Hollywood Park, Inc.
Exhibit 10.42
Form 10-K, 1997
TERMINATION OF CONSULTING AGREEMENT
This Termination of Consulting Agreement is entered into as of January 1,
1998, among the parties listed on the signature page hereto.
Reference is hereby made to that certain Consulting Agreement dated
September 11, 1997 (the "Consulting Agreement"), entered into by the Yakama
Tribal Gaming Corporation, a tribal corporation established under the laws of
The Confederated Tribes and Bands of the Yakama Nation (the "Nation"), HP Yakama
Consulting, Inc., a Delaware corporation, and the Nation. The parties hereby
acknowledge that, in order to obtain certain regulatory approvals from the
National Indian Gaming Commission, it is necessary to terminate the Consulting
Agreement. Therefore, the parties hereby agree that, as of January 1, 1998, the
Consulting Agreement was terminated and of no further force and effect.
In addition, the parties have agreed to revise certain related documents to
remove all references therein to the Consulting Agreement. Accordingly, the
parties agree to substitute the various pages attached hereto as Exhibit A for
the corresponding pages in the following documents, each of which was entered
into on September 11, 1997 by one or more of the parties or their affiliates:
Loan Agreement; Secured Promissory Note; Master Lease; Sublease; and
Construction and Development Agreement.
This Agreement may be executed in one or more counterparts, each of which
shall be an original, and all of which shall constitute one complete instrument.
IN WITNESS WHEREOF, the parties hereto have, by their duly authorized
officers and agents caused this Agreement to be executed on the day and year
first written above.
YAKAMA TRIBAL GAMING CORPORATION,
a tribal corporation established
under the laws of THE CONFEDERATED
TRIBES AND BANDS OF THE YAKAMA NATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Chairman, Gaming Commission
---------------------------
HP YAKAMA CONSULTING, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
-----------------------------
Title:____________________________
CONFEDERATED TRIBES AND BANDS OF
THE YAKAMA INDIANS,
a federally-recognized Indian Tribe
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------
Title: Chairman
----------------------------
Exhibit A
---------
LOAN AGREEMENT
By and Between
YAKAMA TRIBAL GAMING CORPORATION
and
HP YAKAMA, INC.
Dated: September 11, 1997
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is entered into this 11th day of
September, 1997 by and between YAKAMA TRIBAL GAMING CORPORATION, ("Borrower"), a
tribal corporation established under the laws of The Confederated Tribes and
Bands of the Yakama Indian Nation (the "Nation"), having a mailing address of
X.X. Xxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000, and HP YAKAMA, INC. ("Lender"), a
Delaware corporation, having a place of business at c/o Hollywood Park, Inc.,
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, with reference to the
following facts and circumstances:
A. Nation is a federally recognized Indian tribe eligible for the special
programs and services which the United States provides to Indians because of
their status as Indians, and possessing sovereign powers of self-government.
B. Nation is the beneficial owner of certain real property (the
"Property") within its reservation in the State of Washington which is held in
trust by the United States for the benefit of the Nation and over which it
exercises governmental jurisdiction. The Property is more particularly described
in Exhibit A attached hereto.
---------
C. Nation has established Borrower as a special purpose tribal entity to
establish and operate the Enterprise (as defined in the Master Definition List
attached hereto as Exhibit B; all capitalized terms used herein without
---------
definition shall have the respective meanings described thereto in the Master
Definition List) at the Facility for the purpose of engaging in Gaming.
D. Nation has determined that the construction of the Facility and the
development and operation of the Enterprise is an important tribal governmental
project which is intended to improve the economic condition of the Nation and
its members, increase tribal revenues, enhance the Nation's economic self-
sufficiency, and enable the Nation's government to better serve the social,
economic, educational and health needs of the Nation's members.
E. Nation and Borrower are in need of the financial means to permit them
to construct, develop, operate and maintain the Facility and Gaming Enterprise.
F. Nation and Borrower have requested that Lender make a loan of up to
Nine Million and 00/100 Dollars ($9,000,000.00) (the "Loan"), and in connection
therewith, will execute and deliver to the Lender's benefit, among other things,
the Note and the Security Agreement (as such capitalized terms are defined
hereinafter). These documents, together with all other documents evidencing or
securing the Loan, are referred to jointly and severally herein as the "Loan
Documents."
G. This Agreement sets forth the terms and conditions of the obligations
undertaken by Borrower to induce Lender to make the Loan.
-1-
H. This Agreement is intended to be for the financing of the Facility and
the Enterprise only. Nothing herein is intended to be and shall not be
construed as constituting a contract for management services as contemplated by
IGRA, 25 U.S.C. sec. 2711 (or any successor or related statute or regulation).
The parties acknowledge that Lender is to have no management responsibilities
with respect to the Enterprise or Gaming activities whatsoever.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged by the parties, the parties
hereby agree, as of the date first stated above, as follows:
1. Defined Terms. In addition to the words and terms elsewhere
-------------
defined in this Agreement or in the Master Definition List, the words and terms
set forth in this Article I shall have the meanings herein set forth. All
references in this Agreement to any agreement or instrument shall include such
agreement or instrument as the same may be amended, restated, modified,
supplemented, replaced or substituted from time to time. Such definitions shall
be equally applicable to both singular and plural forms of any of the words and
terms therein defined. As used herein:
Council: The Tribal Council of the Nation.
-------
Financing Statements: The UCC-1 Financing Statements executed and
--------------------
delivered by Borrower to Lender naming Borrower as debtor and Lender as secured
party in order to perfect the security interests granted to the Lender in the
Security Agreement.
Indebtedness: (i) all indebtedness, whether or not represented by bonds,
------------
debentures, notes or other securities, for the repayment of money borrowed, (ii)
all deferred indebtedness for the payment of the purchase price of property or
assets purchased, (iii) all guaranties, endorsements, assumptions and other
contingent obligations in respect of, or to purchase or otherwise to acquire,
indebtedness of others, (iv) all indebtedness secured by any mortgage, pledge or
lien existing on property owned, subject to such mortgage, pledge or lien,
whether or not the indebtedness secured thereby shall have been assumed, and (v)
installment purchase contracts, loans secured by purchase money security,
interests, and lease-purchase agreements or capital leases.
Organizational Documents: Collectively, the following documents, each of
------------------------
which shall be in form and substance acceptable to the Lender:
(a) a copy of the Bylaws of the Borrower;
(b) a copy of the ordinances and/or resolutions of the Nation and the
Borrower authorizing the execution, delivery and performance of the
Loan Documents and the Transaction Documents and providing a limited
waiver of its sovereign immunity to the extent required hereby hereof,
and
-2-
providing that all notice and other procedures in connection with the
adoption of such ordinances were complied with;
(c) certificates of the Nation and the Borrower as to organizational
matters in form and substance acceptable to Lender;
(d) financial statements of the Borrower and the Enterprise as may be
required to be delivered under the Transaction Documents.
2. The Loan.
--------
2.1 Funding Commitment. Lender hereby represents that upon the
------------------
Execution Date of this Agreement it shall have on hand or available to it for
funding hereunder, and shall loan to Borrower, and Borrower hereby agrees to
borrow and repay to Lender upon and after receipt of such amount (the "Loan"),
the maximum sum of Nine Million Dollars ($9,000,000)("Maximum Loan Amount").
The Loan shall be evidenced by the Note.
2.2 Repayment. The full terms and conditions regarding repayment,
---------
interest, prepayment and other matters related to repayment of the Loan are as
set forth in the Promissory Note.
2.3 Purpose; Disbursement Conditions. The proceeds of the Loan shall
--------------------------------
be used solely in accordance with the Cost Breakdown to fund the construction,
development, equipping, furnishing, decorating, staffing (including training),
startup operating capital and related start-up needs of the Facility and the
Enterprise. Subject to the terms and conditions of this section, the Loan shall
be funded in such a manner so as to assure Borrower that at least sufficient
funds will be on hand to cover the next sixty (60) days of expenses, based upon
cash flow needs to be developed and approved by the Borrower and Lender.
Borrower shall not incur any construction or development obligations without its
reasonable satisfaction that adequate cash is available.
2.3.1 Cost Breakdown
--------------
(a) Lender will make disbursements of the Loan based on a
detailed breakdown (a "Cost Breakdown" and projected disbursement release
schedule) of construction, financing and other development costs, as more fully
described in the attached Exhibit C, which shall be submitted to, and approved
---------
by, Lender prior to the initial disbursement of the Loan.
(b) The Cost Breakdown restricts disbursements to line items
in cost categories. Lender acknowledges that the Cost Breakdown includes funds
and disbursements which cover a mutually agreed upon amount of Nation's and
Borrower's reasonable legal fees in connection with the negotiation and
preparation of this Agreement, the other Loan Documents and the Transaction
Documents, and projected costs of efforts to obtain BIA and Commission approval
thereof. Borrower agrees to use
-3-
disbursements solely in conformity with the Cost Breakdown. If the Facility
cannot be completed in strict conformity with the most recently approved Cost
Breakdown, Borrower must submit immediately to Lender for its approval a revised
Cost Breakdown. In the revised Cost Breakdown, Borrower must identify requested
changes in any line items and provide a written statement of reasons for the
changes. If further changes are required, Borrower must seek Lender's approval.
Lender need make no further disbursements unless and until it approves the
revised Cost Breakdown as provided, which approval (or the denial thereof) shall
be in Lender's reasonable discretion; provided, however that, Lender shall
approve all revised Cost Breakdowns necessitated as a consequence of
Consultant's default or breach of its obligations under Section 3(ii) of the
Construction and Development Agreement so long as the aggregate costs specified
in such revised Cost Breakdown do not exceed $9,000,000. The most recently
approved Cost Breakdown supersedes all previously approved Cost Breakdowns.
2.3.2 Loan in Balance; Borrower's Funds Account
-----------------------------------------
(a) The Loan is "in balance" whenever the amount of the
undistributed Loan funds, plus any sums provided or to be provided by Borrower
as shown in the Cost Breakdown most recently approved by Lender, are sufficient
in Lender's reasonable judgment to pay, through completion of the Facility and
maturity of the Loan, all costs of construction of the Facility and commencement
of initial operation of the Enterprise. The Loan is "out of balance" if and when
Lender in its reasonable judgment determines that the funds are insufficient to
pay for all such costs and sums payable under the Loan Documents.
