<PAGE>   1
       T H E  A M E R I C A N  I N S T I T U T E  O F  A R C H I T E C T S

                                                                   Exhibit 10.3

                                   [AIA LOGO}

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                               AIA Document A107

                         ABBREVIATED FORM OF AGREEMENT
                          BETWEEN OWNER AND CONTRACTOR

                For CONSTRUCTION PROJECTS OF LIMITED SCOPE where
                    the Basis of Payment is a STIPULATED SUM

                                  1987 EDITION

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

             This document includes abbreviated General Conditions
             and should not be used with other general conditions.

                      It has been approved and endorsed by
                 The Associated General Contractors of America

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AGREEMENT

made as of the third day of December in the year of Nineteen Hundred and Ninety
Six

BETWEEN the Owner:      Inland Casino Corporation
(Name and address)      4225 Executive Square
                        Suite 1650
                        La Jolla, CA 92037

and the Contractor:     Pacific Industries Northwest, Inc.
(Name and address)      dba Commercial Pacific Company
                        P.O. Box 584
                        Woodinville, WA 98072

The Project is:         Kla-Mo-Ya Casino
(Name and address)      Highway 97
                        Chiloquin, ID

The Architect is:       Gaming Environment Design, Inc.
(Name and address)      1813 130th Avenue N.E.
                        Suite 220
                        BELLEVUE, WA 98005

The Owner and Contractor agree as set forth below.

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     Copyright 1936, 1951, 1958, 1961, 1963, 1966, 1974, 1978, (c) 1987 by The
     American Institute of Architects, 1735 New York Avenue, N.W., Washington,
     D.C. 20006. Reproduction of the materiel 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 A107 -  ABBREVIATED OWNER-CONTRACTOR AGREEMENT - 
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS, 
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006                   A107-1987 1

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<PAGE>   2
                                   ARTICLE 1
                           THE WORK OF THIS CONTRACT

1.1     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:

        Varco-Pruden structural framing, roof secondary, "Patina Green" standing
        seam roof with copper battens, wall secondary, furring channel on
        outside of wall secondary, gable trim, gutters & downspouts, soffit at
        2' overhand and all other required trims and flashing. Exact description
        and scope of work per 11/18/96 proposal - attached herewith as
        "Attachment A".

                                   ARTICLE 2
                DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1     The date of commencement is the date from which the Contract Time of
Paragraph 2.2 is measured, and 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, show that the date will be fixed by a notice to proceed.)

2.2     The Contractor shall achieve 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 slated elsewhere in the Contract 
Documents.)

        March 15, 1996

, 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.)

        n/a

                                   ARTICLE 3
                                  CONTRACT SUM
3.1     The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum of Three Hundred
Twenty One Thousand Five Hundred Fifty Dollars ($321,550.00), subject to
additions and deductions as provided in the Contract Documents.

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AIA DOCUMENT A107 -  ABBREVIATED OWNER-CONTRACTOR AGREEMENT - 
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS, 
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006                   A107-1987 2

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<PAGE>   3
3.2  The Contract Sum is based upon 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 alternates 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 until which that amount is valid.


n/a


3.3  Unit prices, if any, are as follows:


n/a



                                   ARTICLE 4
                               PROGRESS PAYMENTS

4.1  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 accounts of the Contract Sum to the Contractor
as provided below and elsewhere in the Contract Documents.  The period covered
by each Application for Payment shall be one calendar month ending on the last
day of the month, or as follows:

        Work invoiced through end of month, due and payable on the 10th of the
        following month.

4.2  Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, 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.)



(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal place 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 disclosures or waivers.)



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                AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987 
                THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON,     
                D.C. 20006                                                                                     A107-1987 4

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                                   ARTICLE 5
                                 FINAL PAYMENT

5.1  Final payment, constituting the entire unpaid balance of the Contract Sum,
shall be made by the Owner to the Contractor when the Work has been completed,
the Contract fully performed, and a final Certificate for Payment has been
issued by the Architect.

