Construction Contract

AIA Document A III


Standard Form of Agreement
Between Owner and Contractor


where the basis of payment is the
COST OF THE WORK PLUS A FEE
with or without a Guaranteed Maximum Price


1987 EDITION


THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN
ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.


The 1987 Edition of AJA Document A201, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless This document is modified. This document has been approved and endorsed by The Associated General Contractors of America. - --------------------------------------------------------------------------------


AGREEMENT


made as of the twenty-ninth (29th) day of December in the year of Nineteen Hundred and Ninety-Seven (1997).


BETWEEN the Owner: Riviera Black Hawk, Inc. (Name and address) 2901 Las Vegas Boulevard South
Las Vegas, NV 89109


and the Contractor: Weitz-Cohen Construction Co. (Name and address) 899 Logan Street, Suite 600
Denver, CO 80203


the Project is: Riviera Black Hawk Casino (Name and address) 444 Main Street
Black Hawk, CO 80422


the Architect is: Melick Associates, Inc. (Name and address) Suite Four West
1620 Market Street
Denver, CO 80202


The Owner and Contractor agree as set forth below.


- -------------------------------------------------------------------------------- Copyright 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978. (C) 1987 by The American Institute of Architects, 1735 New York Avenue, N.W., Washington, D.C. 20006. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will be subject to legal prosecution. - --------------------------------------------------------------------------------


ARTICLE 1
THE CONTRACT DOCUMENTS


1.1. The Contract Documents consist of this Agreement, Conditions of the Contract (General. Supplementary and other Conditions), Drawings, Specifications, addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement; these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents. other than Modifications. appears in Article 16. If anything in the other Contract Documents is inconsistent with this Agreement, this Agreement shall govern.


ARTICLE 2
THE WORK OF THIS CONTRACT


2.1. The Contractor shall execute the entire Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others. or as follows:


The Contractor will perform all services for site development, parking garage, casino, and associated areas, as further defined by the Plans and Specifications.


See Exhibit B, Add Paragraph 2.2 and 2.3.


ARTICLE 3
RELATIONSHIP OF THE PARTIES


3.1. The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and utilize the Contractor's best skill, efforts and judgment in furthering the interests of the Owner. to furnish efficient business administration and supervision; and supervision to make best efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in the best way and most expeditious and economical manner consistent with the interests of the Owner. The Owner agrees to exercise best efforts to enable the Contractor to perform the Work in the best way and most expeditious manner by furnishing and approving in a timely way information required by the Contractor and making payments to the Contractor in accordance with requirements of the Contract Documents.


ARTICLE 4
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION


4.1. The date of commencement is the date from which the Contract Time of Subparagraph 4.2 is measured: it shall be the date of this Agreement, as first written above, unless a different date is stated below or provision is made for the date to be fixed in a notice to proceed issued by the Owner.


(Insert the date of commencement if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice for proceed)


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Unless the date of commencement is established by a notice to proceed issued by the Owner, the contractor shall notify the Owner in writing not less than five days before commencing the Work to permit the timely filing of mortgages, mechanic's liens and other security interests.


4.2. The Contractor shall 2chieve Substantial Completion of the entire Work not later than


(Insert the calendar date or number of calendar days after the date of commencement. Also insert any requirements for earlier Substantial Completion of certain portions of the Work, if not stated elsewhere in the Contract Documents.)


See Exhibit B, Paragraph 4.2.


,subject to adjustments of this Contract Time as provided in the Contract Documents.


(Insert provisions, if any, for liquidated damages relating to failure to complete on time.)


ARTICLE 5
CONTRACT SUM


5.1. The Owner shall Pay the Contractor in current funds for the Contractor's performance of the Contract the Contract Sum consisting of the Cost of the Work as defined in Article 7 and the Contractor's Fee determined as follows:


(State a lump sum percentage of Cost of the Work or other provision for determining the Contractor's Fee, and explain how the Contractor's Fee is to be adjusted for changes in the Work.)


