Standard Form of Agreement Between Owner And Architect

Exhibit 10.2


1997 Edition- Electronic Format


AIA Document A111-1997


Standard Form of Agreement Between Owner and Contractor

where the basis for payment is the COST OF THE WORK PLUS A FEE with a negotiated Guaranteed Maximum Price

AGREEMENT made as of the Twenty-fifth day of February in the year Two Thousand three (In words, indicate day, month and year)

BETWEEN the Owner: (Name, address and other information)

The Old Evangeline Downs, LLC

7620 N.W. Evangeline Thruway

Carencro, Louisiana 70520

and the Contractor:

(Name, address and other information)


W.G. Yates & Sons Construction Company

200-A Lameuse Street

Biloxi, Mississippi 39530


The Project is: (Name and location)

Evangeline Downs

P.O. Box 90270 Lafayette, Louisiana 70509-0270

The Architect is:

(Name, address and other information)


KGA Architecture 4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103


The Owner' s Construction Manager:

KGA Architecture

4170 South Decatur Boulevard, Suite B-5

Las Vegas, Nevada 89103


The Noteholders' Consultant is:


ABACUS Project Management, Inc.

303 North Central Avenue, Suite 1207

Phoenix, Arizona 85012


The Owner and Contractor agree as follows.


ARTICLE 1 THE CONTRACT DOCUMENTS


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 15. If anything in the other Contract Document is inconsistent with this Agreement, this Agreement shall govern.


ARTICLE 2 THE WORK OF THIS CONTRACT


The Contractor shall fully execute the Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others.

ARTICLE 3 RELATIONSHIP OF THE PARTIES


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


ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION


4.1 The Contractor and the Owner acknowledge that the Work is to be performed in two phases as set forth in the Schedule of Values as Phase I and Phase II. The date of commencement of Phase I shall be the date fixed in a notice to proceed issued by the Owner. The date of commencement of Phase II shall be on December 1, 2003 unless an earlier notice to proceed has been issued by the Owner.

4.2 The Contract Time for Phase I shall be measured from the date of the Notice to Proceed. The Contract Time for Phase II shall be measured from December 1, 2003 unless an earlier notice to proceed is given by the Owner for Phase II with adequate notice to Contractor in which case the Contract Time for Phase II shall be measured from the date of such notice to proceed.


4.3


4.3.1 The Contractor shall achieve Substantial Completion of the portion of the Work performed as Phase I on or before the date which is twelve (12) months from the date fixed in the notice to proceed which has been issued by the Owner pursuant to Paragraph 4.1. The Contractor acknowledges and agrees that time is of the essence as to such date of Substantial Completion and the Contract and the Owner each agree that the damages to be suffered by the Owner for the Contractor' s failure to complete Phase I by said date is not susceptible to calculation. Accordingly, the Contractor and the Owner agree that the Contract Sum shall be reduced by an amount equal to $33,333 for each day that Substantial Completion of Phase I extends beyond the date which is twelve (12) months from the date fixed in such notice to proceed subject to adjustments of this Contract Time as provided in the Contract Documents and the Owner acknowledges that such liquidated damages shall be the only damages to be recovered by the Owner with respect to failure to achieve Substantial Completion by such date. In the event that Substantial Completion of Phase I occurs prior to the date which is twelve (12) months from the date fixed in such notice to proceed subject to adjustments of this Contract Time as provided in the Contract


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Documents, the Owner shall increase the Contract Sum by an amount equal to $33,333 for each day that Substantial Completion has been achieved prior to the date which is twelve (12) months from the date fixed in such notice to proceed and Owner shall pay Contractor such amount that contract is increased as a bonus; provided, however, if the Contractor does not achieve Substantial Completion for the portion of the Work performed as Phase II on or before November 15, 2003, the bonus may be forfeited. Any such bonus amount otherwise payable to the Contractor pursuant to the preceding sentence shall be forfeited if Owner does not fulfill its completion obligation to the Louisiana Gaming Control Board and the Louisiana State Racing Commission due to Contractor not performing its work in accordance with the following paragraph. In the event of such forfeiture, Owner shall have no obligation whatsoever to increase the Contract Sum as provided herein. Adjustments to Contract Sum as set forth in this Paragraph shall be by Change Order which shall be prepared by the Architect for signature by the Owner, the Contractor and the Architect within ten (10) days after Substantial Completion of the portion of the Work to be performed as Phase II. Contractor acknowledges that any such forfeiture shall not affect its obligations to pay the amounts set forth in 4.3.2.


