EXHIBIT 10.71
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement, and Mutual Release ("Agreement"), entered into
this 17th day of May, 2002, is by and between Olympia Gaming Corporation, a
wholly owned subsidiary of Elsinore Corporation (hereinafter collectively
referred to as "Olympia"), Elsinore Corporation ("Elsinore"), The Jamestown
S'Klallam Tribe (the "Tribe"), and JKT Gaming, Inc., ("JKTG") (together, the
"Parties").
RECITALS
A. The Parties entered into agreements as follows: Gaming Project
Development and Management Agreement, dated September 28, 1993, between Olympia,
the Tribe and JKTG; First Amendment to Gaming Project Development and Management
Agreement, dated November 12, 1993, between Olympia, the Tribe and JKTG; Loan
Agreement, dated November 12, 1993, between Olympia, the Tribe and JKTG;
Performance Guaranty dated as of December 3, 1993 between Elsinore, the Tribe
and JKTG; First Amendment to Loan Agreement, dated December 3, 1993, between
Olympia, the Tribe and JKTG; Addendum to Management Agreement, dated January 28,
1994, between Olympia, the Tribe and JKTG; Amended Project Note, dated January
23, 1994, and, Amendment To Management Contract, dated June 6, 1994, between
Olympia, the Tribe and JKTG.
B. Pursuant to the agreements, Olympia, among other things, loaned $9
million to JKTG. In November 1995, JKTG gave notice of termination of the Gaming
Project Development and Management Agreement, as amended. Discussions between
the Parties regarding the foregoing raised a number of disputes and differences.
Olympia alleges that it is due approximately $2,200,000 pursuant to the terms of
the agreements between the Parties, but Olympia is willing to compromise in
consideration of JKTG's agreement to voluntarily make the payments provided in
this Agreement. JKTG alleges that it is obligated to pay no monies to Olympia,
but JKTG is willing to compromise and settle to avoid the expense of litigation.
The Parties now agree to resolve all disputes and differences through this
Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the following terms,
conditions, and covenants, the Parties agree as follows:
1. Intent to Settle. The Parties intend to and the Agreement does resolve
all claims and disputes between them arising out of or related to the agreements
identified in the above recitals, including all claims and cross-claims, which
could have been asserted by the Parties in a lawsuit or arbitration proceeding
("Claims").
2. Settlement Terms.
2.1 Payment Amount. In full consideration for this Agreement, Olympia
agrees to accept, and JKTG agrees to pay Olympia, a total of $1,500,000 subject
to the following terms and conditions:
(a) Initial Payment: Standard Payment Schedule. JKTG shall pay Olympia
$300,000 (the "Initial Payment") upon execution of this Agreement and will pay
to Olympia the balance of $1,200,000 over 36 months beginning June 15, 2002, and
payable on the 15th day of each month thereafter with simple interest at 7.95%,
computed on a 360 day year, according to the amortization schedule attached as
Exhibit A (the "Standard Payment Schedule"). All payments made will be credited
first to accrued but unpaid interest and then to principal.
(b) Advance Payment. JKTG may pay the entire balance due in cash at any
time. In the event JKTG elects to pay the entire balance in advance, the amount
owing will be reduced or "kicked down" and the total pay-off amount (hereafter
the "Advance Payment Amount") will be equal to the Base Principal Amount
(according to Table 1 below) less credit for the $300,000 paid on execution and
credit for the principal portion for each monthly payment that has been made,
plus any accrued but unpaid interest owing as of the date of payment.