(b) Borrower acknowledges the Loan may become "out of
balance" in numerous ways, not all of which may now be foreseen. Borrower
further acknowledges that the Loan may become "out of balance" from a shortage
of funds in any single line item or category of the Cost Breakdown, even if
there are undisbursed Loan funds in other line items or categories. Undisbursed
Loan funds in one category or line item (e.g., insurance costs) may not be
applied to another category or line item (e.g., HVAC) unless either the Cost
Breakdown allows such use (and only to the extent specifically allowed) or
Lender consents in writing to such use in each instance, which consent shall not
be unreasonably withheld.
2.3.3 Disbursement Conditions, Amounts and
------------------------------------
Procedures. The Disbursement Procedures attached as Exhibit D, set forth
----------- ---------
disbursement conditions, amounts and procedures applicable to the Loan. Lender
will disburse the Loan as described in Exhibit D and elsewhere in this
---------
Agreement.
2.3.4 Repayment of Initial HP Loan and
--------------------------------
Pre-Development Amount. Borrower hereby agrees that: (i) the Initial HP Loan
-----------------------
and fifty percent (50%) of the Pre-Development Amount shall be repaid from the
first advance of funds to Borrower that occurs after Lender has received a
license from the Washington State Gambling Commission ("WSGC") as required by
Applicable Law; and (ii) at such time as advances under the Loan equal fifty
percent (50%) of the amounts required to fund
-4-
construction of the Facility (as determined in accordance with the Cost
Breakdown), the remaining fifty percent (50%) of the Pre-Development Amount
shall be repaid as an advance under the Loan.
2.4 Conditions to Funding Obligation. The obligation of Lender to
--------------------------------
make or cause to be made the Loan pursuant to Article 2 hereof shall be subject
to, among other things, the following conditions precedent, unless Lender shall
have, in each instance, waived such requirement in writing:
2.4.1 Lender and any Affiliates, officers, shareholders,
directors, employees or others connected therewith, as may be required by
Applicable Law, shall have applied for and been granted a license or other
permission as may be required from the Tribal Gaming Commission, the WSGC, and
any other Governmental agency required by Applicable Law, approving said funding
by Lender; provided, however, that if Lender has received Interim Funding
Approval (as defined herein), the granting of a license from the WSGC shall not
be a condition to any funding up to the dollar amount authorized by such Interim
Funding Approval; and provided, further, that any funding made pursuant to an
Interim Funding Approval shall not be used to repay the Initial HP Loan or the
Predevelopment Amount. For purposes hereof, the term "Interim Funding Approval"
shall mean written authorization from the WSGC, in form and substance reasonably
satisfactory to Lender, approving the funding by Lender of a specified dollar
amount prior to the receipt of a license from the WSGC. Lender agrees to
promptly apply for such licenses and permissions as soon as practicable
following the date of this Agreement, shall cooperate fully with and
expeditiously to all requests of any such agency to provide any information
required to approve such licensing or other approval, and shall use commercially
reasonable efforts, to receive such approval within ninety (90) days of such
application. Lender shall bear all of its own costs and attorneys fees
associated with obtaining such licenses and permissions. Lender warrants and
represents that it knows of no information that would reasonably be expected to
prevent it from obtaining such licenses or approvals. The failure to obtain
such licenses or approvals in the time specified shall be cause, at Lender's or
Borrower's discretion, to terminate the Loan Documents and the Transaction
Documents to which Lender is a party, but shall not operate to forgive Borrower
of its obligation to repay monies previously advanced to it in accordance with
the terms hereof or Nation of its obligation to repay the Initial HP Loan
pursuant to the terms of that certain Promissory Note in the maximum principal
amount of $800,000 dated August 4, 1997 by the Nation in favor of Lender and
that certain Promissory Note in the maximum principal amount of $800,000 dated
November 25, 1997 by the Nation in favor of Lender.
2.4.2 All of the Loan Documents and the Transaction
Documents, including the Exhibits to be attached thereto, shall have been fully
completed and executed and delivered by both parties.
2.4.3 Lender shall have received verification in form and
substance satisfactory to it that the NIGC does not consider the Loan Documents
or Transaction Documents, or any of them taken individually, to constitute a
management
-5-
contract as defined under IGRA, 25 U.S.C. (S) 2711, provided that Nation shall
seek such approval from the NIGC immediately after the Execution Date, and if
such verification is not approved within ninety (90) days after such approval is
sought, this Agreement and the other Loan Documents and Transaction Documents
shall terminate and be of no force and effect.
2.4.4 Lender shall have received approval of the Loan
Documents and the Transaction Documents, to the extent required by Applicable
Law, from the BIA. Nation shall seek such approval from the Secretary of the
Interior immediately after the Execution Date, and if such verification is not
approved within sixty (60) days after such approval is sought, this Agreement
and the other Transaction Documents shall terminate and be of no force and
effect.
2.4.5 Lender shall have approved UCC, state and federal tax
lien, bankruptcy and judgment searches with respect to Nation, Borrower, the
Property, the Facility and the Collateral duly certified to a current date by
the appropriate filing officer, from the Secretary of State of Washington, the
BIA, and each and every other jurisdiction in which the Borrower or the Nation
owns assets (other than vehicles covered by a certificate of title), which
searches, if not disapproved within ten (10) days after execution of this
Agreement, shall be deemed approved.
2.4.6 Lender shall have received:
(a) an opinion of the Nation's and Borrower's Counsel,
in a form and substance acceptable to Lender, addressing such matters as Lender
may require;
(b) a copy of the Compact;
(c) the Organizational Documents;
(d) Borrower shall have directed Lender to pay all
disbursements to be made on the occasion of the initial advance;
(e) A certificate of an officer of the Nation and the
Borrower confirming the representations and warranties set forth herein;
(f) All certificates of insurance and insurance
endorsements required herein; and
(g) All collateral schedules, security interest
subordination agreements, searches, releases and termination statements which
Lender may request to assure and confirm the creation, perfection and first
priority of the security interests created by the Security Agreement.
-6-
3. Warranties and Representations. The Nation and Borrower hereby
------------------------------
warrant, represent and certify to and for the benefit of Lender as follows,
which warranties, representations, certifications and agreements shall be
conditions to the disbursement of the Loan, shall survive the funding of the
Loan and shall remain continuing during all times when any portion of the Loan
remains outstanding:
3.1 Nation and Borrower each have the full power, authority and
authorization to execute, enter into, and deliver the Loan Documents and the
Transaction Documents to which each is a party and to perform the obligations
Nation and Borrower have assumed hereunder and thereunder, and to own and
operate the Facility and to conduct the Enterprise.
3.2 Borrower is authorized to conduct Gaming on the Property in the
manner and in the places anticipated in this Agreement, and to perform the
obligations it has assumed under this Agreement.
3.3 The execution, delivery and performance of the Loan Documents and
the Transaction Documents by the Nation and Borrower will not violate any law of
the Nation or any law, rule, regulation or court order applicable to the Nation
or Borrower, or result in the breach of or constitute a default under the
Compact, any indenture or loan, credit or other agreement or instrument to which
the Nation is a party or by which they or their assets may be bound or affected
or result in the creation or imposition of any lien, charge or encumbrance of
any nature upon any of its properties or assets contrary to the terms of any
such instrument or agreement;
3.4 The Loan Documents and the Transaction Documents (including,
without limitation, the waivers of sovereign immunity contained therein) have
been duly authorized, executed and delivered by the Nation and Borrower, and
constitute legal, valid and binding obligations of the Nation and Borrower,
enforceable in accordance with the terms thereof except as may be limited by
bankruptcy or other laws.
3.5 Any resolution of the Nation and Borrower approving and
authorizing the execution of the Loan Documents and the Transaction Documents
was duly adopted at a meeting of the authorizing body at a duly called and
convened meeting at which a quorum was present, and has not been repealed,
modified or amended since its adoption. All necessary resolutions or other
Tribal actions have been taken, and such actions are not subject to any reverse
referendum or similar requirement or provision.
3.6 There are no judgments filed or suits, actions or proceedings
pending, or to the knowledge of the Nation or Borrower, threatened against or
affecting the Nation or Borrower, or the Property or by any Court, arbitrator,
administrative agency or other governmental authority which, if adversely
determined, would materially and adversely affect the construction, development
or operation of the Enterprise contemplated in the Loan Documents and the
Transaction Documents.
-7-
3.7 Borrower possesses adequate licenses, certificates, permits,
franchises, patents, copyrights, trademarks and trade names, or the rights
thereto, to conduct the Enterprise.
3.8 The Property, the Facility and the Enterprise and the intended
use thereof for the purpose and in the manner contemplated by this Agreement or
any other document related hereto are permitted by and will comply in all
material respects with all presently applicable Governmental use requirements.
3.9 The most recent financial statements furnished to Lender by
Borrower fairly present the financial condition of the Borrower at and as of the
date thereof, and, as of said date, there were no material liabilities of the
Borrower, direct or indirect, fixed or contingent, which were not reflected in
such financial statements or the notes thereto.
3.10 To the best of its knowledge, Borrower and the Nation have filed
all federal and state tax returns and reports required to be filed, which
returns properly reflect the taxes owed for the period covered thereby, and
except for taxes being contested in good faith by appropriate proceedings
Borrower and the Nation have paid or made appropriate provisions for the payment
of all taxes which may become due pursuant to said returns and for the payment
of all present installments of any assessments, fees and other Governmental
charges upon Borrower or upon any of its property.
3.11 No consent, approval or authorization of or permit or license
from or registration with or notice to any federal or state regulatory
authority, the BIA or any third party is required in connection with the making
or performance of the Loan Documents, the Transaction Documents or any document
or instrument related hereto or thereto, or, if so required, such consent,
approval, authorization, permit or license has been requested and/or obtained or
will be requested within five (5) business days of the Execution Date or such
registration has been made or notice has been given or such other appropriate
action has been taken on or prior to the date of such making or performance.
3.12 Neither the Nation nor Borrower is in default of a material
provision under any material agreement, instrument, decree or order to which it
is a party or to which it, the Property, the Facility or the Enterprise are
bound or affected.
3.13 The conduct and operation of the Enterprise by the Borrower is
not subject to registration with, notification to, or regulation, licensing,
franchising, consent or approval by any state or federal Governmental authority
or administrative agency, except (i) general laws and regulations which are not
related or applicable particularly or uniquely to the type of business conducted
by the Nation, which do not materially restrict or limit the business of the
Nation, and with which the Nation is in substantial compliance and (ii) laws and
regulations promulgated by or associated with the BIA, the NIGC or any State law
or agency with jurisdiction over gaming activities under the
-8-
Compact, including the Washington State Gaming Commission and the laws of the
United States and the State of Washington, all of which have been obtained or
will be applied for in accordance with the terms hereof.