                                   ARTICLE 6
                       ENUMERATION OF CONTRACT DOCUMENTS

6.1  The Contract Documents are listed in Article 7 and, except for
Modifications issued after execution of this Agreement, are enumerated as
follows:

6.1.1  The Agreement is this executed Abbreviated Form of Agreement Between
Owner and Contractor, AIA Document A107, 1987 Edition.

6.1.2  The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated ________________________ , and are as
follows: 

Document                        Title                           Pages

n/a



6.1.3  The Specifications are those contained in the Project Manual dated as in
Subparagraph 6.1.2, and are as follows:


Section                         Title                           Pages


n/a



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                AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987 
                THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006       
                                                                                                               A107-1987 4
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6.1.4  The Drawings are as follows, and are dated 11/19/96  unless a different
date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.) 


Number                          Title                           Date

Preliminary Drawing Floor Plan (1)                              11/19/96

By:  Gaming Environment Design Inc.

     dated: 11/19/96


6.1.5  The Addenda, if any, are as follows:

Number                          Title                           Pages

n/a



Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 6.

6.1.6  Other documents, if any, forming part of the Contract Documents are as
follows: 
(List any additional documents which are intended to form part of the Contract
Documents.) 

Commercial Pacific Company proposal dated 11/18/96.




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                AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987 
                THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006
                                                                                                               A107-1987 5
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                               GENERAL CONDITIONS
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                                   ARTICLE 7
                                   ---------
                               CONTRACT DOCUMENTS

7.1     The Contract Documents consist of this Agreement with Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, addenda issued prior to the execution of this Agreement, other
documents listed in this Agreement and Modifications issued after execution of
this Agreement. The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work by the Contractor.
The Contract Documents are complementary, and what is required by one shall be
as binding as if required by all; performance by the Contractor shall be
required only to the extent consistent with the Contract Documents and
reasonably inferable from them as being necessary to produce the intended
results.

7.2     The Contract Documents shall not be construed to create a contractual
relationship of any kind (1) between the Architect and Contractor, (2) between
the Owner and a Subcontractor or Sub-subcontractor or (3) between any persons
or entities other than the Owner and Contractor.

7.3     Executions of the Contract by the Contractor is a representation that
the Contractor has visited the site and become familiar with the local
conditions under which the Work is to be performed.

7.4     The term "Work" means the construction and services required by the
Contract Documents, whether completed or partially completed, and includes all
other labor, materials, equipment and services provided or to be provided by
the Contractor to fulfill the Contractor's obligations. The work may constitute
the whole or a part of the Project.

                                   ARTICLE 8
                                   ---------
                                     OWNER

8.1     The Owner shall furnish surveys and a legal description of the site.

8.2     Including for permits and fees which are the responsibility of the
Owner under the Contract Documents, the Owner shall secure and pay for
necessary approvals, easements, assessments and charges required for the
construction, use or occupancy of permanent structures or permanent changes in
existing facilities.

8.3     If the Contractor fails to correct Work which is not in accordance with
the requirements of the Contract Documents or persistently fails to carry out
the Work in accordance with the Contract Documents, the Owner, by a written
order, may order the Contractor to stop the Work, or any portion thereof, until
the cause for such order has been eliminated; however, the right of the Owner to
stop the Work shall not give rise to a duty on the part of the Owner to exercise
this right for the benefit of the Contractor or any other person or entity.

                                   ARTICLE 9
                                   ---------
                                   CONTRACTOR

9.1     The Contractor shall supervise and direct the Work, using the
Contractor's best skill and attention. The Contractor shall be solely
responsible for and have control over construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the Work under
the Contract, unless Contract Documents give other specific instructions
concerning these matters.

9.2     Unless otherwise provided in the Contract Documents, the Contractor
shall provide and pay for labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for the proper execution and completion of
the Work, whether temporary or permanent and whether or not incorporated or to
be incorporated in the Work.

9.3     The Contractor shall enforce strict discipline and good order among the
Contractor's employees and other persons carrying out the Contract. The
Contractor shall not permit employment of unfit persons or persons not skilled
in tasks assigned to them.