TABLE 1
Advance Payment Made Base Principal Amount
On or before November 15, 2002 $1,250,000
On or before May 15, 2003 1,300,000
On or before November 15, 2003 1,350,000
On or before May 15, 2004 1,400,000
On or before November 15, 2004 1,450,000
On or before May 15, 2005 1,500,000
By way of a first example, if JKTG makes only one payment on June 15, 2002,
of $37,575.97, consisting of $29,625.97 in principal and $7,950.00 in interest,
and decides to make advance payment on June 16, 2002, then the Advance Payment
Amount would be $920,374.03, plus any accrued but unpaid interest, calculated as
follows:
$1,250,000.00 Base Principal Amount
($ 300,000.00) Payment on Execution
($ 29,625.97) Total Principal Payments made through June 16, 2002
$ 920,374.03 Advance Payment Amount
By way of a second example, if JKTG makes ten payments starting June 15,
2002, and ending on March 15, 2003, consisting of $305,249.78 in principal, and
thereafter desires to make advance payment on March 16, 2003, then the Advance
Payment Amount on March 16, 2003 would be $694,750.22, plus any accrued but
unpaid interest, calculated as follows:
$1,300,000.00 Base Principal Amount
($ 300,000.00) Payment on Execution
($ 305,249.78) Total Principal Payments made through March 15, 2003
$ 694,750.22 Advance Payment Amount
(c) Late Payment. In the event JKTG fails to pay a monthly payment, and
does not cure within sixty (60) days, then the total amount of principal due
will increase or "kick-up" to $2,200,000, plus any accrued and unpaid interest,
with credit for the $300,000 paid on execution and with credit for the principal
portion of each monthly payment paid (hereafter the "Late Payment Amount"). The
Late Payment Amount, calculated according to the foregoing formula and
consistent with the examples set forth below, will be immediately due in the
event JKTG fails to pay a monthly payment and does not cure within the allotted
sixty (60) days. The Late Payment Amount will bear interest at the rate of 7.95%
per annum, until paid.
In order to lessen the prospect of an inadvertent failure to pay,
misdelivery, or miscommunication, in the event that Olympia fails to receive a
monthly payment when due, Olympia shall make a good faith effort to provide
written notice of the failure to receive payment to JKTG and to provide said
notice on or before the 15th calendar day after the due date.
By way of a first example, if JKTG makes only one payment of $37,575.97 on
June 15, 2002, consisting of $29,625.97 in principal and $7,950.00 in interest,
and thereafter fails to make payments and to cure within sixty (60) clays, then
the Late Payment Amount of $1,870,374.03 (calculated as follows) plus accrued
interest, would be immediately due:
$2,200,000.00 "Kick-up" Amount
($ 300,000.00) Payment on Execution
($ 29,625.97) Total Principal Payments made through June 16, 2002
$1,870,374.03 Advance Payment Pay-Off Amount
By way of a second example, if JKTG makes ten payments starting June 15,
2002, and ending on March 15, 2003, consisting of $305,249.78 in principal, and
thereafter fails to make payments and to cure within the sixty (60) day period,
then the Late Payment Pay-off Amount of $1,594,750.22 (calculated as follows)
plus accrued interest would be immediately due:
$2,200,000.00 Base Principal Amount
($ 300,000.00) Payment on Execution
($ 305,249.78) Total Principal Payments made through March 15, 2003
$1,594,750.22 Advance Payment Pay-Off Amount
(d) Payment Instruction. Unless otherwise instructed by Olympia in writing,
all payments shall be made payable to Olympia Gaming Corporation at the
following address:
Olympia Gaming Corporation
000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxxxx
3. Mutual Release of the Parties: Hold Harmless.
3.1 Release. Each of the Parties and their officers, directors, employees,
agents, and representatives, and all predecessors, successors, assigns, and
entities claiming by or through any of the Parties, hereby releases each of the
other Parties and their officers, directors, employees, agents, and
representatives, and all predecessors, successors, assigns, and entities
claiming by or through any of the Parties, without limitation, from all Claims
or causes of action of any kind or nature whatsoever, accrued or unaccrued,
known or unknown, foreign or domestic, including but not limited to subrogation,
which any of the Parties now has or may have related to or arising out of,
directly or indirectly, the Claims or any other claims whatsoever arising out of
or related to any of the facts or allegations underlying the Claims which could
have been asserted in any lawsuit or arbitration proceeding. Notwithstanding the
foregoing, this Agreement does not release any prospective claim regarding
breach of this Agreement.