3.14 No tax claims or governmental proceedings are pending or are
threatened against Borrower.
3.15 The Property and the Facility are in compliance with applicable
provisions of any specific or general plan and all zoning, subdivision,
environmental and health and safety rules, regulations, ordinances, directives
and statutes applicable to the Property and the Facility, its occupancy or use;
all restrictive covenants, zoning and subdivision ordinances and building laws
and other applicable governmental laws, ordinances and lawful requirements
applicable to the Property and the Facility have been complied with in all
material respects; and no order, notice, complaint, report, or warning from any
Governmental agency has been or will be received by or communicated to Nation
and/or Borrower, their respective agents, assigns, tenants, subcontractors, or
any other Person acting for Nation and/or Borrower, regarding the Property and
the Facility, its occupancy or use that has not been or will not be promptly
communicated and delivered to Lender.
3.16 As used herein, "Regulated Substance" means any substance,
material, or matter (including, without limitation, medical waste, asbestos,
oil, petroleum or chemical liquids or solids, liquids or gaseous products) that
may give rise to liability under any Environmental Laws (as defined herein). As
used herein, "Environmental Laws" means (i) any local, state or federal laws,
rules, ordinances or regulations either in existence as of the date hereof, or
enacted or promulgated after the date of this Agreement, that concern the
existence, management, control, discharge, treatment, containment, and/or
removal of substances or materials that are or may become a threat to public
health or the environment; or (ii) any common law theory based on nuisance,
trespass, negligence, strict liability, aiding and abetting, or other tortious
conduct.
3.16.1 To Borrower's and Nation's knowledge without
investigation or inquiry, there has been no deposit, storage, seepage or
filtration of any Regulated Substances at, upon, under or within the Property or
any contiguous real estate. To Borrower's and Nation's knowledge without
investigation or inquiry, neither the Nation nor the Borrower has caused or
permitted to occur, and shall not permit to exist, any condition that may cause
a discharge of any Regulated Substances at, upon, under or within the Property
or on any contiguous real estate.
3.16.2 Nation and Borrower shall comply strictly and in all
respects with the requirements of the Environmental Laws applicable to the
Property and related regulations and with all similar laws and regulations and
shall notify Lender immediately in the event of any discharge or discovery of
any Regulated Substance at, upon, under or within the Property and the Facility
of which Lender has notice. Nation and Borrower shall promptly forward to Lender
copies of all orders, notices, permits, applications or other communications and
reports of which Lender has notice in
-9-
connection with any discharge or the presence of any Regulated Substance or any
other matters relating to the Environmental Laws or any similar laws or
regulations, as they may affect the Property and the Facility.
4. Representations and Warranties of Lender. Lender, as an inducement to
----------------------------------------
the Nation to enter into this Agreement hereby represents, warrants and
covenants that:
4.1 Lender is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and is (or prior to the
providing of funds herein shall be) licensed, to conduct business in the State
of Washington as contemplated herein, and has applied for, and, except as
otherwise provided herein, shall obtain prior to providing such funds, such
licenses and background investigation approvals as may be required by Applicable
Law.
4.2 The execution, delivery and performance of the Loan Documents
have been duly authorized by Lender and such documents are valid and binding
obligations of Lender in accordance with their terms thereof, except as such
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
creditor's rights.
4.3 To the extent relevant under Applicable Law with respect to
Lender's obtaining Governmental approval of the Loan, and to the best of
Lender's knowledge, neither Lender nor any current Affiliate, shareholder,
officer, director or key employee thereof has ever had an application for a
gaming license rejected, or because of its or their own background caused the
application for a gaming license for another to be rejected, nor has any gaming-
related license which has been issued to any of such entities or persons ever
been suspended or revoked, and neither Lender nor any of its current Affiliates,
officers, directors or key employees has ever been convicted of a felony or a
gaming-related misdemeanor.
5. Affirmative Covenants. In addition to the covenants and agreements of
---------------------
the Nation set forth and contained in the other Loan Documents and the
Transaction Documents, the Nation and Borrower hereby covenant and agree to and
with Lender that, so long as the Note remains due and unpaid, or any other
obligation of Nation to Lender pursuant to the Loan Documents or the Transaction
Documents remains due under the terms hereof, Borrower will:
5.1 Use the proceeds of the Loan solely for the purposes of and in
accordance with the terms hereof;
5.2 Pay all taxes (including payroll and withholding taxes)
assessments and governmental charges prior to the time when any penalties or
interest accrue, unless contested in good faith by appropriate proceedings in
accordance with Section 10;
5.3 Continue the operation of the Enterprise; maintain all rights,
licenses, and franchises necessary for the operation of the Enterprise; and
comply with all Applicable Laws pertaining to the Enterprise, including but not
limited to IGRA;
-10-
5.4 Maintain property, liability, business interruption, worker's
compensation and other forms of insurance in commercially reasonable amounts
naming Lender as an additional insured and a loss payee, with thirty (30) day
cancellation notices to go to Lender.
5.5 Furnish to Lender as soon as possible and in any event within
five (5) business days after the Nation has obtained actual knowledge of the
occurrence of Event of Default or any event which with the passage of time or
the giving of notice or both would constitute an Event of Default, a statement
signed by Borrower setting forth details of such event and the action which
Borrower has taken, is taking, or proposes to take to correct the same;
5.6 Promptly give notice in writing to Lender of any and all
litigation involving Borrower, the Nation, the Enterprise or the Facility where
the amount in dispute exceeds $50,000 or is not covered by insurance, and of any
and all proceedings commenced against the Nation or Borrower by or before any
court or governmental or regulatory agency, which may have an adverse material
impact on the Enterprise or Borrower's ability to pay amounts due under the
Note;
5.7 Comply with the requirements of all Applicable Laws, rules,
regulations and orders of any Governmental Authority a breach of which would
materially and adversely affect the Enterprise, except where diligently
contested in good faith and by proper proceedings;
5.8 Obtain all necessary and appropriate state, federal, local,
tribal, and private clearances, authorizations, permits and licenses with
respect to the Enterprise;
5.9 Preserve all of the rights, privileges and franchises necessary
or desirable in the normal conduct of the Enterprise; conduct the Enterprise in
an orderly, efficient and regular manner; and not liquidate, merge, dissolve,
suspend business operations or assign, encumber, lease, transfer, encumber or
sell the Facility, the Enterprise, the Collateral or any portion thereof or all
or substantially all of its assets and the Nation shall not transfer any of its
ownership interest in Borrower without the prior written consent of Lender,
which consent (or the denial thereof) shall be in Lender's sole and absolute
discretion;
5.10 Keep all of the assets and properties necessary to its business,
including without limitation the Facility, in good working order and condition,
ordinary wear and tear excepted;
5.11 At all times keep proper books of record and accounts for the
Enterprise in accordance with GAAP, and, upon one (1) days notice of Lender,
provide any duly authorized representative of Lender access during normal
business hours to, and permit such representative to reasonably examine, copy or
make extracts from, any
-11-
and all books, records and documents in the Nation's possession or control
relating to the Facility, the Property or the Enterprise;
5.12 Authorize and cause the Enterprise, on behalf of the Nation, to
make monthly principal payments under the Note to the extent it is required to
do so, under the Note, which authorization shall not be revoked, canceled, or
terminated;
5.13 Employ as Enterprise management and key operating personnel
persons with requisite and appropriate experience for the position for which
they are employed, taking into account Nation's Indian preference policy and its
goal of placing and advancing as many of Nation's qualified tribal members as
possible into Gaming Enterprise managerial, key and other employee positions;
and
5.14 Employ in positions other than as management and key operating
personnel a reasonable and appropriate number of persons with requisite and
appropriate experience for the position for which they are employed, at rates of
pay appropriate to the position; and establish, maintain and enforce operating
policies and procedures which reflect sound and reasonable business judgment and
which are appropriate for the Enterprise.
5.15 Retain competent consultants with requisite and appropriate
experience to consult with Borrower as necessary to assist in the operation of
the Facility and the Enterprise in accordance with industry standards for
similar operations. All rights of any consultant to compensation or fees
pursuant to any such contract shall be subordinate to Lender's rights under the
Loan Documents and the Transaction Documents.
6. Financial Statements and Audits.
-------------------------------
6.1 Borrower shall deliver to the Lender as soon as practicable and
in any event within twenty (20) days after the end of each month, a statement of
Gross Revenue, Net Receipts, Net Revenue and Available Distributable Cash for
the preceding month, all in reasonable detail and certified by the chief
executive or financial officer of Borrower to have been prepared in accordance
with GAAP and this Agreement.
6.2 Borrower shall deliver to the Lender an accounts receivable
report and an accounts payable aging report of the Enterprise at such times as
the Lender may from time to time request.
6.3 Borrower shall deliver to the Lender, all reports required by law
and applicable regulations submitted to or received from any federal, state or
Tribal gaming authorities within thirty (30) days of receipt thereof.
6.4 Borrower shall deliver to the Lender as soon as is practicable
and in any event within ninety (90) days after the close of each fiscal year,
(i) an audited balance sheet of the Enterprise and Borrower, (ii) an audited
statement of income of the
-12-
Enterprise and Borrower, and (iii) an audited statement of cash flows, in each
case, of the Enterprise and Borrower, as at the end of and for the fiscal year
just closed, setting forth in comparative form the corresponding figures for the
preceding Fiscal Year all in reasonable detail and certified (without any
qualification or exception) by independent, nationally recognized public
accountants; and concurrently with such financial statements, a written
statement signed by such independent accountants (x) to the effect that, in
making the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of any Event
of Default or potential Event of Default, or, if such independent accountants
shall have obtained from such examination any such knowledge, they shall
disclose in such written statement the Event of Default or potential Event of
Default and the nature thereof, it being understood that such independent
accountants shall be under no liability, directly, or indirectly, to anyone for
failure to obtain knowledge of any such Event of Default or potential Event of
Default, and (y) setting forth calculations of such auditors as to the
compliance by Borrower with all the covenants contained herein (including,
without limitation, calculations of Gross Gaming Revenues, Net Receipts, Net
Revenues and Available Distributable Cash).