See Exhibit B, Subparagraph 5.1.


5.2. GUARANTEED MAXIMUM PRICE (IF APPLICABLE)


5.2.1. The sum of the Cost of the Work and the Contractor's Fee is guaranteed by the Contractor not to exceed Twenty-four Million Five Hundred Thousand and 00/000 ________ Dollars ($24,500,000.00 ), subject to additions and deductions by Change Order as provided in the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the Owner.


(Insert specific provisions if the Contractor is to participate in any savings.)


All savings on the project will be returned to the Owner.


5.2.2. The Guaranteed Maximum Price is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner:


Exhibit F, Paragraph #1, is the basis for the guaranteed maximum price.


5.2.3. The amounts agreed to for unit prices, if any, are as follows:


(State unit prices only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1.)


Does Not Apply.


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ARTICLE 6
CHANGES IN THE WORK


6.1. CONTRACTS WITH A GUARANTEED MAXIMUM PRICE


6.1.1. Adjustment to the Guaranteed Maximum Price on account of changes in the Work may be determined by any of the methods listed in Subparagraph 7.3.3. of the General Condition.


6.1.2. In calculating adjustments to subcontracts (except those awarded with the Owner's prior consent on the basis of cost plus a fee) the terms "cost" and "fee" as used in Clause 7.3.3.3. of the General Conditions and the terms "costs" and "a reasonable allowance for overhead and profit" as used in Subparagraph 7.3.6 of the General Conditions, shall have the meanings assigned to them in the General Conditions and shall not be modified by Articles 5 and 8 of this Agreement. Adjustments to subcontracts awarded with the Owner's prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts


6.1.3. In calculating adjustments to this Contract, the terms "cost" and "costs" as used in the above-referenced provisions of the General Conditions shall mean the Cost of the Work as defined in Article ___ of this Agreement and the terms "fee" and "a reasonable allowance for overhead and profit" shall mean the Contractor's Fee a, defined in Paragraph 5.1 of this Agreement.


ARTICLE 7
COSTS TO BE REIMBURSED


7.1. The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in this Article 7.


7.1.1. LABOR COSTS


See Exhibit B , Paragraph 7.1.1.1.


See Exhibit B, Paragraph 7.1.1.2.


(If it is intended that the wages or salaries of certain personnel stationed at the Contractor's principal or other offices shall be included in the Cost of the Work, identify in Article 14 the personnel to be included and whether for all or only part of their time.)


See Exhibit B, paragraph 7.1.1.3.


7.1.2. SUBCONTRACT COSTS


See Exhibit B. Paragraph 7.1.2.


7.1.3. COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION


7.1.3.1. Costs, including transportation, of materials and equipment incorporated or to be incorporated in the completed construction.


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7.1.3.2. Costs of materials described in the preceding Clause 7.1.3.1 in excess of those actually installed but required to provide reasonable allowance for waste and for spoilage. Unused excess materials. if any, shall be handed over to the Owner at the completion of the Work or, at the owner's option, shall be sold by the Contractor; amounts realized, if any, from such sales shall be credited to the Owner as a deduction from the Cost of the Work.


7.1.4. COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS


7.1.4.1. Costs. including transportation, installation. maintenance. dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost less salvage value on such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value.


7.1.4.2. Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers. which are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, installation, minor repairs and replacements, dismantling and removal thereof.


See Exhibit B, Paragraph 7.1.4.2.


7.1.4.3. Costs of removal of debris from the site.


See Exhibit B, Paragraph 7.1.4.4.


7.1.4.4. That portion of the reasonable travel and subsistence expenses of the Contractor's personnel incurred while traveling in discharge of duties connected with the Work.


7.1.5. MISCELLANEOUS COSTS


7.1.5.1. That portion directly attributable to this Contract of premiums for insurance and bonds.


See Exhibit B, Paragraph


7.1.5.2. Sales, use or similar taxes imposed by a governmental authority which are related to the Work and for which the Contractor is liable.