4. No Admissions. This Agreement is executed for the purpose of settling
disputes and avoiding the expense and risks of litigation. This Agreement is not
and shall not be construed as an admission or acknowledgment of liability or
wrongdoing on the part of any of the Parties.
5. Limited Waiver of Sovereign Immunity.
5.1 Jurisdiction and Venue. The Tribe and JKTG do not waive, limit, or
modify their sovereign immunity from unconsented suit except as provided in this
Section 5. The Tribe and JKTG expressly waive their sovereign immunity from suit
or action for any and all matters arising out of or related to this Agreement,
including but not limited to any actions to enforce this Agreement, or the
collection of amounts owing under this Agreement. The Tribe and JKTG consent to
be sued in the United States District Court for the Western District of
Washington, the United States Court of Appeals for the Ninth Circuit, and the
United States Supreme Court. Venue for any suits or actions between the parties
shall be in United States District Court for the Western District of Washington.
If and only if the United States District Court lacks jurisdiction, then and
only then do the Tribe and JKTG consent to be sued in the Superior Court of the
State of Washington in Clallam County, with appeals as appropriate to the
Washington Court of Appeals and the Washington State Supreme Court. Provided
further, that if Olympia in any way challenges the jurisdiction of the United
States District Court, the Tribe, upon such event, shall be deemed to have
revoked this limited waiver of sovereign immunity to the State court system. The
parties agree that recourse to the Tribal Court for dispute resolution is
inappropriate and not desired. The Tribe and JKTG specifically and expressly
waive the doctrine of tribal remedies or comity, to the fullest extent permitted
by law.
5.2 Scope of Remedies. The waiver in this Section 5 authorizes only the
following remedy:
(a) Monetary Damages. The Courts described in Section 5.1 shall have
authority to enforce an award of monetary damages set forth in any judgment or
order of the court. However, Olympia agrees that the sole source of funds which
can be used to pay any judgment or order of the Court related to the Agreement
shall be from the Net Income Before Extraordinary Items of JKTG from the
operation of the Seven Cedars Casino from and after April 15, 2002. For purposes
of calculating Net Income Before Extraordinary Items, any month in which there
is a Net Loss Before Extraordinary Items will be excluded from the calculation.
Net Income Before Extraordinary Items shall be determined in accordance with
Generally Accepted Accounting Principals ("GAAP"). In no instance shall any
enforcement of any kind whatsoever be allowed against any other assets of the
Tribe or JKTG other than the assets of the Tribe and JKTG specified herein. In
no case shall a party be entitled to punitive damages.
(b) Injunctive or Declaratory Relief. The Court may utilize its powers,
including its equity Powers, as it deems necessary and appropriate, except that
nothing herein shall be deemed to constitute consent by the Tribe or JKTG to
waive immunity with respect to any claim by Olympia for possession, control, or
occupancy of the Facility, the Gaming Enterprise, any part of the reservation,
or any real or personal property of the Tribe or JKTG.
6. Capacity; General Provisions.
6.1 The signors for the corporate entities have full corporate authority to
bind them to this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Parties and their officers,
directors, employees, agents, and representatives and all other predecessors,
successors, assigns, and entities claiming by or through any of the Parties.
6.2 This Agreement reflects the entire understanding of the Parties, and
cannot be amended except by a writing signed by all Parties.
6.3 The terms of this Agreement are contractual and have been entered into
for valid and adequate consideration. No promise or inducement has been offered
except as set forth herein.
7. Governing Law. If it becomes necessary to enforce or interpret any of
this Agreement's terms, the laws of the State of Washington shall apply, with
jurisdiction in Washington and venue in King County, without giving effect to
principles or provisions relating to conflicts of laws or choice of law.