6.5 Audits. Borrower shall cause to be performed on a timely basis,
------
and delivered to Lender within thirty (30) days of completion and receipt by
Borrower thereof, all audits of the Enterprise which must be performed in
accordance with Applicable Law. Such reports shall include at a minimum an
annual audit performed by a nationally recognized independent public accounting
firm in accordance with generally accepted auditing standards as applied to
casinos and sufficient to meet NIGC auditing requirements.
6.6 Government Reports. The Nation shall deliver to Lender all
------------------
reports to or from any Governmental agency within five (5) days of submission to
or receipt from such agency.
7. Negative Covenants. Nation and Borrower covenant and agree that
------------------
Borrower will not, except with the prior written consent of Lender (which
consent, or the denial thereof, shall be in Lender's sole and absolute
discretion):
7.1 Indebtedness. Incur any Indebtedness during the term of the Loan
------------
other than (i) the Loan, (ii) trade payables of the Enterprise incurred in the
ordinary course of business, and (iii) purchase money financing not in excess of
$100,000 at any one time outstanding;
7.2 Sale or Disposition of Property. Sell, dispose of, lease,
-------------------------------
assign, sublet, transfer, mortgage or encumber (whether voluntarily or by
operation of law) all or any part of its right, title or interest in or to the
Property, the Facility, the Collateral, the Enterprise or, in the case of
Nation, Borrower except (i) encumbrances to secure purchase money financing
permitted under Section 7.1 which attach solely to the asset being financed
thereby; and (ii) dispositions of equipment in connection with replacements with
equipment of equal or greater value;
-13-
7.3 Alteration of Enterprise. Materially alter the nature of the
------------------------
Enterprise;
7.4 Excessive Compensation. Pay excessive or unreasonable salaries,
----------------------
bonuses, commissions, consultant fees, or other commissions to employees,
agents, contractors, vendors or the Tribal Gaming Commission;
7.5 Material Breach. Cause or permit any breach, default or event of
---------------
default to occur under any of the Transaction Documents which is not cured
within the applicable cure provisions thereof;
7.6 Consolidations; Mergers. Consolidate or merge with any
-----------------------
corporation; acquire any business, or acquire stock of any corporation; enter
into any partnership or joint venture; or form any subsidiary.
7.7 Distributions. Make any distribution of funds to the Nation or
-------------
any dependent or independent entity or Affiliate of the Nation or Borrower not
expressly permitted in the Loan Documents or the Transaction Documents; or
7.8 Investments. Lend or advance money or credit to any person
-----------
(other than customers of the Enterprise in the ordinary course of business,
consistent with industry standards and on commercially reasonable terms), or
invest in (by capital contribution, creation of subsidiaries or otherwise), or
purchase or repurchase the stock or Indebtedness, or all or a substantial part
of the assets or properties, of any person, or enter into any exchange of
securities with any person, or guarantee, assume, endorse or otherwise become
responsible for (directly or indirectly or by any instrument having the effect
of assuring any person's payment or performance or capability) the Indebtedness,
performance, obligations, stock or dividends of any person, or agree to do any
of the foregoing.
8. Events of Default. Each of the following occurrences shall constitute
-----------------
an Event of Default under this Agreement and under the other Loan Documents (any
such event, an "Event of Default"):
8.1 Failure of Borrower to pay any or all of the Indebtedness arising
out of this Agreement or the other Loan Documents or any amounts owing pursuant
to the Transaction Documents or provide any financial statements or audits
required pursuant to Section 6 hereof within five (5) days of when due;
8.2 Failure of Borrower to observe or perform any of its respective
covenants, conditions or agreements to be observed or performed by it under the
Loan Documents so as to render it in default thereof, including the failure to
cure as provided in such document, for a period of fifteen (15) days after
written notice specifying such default and requesting that it be remedied,
unless Lender has agreed in writing to an extension of such time prior to its
expiration, or for such longer period as may be reasonably necessary to remedy
such default (other than defaults which can be cured
-14-
through payment of money), provided that such breaching party is proceeding with
reasonable diligence to remedy the same;
8.3 Nation or Borrower shall file a petition in bankruptcy or for
reorganization or for an arrangement pursuant to any present or future state or
federal bankruptcy act or under any similar federal or state law, or shall be
adjudicated a bankrupt or insolvent, or shall make a general assignment for the
benefit of its creditors, or shall be unable to pay its debts generally as they
become due (other than as permitted in the Note and the Sublease); or if a
petition or answer proposing the adjudication of Nation or Borrower by Nation,
Borrower or any Affiliate of Nation or Borrower as a bankrupt or its
reorganization under any present or future state or federal bankruptcy act or
any similar federal or state law shall be filed in any court and such petition
or answer shall not be discharged or denied within thirty (30) days after the
filing thereof, or if a receiver, trustee or liquidator of Nation or Borrower of
all or substantially all of the assets of Nation or Borrower or of the Property,
the Facility, the Enterprise, or the Collateral shall be appointed in any
proceeding and shall not be discharged within thirty (30) days of such
appointment; or if such party shall consent to or acquiesce in such appointment;
or if the property and estate and interest of the Nation or Borrower in the
Property, the Facility, the Enterprise, or the Collateral or any part thereof
shall be levied upon or attached in any proceeding, and such levy or attachment
shall remain undischarged for a period of thirty (30) days during which
execution has not been effectively stayed; or
8.4 The Property, the Facility or the Enterprise is condemned,
destroyed or damaged to any material extent, and is not substantially restored
within one (1) year after the date thereof.
8.5 Any representation or warranty made by the Nation or Borrower in
any of the Loan Documents or the Transaction Documents shall prove to be untrue
or misleading in any material respect, or any financial information, or any
statement, certificate or report furnished hereunder or under any of the Loan
Documents or the Transaction Documents by or on behalf of the Nation or Borrower
shall prove to be untrue or misleading in any material respect on the date when
the facts set forth and recited therein are stated or certified.
8.6 The occurrence of an event of default of Borrower with respect to
any Indebtedness other than the Loan.
8.7 Any breach or default under any Transaction Document (taking into
account applicable cure periods set forth therein).
9. Rights and Remedies. Upon the occurrence of an Event of Default and
-------------------
at any time thereafter until such Event of Default is cured to the written
satisfaction of Lender, may, without notice or demand, exercise one or more of
the following rights and remedies:
-15-
9.1 So long as Lender has given the notice required pursuant to
Section 11.6.3.4 and the thirty (30) day period specified therein has expired
without cure, declare all unmatured obligations to be immediately due and
payable, and the same shall thereupon be immediately due and payable;
9.2 Offset any indebtedness Lender or any of its Affiliates then owes
to the Nation, whether or not then due, against any obligation then owed to the
Lender or any of its Affiliates, whether or not then due;
9.3 Exercise and enforce any and all rights and remedies available
upon default otherwise available under Applicable Law or any other Loan Document
or Transaction Document, including but not limited to the Security Agreement.
10. Permitted Contests. Neither the Nation nor the Borrower shall be
------------------
required to pay any tax, charge, assessment or imposition on Gross Revenues or
Net Revenues, or imposed on the Nation or Borrower with respect to the Facility
or the Enterprise, or on the Facility or Gaming Enterprise themselves, so long
as the Nation or Borrower shall contest, in good faith and at its own cost and
expense, the amount or validity thereof, in an appropriate manner or by
appropriate proceedings which shall operate during the pendency thereof to
prevent the collection of or other realization upon the tax, assessment, levy,
fee, rent, charge, lien or encumbrance so contested and to further prevent the
sale, forfeiture or loss of the Enterprise or Facility or any part thereof, to
satisfy the same. Each such contest shall be promptly prosecuted to final
conclusion (subject to the right of the Nation or Borrower to settle any such
contest), and in any event the Nation and Borrower will save Lender harmless
against all losses, judgments, decrees and costs (including attorneys fees and
expenses in connection therewith) and will, promptly after the final
determination of such contest or settlement thereof, pay and discharge the
amounts which shall be levied, assessed or imposed or determined to be payable
therein, together with all penalties, fines, interest, costs and expenses
thereon or in connection therewith. Nation or Borrower shall give Lender prompt
written notice of any such contest.
11. Miscellaneous.
-------------
11.1 Notices. Any notice required to be given pursuant to this
-------
Agreement shall be delivered by overnight courier or U.S. Express Mail with
notice deemed effective on the later of the first business day after deposit or
the day on which the courier confirms delivery, addressed as follows:
(a) If to the Borrower:
Yakama Tribal Gaming Corporation
c/o The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
-16-
With a copy to:
The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Chairperson, Tribal Council
and:
Xxxxxx & Associates
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
(b) If to Lender:
HP Yakama, Inc.
c/o Hollywood Park, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
With simultaneous copies to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
or to such other address(es) as the parties provide to each other in writing.
11.2 Amendments, Etc. This Agreement and the Transaction Documents
---------------
may not be amended or modified, nor may any of their terms (including, without
limitation, terms affecting the maturity of or rate of interest on the Note) be
modified or waived, except by written instruments signed by Lender and Borrower.
11.3 Time of Essence. Time is of the essence in the performance of
---------------
this Agreement.
11.4 Binding Effect and Assignment. This Agreement shall be binding
-----------------------------
upon and inure to the benefit of the Nation and Lender and their respective
successors and permitted assigns, except that neither party may transfer or
assign its rights hereunder without the prior written consent of the other.
-17-
11.5 Waivers. No waiver by a party of any right, remedy or Event
-------
of Default hereunder shall operate as a waiver of any other right, remedy, or
Event of Default or of the same right, remedy or Event of Default on a future
occasion. No delay on the part of a party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy preclude other or future exercise thereof or the
exercise of any other right or remedy.
11.6 Limited Waiver of Sovereign Immunity.
------------------------------------
11.6.1 Retention of Sovereign Immunity. By this Agreement,
-------------------------------
the Nation and Borrower do not waive, limit or modify their respective sovereign
immunity from unconsented suit or proceedings in arbitration, except as provided
in this Section.
11.6.2 Scope of Waiver. Subject to the provisions of this
---------------
Section the Nation and Borrower hereby expressly grant to Lender and other
Persons within the scope of Section 11.6.5, a limited waiver of their respective
sovereign immunity from unconsented suit and proceedings in arbitration, their
respective right to require exhaustion of Tribal remedies, its right to seek
Tribal remedies and their respective right to be sued in the Courts of the
Nation, as such Courts are or may be established, and consents to suit in
accordance with this Section.
