<PAGE>   1
                 [AMERICAN INSTITUTE OF ARCHITECTS LETTERHEAD]

                                                                    EXHIBIT 10.7
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                               AIA DOCUMENT A401

                           STANDARD FORM OF AGREEMENT
                      BETWEEN CONTRACTOR AND SUBCONTRACTOR

                                  1987 EDITION

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

                This document has been approved and endorsed by
                the American Subcontractors Association and the
                     Associated Specialty Contractors, Inc.
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AGREEMENT
made as of the 22 Twenty Two day of January in the year of Nineteen Hundred and
Ninety Seven

BETWEEN the Contractor:
(Name and Address)              Inland Casino Corporation
                                4225 Executive Square, Suite 1650
                                La Jolla, CA 92037
and the Subcontractor:
(Name and Address)              Powley Plumbing Inc.
                                515 Market Street
                                Klamath Falls, Oregon 97601-6250
The Contractor has made a contract for construction dated            with
The Owner:                      Klamath Confederate Tribes
(Name and Address)              PO Box 436
                                Chiloquin, Oregon 97624
For the following Project:
(Name and Location)             KLA-MO-YA Casino
                                34333 Highway 97 North
                                Chiloquin, Oregon 97624

which Contract is hereinafter referred to as the Prime Contract and which
provides for the furnishing of labor, materials, equipment and services in
connection with the construction of the Project. A copy of the Prime Contract,
consisting of the Agreement Between Owner and Contractor (from which
compensation amounts may be deleted) and the other Contract Documents
enumerated therein has been made available to the Subcontractor.

The Architect for the Project is:
(Name and Address)              Gaming Environment Design Inc.
                                1813 130th Ave NE, suite 220
                                Bellevue, WA 98005

The Contractor and the Subcontractor agree as set forth below.
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     Copyright 1915, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967, 1972, 1978,
     (C)1987 by the American Institute of Architects, 1735 New York Avenue,
     N.W., Washington, D.C. 20006. Reproduction of the material herein or
     substantial quotation of its provisions without written permission of the
     AIA violates the copyright laws of the United States and will be subject to
     legal prosecution.
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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006                                                A401-1987

  WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
                             TO LEGAL PROSECUTION.
<PAGE>   2
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                       TERMS AND CONDITIONS OF AGREEMENT
                      BETWEEN CONTRACTOR AND SUBCONTRACTOR
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                                   ARTICLE 1
                                   ---------
                           THE SUBCONTRACT DOCUMENTS

1.1     The Subcontract Documents consist of (1) this Agreement; (2) the Prime
Contract, consisting of the Agreement between the Owner and Contractor and the
other Contract Documents enumerated therein, including Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of the Agreement between the
Owner and Contractor and Modifications issued subsequent to the execution of the
Agreement between the Owner and Contractor, whether before or after the
execution of this Agreement, and other Contract Documents, if any, listed in the
Owner-Contractor Agreement; (3) other documents listed in Article 16 of this
Agreement; and (4) Modifications to this Subcontract issued after execution of
this Agreement. These form the Subcontract, and are as fully a part of the
Subcontract as if attached to this Agreement or repeated herein. The Subcontract
represents the entire and integrated agreement between the parties hereto and
supersedes prior negotiations, representations or agreements, either written or
oral. An enumeration of the Subcontract Documents, other than Modifications
issued subsequent to the execution of this Agreement, appears in Article 16.

1.2     The Subcontractor shall be furnished copies of the Subcontract
Documents upon request, but the Contractor may charge the Subcontractor for the
cost of reproduction.

                                   ARTICLE 2
                                   ---------
                       MUTUAL RIGHTS AND RESPONSIBILITIES

2.1     The Contractor and Subcontractor shall be mutually bound by the terms of
this Agreement and, to the extent that provisions of the Prime Contract apply to
the Work of the Subcontractor, the Contractor shall assume toward the
Subcontractor all obligations and responsibilities that the Owner, under the
Prime Contract, assumes toward the Contractor, and the Subcontractor shall
assume toward the Contractor all obligations and responsibilities which the
Contractor, under the Prime Contract, assumes toward the Owner and the
Architect. The Contractor shall have the benefit of all rights, remedies and
redress against the Subcontractor which the Owner, under the Prime Contract, has
against the Contractor, and the Subcontractor shall have the benefit of all
rights, remedies and redress against the Contractor which the Contractor, under
the Prime Contract, has against the Owner, insofar as applicable to this
Subcontract. Where a provision of the Prime Contract is inconsistent with a
provision of this Agreement, this Agreement shall govern.

2.2     The Contractor may require the Subcontractor to enter into agreements
with Sub-subcontractors performing portions of the Work of this Subcontract by
which the Subcontractor and the Sub-subcontractor are mutually bound, to the
extent of the Work to be performed by the Sub-subcontractor, assuming toward
each other all obligations and responsibilities which the Contractor and
Subcontractor assume toward each other and having the benefit of all rights,
remedies and redress each against the other which the Contractor and
Subcontractor have by virtue of the provisions of this Agreement.