9.4     The Contractor warrants to the Owner and Architect that materials and
equipment furnished under the Contract will be of good quality and new unless
otherwise required or permitted by the Contract Documents, that the Work will
be free from defects not inherent in the quality required or permitted, and
that the Work will conform with the requirements of the Contract Documents.
Work not conforming to these requirements, including substitutions not properly
approved and authorized, may be considered defective. The Contractor's warranty
excludes remedy for damage or defect caused by abuse, modifications not
executed by the Contractor, improper or insufficient maintenance, improper
operation, or normal wear and tear under normal usage. If required by the
Architect, the Contractor shall furnish satisfactory evidence as to the kind
and quality of materials and equipment.

9.5     Unless otherwise provided in the Contract Documents, the Contractor
shall pay sales, consumer, use, and other similar taxes which are legally
enacted when bids are received or negotiations concluded, whether or not yet
effective or merely scheduled to go into effect, and shall secure and pay for
the building permit and other permits and governmental fees, licenses and
inspections necessary for proper execution and completion of the Work.

9.6     The Contractor shall comply with and give notices required by laws,
ordinances, rules, regulations, and lawful orders of public authorities bearing
on performance of the Work. The Contractor shall promptly notify the Architect
and owner if the Drawings and Specifications are observed by the Contractor to
be at variance therewith.

9.7     The Contractor shall be responsible to the Owner for the acts and
omissions of the Contractor's employees, Subcontractors and their agents and
employees, and other persons performing portions of the Work under a contract
with the Contractor.
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AIA DOCUMENT A107 -  ABBREVIATED OWNER-CONTRACTOR AGREEMENT - 
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS, 
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006                   A107-1987 6

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<PAGE>   7
9.8     The Contractor shall review, approve and submit to the Architect Shop
Drawings, Product Data, Samples and similar submittals required by the Contract
Documents with reasonable promptness.  The Work shall be in accordance with
approved submittals.  When professional certification of performance criteria of
materials, systems or equipment is required by the Contract Documents, the
Architect shall be entitled to rely upon the accuracy and completeness of such
certifications.

9.9     The Contractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations under the
Contract.  At completion of the Work the Contractor shall remove from and about
the Project waste materials, rubbish, the Contractor's tools, construction
equipment, machinery and surplus materials.

9.10    The Contractor shall provide the Owner and Architect access to the Work
in preparation and progress wherever located.

9.11    The Contractor shall pay all royalties and license fees; shall defend
suits or claims for infringement of patent rights and shall hold the Owner
harmless from loss on account thereof, but shall not be responsible for such
defense or loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by the Contract Documents unless the
Contractor has reason to believe that there is an infringement of patent.

9.12    To the fullest extent permitted by law, the Contractor shall indemnify
and hold harmless the Owner, 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 attorneys' fees, arising out of or resulting from
performance of the Work, 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, a Subcontractor, 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 reduce other rights or obligations of indemnity which
would otherwise exist as to a party or person described in this Paragraph 9.12.

9.12.1  In claims against any person or entity indemnified under this Paragraph
9.12 by an employee of the Contractor, a Subcontractor, anyone directly or
indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under this Paragraph 9.12 shall not be limited by a
limitation on amount or type of damages, compensation or benefits payable by or
for the Contractor or a Subcontractor under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.

9.12.2  The obligations of the Contractor under this Paragraph 9.12 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,
Construction Change Directives, 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.

                                   ARTICLE 10
                                   ----------
                         ADMINISTRATION OF THE CONTRACT

10.1    The Architect will provide administration of the Contract and will be
the Owner's representative (1) during construction, (2) until final payment is
due and (3) with the Owner's concurrence, from time to time during the
correction period described in Paragraph 18.1

10.2    The Architect will visit the site at intervals appropriate to the stage
of construction to become generally familiar with the progress and quality of
the completed Work and to determine in general if the Work is being performed in
a manner indicating that the Work, when completed, will be in accordance with
the Contract Documents.  However, the Architect will not be required to make
exhaustive or continuous on-site inspections to check quality or quantity of the
Work.  On the basis of on-site observations as an architect, the Architect will
keep the Owner informed of progress of the Work and will endeavor to guard the
Owner against defects and deficiencies in the Work.