11.6.3 Procedural Requirements. The Nation and Borrower
-----------------------
grant a limited waiver of their respective sovereign immunity as to suit
involving a claim if, and only if, each and every one of the following
conditions is met:
11.6.3.1 The claim is made by a party designated
under Section 11.6.5, and not by any other Person;
11.6.3.2 The claim alleges a breach by the Nation or
Borrower of one or more of the specific obligations or duties expressly assumed
by the Nation or Borrower under the terms of this Agreement or the other Loan
Documents (including, without limitation, all indemnification obligations
hereunder);
11.6.3.3 The claim seeks:
(a) some specific action, or discontinuance
of some action, by the Nation, Borrower or the Enterprise to bring the Nation or
Borrower into full compliance with the duties and obligations expressly assumed
by the Nation or Borrower under this Agreement or the other Loan Documents; or
(b) money damages for noncompliance with the
terms and provisions of this Agreement or the other Loan Documents (including,
without limitation, all indemnification obligations hereunder).
11.6.3.4 The claim is made in a detailed written statement to
the Nation or Borrower, as applicable, stating the specific action or
discontinuance of action
-18-
by the Nation, Borrower, or the Enterprise which would cure the alleged breach
or non-performance, or the sum of money claimed to be due and owing from the
Nation or Borrower, as applicable, to Lender by reason of such specific breach
or non-performance, and, except where Lender is seeking injunctive relief, the
Nation or Borrower shall have thirty (30) calendar days to cure such breach or
non-performance or to make such payment before arbitration or judicial
proceedings may be instituted.
11.6.4 Time Period. With respect to any claim authorized in
-----------
this Section, initial judicial proceedings, as authorized herein, shall be
commenced within the later of two (2) years after the claim accrues or one year
after the claim is discovered, or such claim shall be forever barred. The waiver
granted herein shall commence on the Execution Date and shall continue for two
years following the expiration, termination, or cancellation of this Agreement
or the other Loan Documents (whichever is later), except that the waiver shall
remain effective for any proceedings then pending, and all appeals therefrom.
11.6.5 Recipient of Waiver. The recipients of the benefit
-------------------
of this waiver of sovereign immunity are limited to Lender, its successors and
assigns, and any and all Persons covered by the indemnification provisions
hereof.
11.6.6 Federal Question. The parties agree that any dispute
----------------
raised under the provisions of this Section 11.6 shall be resolved first
pursuant to applicable federal law, and if no federal law applies, pursuant to
the applicable laws of the State.
11.6.7 Service of Process. In any proceeding brought
------------------
pursuant to this Section 11.6, the Nation and Borrower consent to service made
in accordance with the notice provisions of this Agreement.
11.6.8 Enforcement. The Nation and Borrower waive their
-----------
respective sovereign immunity from a judgment or order consistent with the terms
and provisions of this Section 11.6, which is final because either the time for
appeal thereof has expired or the judgment or order is issued by a court having
final appellate jurisdiction over the matter. The Nation and Borrower consent to
the jurisdiction of the United States District Court for the Eastern District of
Washington and any court having appellate jurisdiction thereover, consistent
with the terms and conditions of this Section 11.6. None of the parties shall
object to the jurisdiction or venue of said federal court. Without in any way
limiting the generality of the foregoing, the Nation and Borrower expressly
authorize any Governmental authorities who have the right and duty under
Applicable Law to take any action authorized by any court, to take such action
to give effect to any judgment entered against the Nation or Borrower,
including, without limitation, entering on to the Property, or any other lands
within the Nation's jurisdiction, and the Facility to seize possession of any
Collateral for the purpose of giving effect to any judgment entered against the
Nation or Borrower pursuant to this Section 11.6.
-19-
11.6.9 Assets Pledged to Satisfy Enforcement Proceedings.
-------------------------------------------------
The foregoing limited waiver of sovereign immunity is expressly conditioned on
the parties' agreement, set forth herein, that the only assets, including
property and funds, which shall be available, and which are thus specifically
pledged and assigned hereby, to satisfy any enforcement proceedings or judgment
in connection with this Agreement, or any other Loan Document, shall be limited
to (i) the Collateral, and (ii) possession of the Leased Premises as provided in
the Master Lease.
11.6.10 Limitation Upon Enforcement. Except with respect to
---------------------------
damages arising under the indemnification provisions of this Agreement awarded
against the Borrower and/or the Enterprise, damages awarded against the Nation,
Borrower, or the Enterprise shall be satisfied solely from assets specified in
Section 11.6.9, and shall not constitute a lien upon or be collectible from any
other income or assets of the Nation or Borrower, except with the written
consent of the Nation or Borrower.
11.6.11 Expenses of Judicial Enforcement. Except as ordered
--------------------------------
by a court of competent jurisdiction and as set forth in the indemnification
provisions hereof, all parties shall bear their own costs, including attorneys'
fees, in connection with any judicial proceedings authorized under this
Agreement. The parties expressly agree that this provision shall survive the
termination, for any reason, or expiration of this Agreement.
11.6.12 Guaranty. The Nation and Borrower agree not to
--------
revoke or limit, in whole or in part, the limited waiver of sovereign immunity
of the Nation and Borrower contained in this Section 11.6 or in any way attempt
to revoke or limit, in whole or in part, such limited waiver of sovereign
immunity. In the event of any such revocation or attempted revocation, the
parties expressly recognize and agree that there remains no adequate remedy at
law available to Lender or the Persons covered by the indemnification provisions
hereof, and the Nation and Borrower hereby consent to the entry of appropriate
injunctive relief consistent with the terms and conditions of this Agreement, as
may be granted by any court of competent jurisdiction.
11.7 Remedies Cumulative. The rights and remedies herein specified
-------------------
of the parties hereto are cumulative and not exclusive of any rights or remedies
which the parties hereto would otherwise have at law or in equity or by statute.
11.8 Governing Law and Entire Agreement. This Agreement shall be
----------------------------------
governed by federal law, if applicable, then by the laws of the State of
Washington. The Loan Documents and the Transaction Documents contain the entire
agreement of the parties on the matters covered herein.
11.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
-20-
11.10 Not Joint Venturers. Lender is not, and shall not by reason of
-------------------
any provision of any of the Transaction Documents be deemed to be, a joint
venturer with or partner or agent of the Nation and/or Borrower.
12. Indemnification.
---------------
12.1 Indemnification by Nation and Borrower. The Nation and
--------------------------------------
Borrower agree to indemnify and hold harmless Lender, its directors, officers,
agents and employees, against any and all claims of or losses, damages or
liability to third parties to which Lender, its directors, officers, agents and
employees, may become subject under any law in connection with the carrying out
of the transactions contemplated by this Agreement or the other Loan Documents,
or the conduct of any activity on the Property (other than as a result of gross
negligence or willful misconduct of any such party) and to reimburse Lender, its
directors, officers, agents and employees, for any out-of-pocket legal and other
expenses (including reasonable attorneys' fees) incurred by Lender, its
directors, officers, agents and employees, in connection with investigating any
such losses, claims, damages or liabilities or in connection with defending any
actions relating thereto. Lender agrees, at the request and reasonable expense
of the Nation and Borrower, to cooperate in the making of any investigation in
defense of any such claim and promptly to assert any or all of the rights and
privileges and defenses which may be available to Lender. The Nation and
Borrower further release and agree to hold harmless Lender, its directors,
officers, agents and employees, from any claims of or losses, damages or
liability to third parties arising out of any covenant, representation or
undertaking of the Nation or Borrower contained in this Agreement, or the other
Loan Documents. The provisions of this Section shall survive the termination of
this Agreement and the other Loan Documents.
12.1.1 Indemnification by Lender. Lender agrees to indemnify and
-------------------------
hold harmless the Nation and Borrower and their respective directors, officers,
agents and employees, against any and all claims of or losses, damages or
liability to third parties to which the Nation and Borrower and their respective
directors, officers, agents and employees, may become subject under any law as a
result of the gross negligence or willful misconduct of the directors, officers,
agents or employees of the Lender, and to reimburse the Nation and Borrower and
their respective directors, officers, agents and employees, for any out-of-
pocket legal and other expenses (including reasonable attorneys' fees) incurred
by the Nation or Borrower or their respective directors, officers, agents and
employees, in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions relating thereto. The
Nation and Borrower agree, at the request and reasonable expense of the Lender,
to cooperate in the making of any investigation in defense of any such claim and
promptly to assert any or all of the rights and privileges and defenses which
may be available to the Nation and Borrower. Lender further releases and agrees
to hold harmless the Nation and Borrower and their respective directors,
officers, agents and employees, from any claims of or losses, damages or
liability to third parties arising out of any covenant, representation or
warranty of the Lender contained in this Agreement or the other Loan
-21-
Documents. The provisions of this Section shall survive the termination of this
Agreement and the other Loan Documents.
12.1.2 Rights of Persons Covered. The Persons covered by the
-------------------------
indemnification provisions hereof shall be third party beneficiaries of this
Agreement and shall have the right, subject to the provisions of this Agreement,
to enforce such indemnification provisions.
-22-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives and delivered as of the day
and year first above written.
"Borrower"
YAKAMA TRIBAL GAMING CORPORATION,
a tribal corporation formed under the laws of
the Confederated Nations and Bands of the
Yakama Indian Nation
By:______________________________
Name:____________________________
Title:___________________________
"Lender"
HP YAKAMA, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
As to Sections 3, 5, 6, 7, 10, 11.4, 11.6, 11.8 and 12 only
"Nation"
CONFEDERATED NATIONS AND BANDS OF THE
YAKAMA INDIAN NATION,
a federally recognized Indian Nation
By:______________________________
Name:____________________________
Title:___________________________
-23-
Exhibit A
---------
[description of property]
-1-
Exhibit B
---------
Master Definitions List
-1-
Exhibit C
---------
COST BREAKDOWNS
The Cost Breakdown shall be an analysis, prepared by Borrower and approved
by Lender, of the total amount needed by Borrower to construct, develop and
initiate operations of the Facility and the Enterprise and to perform Borrower's
other obligations under the Loan Documents and the Transaction Documents.
The Cost Breakdown shall set forth the maximum amount of Loan funds
allocated to each line item. Lender will disburse the Loan according to those
allocations, all on the terms and subject to the conditions of this Agreement.
Whenever a revised Cost Breakdown is required, Borrower must prepare and
submit it for Lender's approval all in accordance with this Agreement. Any
revised Cost Breakdown approved by Lender will be a more recent version of the
analysis provided in the initial cost breakdown, and must include revised
versions of any detailed breakdowns included in the initial cost breakdown.