                                   ARTICLE 3
                                   ---------
                                   CONTRACTOR

3.1     SERVICES PROVIDED BY THE CONTRACTOR

3.1.1   The Contractor shall cooperate with the Subcontractor in scheduling and
performing the Contractor's Work to avoid conflicts or interference in the
Subcontractor's Work and shall expedite written responses to submittals made by
the Subcontractor in accordance with Paragraph 4.1 and Article 5. As soon as
practicable after execution of this Agreement, the Contractor shall provide the
Subcontractor copies of the Contractor's construction schedule and schedule of
submittals, together with such additional scheduling details as will enable the
Subcontractor to plan and perform the Subcontractor's Work properly. The
Subcontractor shall be notified promptly of subsequent changes in the
construction and submittal schedules and additional scheduling details.

3.1.2   The Contractor shall provide suitable areas for storage of the
Subcontractor's materials and equipment during the course of the Work.
Additional costs to the Subcontractor resulting from relocation of such
facilities at the direction of the Contractor, except as previously agreed
upon, shall be reimbursed by the Contractor.

3.1.3   Except as provided in Article 14, the Contractor's equipment will be
available to the Subcontractor only at the Contractor's discretion and on
mutually satisfactory terms.

3.2     COMMUNICATIONS

3.2.1   The Contractor shall promptly make available to the Subcontractor
information which affects this Subcontract and which becomes available to the
Contractor subsequent to execution of this Subcontract.

3.2.2   The Contractor shall not give instructions or orders directly to
employees or workmen of the Subcontractor, except to persons designated as
authorized representatives of the Subcontractor.

3.2.3   The Contractor shall permit the Subcontractor to request directly from
the Architect information regarding the percentages of completion and the
amount certified on account of Work done by the Subcontractor.

3.2.4   If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Contractor, a
subcontractor or anyone directly or indirectly employed by them (other than the
Subcontractor), the Contractor shall, prior to harmful exposure of the
Subcontractor's employees to such substance, give written notice of the
chemical composition thereof to the Subcontractor in sufficient detail and time
to permit the Subcontractor's compliance with such laws.

3.3     CLAIMS BY THE CONTRACTOR

3.3.1   Liquidated damages for delay, if provided for in Paragraph 9.3 of this
Agreement, shall be assessed against the Subcontractor only to the extent
caused by the Subcontractor, the Subcontractor's employees and agents,
Sub-contractors, suppliers or any person or entity for whose acts the Subcon-
--------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006                                               A401-1987 2

  WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
                             TO LEGAL PROSECUTION.

<PAGE>   3
tractor may be liable, and in no case for delays or causes arising outside the
scope of this Subcontract.

3.3.2   Except as may be indicated in this Agreement, the Contractor agrees
that no claim for payment for services rendered or materials and equipment
furnished by the Contractor to the Subcontractor shall be valid without prior
notice to the Subcontractor and unless written notice thereof is given by the
Contractor to the Subcontractor not later than the tenth day of the calendar
month following that in which the claim originated.

3.4     CONTRACTOR'S REMEDIES

3.4.1   If the Subcontractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within three working days after receipt
of written notice from the Contractor to commence and continue correction of
such default or neglect with diligence and promptness, the Contractor may, after
three days following receipt by the Subcontractor of an additional written
notice, and without prejudice to any other remedy the Contractor may have, make
good such deficiencies and may deduct the cost thereof from the payments then or
thereafter due the Subcontractor, provided, however, that if such action is
based upon faulty workmanship or materials and equipment, the Architect shall
first have determined that the workmanship or materials and equipment are not in
accordance with requirements of the Prime Contract.

                                   ARTICLE 4
                                   ---------
                                 SUBCONTRACTOR

4.1     EXECUTION AND PROGRESS OF THE WORK

4.1.1   The Subcontractor shall cooperate with the Contractor in scheduling and
performing the Subcontractor's Work to avoid conflict, delay in or interference
with the Work of the Contractor, other subcontractors or Owner's own forces.

4.1.2   The Subcontractor shall promptly submit Shop Drawings, Product Data,
Samples and similar submittals required by the Subcontract Documents with
reasonable promptness and in such sequence as to cause no delay in the Work or
in the activities of the Contractor or other subcontractors.

4.1.3   The Subcontractor shall submit to the Contractor a schedule of values
allocated to the various parts of the Work of this Subcontract, aggregating the
Subcontract Sum, made out in such detail as the Contractor and Subcontractor
may agree upon or as required by the Owner, and supported by such evidence as
the Contractor may direct. In applying for payment, the Subcontractor shall
submit statements based upon this schedule.

4.1.4   The Subcontractor shall furnish to the Contractor periodic progress
reports on the Work of this Subcontract as mutually agreed, including
information on the status of materials and equipment which may be in the course
of preparation or manufacture.

4.1.5   The Subcontractor agrees that the Architect will have the authority to
reject Work which does not conform to the Prime Contract. The Architect's
decisions on matters relating to aesthetic effect shall be final if consistent
with the intent expressed in the Prime Contract.

