereof, not held invalid, void or unenforceable,
shall continue in full force and effect and shall in no way be
effected, impaired or invalidated thereby.
25
ARTICLE 25
SUCCESSORS IN INTEREST
Neither Owner nor Contractor may transfer or assign this
Contract, or any interest therein, without the prior written
permission of the other. However, this Contract shall insure to
be benefit of, and be binding upon, the successors, assigns
(where permitted) and representatives of both the Owner and
Contractor, and the Owner and Contractor covenant for themselves
and for their successors, assigns and representatives, that they
will fully perform on the terms and conditions of this Contract.
ARTICLE 26
CAPTIONS AND PRONOUNS
The captions appearing at the commencement of the Articles hereof
are descriptive only and for convenience in reference to this
Contract, and in no way whatsoever define, limit or describe the
scope or intent of this Contract, or in any way affect this
Contract.
ARTICLE 27
CORPORATE AUTHORIZATION
The parties executing this Contract acknowledge and
represent that all corporate authorization has been obtained for
the execution of this Contract and for the compliance with each
and every term hereof.
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ARTICLE 28
LEGAL SITUS
The terms and conditions of this Contract shall be
construed in accordance with and governed by the laws of the
State of Nevada, and the parties hereto acknowledge that the
Courts of this State shall have exclusive jurisdiction over any
action or proceeding brought under or by reason of this Contract.
IN WITNESS WHEREOF, the Contractor and Owner have executed
this contract as of the day and year first above written.
RIO PROPERTIES, INC. d/b/a XXXXXXX XXXXXX ASSOCIATES,
RIO SUITE HOTEL & CASINO INC.
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxx X. Xxxxx
Its Exec VP Its Vice President of
Operations
Nevada State Contractor's
License No. 39178
Attachments: Exhibit 'A' Legal Description
Exhibit 'B' Preliminary Magnitude Budget
Estimates dated 10/15/97
Exhibit 'C' Billing Format
Exhibit 'D' Exclusion List
27
EXHIBIT 'A'
(Legal Description)
[NOT INCLUDED]
28
EXHIBIT 'B'
(Preliminary Magnitude Budget Estimates dated 10/15/97)
[NOT INCLUDED]
EXHIBIT 'C'
(Billing Format)
[NOT INCLUDED]
EXHIBIT 'D'
(Exclusion List)
[NOT INCLUDED]