The signature of Borrower or any of its authorized agents or
representatives on the initial Cost Breakdown or any revised Cost Breakdown
constitutes representations and warranties made by Borrower to Lender under this
Agreement.
-1-
Exhibit D
---------
DISBURSEMENT PROCEDURES
I. Conditions to Disbursement
--------------------------
Before Lender becomes obligated to make any disbursement under this
Agreement, all conditions to the disbursement must have been satisfied at
Borrower's sole cost and expense in a manner reasonably acceptable to Lender.
No waiver of any condition to disbursement is effective unless expressly
made by Lender in writing. If Lender makes a disbursement before fulfillment of
one or more required conditions, that disbursement alone will not be a waiver of
such conditions, and Lender reserves the right to require their fulfillment
before making any subsequent disbursements. If all conditions are not satisfied,
Lender, acting in its reasonable judgment, may disburse as to certain items or
categories of costs and not others.
1.1 Loan Closing and First Disbursement
-----------------------------------
Lender is not required to make the first disbursement until all
conditions to close the Loan are satisfied. In addition to the conditions set
forth in the body of this Agreement, these conditions include the following:
(a) Lender must receive a Draw Request, as defined and described
hereinafter.
(b) The plans and specifications for the Facility must be approved by
Lender.
(c) The account(s) to be established for funding of the Loan must be
opened.
(d) Lender must receive such financial statements, tax returns and
other financial information as it may reasonably require regarding the financial
condition of Borrower or any of its other parties or the Property.
(e) Lender shall have received and approved the first Cost Breakdown.
1.2 Subsequent Disbursements
------------------------
After the first disbursement, Lender shall not be required to make any
further disbursements if:
(a) Lender does not receive a Draw Request; or
-2-
(b) Lender has not received copies of all building permits (or their
equivalent) for the Facility or evidence satisfactory to Lender from the
appropriate Governmental authorities that, except for the payment of permit
issuance fees, all conditions to the issuance of permits (or their equivalent)
have been satisfied and the Governmental authorities are in a position to
deliver such permits (or their equivalent) to Borrower; or
(c) The Facility (or any portion thereof) is materially damaged and
not repaired, unless Lender receives funds from Borrower or insurance proceeds
sufficient to pay for all repairs in a timely manner; or
(d) The Property or any interest in it is affected by eminent domain
or condemnation proceedings; or
(e) Lender receives a bonded stop notice or notice of a mechanics
lien or notice of a claim from a contractor for unpaid and delinquent amounts
owing, unless Borrower files a bond satisfactory to Lender; or
(f) The Loan is "out of balance" according to this Agreement; or
(g) Lender determines that there has been or will be a material
failure to meet the projections of the Cost Breakdown, and Borrower fails to
comply with any demand by Lender to submit a revised Cost Breakdown or Lender
does not approve any revised Cost Breakdown proposed by Borrower; or
(h) Lender has notified Borrower that a reasonable basis to believe
that a breach, default or failure of condition under any of the Loan Documents
and/or the Transaction Documents exists.
(i) An Event of Default has occurred and is continuing, or an event
has occurred that with notice or the passage of time could become such an Event
of Default.
II. Disbursement Amounts
--------------------
Set forth in one of the columns of the cost breakdown will be a "Loan
Disbursement Budget" broken down by line items. From each line item, Lender will
disburse Loan funds in a total amount not to exceed the Loan Disbursement Budget
for that line item, taking into account all prior disbursements, any applicable
retention requirements and any reallocation of funds to which Lender has
consented in writing.
-3-
III. Disbursement Procedures
-----------------------
3.1 Draw Requests
-------------
(a) For each disbursement, Borrower must submit to Lender a written
request signed by Borrower or its agent designated below and its contractor,
together with such documentation and information as Lender requires
(collectively, a "Draw Request"). Each Draw Request must be acceptable in form
and substance to Lender in the exercise of its reasonable judgment and include
such items of information and documentation, including invoices, canceled
checks, lien waivers and other evidence as Lender requires, to show that
Borrower is in compliance with the Loan Documents. If Lender so requires, any
given Draw Request also must include written certification by the Facility
architect and the contractor that the Facility as constructed to date conform to
the plans and specifications previously approved by Lender.
(b) In each Draw Request, Borrower must request disbursement for one
or more specified line items of the cost breakdown. Borrower may submit a Draw
Request to Lender on or about the 1st day of each month, unless Lender agrees to
make disbursements more frequently than once a month. Borrower must use all Loan
funds strictly for the purposes for which they are disbursed.
(c) Unless Borrower has notified Lender in writing to the contrary,
each Draw Request constitutes Borrower's representation and warranty to Lender
that (i) the Loan is "in balance," (ii) all prior disbursements, as well as that
currently being requested, were and will be used in strict compliance with the
cost breakdown and (iii) no Event of Default has occurred, and no event has
occurred that, with notice or the passage of time, could become an Event of
Default.
3.2 Account
-------
Unless Lender and Borrower have agreed otherwise in writing, Lender
shall make disbursements into a single account established for the funding of
the Loan.
3.3 Disbursements to Other Parties
------------------------------
Notwithstanding the foregoing, Lender if it so chooses may make
disbursements directly to Borrower's contractor, subcontractors, laborers or
material suppliers designated by Borrower.
3.4 Interest on Disbursements
-------------------------
Interest on each disbursement, whether initiated by Borrower or
Lender, is payable from the time Lender debits the Loan funds in the amount of
the disbursement.
-4-
3.5 Authorized Signatories
----------------------
Borrower authorizes either Xxxxxxx Xxxxx Xxxxx or Xxxxxx Xxxxx Xxxxx
to sign all Draw Requests and other documents in connection with the
administration of the Loan. Borrower represents and warrants to Lender that the
following signatures are specimen signatures of the persons named in the
preceding sentence:
_____________________________
_____________________________
-5-
EXHIBIT B
---------
MASTER DEFINITIONS LIST
In addition to the words and terms elsewhere defined in this Agreement, the
words and terms set forth in this Exhibit A shall have the meanings herein set
forth. All references herein to any agreement or instrument shall include such
agreement or instrument as the same may be amended, restated, modified,
supplemented, replaced or substituted from time to time. Such definitions shall
be equally applicable to both singular and plural forms of any of the words and
terms therein defined. As used herein:
Affiliate: With respect to a specified person or entity, any other person
---------
or entity that directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with the specified person
or entity. For the purpose of this definition, "control" means the ability to
directly or indirectly, by voting securities, partnership interests, contract or
otherwise, direct or cause the direction of the policies or management of the
specified person or entity.
Applicable Law: All laws of the Nation, the United States and any state
--------------
which apply to any activity herein, which laws shall include, but are not
limited to, IGRA (including all regulations, rules or ordinances promulgated
thereunder, or any amendments or successors in whole or in part thereto), the
Tribal Gaming Ordinance (including all regulations, rules or ordinances
promulgated thereunder and all amendments or successors thereto), and any law
made applicable under the Compact.
Available Distributable Cash: Net Receipts after deduction of the
----------------------------
following items in the following order of priority: (1) interest payments on the
Loan, (2) a set aside as a reserve for operating and contingent needs of the
Enterprise made with HP's prior written consent, which consent or the denial
thereof shall not be unreasonably denied or delayed, and (3) the Tribal
Preference.
BIA: The Bureau of Indian Affairs, United States Department of Interior.
---
Borrower: The Tribal Corporation.
--------
Business Day: Monday through Friday, excluding legal holidays.
------------
Chairman: The Chairman of the NIGC.
--------
Commencement Date: The first date the Enterprise is open to the public for
-----------------
Gaming.
Collateral: The property defined in the Security Agreement as
----------
"Collateral."
Compact: The tribal-state compact between the Nation and the State dated
-------
June 9, 1996 which has been approved by the Secretary pursuant to 25 U.S.C.
(S)2710(d).
Construction and Development Agreement: The Construction and Development
--------------------------------------
Agreement dated as of the date first stated above between the Nation, the Tribal
Corporation and Consultant.
Consultant: HP Yakama Consulting, Inc., a Delaware corporation.
----------
Consulting Agreement: The Consulting Agreement dated as of the date first
--------------------
stated above between the Nation, the Tribal Corporation and Consultant.
Effective Date: The first business day after (i) the Consultant and the
--------------
Nation have received written notice from (x) the Chairman or NIGC that the Loan
Documents and the Transaction Documents both collectively and individually, do
not constitute a "management contract," as defined in 25 C.F.R. (S)502.15, and
(y) the Secretary, or his designee, that the Loan Documents and the Transaction
Documents have been approved, and (ii) the receipt by Lender and Consultant and
their respective Affiliates, officers, shareholders, directors, employees or
others, of all licenses or other permissions as may be required from the Tribal
Gaming Commission, the Washington State Gambling Commission and any other
Governmental agency as required by Applicable Law.
Enterprise: The Gaming operations and ancillary business activities
----------
conducted in the Facility.
Execution Date: The date set forth in the first paragraph of the document
--------------
in which the term is used.
Facility: The bingo hall and casino to be constructed on the Property,
--------
together with all related infrastructure, parking, landscaping, interior design,
engineering, architectural and other services, on Yakama Indian lands in
Toppenish, Washington.
GAAP: Generally accepted accounting principles, consistently applied
----
pursuant to IGRA.
Gaming: Any "Class II" or "Class III" gaming activity under IGRA.
------
Gaming Control Ordinance: That certain ordinance adopted by the Nation in
------------------------
accordance with IGRA authorizing Gaming on the Property.
Government: Any federal, state, county or local government body or a
----------
governing body of the Nation having jurisdiction over the Property, the Facility
or the Enterprise.
Gross Revenues: The total revenues received by the Enterprise from all
--------------
sources less cash and prizes paid to Gaming winners.
-2-
IGRA: The Indian Gaming Regulatory Act of 1988 (Public Law 100-497; Title
----
25, United States Code, Sections 2701 et seq.) and the regulations adopted by
------
the Commission pursuant thereto, and as they may be amended or replaced from
time-to-time.
Initial HP Loan: The loan of up to One Million Six Hundred Hundred
---------------
Thousand Dollars ($1,600,000) in principal amount evidenced by the promissory
notes dated August 4, 1997 and November 25, 1997 executed by the Nation in favor
of Lender.
Lender: HP Yakama, Inc., a Delaware corporation.
------
Loan: The loan made by Lender to the Tribal Corporation pursuant to the
----
Loan Agreement.