4.1.6   The Subcontractor shall pay for materials, equipment and labor used in
connection with the performance of this Subcontract through the period covered
by previous payments received from the Contractor, and shall furnish
satisfactory evidence, when requested by the Contractor, to verify compliance
with the above requirements.

4.1.7   The Subcontractor shall take necessary precautions to protect properly
the Work of other subcontractors from damage caused by operations under this
Subcontract.

4.1.8   The Subcontractor shall cooperate with the Contractor, other
subcontractors and the Owner's own forces whose Work might interfere with the
Subcontractor's Work. The Subcontractor shall participate in the preparation of
coordinated drawings in areas of congestion, if required by the Prime Contract,
specifically noting and advising the Contractor of potential conflicts between
the Work of the Subcontractor and that of the Contractor, other subcontractors
or the Owner's own forces.

4.2     LAWS, PERMITS, FEES AND NOTICES

4.2.1   The Subcontractor shall give notices and comply with laws, ordinances,
rules, regulations and orders of public authorities bearing on performance of
the Work of this Subcontract. The Subcontractor shall secure and pay for
permits and governmental fees, licenses and inspections necessary for proper
execution and completion of the Subcontractor's Work, the furnishing of which
is required of the Contractor by the Prime Contract.

4.2.2   The Subcontractor shall comply with Federal, state and local tax laws,
social security acts, unemployment compensation acts and workers' or workmen's
compensation acts insofar as applicable to the performance of this Subcontract.

4.3     SAFETY PRECAUTIONS AND PROCEDURES

4.3.1   The Subcontractor shall take reasonable safety precautions with respect
to performance of this Subcontract, shall comply with safety measures initiated
by the Contractor and with applicable laws, ordinances, rules, regulations and
orders of public authorities for the safety of persons or property in
accordance with the requirements of the Prime Contract. The Subcontractor shall
report to the Contractor within three days an injury to an employee or agent of
the Subcontractor which occurred at the site.

4.3.2   If hazardous substances of a type of which an employer is required by
law to notify its employees are being used on the site by the Subcontractor,
the Subcontractor's Sub-subcontractors or anyone directly or indirectly
employed by them, the Subcontractor shall, prior to harmful exposure of any
employees on the site to such substance, give written notice of the chemical
composition thereof to the Contractor in sufficient detail and time to permit
compliance with such laws by the Contractor, other subcontractors and other
employers on the site.

4.3.3   In the event the Subcontractor encounters on the site material
reasonably believed to be asbestos or polychlorinated biphenyl (PCB) which has
not been rendered harmless, the Subcontractor shall immediately stop Work in the
area affected and report the condition to the Contractor in writing. The Work in
the affected area shall resume in the absence of asbestos or polychlorinated
biphenyl (PCB), or when it has been rendered harmless, by written agreement of
the Contractor and Subcontractor, or in accordance with final determination by
the Architect on which arbitration has not been demanded or by arbitration as
provided in this Agreement. The Subcontractor shall not be required pursuant to
Article 5 to perform without consent any Work relating to asbestos or
polychlorinated biphenyl (PCB).
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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006                                              A401-1987 3

  WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
                             TO LEGAL PROSECUTION.
<PAGE>   4
4.3.4   To the fullest extent permitted by law, the Contractor shall indemnify
and hold harmless the Subcontractor, the Subcontractor's Sub-contractors, and
agents and employees of any of them from and against claims, damages, losses and
expenses, including but not limited to attorneys' fees, arising out of or
resulting from performance of the Work in the affected area if in fact the
material is asbestos or polychlorinated biphenyl (PCB) and has not been rendered
harmless, provided that such claim, damage, loss or expense is attributable to
bodily injury, sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself) including loss of use resulting
therefrom, but only to the extent caused in whole or in part by negligent acts
or omissions of the Contractor, Architect, Owner, anyone directly or indirectly
employed by any of them, or anyone for whose acts any of them may be liable,
regardless of whether or not such claim, damage, loss or expense is caused in
part by a party indemnified hereunder. Such obligation shall not be construed to
negate, abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Subparagraph 4.3.4.

4.4     CLEANING UP

4.4.1   The Subcontractor shall keep the premises and surrounding area free
from accumulation of waste materials or rubbish caused by operations performed
under this Subcontract. The Subcontractor shall not be held responsible for
unclean conditions caused by other contractors or subcontractors.

4.5     WARRANTY

4.5.1   The Subcontractor warrants to the Owner, Architect and Contractor that
materials and equipment furnished under this Subcontract will be of good
quality and new unless otherwise required or permitted by the Subcontract
Documents, that the Work of this Subcontract will be free from defects not
inherent in the quality required or permitted, and that the Work will conform
with the requirements of the Subcontract Documents. Work not conforming to
these requirements, including substitutions not properly approved and
authorized, may be considered defective. The Subcontractor's warranty excludes
remedy for damage or defect caused by abuse, modifications not executed by the
Subcontractor, improper or insufficient maintenance, improper operation, or
normal wear and tear under normal usage. This warranty shall be in addition to
and not in limitation of any other warranty or remedy required by law or by the
Subcontract Documents.