10.3    The Architect will not have control over or charge of and will not be
responsible for construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection with the Work,
since these are solely the Contractor's responsibility as provided in Paragraphs
9.1 and 16.1.  The Architect will not be responsible for the Contractor's
failure to carry out the Work in accordance with the Contract Documents.

10.4    Based on the Architect's observations and evaluations of the
Contractor's Applications for Payment, the Architect will review and certify the
amounts due the Contractor and will issue Certificates for Payment in such
amounts.

10.5    The Architect will interpret and decide matters concerning performance
under and requirements of the Contract Documents on written request of either
the Owner or Contractor.  The Architect will make initial decisions on all
claims, disputes or other matters in question between the Owner and Contractor,
but will not be liable for results of any interpretations or decisions rendered
in good faith.  The Architect's decisions in matters relating to aesthetic
effect will be final if consistent with the intent expressed in the Contract
Documents.  All other decisions of the Architect, except those which have been
waived by making or acceptance of final payment, shall be subject to arbitration
upon the written demand of either party.

10.6    The Architect will have authority to reject Work which does not conform
to the Contract Documents.

10.7    The Architect will review and approve or take other appropriate action
upon the Contractor's submittals such as Shop Drawings, Product Data and
Samples, but only for the limited purpose of checking for conformance with
information given and the design concept expressed in the Contract Documents.

10.8    All claims or disputes between the Contractor and the Owner arising out
or relating to the Contract, or the breach thereof, shall be decided by
arbitration in accordance with the Construction Industry Arbitration Rules of
the American Arbitration Association currently in effect unless the parties
mutually agree otherwise and subject to an initial presentation of the claim or
dispute to the Architect as required under Paragraph 10.5.  Notice of the demand
for arbitration shall be filed in writing with the other party to this Agreement
and with the American Arbitration Association and shall be made within a
reasonable time after the dispute has arisen.  The award rendered by

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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.
Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Contract Documents shall include,
by consolidation, 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 or any of the Architect's employees or consultants.  The agreement
herein among the parties to the Agreement and any other written agreement to
arbitrate referred to herein shall be specifically enforceable under applicable
law in any court having jurisdiction thereof.

                                   ARTICLE 11
                                   ----------
                                  SUBCONTRACTS

11.1    A Subcontractor is a person or entity who has a direct contract with
the Contractor to perform a portion of the Work at the site.

11.2    Unless otherwise stated in the Contract Documents or the bidding
requirements, the Contractor, as soon as practicable after award of the
Contract, shall furnish in writing to the Owner through the Architect the names
of the Subcontractors for each of the principal portions of the Work.  The
Contractor shall not contract with any Subcontractor to whom the Owner or
Architect has made reasonable and timely objection.  The Contractor shall not be
required to contract with anyone to whom the Contractor has made reasonable
objection.  Contracts between the Contractor and Subcontractors shall (1)
require each Subcontractor, to the extent of the Work to be performed by the
Subcontractor, to be bound to the Contractor by the terms of the Contract
Documents, and to assume toward the Contractor all the obligations and
responsibilities which the Contractor, by the Contract Documents, assumes
toward the Owner and Architect, and (2) allow to the Subcontractor the benefit
of all rights, remedies and redress afforded to the Contractor by these
Contract Documents.

                                   ARTICLE 12
                                   ----------
                            CONSTRUCTION BY OWNER OR
                            BY SEPARATE CONTRACTORS

12.1    The Owner reserves the right to perform construction or operations
related to the Project with the Owner's own forces, and to award separate
contracts in connection with other portions of the Project or other
construction or operations on the site under conditions of the contract
identical or substantially similar to these, including those portions related
to insurance and waiver of subrogation.  If the Contractor claims that delay or
additional cost is involved because of such action by the Owner, the Contractor
shall make such claim as provided elsewhere in the Contract Documents.

12.2    The Contractor shall afford the Owner and separate contractors
reasonable opportunity for the introduction and storage of their materials and
equipment and performance of their activities, and shall connect and coordinate
the Contractor's construction and operations with theirs as required by the
Contract Documents.