Loan Agreement: The Loan Agreement dated as of the date first stated above
--------------
among the Nation, Borrower and Lender.
Loan Documents: The Loan Agreement, the Note, the Security Agreement and
--------------
all other documents evidencing and/or securing the Loan.
Master Lease: The Master Lease dated as of the date first stated above
------------
between the Nation and Lender pursuant to which the Leased Premises (as defined
therein), including, without limitation, the Property, is leased to Lender.
MOU: The Memorandum of Understanding, dated August 4, 1997, between the
---
Nation and HP Yakama, Inc., a Delaware corporation.
Nation: The Confederated Tribes and Bands of the Yakama Indian Nation, a
------
federally recognized Indian tribe.
Net Receipts: Gross Revenues less normal and necessary operating expenses
------------
of the Enterprise as determined in accordance with GAAP, provided that such
--------
operating expenses shall not include (i) extraordinary losses or expenses, (ii)
consulting fees paid to third parties, (iii) any depreciation, amortization or
interest expense included in the determination of Net Revenues, or (iv) amounts
paid for Sublease Rent.
Net Revenues: Gross Revenues less normal and necessary operating expenses
------------
of the Enterprise as determined in accordance with GAAP, provided that such
--------
operating expenses shall (i) include interest payments on the Loan and, to the
extent required by the NIGC, depreciation and amortization (over the maximum
allowable period), and (ii) exclude (A) extraordinary losses or expenses and
consulting fees, and (B) amounts paid for Sublease Rent.
NIGC: The National Indian Gaming Commission established pursuant to IGRA.
----
NORAM: North American Sports Management, Inc., a Florida corporation.
-----
-3-
Note: The Secured Promissory Note dated as of the date first stated above
----
executed by Borrower and payable to the order of Lender in the maximum principal
amount equal to Nine Million Dollars ($9,000,000).
Person: Any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust, unincorporated organization, Government
or Indian tribe, or any agency, instrumentality or political subdivision
thereof.
Pre-Development Amount: The funds expended by NORAM, which equal Eight
----------------------
Hundred and Ninety Two Thousand, Eight Hundred Eighty-five Dollars and Eight
Cents ($892,885.08), in connection with the planning and development of a gaming
facility, the benefit of which expenditures will be assumed by the Nation.
Property: The real property within the Nation's reservation in the State
--------
of Washington which is held in trust by the United States for the benefit of the
Nation and over which it exercises governmental jurisdiction and upon which the
Facility will be constructed.
Representatives: Those parties designated by Consultant and the Nation to
---------------
oversee the development and construction of the Facility.
Secretary: The Secretary of the United States Department of Interior, or
---------
his or her designee.
Security Agreement: The Security Agreement dated as of the date first
------------------
stated above between Lender and Borrower.
State: The State of Washington.
-----
Sublease: The Sublease dated as the date first stated above between Lender
--------
and Borrower.
Sublease Rent: Shall have the meaning ascribed thereto in the Sublease.
-------------
Transaction Documents: The Master Lease, the Sublease, the Construction
---------------------
and Development Agreement, and/or all other documents other than the Loan
Documents relating to the operation, development or occupancy of the Property
and the Facility.
Tribal Corporation: Yakama Tribal Gaming Corporation, a tribal corporation
------------------
formed under the laws of the Nation.
Tribal Gaming Ordinance: The ordinance adopted by the Nation and approved
-----------------------
by the Chairman, pursuant to 25 U.S.C. (S)2710.
Tribal Preference: An amount equal to (a) thirty thousand dollars
-----------------
($30,000) (or such other amount as the parties shall agree upon in accordance
with the next sentence)
-4-
minus (b) the Tribal Rent, which amount shall be paid to the Nation on a monthly
basis from and to the extent of Net Receipts. It is understood that the Tribal
Preference is based on projections of over $100,000 per month in Net Revenues
being earned on average over a five-year period. Prior to signing the Documents,
further market studies may be done and if so, the parties shall negotiate in
good faith to adjust the Tribal Preference if such studies indicate that the
initial projections were materially lower or higher than such studies indicate
should be expected from the Enterprise.
Tribal Rent: The sum of one thousand dollars ($1,000) per month.
-----------
United States: The United States of America, its authorized officials,
-------------
agents and representatives.
WSGC: The Washington State Gambling Commission.
----
-5-
SECURED PROMISSORY NOTE
$9,000,000 Toppenish, Washington
September 11, 1997
FOR VALUE RECEIVED, the YAKAMA TRIBAL GAMING CORPORATION, a tribal
corporation established under the laws of Confederated Bands and Tribes of the
Yakama Indian Nation ("Maker"), agrees and promises to pay to the order of HP
YAKAMA, INC., a Delaware corporation, its endorsees, successors and assigns
("Holder"), at c/o Hollywood Park, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, or such other place as Holder may from time to time at its
sole discretion designate, the principal sum of Nine Million Dollars
($9,000,000), or so much thereof as may be advanced together with interest on
the unpaid principal balance at an annual rate of interest of ten percent
(10%)(the "Stated Rate").
(a) Loan Agreement. All capitalized terms used herein and not defined
--------------
herein shall have the respective meanings ascribed thereto in the Loan Agreement
by and between Maker and Holder of even date herewith (the "Loan Agreement").
This Secured Promissory Note is issued pursuant to the Loan Agreement, and is
entitled to the benefits thereof, including, without limitation, all collateral
provided for therein or in connection therewith. Reference is made to the Loan
Agreement for certain rights of Holder as to the acceleration of the unpaid
principal balance hereof before its stated maturity upon the happening of
certain events and/or the giving of notice and/or the passage of time.
(b) Repayment. Principal and interest at the Stated Rate shall be paid in
---------
eighty-four (84) equal consecutive monthly installments on the first day of each
month beginning on the twentieth (20) day of the first complete month following
the Commencement Date. Interest shall be payable monthly from and after such
date from Net Receipts irrespective of the amount of Available Distributable
Cash and shall be paid prior to setasides for reserves or payment of the Tribal
Preference or Tribal Rent. Principal shall only be payable from and to the
extent of Available Distributable Cash remaining and shall be paid prior to
Sublease Rent or Tribal Rent. Principal or interest amounts unable to be repaid
in any month due to insufficiency of Available Distributable Cash shall be added
to the next month's payment. The remaining principal balance hereof together
with all accrued interest thereon shall be due and payable on the seventh (7th)
anniversary of the Commencement Date.
(c) Limitations on Repayment: The parties acknowledge that the Borrower's
------------------------
obligations to repay the Loan are subject to the following limitations:
().1 On September 8, 1997, $30,000 of the principal amount of the
Loan shall be forgiven if the Commencement Date has not yet occurred, and an
additional like amount of the principal of the Loan shall be forgiven in each
month thereafter, on the eighth day thereof, if the Commencement Date has not
yet occurred,
provided, that the maximum amount forgiven pursuant to this Section shall not
--------
exceed $150,000.
().2 All Loan amounts accrued but remaining unpaid more than 31 days
(extended by the number of days of any periods during which Maker and/or Nation
is in material default under any of the Loan Documents and/or the Transaction
Documents) after) the last day of the eighty-fourth month following the
Commencement Date as a consequence of insufficient Net Receipts (as to interest
payable hereunder or Available Distributable Cash (as to principal payable
hereunder) (unless accelerated prior thereto in accordance with the Loan
Agreement) shall no longer by payable.
(d) Application of Payments; Calculations. All payments made hereunder
-------------------------------------
shall be made in lawful money of the United States applied first to interest and
then to principal. Interest shall be calculated on the basis of a 360 day year
consisting of twelve (12) thirty (30) day months.
(e) Prepayments. This Secured Promissory Note may be prepaid by Maker (a)
-----------
in whole or (b) in part in amounts not less than Fifty Thousand Dollars
($50,000), at anytime, upon 15 days advance written notice to Holder, without
any prepayment premium or penalty. Upon such prepayment, the remaining principal
balance shall not be reamortized, and monthly installments shall neither be
readjusted nor avoided; rather, prepayments shall be applied to the final
remaining principal payments owing pursuant to the amortization schedule in
inverse order. Prepayment of this Note does not, and shall not be deemed to,
relieve Maker from any other obligations to the Holder or to any other party
under the Transaction Documents, or any one of them (including, without
limitation, the obligation to make monthly rental payments under the Sublease
(including, without limitation, the obligation to pay Sublease Rent as provided
therein)).
(f) Mandatory Prepayments. Maker shall pay and there shall become due and
---------------------
payable, concurrently with the receipt by Maker of the proceeds of (i) any sale,
lease, conveyance, transfer, financing or disposition of any asset of Maker from
or relating to the Facility, the Property or the Enterprise (including, without
limitation, insurance proceeds) in excess of $100,000 in any calendar year, or
(ii) cash receipts of Maker from or relating to the Facility, the Property or
the Enterprise not in the ordinary course of business, a prepayment in respect
of the indebtedness evidenced hereby equal to 100% of such proceeds, such
prepayment to be applied to the final remaining principal payments owing
pursuant to the amortization schedule in inverse order in accord with the
preceding paragraph).
(g) Grid. Each portion of the amount of each disbursement of the Loan
----
which Holder has made to Maker and the amount of each payment or prepayment made
on account of principal thereof shall be recorded by Holder and endorsed on the
grid schedule attached hereto, which is made a part of this Secured Promissory
Note (or so noted in its records); provided, however, that the failure of Holder
-------- -------
to make any such endorsement or recordation shall not in any manner affect the
obligation of Maker to repay the Loan in accordance with the terms hereof. Any
such endorsement or
2
recordation shall represent prima facie evidence of the date and amount of the
date and amount of disbursements of the Loan or any payment or prepayment of
principal thereon, absent manifest error.
(h) Late Charge. In the event that any payment required hereunder is not
-----------
paid on its due date, for any reason other than a good faith accounting dispute
as to the amount of such payment which is payable in accordance herewith Maker
shall pay a late charge equal to 2% of the late payment to defray the costs of
Holder incident to collecting and accounting for such payment. This late charge
shall not be deemed to excuse a late payment or be deemed a waiver of any other
rights Holder may have (including, without limitation, the right to declare the
entire unpaid principal and interest immediately due and payable upon the
occurrence of certain events).
(i) Waiver of Sovereign Immunity. Maker hereby waives its sovereign
----------------------------
immunity from suit and consents to jurisdiction and arbitration as provided in
the Loan Agreement.