4.6     INDEMNIFICATION

4.6.1   To the fullest extent permitted by law, the Subcontractor shall
indemnify and hold harmless the Owner, Contractor, Architect, Architect's
consultants, and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorney's fees,
arising out of or resulting from performance of the Subcontractor's Work under
this Subcontract, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or in part by
negligent acts or omissions of the Subcontractor, the Subcontractor's
Sub-contractors, anyone directly or indirectly employed by them or anyone for
whose acts they may be liable, regardless of whether or not such claim, damage,
loss or expense is caused in part by a party indemnified hereunder. Such
obligation shall not be construed to negate, abridge, or otherwise reduce other
rights or obligations of indemnity which would otherwise exist as to a party or
person described in this Paragraph 4.6.

4.6.2   In claims against any person or entity indemnified under this Paragraph
4.6 by an employee of the Subcontractor, the Subcontractor's
Sub-subcontractors, anyone directly or indirectly employed by them or anyone
for whose acts they may be liable, the indemnification obligation, under the
Paragraph 4.6 shall not be limited by a limitation on amount or type of
damages, compensation or benefits payable by or for the Subcontractor or the
Subcontractor's Sub-subcontractors under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.

4.6.3   The obligations of the Subcontractor under this Paragraph 4.6 shall not
extend to the liability of the Architect, the Architect's consultants, and
agents and employees of any of them arising out of (1) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change Orders, designs
or specifications, or (2) the giving of or the failure to give directions or
instructions by the Architect, the Architect's consultants, and agents and
employees of any of them, provided such giving or failure to give is the
primary cause of the injury or damage.

4.7     REMEDIES FOR NONPAYMENT

4.7.1   If the Contractor does not pay the Subcontractor through no fault of
the Subcontractor, within seven days from the time payment should be made as
provided in this Agreement, the Subcontractor may, without prejudice to other
available remedies, upon seven additional days' written notice to the
Contractor, stop the Work of this Subcontract until payment of the amount owing
has been received. The Subcontract Sum shall, by appropriate adjustment, be
increased by the amount of the Subcontractor's reasonable costs of shutdown,
delay and start-up.

                                   ARTICLE 5
                              CHANGES IN THE WORK

5.1     The Owner may make changes in the Work by issuing Modifications to the
Prime Contract. Upon receipt of such a Modification issued subsequent to the
execution of the Subcontract Agreement, the Contractor shall promptly notify
the Subcontractor of the Modification. Unless otherwise directed by the
Contractor, the Subcontractor shall not thereafter order materials or perform
Work which would be inconsistent with the changes made by the Modifications to
the Prime Contract.

5.2     The Subcontractor may be ordered in writing by the Contractor, without
invalidating this Subcontract, to make changes in the Work within the general
scope of this Subcontract consisting of additions, deletions or other
revisions, including those required by Modifications to the Prime Contract
issued subsequent to the execution of this Agreement, the Subcontract Sum and
the Subcontract Time being adjusted accordingly. The Subcontractor, prior to
the commencement of such changed or revised Work, shall submit promptly to the
Contractor written copies of a claim for adjustment to the Subcontract Sum and
Subcontract Time for such revised Work in a manner consistent with requirements
of the Subcontract Documents.

5.3     The Subcontractor shall make claims promptly to the Contractor for
additional cost, extensions of time and damages for delays or other causes in
accordance with the Subcontract
--------------------------------------------------------------------------------
AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
TWELFTH EDITION - AIA(R) - (C)1987 THE AMERICAN INSTITUTE
OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C. 20006                                               A401-1987 4

  WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND IS SUBJECT
                             TO LEGAL PROSECUTION.


<PAGE>   5
Documents. A claim which will affect or become part of a claim which the
Contractor is required to make under the Prime Contract within a specified time
period or in a specified manner shall be made in sufficient time to permit the
Contractor to satisfy the requirements of the Prime Contract. Such claims shall
be received by the Contractor not less than two working days preceding the time
by which the Contractor's claim must be made. Failure of the Subcontractor to
make such a timely claim shall bind the Subcontractor to the same consequences
as those to which the Contractor is bound.

                                   ARTICLE 6
                                  ARBITRATION

6.1     Any controversy or claim between the Contractor and the Subcontractor
arising out of or related to this Subcontract, or the breach thereof, shall be
settled by arbitration, which shall be conducted in the same manner and under
the same procedure as provided in the Prime Contract with respect to claims
between the Owner and the Contractor, except that a decision by the Architect
shall not be a condition precedent to arbitration. If the Prime Contract does
not provide for arbitration or fails to specify the manner and procedure for
arbitration, it shall be conducted in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association currently in effect
unless the parties mutually agree otherwise. 