12.3    Costs caused by delays, improperly timed activities or defective
construction shall be borne by the party responsible therefor.

                                   ARTICLE 13
                                   ----------
                              CHANGES IN THE WORK

13.1    The Owner, without invalidating the Contract, may order changes in the
Work consisting of additions, deletions or modifications, the Contract Sum and
Contract Time being adjusted accordingly.  Such changes in the Work shall be
authorized by written Change Order signed by the Owner, Contractor and
Architect, or by written Construction Change Directive signed by the Owner and
Architect.

13.2    The Contract Sum and Contract Time shall be changed only by Change
Order.

13.3    The cost or credit to the Owner from a change in the Work shall be
determined by mutual agreement.

                                   ARTICLE 14
                                   ----------
                                      TIME

14.1    Time limits stated in the Contract Documents are of the essence of the
Contract.  By executing the Agreement the Contractor confirms that the Contract
Time is a reasonable period for performing the Work.

14.2    The date of Substantial Completion is the date certified by the
Architect in accordance with Paragraph 15.3.

14.3    If the Contractor is delayed at any time in progress of the Work by
changes ordered in the Work, by labor disputes, fire, unusual delay in
deliveries, abnormal adverse weather conditions not reasonably anticipatable,
unavoidable casualties or any causes beyond the Contractor's control, or by
other causes which the Architect determines may justify delay, then the
Contract Time shall be extended by Change Order for such reasonable time as the
architect may determine.

                                   ARTICLE 15
                                   ----------
                            PAYMENTS AND COMPLETION

15.1    Payments shall be made as provided in Articles 4 and 5 of this
Agreement.

15.2    Payments may be withheld on account of (1) defective Work not remedied,
(2) claims filed by third parties, (3) failure of the Contractor to make
payments properly to Subcontractors or for labor, materials or equipment, (4)
reasonable evidence that the Work cannot be completed for the unpaid balance of
the Contract Sum, (5) damage to the Owner or another contractor, (6) reasonable
evidence that the Work will not be completed within the Contract Time and that
the unpaid balance would not be adequate to cover actual or liquidated damages
for the anticipated delay, or (7) persistent failure to carry out the Work in
accordance with the Contract Documents.

15.3    When the Architect agrees that the  Work is substantially complete, the
Architect will issue a Certificate of Substantial Completion.

15.4    Final payment shall not become due until the Contractor has delivered
to the Owner a complete release of all liens arising out of this Contract or
receipts in full covering all labor, materials and equipment for which a lien
could be filed, or a bond satisfactory to the Owner to indemnify the Owner
against such 



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AIA DOCUMENT A107 * ABBREVIATED OWNER CONTRACTOR AGREEMENT 
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INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE, N.W.,
WASHINGTON, D.C., 20006

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<PAGE>   9
lien. If such lien remains unsatisfied after payments are made, the Contractor
shall refund to the Owner all money that the Owner may be compelled to pay in
discharging such lien, including all costs and reasonable attorneys' fees.

15.5    The making of final payment shall constitute a waiver of claims by the
Owner except those arising from:

        .1  liens, claims, security interests or encumbrances arising out of the
            Contract and unsettled;

        .2  failure of the Work to comply with the requirements of the Contract
            Documents; or

        .3  terms of special warranties required by the Contract Documents.

Acceptance of final payment by the Contractor, a Subcontractor or material
supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the
time of final Application for Payment.


                                   ARTICLE 16
                                   ----------
                       PROTECTION OF PERSONS AND PROPERTY

16.1    The Contractor shall be responsible for initiating, maintaining, and
supervising all safety precautions and programs in connection with the
performance of the Contract. The Contractor shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage,
injury or loss to:

        .1  employees on the Work and other persons who may be affected thereby;

        .2  the Work and materials and equipment to be incorporated therein; and

        .3  other property at the site or adjacent thereto.