4.3.2 The Contractor shall achieve Substantial Completion of the portion of the Work performed as Phase II on or before November 15, 2004. The Contractor acknowledges and agrees that time is of the essence as to such date of Substantial Completion and the Contractor and the Owner each agree that the damages to be suffered by the Owner for the Contractor' s failure to complete Phase II by said date is not susceptible to calculation. Accordingly, the Contractor and the Owner agree that the Contract Sum shall be reduced by an amount equal to $20,000 for each day that Substantial Completion of Phase II extends beyond November 15, 2004 subject to adjustments of this Contract Time as provided in the Contract Documents and the Owner acknowledges that such liquidated damages shall be the only damages to be recovered by the Owner with respect to failure to achieve Substantial Completion by such date. In the event that Substantial Completion of Phase II occurs prior to the November 15, 2004 subject to adjustments of this Contract Time as provided in the Contract Documents, the Owner shall increase the Contract Sum by an amount equal to $20,000 for each day that Substantial Completion has been achieved prior to November 15, 2004 and Owner shall pay Contractor such amount that contract is increased as a bonus. Adjustments to Contract Sum as set forth in this paragraph shall be by Change Order which shall be prepared by the Architect for signature by the Owner, the Contractor and the Architect within ten (10) days after Substantial Completion of the portion of the Work to be performed as Phase II.


4.3.3 Notwithstanding anything to the contrary contained in Paragraphs 4.3.1 and 4.3.2 hereof, in addition to the liquidated damages remedy specified above, if any, Owner shall also have the right to terminate this Agreement for Contractor' s default (beyond the expiration of applicable grace, notice and 7 day or appropriate cure periods) in failing to Substantially Complete the Work on the date which is twelve (12) months from the date fixed in the notice to proceed as to Phase I and November 15, 2004 as to Phase II as both dates are subject to adjustments of this Contract Time as provided in the Contract Documents and shall maintain all other remedies provided for such termination in section 14.2 of the General Conditions.


ARTICLE 5 BASIS FOR PAYMENT


5.1 CONTRACT SUM


5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor' s performance of the Contract. The Contract Sum is the Cost of the Work as defined in Article 7 plus the Contractor' s Fee.


5.1.2 The Contractor' s Fee is:

(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor' s Fee, and describe the method of adjustment of the Contractor' s Fee for changes in the Work.)


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4 bd% of the Cost of the Work.


5.2 GUARANTEED MAXIMUM PRICE


5.2.1 The sum of the Cost of the Work and the Contractor' s Fee is guaranteed by the Contractor not to exceed Fifty-Two Million Dollars ($52,000,000.00), 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. The GMP does not include the " Contract Reserve Amount" of $2,739,000 which includes an allocation of $910,000 (the " Contractor' s Allocation" ). The Contractor' s Allocation will be available to fund increases to the GMP in the amounts set forth in one or more Change Orders delivered by the Contractor, the Owner and the Architect in accordance with the Contract Documents. The Contract Reserve Amount has been funded by the Owner as of the date of this Agreement. The Owner agrees that upon delivery of a Change Order signed by the Contractor, the Change Owner will be signed by the Owner and Architect and delivered to the Disbursement Agent along with all certificates required under the Cash Collateral and Disbursement Agreement (defined in paragraph 13.2.2 of the General Conditions) such that the portion of the Contractor' s Allocation set forth in such Change Order will be withdrawn from the Completion Reserve Account (as defined in the Cash Collateral and Disbursement Agreement), and deposited into the Construction Disbursement Account (as defined in the Cash Collateral and Disbursement Agreement) for further disbursement in accordance with the Cash Collateral and Disbursement Agreement.