6.2     Except by written consent of the person or entity sought to be jointed,
no arbitration arising out of or relating to the Subcontract shall include, by
consolidation or joinder or in any other manner, any person or entity not a
party to the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the
arbitration, (3) the interest or responsibility of such person or entity in the
matter is not insubstantial, and (4) such person or entity is not the Architect,
the Architect's employee, the Architect's consultant, or an employee or agent of
any of them. This agreement to arbitrate and any other written agreement to
arbitrate with an additional person or persons referred to herein shall be
specifically enforceable under applicable law in any court having jurisdiction
thereof.

6.3     The Contractor shall give the Subcontractor prompt written notice of any
demand received or made by the Contractor for arbitration if the dispute
involves or relates to the Work, materials, equipment, rights or
responsibilities of the Subcontractor. The Contractor shall consent to inclusion
of the Subcontractor in the arbitration proceeding whether by joinder,
consolidation or otherwise, if the Subcontractor requests in writing to be
included within ten days after receipt of the Contractor's notice.

6.4     The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.

6.5     This Article 6 shall not be deemed a limitation of rights or remedies
which the Subcontractor may have under Federal law, under state mechanics' lien
laws, or under applicable labor or material payment bonds unless such rights or
remedies are expressly waived by the Subcontractor.

                                   ARTICLE 7
            TERMINATION, SUSPENSION OR ASSIGNMENT OF THE SUBCONTRACT

7.1     TERMINATION BY THE SUBCONTRACTOR

7.1.1   The Subcontractor may terminate the Subcontract for the same reasons and
under the same circumstances and procedures with respect to the Contractor as
the Contractor may terminate with respect to the Owner under the Prime Contract,
or for nonpayment of amounts due under this Subcontract for 60 days or longer.
In the event of such termination by the Subcontractor for any reason which is
not the fault of the Subcontract, Sub-subcontractors or their agents or
employees or other persons performing portions of the Work under contract with
the Subcontractor, the Subcontractor shall be entitled to recover from the
Contractor payment for Work executed and for proven loss with respect to
materials, equipment, tools, and construction equipment and machinery, including
reasonable overhead, profit and damages.

7.2     TERMINATION BY THE CONTRACTOR

7.2.1   If the Subcontractor persistently or repeatedly fails or neglects to
carry out the Work in accordance with the Subcontract Documents or otherwise to
perform in accordance with this Agreement and fails within seven days after
receipt of written notice to commence and continue correction of such default or
neglect with diligence and promptness, the Contractor may, after seven days
following receipt by the Subcontractor of an additional written notice and
without prejudice to any other remedy the Contractor may have, terminate the
Subcontract and finish the Subcontractor's Work by whatever method the
Contractor may deem expedient. If the unpaid balance of the Subcontract Sum
exceeds the expense of finishing the Subcontractor's Work, such excess shall be
paid to the Subcontractor, but if such expense exceeds such unpaid balance, the
Subcontractor shall pay the difference to the Contractor.

7.3     ASSIGNMENT OF THE SUBCONTRACT

7.3.1   In the event of termination of the Prime Contract by the Owner, the
Contractor may assign this Subcontract to the Owner, with the Owner's agreement,
subject to the provisions of the Prime Contract and to the prior rights of the
surety, if any, obligated under bonds relating to the Prime Contract. If the
Work of the Prime Contract has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.

7.3.2   The Subcontractor shall not assign the Work of this Subcontract without
the written consent of the Contractor, nor subcontract the whole of this
Subcontract without the written consent of the Contractor, nor further
subcontract portions of this Subcontract without written notification to the
Contractor when such notification is requested by the Contractor.

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5  A401-1987    AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT -
                TWELFTH EDITION - AIA - (c) 1987
                THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE,
                N.W., WASHINGTON, D.C. 20006

       WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS AND
                           IS SUBJECT TO PROSECUTION.
<PAGE>   6
                                   ARTICLE 8
                                   ---------

                          THE WORK OF THIS SUBCONTRACT

8.1     The Subcontractor shall execute the following portion of the Work
described in the Subcontract Documents, including all labor, materials,
equipment, services and other items required to complete such portion of the
Work, except to the extent specifically indicated in the Subcontract documents
to be the responsibility of others:

(Insert a precise description of the Work of this Subcontract, referring where
appropriate to numbers of Drawings, sections of Specifications and pages of
Addenda, Modifications and accepted Alternates.)

        Design - TPLD
        Occupancy Load 954 people, 16,020 SF with a Kitchen for buffet dining
          and a deli.
        Design Development Drawings
          C-1 through C-12, 
          A1.0-A1.3, A2.0-A2.1, A3.0 through A3.2, A4.0 dated 12-3-96 & 11-8-96
          S-1-S3 dated 12-3-96
          K-1 through K-9 dated 12-16-96

        See attached proposal



                                   ARTICLE 9
                                   ---------

                DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

9.1     The Subcontractor's date of commencement is the date from which the
Contract Time of Paragraph 9.3 is measured; it shall be the date of this
Agreement, as first written above, unless a different date is stated below or
provision is made for the date to be fixed in a notice to proceed issued by the
Contractor.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)

        JANUARY 22, 1997

9.2     Unless the date of commencement is established by a notice to proceed
issued by the Contractor, or the contract has commenced visible Work at the
site under the Prime Contract, the Subcontractor shall notify the Contractor in
writing not less than five days before commencing the Subcontractor's Work to
permit the timely filing of mortgages, mechanic's liens and other security
interests.