The Contractor shall give notices and comply with applicable laws, ordinances,
rules, regulations and lawful orders of public authorities bearing on safety of
persons and property and their protection from damage, injury or loss. The
Contractor shall promptly remedy damage and loss to property at the site caused
in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or
anyone directly or indirectly employed by any of them, or by anyone for whose
acts they may be liable and for which the Contractor is responsible under
Subparagraphs 16.1.2 and 16.1.3, except for damage or loss attributable to acts
or omissions of the Owner or Architect or by anyone for whose acts either of
them may be liable, and not attributable to the fault or negligence of the
Contractor. The foregoing obligations of the Contractor are in addition to the
Contractor's obligations under Paragraph 9.12.

16.2    The Contractor shall not be required to perform without consent any
Work relating to asbestos or polychlorinated biphenyl (PCB).


                                   ARTICLE 17
                                   ----------
                                   INSURANCE

17.1    The Contractor shall purchase from and maintain in a company or
companies lawfully authorized to do business in the jurisdiction in which the
Project is located insurance for protection from claims under workers' or
workmen's compensation acts and other employee benefit acts which are
applicable, claims for damages because of bodily injury, including death, and
from claims for damages, other than to the Work itself, to property which may
arise out of or result from the Contractor's operations under the Contract,
whether such operations be by the Contractor or by a Subcontractor or anyone
directly or indirectly employed by any of them. This insurance shall be written
for not less than limits of liability specified in the Contract Documents or
required by law, whichever coverage is greater, and shall include contractual
liability insurance applicable to the Contractor's obligations under Paragraph
9.12. Certificates of such insurance shall be filed with the Owner prior to the
commencement of the Work.

17.2    The Owner shall be responsible for purchasing and maintaining the
Owner's usual liability insurance. Optionally, the Owner may purchase and
maintain other insurance for self-protection against claims which may arise
from operations under the Contract. The Contractor shall not be responsible for
purchasing and maintaining this optional Owner's liability insurance unless
specifically required by the Contract Documents.

17.3    Unless otherwise provided, the Owner shall purchase and maintain, in a
company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located, property insurance upon the entire Work at the
site to the full insurable value thereof. This insurance shall be on an
all-risk policy form and shall include interests of the Owner, the Contractor,
Subcontractors and Sub-subcontractors in the Work and shall insure against the
perils of fire and extended coverage and physical loss or damage including,
without duplication of coverage, theft, vandalism and malicious mischief.

17.4    A loss insured under Owner's property insurance shall be adjusted with
the Owner and made payable to the Owner as fiduciary for the insureds, as their
interests may appear, subject to the requirements of any applicable mortgagee
clause.

17.5    The Owner shall file a copy of each policy with the Contractor before
an exposure to loss may occur. Each policy shall contain a provision that the
policy will not be cancelled or allowed to expire until at least 30 days' prior
written notice has been given to the Contractor.

17.6    The Owner and Contractor waive all rights against each other and the
Architect, Architect's consultants, separate contractors described in Article
12, if any, 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 obtained pursuant to this Article 17 or any other property
insurance applicable to the Work, except such rights as they may have to the
proceeds of such insurance held by the Owner as fiduciary. The Contractor shall
require similar waivers in favor of the Owner and the Contractor by
Subcontractors and Sub-subcontractors. The Owner shall require similar waivers
in favor of the Owner and Contractor by the Architect, Architect's consultants,
separate contractors described in Article 12, if any, and the subcontractors,
sub-subcontractors, agents and employees of any of them.


                                   ARTICLE 18
                                   ----------
                               CORRECTION OF WORK

18.1    The Contractor shall promptly correct Work rejected by the Architect or
failing to conform to the requirements of the Contract Documents, whether
observed before or after Substantial Completion and whether or not fabricated,
installed or completed, and shall correct any Work found to be not in
accordance with the requirements of the Contract Documents within a period of
one year from the date of Substantial Com-




-------------------------------------------------------------------------------
                    AIA DOCUMENT A107 * ABBREVIATED OWNER CONTRACTOR AGREEMENT 
9 A107-1987         NINTH EDITION * AIA * copyright 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
legal prosecution.
<PAGE>   10
pletion of the Contract or by terms of an applicable special warranty required
by the Contract Documents.  The provisions of this Article 18 apply to Work
done by Subcontractors as well as to Work done by direct employees of the
Contractor. 