7.1.5.3. Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay.


7.1.5.4. Fees of testing laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Subparagraph 13.5.3 of the General Conditions or other provisions of the Contract Documents and which do not fall within the scope of Subparagraphs 7.2.2 through 7.2.4 below.


7.1.5.5. Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement by the Contract Documents; payments made in accordance with legal judgments against the Contractor resulting from such suits or claims and payments of settlement made with the


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Owner's consent; provided, however, that such costs of legal defenses, judgment and settlements shall not be included in the calculation of the Contractor's Fee or of a Guaranteed Maximum Price, if any, and provided that such royalties, fees and costs are not excluded by the last sentence of Subparagraph 3.17.1 of the General Conditions or other provisions of the Contract Documents.


7.1.5.6. Deposits lost for causes other than the Contractor's fault or negligence.


7.1.6. OTHER COSTS


7.1.6.1. Other costs incurred in the performance of the Work if and to the went approved in advance in writing by the Owner.


See Exhibit B, Add Paragraphs 7.1.6.2 and 7.1.6.3.


7.2. EMERGENCIES: REPAIRS TO DAMAGED, DEFECTIVE OR NONCONFORMING WORK


The Cost of the Work shall also include costs described in Paragraph 7.1 which are incurred by the Contractor:


7.2.1. In taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Paragraph 10.3 of the General Conditions.


7.2.2. In repairing or correcting Work damaged or improperly executed by construction workers in the employ of the Contractor, provided such damage or improper execution did not result from the fault or negligence of the Contractor or the Contractor's foremen, engineers or superintendents, or other supervisory, administrative or managerial personnel of the Contractor.


Exhibit B, Paraqraph.7.2.2.


7.2.3. In repairing damaged Work other man that described in Subparagraph 7.2.2. provided such damage did not result from the fault or negligence of the Contractor or the Contractor's personnel, and only to the extent that the cost of such repairs is not recoverable by the Contractor from others and the Contractor is not compensated therefor by insurance or otherwise.


7.2.4. In correcting defective or nonconforming Work performed or supplied by a Subcontractor or Material supplier and not corrected by them. provided such defective or nonconforming Work did not result from the fault or neglect of the Contractor or the Contractor's personnel adequately to supervise and direct the Work of the Subcontractor or material supplier, and only to the extent that the cost of correcting the defective or nonconforming Work is not recoverable by the Contractor from the Subcontractor or Material supplier.


ARTICLE 8
COSTS NOT TO BE REIMBURSED


8.1. The Cost of the Work shall not include:


8.1.1. Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal office or offices other than the site office, except as specifically provided in Clauses 7.1.1.2 and 7.1.1.3 or as may be provided in Article 14 .


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8.1.2. Expenses of the Contractor's principal office and offices other than the site office.


8.1.3. Overhead and general expenses, except as may be expressly included in Article 7.


8.1.4. The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work.


8.1.5. Rental costs of machinery and equipment, except as specifically provided in Clause 7.1.4.2.


8.1.6. Except as provided in Subparagraphs 7.2.2 through 7.2.4 and Paragraph 13.5 of this Agreement, costs due to the fault or negligence of the Contractor. Subcontractors, anyone directly or indirectly employed by any of them, or for whose acts any of them may be liable, including but not limited to costs for the correction of damaged, defective or nonconforming Work, disposal and replacement of materials and equipment incorrectly ordered or supplied, and making good damage to property not forming part of the Work.


8.1.7. Any cost not specifically and expressly described in Article 7.


8.1.8. Costs which would cause the Guaranteed maximum Price, if any, to be exceeded.


ARTICLE 9
DISCOUNTS, REBATES AND REFUNDS


9.1. Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.