8. Independent Legal Counsel. The Parties acknowledge that they have read
this Agreement and fully understand its terms, and that they have been fully
advised by their legal counsel. Counsel for both of the Parties has had the
opportunity to participate in the preparation and review of this Agreement. The
Parties waive the general rule of construction that an agreement shall be
construed against its drafter.
9. Counterparts. This Agreement may be executed in any number of identical
counterparts, with the same effect as if all Parties had signed the same
document.
10. Not a Management Contract. The parties agree that this Agreement is not
intended to be construed or interpreted in any manner, shape or form as a
Management Contract, requiring approval by the National Indian Gaming Commission
pursuant to the Indian Gaming Regulatory Act of 1988 ("IGRA"), 25 U.S.C. Section
2701 et seq., and, therefore, this Agreement is deemed valid and binding on the
parties upon execution. The parties further agree that Olympia does not have,
nor shall it assert, any rights to manage the Facility or undertake any actions
or conduct with respect to management of the Facility.
11. Resolutions. The Tribe shall pass a tribal resolution in the form
attached hereto as Exhibit B, whereby the Tribe shall reaffirm the terms of this
Agreement. JKTG shall pass a corporate resolution in the form attached hereto as
Exhibit C, whereby JKTG shall affirm the terms of this Agreement.
12. Attorneys Fees. In the event any suit or action is instituted to
enforce or interpret any of the terms of this Agreement, including an action or
participation in or in connection with the case or proceeding under any chapter
of the Bankruptcy Code or any successor statute, the prevailing party shall be
entitled to such sum as the court may adjudge reasonable as attorneys fees in
such suit, action or proceeding or upon any appeal form any judgment, order or
decree entered therein.
13. Inspection of Records. If and only if JKTG fails to make a payment when
due and fails to cure pursuant to Section 2.1.(c) of this Agreement, then JKTG
and the Tribe agree to appoint an independent third-party to examine the books
of accounts, bills, statements and other records and files of JKTG's Seven
Cedars Casino, to make copies thereof, to discuss the financial records and
accounts of the gaming enterprise with its general manager and appropriate
officers of JKTG at reasonable times, and to prepare a financial report to the
Parties. Olympia, Elsinore, and the independent third-party shall use due care
to maintain the confidentiality of said documents and the information therein,
and shall allow disclosure (a) only to those managers and officers of Olympia
and Elsinore who need to know and (b) only as is necessary to enforce the rights
of Olympia and Elsinore under this Agreement.
OLYMPIA GAMING CORPORATION ELSINORE CORPORATION
By: /s/X.X. "Xxxxx" Waterfall By: /s/Xxxxxx X. Xxxxx
Its: President Its: President
Date: 05/20/02 Date: 05/17/02
THE JAMESTOWN S'KLALLAM TRIBE JKTG GAMING, INC.
By: /s/W. Xxx Xxxxx By: /s/W. Xxx Xxxxx
Its: Chairman Its: Chairman
Date: 5/17/02 Date: 5/17/02
Exhibit A
Standard Payment Schedule
Seven Cedars Casino
Elsinore Settlement
Note Payable Interest Rate 7.95%
No. of Payments 36
Monthly Pmt 37,575.97
Payment on Execution/Initial Payment 300,000.00
Payment Due Date 15th of Month
--------------------- ------- ------------------------ ----------------- ------------------- -------------------------
Date Pmt Payments Interest Principal 1,500,000.00
No.