9.3     The work of this Subcontract shall be substantially completed not later
than JUNE 1, 1997 
(Insert the calendar date or number of calendar days after the Subcontractor's
date of commencement. Also insert any requirements for earlier Substantial
Completion of certain portions of the Subcontractor's Work, if not stated
elsewhere in the Subcontract Documents.) 



, subject to adjustments of this Subcontract Time as provided in the
Subcontract Documents.
(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)

        NA

9.4     Time is of the essence of this Subcontract.

9.5     No extension of time will be valid without the Contractor's written
consent after claim made by the subcontractor in accordance with Paragraph 5.2

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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION - 
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
                                                                     A401-1987 6


<PAGE>   7
                                   ARTICLE 10
                                   ----------

                                SUBCONTRACT SUM

10.1    The Contractor shall pay the Subcontractor in current funds for
performance of the Subcontract the Subcontract Sum of Sixty-eight thousand nine
hundred eighty-five dollars ($69,985.00), subject to additions and deductions as
provided in the Subcontract Documents.

10.2    The Subcontract Sum is based upon the following alternates, if any,
which are described in the Subcontract Documents and have been accepted by the
Owner and the Contractor:
(Insert the numbers or other identification of accepted alternates.)

        NA



10.3    Unit prices, if any, are as follows:

        NA



                                   ARTICLE 11
                                   ----------

                               PROGRESS PAYMENTS

11.1    Based upon applications for payment submitted to the Contractor by the
Subcontractor, corresponding to Applications for Payment submitted by the
Contractor to the Architect, and Certificates for Payment issued by the
Architect, the Contractor shall make progress payments on account of the
Subcontract Sum to the Subcontractor as provided below and elsewhere in the
Subcontract Documents.

11.2    The period covered by each application for payment shall be one
calendar month ending on the last day of the month, or as follows:

        Invoices due upon the twenty fifth of the month, payment on the tenth
of the next month

11.3    Provided an application for payment is received by the Contractor not
later than the twenty fifty day of the month, the Contractor shall include the
Subcontractor's Work covered by that application in the next Application for
Payment which the Contractor is entitled to submit to the Architect. The
Contractor shall pay the Subcontractor each progress payment
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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION - 
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
                                                                     A401-1987 7

<PAGE>   8
within three working days after the Contractor receives payment from the Owner.
If the Architect does not issue a Certificate for Payment or the Contractor
does not receive payment for any cause which is not the fault of the
Subcontractor, the Contractor shall pay the Subcontractor, on demand, a
progress payment computed as provided in Paragraphs 11.7 and 11.8.

11.4    If an application for payment is received by the Contractor after the
application date fixed above, the Subcontractor's work covered by it shall be
included by the Contractor in the next Application for Payment submitted to the
Architect.

11.5    Each application for payment shall be based upon the most recent
schedule of values submitted by the Subcontractor in accordance with the
Subcontract Documents. The schedule of values shall allocate the entire
Subcontract Sum among the various portions of the Subcontractor's Work and be
prepared in such form and supported by such data to substantiate its accuracy
as the Contractor may require. This schedule, unless objected to by the
Contractor, shall be used as a basis for reviewing the Subcontractor's
applications for payment.

11.6    Applications for payment submitted by the Subcontractor shall indicate
the percentage of completion of each portion of the Subcontractor's Work as of
the end of the period covered by the application for payment.

11.7    Subject to the provisions of the Subcontract Documents, the amount of
each progress payment shall be computed as follows:

11.7.1  Take that portion of the Subcontract Sum properly allocable to
completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract Sum
allocated to that portion of the Subcontractor's Work in the schedule of
values, less that percentage actually retained, if any, from payments to the
Contractor on account of the Work of the Subcontractor. Pending final
determination of cost to the Contractor of changes in the Work which have been
properly authorized by Construction Change Directive, amounts not in dispute
may be included to the same extent provided in the Prime Contract, even though
the Subcontract Sum has not yet been adjusted;

11.7.2  Add that portion of the Subcontract Sum properly allocable to materials
and equipment delivered and suitably stored at the site by the Subcontractor for
subsequent incorporation in the Subcontractor's Work or, if approved in advance
by the Owner, suitably stored off the site at a location agreed upon in writing,
less the same percentage retainage required by the Prime Contract to be applied
to such materials and equipment in the Contractor's Application for Payment;

11.7.3  Subtract the aggregate of previous payments made by the Contractor; and

11.7.4  Subtract amounts, if any, calculated under Subparagraph 11.7.1 or
11.7.2 which are related to Work of the Subcontractor for which the Architect
has withheld or nullified, in whole or in part, a Certificate of Payment for a
cause which is the fault of the Subcontractor.