18.2    Nothing contained in this Article 18 shall be construed to establish a
period of limitation with respect to other obligations which the Contractor
might have under the Contract Documents.  Establishment of the time period of
one year as described in Paragraph 18.1 relates only to the specific obligation
of the Contractor to correct the Work, and has no relationship to the time
within which the obligation to comply with the Contract Documents may be sought
to be enforced, nor to the time within which proceedings may be commenced to
establish the Contractor's liability with respect to the Contractor's
obligations other than specifically to correct the Work.

                                   ARTICLE 19
                            MISCELLANEOUS PROVISIONS

19.1    The Contract shall be governed by the law of the place where the Project
is located.

19.2    As between the Owner and the Contractor, any applicable statute of
limitations shall commence to run and any alleged cause of action shall be
deemed to have accrued:

        .1      not later than the date of Substantial Completion for acts or
                failures to act occurring prior to the relevant date of
                Substantial Completion;

        .2      not later than the date of issuance of the final Certificate for
                Payment for acts or failures to act occurring subsequent to the
                relevant date of Substantial Completion and prior to issuance of
                the final Certificate for Payment; and

        .3      not later than the date of the relevant act or failure to act by
                the Contractor for acts or failures to act occurring after the
                date of the final Certificate for Payment.

                                   ARTICLE 20
                          TERMINATION OF THE CONTRACT

20.1    If the architect fails to recommend payment for a period of 30 days
through no fault of the Contractor, or if the Owner fails to make payment
thereon for a period of 30 days, the Contractor may, upon seven additional
days' written notice to the Owner and the Architect, terminate the Contract and
recover from the Owner 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 applicable to the
Project. 

20.2    If the Contractor defaults or persistently fails or neglects to carry
out the Work in accordance with the Contract Documents or fails to perform a
provision of the Contract, the Owner, after seven days' written notice to the
Contractor and without prejudice to any other remedy the Owner may have, may
make good such deficiencies and may deduct the cost thereof, including
compensation for the Architect's services and expenses made necessary thereby,
from the payment then or thereafter due the Contractor.  Alternatively, at the
Owner's option, and upon certification by the Architect, that sufficient cause
exists to justify such action, the Owner may terminate the Contract and take
possession of the site and of all materials, equipment, tools, and construction
equipment and machinery thereon owned by the Contractor and may finish the Work
by whatever method the Owner may deem expedient.  If the unpaid balance of the
Contract Sum exceeds costs of finishing the Work, including compensation for
the Architect's services and expenses made necessary thereby, such excess shall
be paid to the Contractor, but if such costs exceeded such unpaid balance, the
Contractor shall pay the difference to the Owner.



<TABLE>
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<S>             <C>
                AIA DOCUMENT A107 - ABBREVIATED OWNER-CONTRACTOR AGREEMENT - NINTH EDITION - AIA(R) - (C)1987
10  A107-1987   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 legal prosecution.
</TABLE>
<PAGE>   11
                                   ARTICLE 21
                                   ----------
                         OTHER CONDITIONS OR PROVISIONS


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



OWNER                                   CONTRACTOR
                                        Pacific Industries, Inc.
                                        DBA Commercial Pacific Co.

/s/ Duncan Edwards                      /s/  James F. Armstrong
----------------------------            -------------------------------
      (Signature)                                 (Signature)

Duncan Edwards, as Agent for                 James F. Armstrong,
 Inland Casino Corporation                   Operations Manager
----------------------------            -------------------------------
  (Printed name and title)                  (Printed name and title)

[AIA LOGO]      CAUTION: You should sign an original AIA document which has this
                caution printed in red. An original assures that changes will
                not be obscured as may occur when documents are reproduced.