--------------------- ------- ------------------------ ----------------- ------------------- -------------------------
Initial Pmt 300,000.00 300,000.00 1,200,000.00
---------------------
6/15/2002 1 37,575.97 7,950.00 29,625.97 1,170,374.03
---------------------
7/15/2002 2 37,575.97 7,753.73 29,822.24 1,140,551.80
---------------------
8/15/2002 3 37,575.97 7,556.16 30,019.81 1,110,531.99
---------------------
9/15/2002 4 37,575.97 7,357.27 30,218.69 1,080,313.30
---------------------
10/15/2002 5 37,575.97 7,157.08 30,148.89 1,049,894.41
---------------------
11/15/2002 6 37,575.97 6,955.55 30,620.42 1,019,273.99
---------------------
12/15/2002 7 37,575.97 6,752.69 30,823.28 988,450.72
---------------------
1/15/2003 8 37,575.97 6,548.49 31,027.48 957,423.24
---------------------
2/15/2003 9 37,575.97 6,342.93 31,233.04 926,190.20
---------------------
3/15/2003 10 37,575.97 6,136.01 31,439.96 894,750.24
---------------------
4/15/2003 11 37,575.97 5,927.72 31,648.25 863,102.00
---------------------
5/15/2003 12 37,575.97 5,718.05 31,857.91 831,244.08
---------------------
6/15/2003 13 37,575.97 5,506.99 32,068.97 799,175.11
---------------------
7/15/2003 14 37,575.97 5,291.54 32,281.43 766,893.68
---------------------
8/15/2003 15 37,575.97 5,080.67 32,495.29 734,398.39
---------------------
9/15/2003 16 37,575.97 4,865.39 32,710.58 701,687.81
---------------------
10/15/2003 17 37,575.97 4,648.68 32,927.28 668,760.53
---------------------
11/15/2003 18 37,575.97 4,430.54 33,145.43 635,615.10
---------------------
12/15/2003 19 37,575.97 4,210.95 33,366.02 602,250.08
---------------------
1/15/2004 20 37,575.97 3,989.91 33,586.05 568,664.02
---------------------
2/15/2004 21 37,575.97 3,767.40 33,808.57 534,855.46
---------------------
3/15/2004 22 37,575.97 3,543.42 34,032.55 500,822.91
---------------------
4/15/2004 23 37,575.97 3,317.95 34,258.01 466,564.90
---------------------
5/15/2004 24 37,575.97 3,090.99 34,484.97 432,079.92
---------------------
6/15/2004 25 37,575.97 2,862.53 34,713.44 397,366.49
---------------------
7/15/2004 26 37,575.97 2,632.55 34,943.41 362,423.07
---------------------
8/15/2004 27 37,575.97 2,401.05 35,174.91 327,248.16
---------------------
9/15/2004 28 37,575.97 2,168.02 35,407.95 291,840.22
---------------------
10/15/2004 29 37,575.97 1,933.44 35,642.52 256,197.69
---------------------
11/15/2004 30 37,575.97 1,697.31 35,878.66 220,319.04
---------------------
12/15/2004 31 37,575.97 1,459.61 36,116.35 184,202.68
---------------------
1/15/2005 32 37,575.97 1,220.34 36,355.62 147,847.06
---------------------
2/15/2005 33 37,575.97 979.49 36,596.48 111,250.58
---------------------
3/15/2005 34 37,575.97 737.04 36,838.93 74,411.65
---------------------
4/15/2005 35 37,575.97 492.98 37,082.99 37,328.66
---------------------
5/15/2005 36 37,575.97 247.30 37,328.66 0.00
---------------------
------------------------ ----------------- -------------------
1,652,734.76 152,754.76 1,500,000.00
------------------------ ----------------- -------------------
Exhibit B
Resolution No.13.02
RESOLUTION
JAMESTOWN S'KLALLAM TRIBE
WHEREAS, the Jamestown S'Klallam Tribe ("Tribe") is a Federally recognized
Indian Tribe and possesses attributes of sovereignty over both its members
and its territories; and
WHEREAS, in accordance with its Constitution and Bylaws, the Tribe is governed
by the Jamestown S'Klallam Tribal Council; and
WHEREAS, the Tribal Council is vested with the powers to manage the financial
affairs of the Tribe and to appropriate Tribal funds for Tribal purposes;
and
WHEREAS, JKT Gaming, Inc. ("JKTG") is a tribal corporation, organized and
chartered by the Tribe; and
WHEREAS, the Tribe and JKTG have entered into a Settlement Agreement and Mutual
Release ("Agreement") with Olympia Gaming Corporation, a subsidiary of
Elsinore Corporation, intended to resolve all pending disputes and
differences between the parties of that Agreement; and
WHEREAS, the Tribe and JKTG have agreed, among other things, that (i) the
Jamestown S'Klallam Tribal Court shall have no jurisdiction over the
Agreement; (ii) any and all tribal remedies are expressly waived; and (iii)
a limited waiver of sovereign immunity as set forth in Paragraph 5 of the
Agreement is expressly consented to and authorized; and
WHEREAS, the Jamestown S'Klallam Tribal Council has determined that it is in the
Tribe's best interest to execute the Agreement.