11.8    SUBSTANTIAL COMPLETION

11.8.1  When the Subcontractor's Work or a designated portion thereof is
substantially complete and in accordance with the requirements of the Prime
Contract, the Contractor shall, upon application by the Subcontractor, make
prompt application for payment for such Work. Within 30 days following issuance
by the Architect of the Certificate for Payment covering such substantially
completed Work, the Contractor shall, to the full extent allowed in the Prime
Contract, make payment to the Subcontractor, deducting any portion of the funds
for the Subcontractor's Work withheld in accordance with the Certificate to
cover costs of items to be completed or corrected by the Subcontractor. Such
payment to the Subcontractor shall be the entire unpaid balance of the
Subcontract Sum if a full release of retainage is allowed under the Prime
Contract for the Subcontractor's Work prior to the completion of the entire
Project. If the Prime Contract does not allow for a full release of retainage,
then such payment shall be an amount which, when added to previous payments to
the Subcontractor, will reduce the retainage on the Subcontractor's
substantially completed Work to the same percentage of retainage as that on the
Contractor's Work covered by the Certificate.

                                   ARTICLE 12
                                   ----------

                                 FINAL PAYMENT

12.1    Final payment, constituting the entire unpaid balance of the
Subcontract Sum, shall be made by the Contractor to the Subcontractor when the
Subcontractor's Work is fully performed in accordance with the requirements of
the Contract Documents, the Architect has issued a Certificate for Payment
covering the Subcontractor's completed Work and the Contractor has received
payment from the Owner. If, for any cause which is not the fault of the
Subcontractor, a Certificate for Payment is not issued or the Contractor does
not receive timely payment or does not pay the subcontractor within three
working days after receipt of payment from the Owner, final payment to the
Subcontractor shall be made upon demand.
(Insert provisions for earlier final payment to the Subcontractor, if
applicable.)

        NA

12.2    Before issuance of the final payment, the Subcontractor, if required,
shall submit evidence satisfactory to the Contractor that all payrolls, bills
for materials and equipment, and all known indebtedness connected with the
Subcontractor's work have been satisfied.
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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION - 
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
                                                                     A401-1987 8
<PAGE>   9
                                   ARTICLE 13
                                   ----------

                              INSURANCE AND BONDS

13.1    The Subcontractor shall purchase and maintain insurance of the
following types of coverage and limits of liability:
                1,000,000  Insurance Coverage
                Oregon State Contractors License

13.2    Coverages, whether written or an occurrence or claims-made basis, shall
be maintained without interruption from date of commencement of the
Subcontractor's Work until date of final payment and termination of any
coverage required to be maintained after final payment.

13.3    Certificates of insurance acceptable to the Contractor shall be filed
with the Contractor prior to commencement of the Subcontractor's Work. These
certificates and the insurance policies required by this Article 13 shall
contain a provision that coverages afforded under the policies will not be
cancelled or allowed to expire until at least 30 days' prior written notice has
been given to the Contractor. If any of the foregoing insurance coverages are
required to remain in force after final payment and are reasonably available,
an additional certificate evidencing continuation of such coverage shall be
submitted with the final application for payment as required in Article 12. If
any information concerning reduction of coverage is not furnished by the
insurer, it shall be furnished by the Subcontractor with reasonable promptness
according to the Subcontractor's information and belief.

13.4    The Contractor shall furnish to the Subcontractor satisfactory evidence
of insurance required of the Contractor under the Prime Contract.

13.5    Waivers of Subrogation.  The Contractor and Subcontractor waive all
rights against (1) each other and any of their Subcontractors,
Sub-subcontractors, agents and employees, each of the other, and (2) the Owner,
the Architect, the Architect's consultants, separate contractors, and any of
their subcontractors, sub-subcontractors, agents and employees for damages
caused by fire or other perils to the extent covered by property insurance
provided under the Prime Contract or other property insurance applicable to the
Work, except such rights as they may have to proceeds of such insurance held by
the Owner as fiduciary. The Subcontractor shall require of the Subcontractor's
Sub-subcontractors, agents and employees, by appropriate agreements, written
where legally required for validity, similar waivers in favor of other parties
enumerated herein. The policies shall provide such waivers of subrogation by
endorsement or otherwise. A waiver of subrogation shall be effective as to a
person or entity even though that person or entity would otherwise have a duty
of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an
insurable interest in the property damaged.

13.6    The Contractor shall promptly, upon request of the Subcontractor,
furnish a copy or permit a copy to be made of any bond covering payment or
obligations arising under the Subcontract.

13.7    Performance Bond and Payment Bond:
(If the Subcontractor is to furnish bonds, insert the specific requirements
here.)

                                   ARTICLE 14
                                   ----------

                  TEMPORARY FACILITIES AND WORKING CONDITIONS

14.1    The Contractor shall furnish and make available to the Subcontractor
the following temporary facilities, equipment and services; these shall be
furnished at no cost to the Subcontractor unless otherwise indicated below:
      NA

14.2    Specific working conditions:
(Insert any applicable arrangements concerning working conditions and labor
matters for the Project.)
      NA

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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION - 
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
                                                                     A401-1987 9
<PAGE>   10
                                   ARTICLE 15
                                   ----------

                            MISCELLANEOUS PROVISIONS

15.1    Where reference is made in this Agreement to a provision of the General
Conditions or another Subcontract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Subcontract
Documents.