9.2. Amounts which accrue to the Owner in accordance with the provisions of Paragraph 9.1 shall be credited to the Owner as deduction from the Cost of the Work.


ARTICLE 10
SUBCONTRACTS AND OTHER AGREEMENTS


10.1. Those portions of the Work that the Contractor does riot customarily perform with the Contractor's own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Contractor shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work which bids will be accepted. The Owner may designate specific persons or entities from whom the Contractor shall obtain bids; however, if a Guaranteed Maximum Price has been established, the Owner may not prohibit the Contractor from obtaining bids from others. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection.


See Exhibit B, Paragraph 10.1.


10.2. If a Guaranteed Maximum Price has been established and a specific bidder among those whose bids are delivered by the Contractor to the Architect (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid which conforms to the


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requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted; then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner.


10.3. Subcontracts or other agreements shall conform to the payment provisions of Paragraphs 12.7 and 12.8. and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner.


See Exhibit B, Add Paragraph 10.4


ARTICLE 11
ACCOUNTING RECORDS


11.1. The Contractor shall keep hill and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract; the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's accountants shall be afforded 2CCCSS to the Contr2ctor's records, books. correspondence, instructions, drawings. receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three VC2rS after final p2vmcnE, or for such longer period as m2% be required b'- law.


ARTICLE 12
PROGRESS PAYMENTS


12.1. Based upon Applications for Payment submitted to the Architect by the Contractor and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents.


12.2. The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows:


12.3. Provided an Application for Payment is received by the Architect not later than the tenth (10th) day of a month, the Owner shall make payment to the Contractor not later than the thirtieth (30th) day of the same month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than twenty (20) days after the Architect receives the Application for payment.


12.4. With each Application for Payment the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor's Fee; plus (3) payrolls for the period covered by the present Application for Payment; plus (4) retainage provided in Subparagraph 12.5.4, if any, applicable to prior progress payments.


12.5. CONTRACTS WITH A GUARANTEED MAXIMUM PRICE


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12.5.1. Each Application for Payment shall be based upon the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor's Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment.


12.5.2. Applications for Payment shall show the percentage completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed or (2) the percentage obtained by dividing (a) the expense which has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.


12.5.3. Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:


12.5.3.1. Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions, even though the Guaranteed Maximum Price has not yet been adjusted by Change Order.


12.5.3.2. Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing.


12.5.3.3. Add the Contractor's Fee, less retainage of ten percent (10%). The Contractor's Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Paragraph 5.1 or, if the Contractor's Fee is stated as a fixed sum in that Paragraph, shall be an amount which bears the same ratio to that fixed-sum Fee as the Cost of the Work in the two preceding Clauses bears to a reasonable estimate of the probable Cost of the Work upon its completion.


12.5.3.4. Subtract the aggregate of previous Payments Made by the Owner.


12.5.3.5. Subtract the shortfall, if any, indicated by the Contractor in the documentation required by Paragraph 12.4 to substantiate prior Applications for Payment. or resulting from errors subsequently discovered by the Owner's accountants in such documentation.


12.5.3.6. Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Paragraph 9.5 of the General Conditions.


12.5.4. Additional retainage, if any, shall be as follows:


(If it is intended to retain additional amounts from progress payments to the Contractor beyond (1) the retainage from the Contractor's Fee provided in Clause 12.5.3.3(2) the retainage from Subcontractors provided in Paragraph 12.7 below; and (3) the retainage, if any, provided by other provisions of the Contract, insert provision for such additional retainage here. Such


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provision, if made, should also describe any arrangement for limiting or reducing the amount retained after the Work reaches a certain state of completion.).


NONE


12.5.4.1. Subtract amounts, if any, for which the Architect has withheld or withdrawn a Certificate for Payment as provided in the Contract Documents.


12.5.5. Additional retainage, if any, shall be as follows:


NONE


12.6. Except with the Owner's prior approval, payments to Subcontractors included in the Contractor's Applicatio ...