NOW, THEREFORE, BE IT RESOLVED, that the Jamestown S'Klallam Tribal Council does
hereby authorize and approve the execution of the Agreement, including the
provisions therein as to limited waiver of sovereign immunity and
exhaustion of tribal remedies.
BE IT FINALLY RESOLVED, that the Jamestown S'Klallam Tribal Council does
hereby authorize its Chairman to execute the Agreement and any related
documents on behalf of the Tribe. and to otherwise take any and all actions
necessary or incident to the performance of the Tribe thereunder.
CERTIFICATION
We, the undersigned, as the Chairman and Secretary of the Jamestown
S'Klallam Tribal Council do hereby certify that the Jamestown S'Klallam Tribal
Council is composed of five (5) members of whom five (5) constituting a quorum
were present at a meeting on this 13th day of May, 2002, and that the foregoing
resolution was adopted by the affirmative vote of 5 members for and 0 against
and 0 abstention.
JAMESTOWN S'KLALLAM TRIBAL COUNCIL
/s/W. Xxx Xxxxx
Chairman
/s/Xxxxxxxx X. Prime
Secretary
Exhibit C
Resolution No. 01.02
RESOLUTION
JKT GAMING, INC.
WHEREAS, JKT Gaming, Inc. ("JKTG") is a tribal corporation, organized and
chartered by the Jamestown S'Klallam Tribe ("Tribe"); and
WHEREAS, JKTG is empowered pursuant to its Articles of Incorporation and Bylaws;
and
WHEREAS, the Tribe and JKTG have entered into a Settlement Agreement and Mutual
Release ("Agreement") with Olympia Gaming Corporation, a subsidiary of
Elsinore Corporation, intended to resolve all pending disputes and
differences between the parties of that Agreement; and
WHEREAS, the Tribe and JKTG have agreed, among other things, that (i) the
Jamestown S'Klallam Tribal Court shall have no jurisdiction over the
Agreement; (ii) any and all tribal remedies are expressly waived; and (iii)
a limited waiver of sovereign immunity as set forth in Paragraph 5 of the
Agreement is expressly consented to and authorized; and
WHEREAS, the JKTG Board of Directors has determined that it is in JKTG's best
interest to execute the Agreement.
NOW, THEREFORE, BE IT RESOLVED, that the JKTG Board of Directors does hereby
authorize and approve the execution, delivery and performance of Agreement,
including the provisions therein as to the limited waiver of sovereign
immunity and exhaustion of tribal remedies.
BE IT FINALLY RESOLVED, that the JKTG Board of Directors does hereby authorize
the Chairperson of the Board to execute the Agreement and any related
documents on behalf of JKTG, and to otherwise take any and all actions
necessary or incident to the performance of JKTG thereunder.
CERTIFICATION
We, the undersigned, as the Chairperson and Secretary of JKTG, do hereby
certify that the Board of Directors, in a meeting held on May 17, 2002, adopted
the foregoing resolution by a vote of 4 (for) to 0 (against).
JKT GAMING, INC.
/s/W. Xxx Xxxxx
Chairperson of the Board of Directors
/s/Xxxxxxxx X. Prime
Secretary