15.2    Payments due and unpaid under this Subcontract shall bear interest from
the date payment is due at such rate as the parties may agree upon in writing
or, in the absence thereof, at the legal rate prevailing from time to time at
the place where the Project is located.
(Insert rate of interest agreed upon, if any.)
N/A

(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations of the Owner's
Contractor's and Subcontractor's principal places of business, the location of
the Project and elsewhere may affect the validity of this provision. Legal
advice should be obtained with respect to deletions or modifications, and also
regarding requirements such as written discounts or waivers.)

                                   ARTICLE 16
                                   ----------

                      ENUMERATION OF SUBCONTRACT DOCUMENTS

16.1    The Subcontract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows:

16.l.1  This executed Standard Form of Agreement Between Contractor and
Subcontractor, AlA Document A401, 1987 Edition;

16.1.2  The Prime Contract, consisting of the Agreement between the Owner and
Contractor dated as first entered above and the other Contract Documents
enumerated in the Owner-Contractor Agreement; Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda and other documents enumerated therein;

16.1.3  The following Modifications to the Prime Contract, if any, issued
subsequent to the execution of the Owner-Contractor Agreement but prior to the
execution of this Agreement:

Modification                                                    Date

        N/A

16.1.4  Other Documents, if any, forming part of the Subcontract Documents are
as follows:
(List any additional documents which are intended to form part of the
Subcontract Documents. Requests for proposal and the Subcontractor's bid or
proposal should be listed here only if intended to be part of the Subcontract
Documents).

This Agreement entered into as of the day and year first written above.

CONTRACTOR                              SUBCONTRACTOR

/s/ DUNCAN EDWARDS                      /s/  TOM L. POWLEY
-------------------------------------   ------------------------------------
(Signature)  Duncan Edwards             (Signature)


DUNCAN EDWARDS, agent for I.C.C.        TOM L. POWLEY, Owner-President
-------------------------------------   ------------------------------------
(Printed name and title)                (Printed name and title)

               1-22-97

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AIA DOCUMENT A401 - CONTRACTOR-SUBCONTRACTOR AGREEMENT - TWELFTH EDITION - 
AIA(R) - (C)1987
THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,
D.C. 20006
                                                                    A401-1987 10










<PAGE>   11
                       [POWLEY PLUMBING, INC. LETTERHEAD]



SUBCONTRACTOR PROPOSAL                          OR LIC      #71735
                                                CA LIC      #622815
                                                CITY LIC    #888

Date:  JANUARY 17, 1997

Submitted to:                           Job Name/Location:
       UNITED MECHANICAL                      KLA-MO-YA CASINO


We propose to furnish material and labor as outlined in the specifications
below:
       o  DOMESTIC PLUMBING
       o  LP GAS PIPING FOR HEATING AND RESTAURANT
       o  RESTAURANT PLUMBING
       o  EXCAVATION
       o  PIPE INSULATION

INCLUDES:
       PLUMBING, GAS PIPING, RESTAURANT PLUMBING WITH CONNECTIONS TO OWNER
       SUPPLIED EQUIPMENT, PIPE INSULATION, 5' OUT SEWER AND WATER, SEPARATE
       GREASE TRAP LINE FOR FUTURE GREASE INTERCEPTOR TO BE LOCATED OUTSIDE,
       EXCAVATION AND COMPACTION WITH NATIVE BACKFILL, 5' OUT LP GAS, 6" SODA
       POP CONDUITS, 100 GALLON WATER HEATER WITH 2 TEMPERATURE SYSTEM.

EXCLUDES:
       PERMITS, FEES, DAVIS-BACON ACT, IMPORTED SELECT BACKFILL, CONDENSATE
       DRAINS.


We propose to furnish material and labor in complete accordance with these
specifications for the base sum of:   $68,985.00

       ALTERNATE #1 -- USE FLUSHOMETER TOILETS:
            $1370.00

Payments to be made on the tenth of the month following progress billings.
All material is guaranteed to be as specified. All work will be completed in a
workmanlike manner according to standard practices. Any alteration or deviation
from above specifications involving extra costs will be executed only upon
written orders and will become an extra charge over and above the proposal. All
agreements contingent upon strikes, accidents or delays beyond our control.
Owner to carry necessary insurance. Our workers are fully covered by Workers
Compensation Insurance.

Authorized signature /s/ Bob Mest and /s/ TOM POWLEY      Powley Plumbing Inc.
                    -------------------------------

The above prices, specifications and conditions are satisfactory and are hereby
accepted. You are authorized to do the work as specified. Payment will be made
as outlined above.

Acceptance of Proposal:  /s/ DUNCAN EDWARDS
                       ----------------------------