--------------------------------------------------------------------------------
AIA DOCUMENT A107 -  ABBREVIATED OWNER-CONTRACTOR AGREEMENT - 
NINTH EDITION - AIA(R) - (C) 1987 THE AMERICAN INSTITUTE OF ARCHITECTS, 
1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C. 20006                  A107-1987 11

WARNING: Unlicensed photocopying violates U.S. copyright law and is subject to
legal prosecution


                                       11
<PAGE>   12
                           [COMMERCIAL PACIFIC LOGO]                ATTACHMENT A

                     COMMERCIAL PACIFIC
                     COMPANY
                     P.O. Box 584
                     Woodinville, Washington 98072
                     (206) 483-6686 - Fax: (206) 486-2158

November 18, 1996

Lawton Design Group
5566 Canfield Place North
Seattle, WA 98103

ATTN: Julie Lawton

RE:   Klamath Falls Casino

Dear Julie,

Thank you for your continued interests in a new Varco-Pruden Building. Based on
your revised preliminary drawing we received, Commercial Pacific Company
proposes to furnish and erect one building with the following specifications:

1.      Size
        ----

        One building 90'-0 feet wide x 178'-0 long with an eave height of 14
        feet. Roof slope to be 6:12.

        62' gable / dormer with valley framing at North side.

        62' x 9' "push out" area with gable /  dormer and valley framing at
        South side.

2.      Design Loads
        ------------

        1994 UBC
        50 PSF snow load
        30 MPH wind load, exposure "B"
        5 PSF sprinkler / mechanical load

3.      Insulation
        ----------

        Fiberglass blanket with R-19, U.L. rated with black vinyl facing.
        Insulation is to be installed at roof area only.




















                 A PACIFIC INDUSTRIES NORTHWEST, INC., COMPANY
<PAGE>   13
Lawton Design Group                                     November 18, 1996
Attn: Julie Lawton                                      Page Two


4.      Wall Secondary
        --------------

        Wall girts 4'-0 with vertical furring channel at 2'-0 o.c. Wood siding
        and batt insulation by others.

5.      Roof Sheeting
        -------------

        Roof to be Varco Pruden - 24 gauge "Patina Green", with 20 year factory
        paint finish and "Copper" battens.

6.      Canopy / Overhang
        -----------------

        2'-0 roof canopy / overhang furnished all around building with metal
        panel soffit.

7.      Gutters and Downspouts
        ----------------------

        Eave gutter and downspouts furnished as required.

8.      Porte Cochere
        -------------

        45' x 62' porte cochere structural steel (tube columns and perimeter
        beams) with roof to match building. Wood trusses and purlins by others.

9.      Mezzanine
        ---------

        Approximately 300 sf mechanical mezzanine structural framing furnished
        including columns, beams, bar joists, pan deck with edge angle, and one
        steel stair. Concrete floor and stair streads by others.

10.     Drawings
        --------

        Anchor bolts drawings, steel building drawings, and structural
        calculations will be provided.

ALSO INCLUDED:
--------------

Anchor bolts and complete erection service.
<PAGE>   14
Lawton Design Group                                           November 18, 1996
Attn:  Julie Lawton                                           Page Three


THE FOLLOWING ITEMS ARE NOT INCLUDED:
------------------------------------

Building permit or plan check fees, architectural drawings, site work,
foundations and floor slabs, plumbing, electrical, heating, any interior
finish, wall siding, wall insulation, trusses at porte cochere, structural
steel finish paint, if required, fans, louvers, vents, windows and doors.

PRICE
-----

The total price for the above described building erected is Three Hundred
Twenty One Thousand Five Hundred Fifty Dollars ($321,550.00), not including any
applicable taxes.

GENERAL CONDITIONS
------------------

1.      Terms - 20% deposit with order, balance on completion or work completed
        at the end of the month, invoiced and payable by the 10th of the
        following month.

2.      This quotation is good for 30 days.

3.      Labor prices included are subject to 20 feet minimum clear, level
        (backfilled) ground around perimeter of building.

      If you would like us to proceed with this building, please indicate your
acceptance by signing in the space provided below and return one copy for our
files, along with the deposit check.

Please call if you have any questions.

Cordially yours,

COMMERCIAL PACIFIC COMPANY



James F. Armstrong

JFA:la

Accepted by:________________________________
Date__________________                                            j/klamath.pro