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


5.2.1.1 Anything herein to the contrary notwithstanding, in the event that the sum of the Cost of the Work and the Contractor' s Fee is less than the GMP (bonus payments contemplated by Paragraph 4.3 as and to the extent payable pursuant thereto, shall increase both GMP and Cost of the Work), 50% of all such savings shall be retained by the Owner, with the remainder payable to Contractor in accordance with Paragraph 12.2 hereof; provided, that Contractor shall not be entitled to any savings with respect to the Contract Reserve Amount.


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

(State the numbers or other identification of accepted alternates. If decisions on other alternatives are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date when the amount expires.

5.2.3 Unit prices, if any, are as follows:


5.2.4 Allowances, if any, are as follows:

(Identify and state the amounts of any allowances, and state whether they include labor, materials, or both.)


Refer to Exhibit B.


5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based are as follows:


Refer to Exhibit C.


5.2.6 As the Drawings and Specifications are not finished at the time the GMP had been agreed upon hereunder, the Contractor has provided in the GMP for further development of the Drawings and


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Specifications by the Architect that is consistent with the Contract Documents and reasonably inferable therefrom. Contractor acknowledges that in accordance with its review of the Drawings and Specifications and the budget for the Project, Contractor represents that the Work can be completed pursuant to the Drawings and Specifications completed as of the date hereof in accordance with the budget for an amount less than or equal to the GMP. The allowances set forth on Exhibit B have been agreed to by Owner and Contractor and the Owner and the Contractor believe that such allowances are reasonable.

ARTICLE 6 CHANGES IN THE WORK

6.1 Adjustments 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 AIA Document A201-1997.


6.2 In calculating adjustments to subcontract (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 AIA Document A201-1997 and the terms " costs" and " a reasonable allowance for overhead and profit" as used in Subparagraph 7.3.6 of AIA Document A201-1997 shall have the meanings assigned to them in AIA Document A201-1997 and shall not be modified by Articles 5, 7 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.


6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms " cost" and " costs" as used in the above-referenced provisions of AIA Document A201-1997 shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms " fee" and " a reasonable allowance for overhead and profit" shall mean the Contractor' s Fee as defined as Subparagraph 5.1.2 of this Agreement.

ARTICLE 7 COSTS TO BE REIMBURSED AND INCLUDED IN GMP


7.1 COST OF THE WORK


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.

7.2 LABOR COSTS

7.2.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner' s approval, at off-site workshops.


7.2.2 Wages or salaries of the Contractor' s supervisory and administrative personnel when at the site or engaged in the performance of Contractor' s services for this Project.

(If it is intended that the wages or salaries of certain personnel stationed at 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, and the rates at which their time will be charged to the Work.)


7.2.3 Wages and salaries of the Contractor' s supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work.


7.2.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under


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Subparagraphs 7.2.1 through 7.2.3. Worker' s compensation rates shall be at manual Worker' s Compensation rates furnished by Zurich for the State of Louisiana which are applicable to the Contractor.


7.3 SUBCONTRACT COSTS


7.3.1 Amounts properly billed by Subcontractors for work which has been approved by the Contractor in accordance with the Subcontract.

7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION

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


7.4.2 Costs of materials described in the preceding Subparagraph 7.4.1 in excess of those actually installed to allow for reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner' s property at the completion of the Work or, at the Owner' s option, shall be sold by the Contractor. Any amounts realized from such sales shall be credited to the Owner as a deduction from the Cost of the Work.

7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS


7.5.1 Costs, including transportation and storage, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by construction workers, that are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost (less salvage value) of 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.


7.5.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by construction workers that are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, fuel, oil, grease, installation, minor ...