(j) Notices. All notices to be given by any party to the other hereunder
-------
shall be in writing and deemed to have been given when delivered in accordance
with the Loan Agreement.
(k) Governing Law. Subject to the waiver of sovereign immunity set forth
-------------
in the Loan Agreement, this Secured Promissory Note shall be governed by federal
law, if applicable, then by the laws of the State of Washington.
(l) Time of Essence; Waiver. Time is of the essence. No delay or omission
-----------------------
on the part of Holder in exercising any right hereunder shall operate as a
waiver of such right or of any other remedy under this Secured Promissory Note.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
such right or remedy on a future occasion.
(m) Waivers; Consent. Presentment for payment, protest and notice of non-
----------------
payment are waived; provided, however, that the foregoing waiver shall not be
deemed to be applicable to the notice requirements set forth in the waiver of
sovereign immunity set forth in the Loan Agreement. Consent is given to any
extension or alteration of the time or terms of payment hereof, any renewal, and
any release or resort to any party liable for payment hereof.
(n) Binding Effect. This Secured Promissory Note shall be binding upon
--------------
and inure to the benefit of Maker and Holder and their respective successors and
assigns.
3
IN WITNESS WHEREOF, Maker has duly executed this Secured Promissory Note as
of the date first above written.
YAKAMA TRIBAL GAMING CORPORATION, a tribal
corporation established under the laws of
Confederated Bands and Tribes of the Yakama
Indian Nation
By:_________________________
Name:_______________________
Title:______________________
4
GRID SCHEDULE
-------------
Unpaid
Amount of Amount of Principal Name of Person
Date Disbursement Principal Paid Balance Making Notation
---- ------------ -------------- ------- ---------------
5
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Security Agreement") made and delivered as
of this 11th day of September, 1997, by and between (i) YAKAMA TRIBAL GAMING
CORPORATION, a tribal corporation established under the laws of the Confederated
Tribes and Bands of the Yakama Indian Nation ("Debtor") (references herein to
and Debtor referring to Debtor only and not referring to Nation), THE
CONFEDERATED TRIBES AND BANDS OF THE YAKAMA INDIAN NATION ("Nation") and (ii) HP
YAKAMA, INC., a Delaware corporation ("Secured Party"), with reference to the
following facts and circumstances:
3.6 The Secured Party and the Debtor have entered into a Loan
Agreement dated as of the date first set forth above (as the same may be
amended, modified, restated or supplemented from time to time (the "Loan
Agreement," all capitalized terms used herein without definition shall have the
respective meanings ascribed thereto in the Loan Agreement) pertaining to the
Loan.
3.7 The Secured Party and the Debtor have entered into the Sublease
pursuant to which the Debtor is leasing the Leased Premises (as defined in the
Sublease) from the Secured Party.
3.8 The Loan and the Debtor's obligations under the Sublease are to
be secured by, among other things, this Security Agreement, creating a first
priority security interest in the Collateral (as defined hereinafter) in favor
of Secured Party.
3.9 As used herein the term "Indebtedness Secured Hereby" shall mean
(i) payment of the indebtedness evidenced by performance of the terms and
conditions of, and payment of all other sums with interest thereon becoming due
and payable to the Secured Party and contained in the Note and the Loan
Agreement; (ii) payment of the rent owing under, performance of the terms and
conditions of, and payment of all other sums with interest thereon becoming due
and payable to the Secured Party and contained in the Sublease; and (iii)
performance and discharge of each and every obligation, covenant and agreement,
whether involving the payment of money or not, contained in any of the other
Loan Documents or the other Transaction Documents.
NOW THEREFORE, in consideration of the Loan and the Sublease and in order
to induce the Secured Party to make the Loan and enter into the Sublease, the
parties agree as follows:
(a) For valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Debtor and Nation hereby convey, assign, transfer and
grant to the Secured Party a first priority security interest in all of their
present right and hereafter acquired right, title and interest in and to the
following (collectively, the "Collateral"):
(a).1 all present and hereafter acquired equipment owned by the Debtor in
all of its forms and wherever located
(a).2 any and all machinery, equipment, controls, attachments, parts,
tools, furniture and furnishings used in the conduct of the
Enterprise, and all attachments, accessories, accessions,
replacements, substitutions, additions and improvements to any of
the foregoing (the property in a. and b. being referred to
collectively herein as the "Equipment");
(a).3 all insurance proceeds (including but not limited to proceeds of
insurance and refunds of unearned premiums) due or to become due to
Debtor or Nation under, and all other rights of Debtor or Nation
under or with respect to, any and all policies of insurance covering
all or any portion of the Property, the Facility, the Leased
Premises, and/or the Equipment;
(a).4 all Available Distributable Cash; and
(a).5 all proceeds and products of the foregoing, including but not
limited to accounts, general intangibles, equipment, inventory,
money, deposit accounts, goods, chattel paper, documents,
instruments and insurance proceeds, all refunds, equities, benefits,
book equities, returns, credits, revolving fund withholdings, return
of capital and certificates evidencing any right to receive payment
in any form from any marketer of goods or inventory and any other
tangible or intangible property received upon the sale, lease,
transfer or other disposition of any of the foregoing.
(b) The Debtor warrants and represents to Secured Party that:
(b).1 Debtor and Nation are the true and lawful owners of the Collateral
and have good and valid title to the Collateral free and clear from
any and all liens, security interests, encumbrances or other rights,
title or interest of any other person, firm or corporation,
excepting the rights and interest of the Secured Party hereunder.
The Equipment has been delivered to and accepted and installed by
the Debtor, and is in good working order. The Equipment is all of
the equipment used in the conduct of the Enterprise.
(b).2 The Collateral is not subject to any other lien or security
interests (including, without limitation, "blanket" security
interests).
(b).3 The Debtor shall defend the Secured Party's interest in the
Collateral against all claims and demands of all or any other
persons at any time claiming the same or any interest therein
adverse to the Secured Party.
(b).4 There are no actions at law, suits in equity, or proceedings before
any governmental agency, commission, bureau or tribunal or any
arbitration proceedings that if adversely determined would adversely
affect the present condition, financial or otherwise, of the
Collateral or would adversely affect the right of the Debtor to
pledge and assign all or any
-2-
part of the Collateral or rights and security afforded Secured Party
hereunder.
(b).5 The Equipment is and will be used for the business purpose of
equipping the Enterprise located within the Facility. The Collateral
will at all times be located at the Property.
(b).6 The Debtor will keep the Collateral insured at all times against
loss by fire and/or other hazards concerning which, in the judgment
of the Secured Party, insurance protection is reasonably necessary,
in a company or companies reasonably satisfactory to the Secured
Party and in amounts sufficient to protect Secured Party against
loss or damage to said Collateral and will pay the premiums
therefore; such policy or policies of insurance will be delivered to
and held by the Secured Party, together with loss payable clauses in
favor of the Secured Party as its interest may appear, in form
satisfactory to the Secured Party; and Secured Party may act as
attorney for Debtor in obtaining, adjusting, settling and canceling
such insurance and endorsing any drafts.
(b).7 The Debtor will keep the Equipment in good condition and repair,
reasonable wear and tear excepted. The Debtor will permit Secured
Party to enter upon any lands owned, leased or otherwise controlled
by or on behalf of the Debtor at reasonable times for the purpose of
examining the Collateral, subject to the security requirements of
the Enterprise.
(b).8 The Debtor will pay as part of the Indebtedness Secured Hereby all
amounts, including reasonable attorneys' fees and legal expenses,
with interest thereon, paid by Secured Party (a) for taxes, levies,
insurance, repairs to, or maintenance of the Collateral, and (b) in
taking possession of, disposing of or preserving the Collateral
after any default hereinafter described.
(b).9 Debtor will not without the prior written consent of Secured Party
(a) permit any liens or security interests (other than the security
interest granted hereby) to attach to any of the Collateral; (b)
permit any of the Collateral to be levied upon or attached by legal
process; (c) except as permitted by the Loan Agreement, sell or
offer to sell or otherwise transfer the Collateral; (d) do or permit
anything to be done that may impair the value of the Collateral; or
(e) except as permitted by the Loan Agreement, remove or permit the
Collateral to be removed from the Property.
(b).10 If any of the Collateral is or is to become a fixture, the Debtor
agrees to furnish Secured Party, at its request, with a statement or
statements signed by all persons who have or claim an interest in
the real estate concerned, which statements shall provide that the
signer consents to the security
-3-
interest created hereby and disclaims any interest in the
Collateral as fixtures.
(b).11 Debtor acknowledges that the Equipment is of the design, capacity
and manufacture specified for and by the Debtor and that Debtor is
satisfied that the same is suitable for its intended purposes.
Debtor further acknowledges and agrees that Secured Party is not a
manufacturer or vendor of the Equipment and that Secured Party has
not made, and does not make, any representation, warranty or
covenant with respect to merchantability, fitness for any purpose,
condition, quality, delivery, installation, durability, patent,
copyright or trademark infringement, suitability or capability of
any item of Equipment in any respect or in connection with any other
purpose or use of Debtor, or any other representation, warranty or
covenant of any kind or character expressed or implied with respect
thereto. Debtor accordingly agrees not to assert any claim
whatsoever against Secured Party based thereon. Secured Party shall
have no obligation to install, erect, test, adjust or service the
Equipment. Debtor shall look to the manufacturer or vendor for any
claims related to the Equipment.
(b).12 Debtor shall provide Secured Party with sixty (60) days' prior
written notice of any change in its name or the location of its
principals offices
(b).13 The Debtor will derive economic benefit from the Loan and the
Sublease, and the Debtor acknowledges that Secured Party is relying
upon the security interests granted herein and in the remaining
Collateral Agreements in making the Loan.
(c) This Agreement constitutes a Security Agreement under the Uniform
Commercial Code (the "UCC") as in effect in the State of Washington.
(d) (d).1 Debtor shall give prompt written notice to Secured Party of any
damage or injury to the Property, the Facility, the Leased Premises
and/or the Equipment or of any loss or diminution in value thereof,
and Debtor shall give whatever notice to insurers of any such
damage, injury, loss or diminution of value as may be required. All
insurance proceeds of the Property, the Facility, the Leased
Premises and/or the Equipment and all causes of action, claims,
compensation, awards and recoveries for any damage or injury to the
Property, the Facility, the Leased Premises and/or the Equipment or
for any loss or diminution in value of the Property, the Facility,
the Leased Premises and/or the Equipment are hereby assigned to and
shall be paid to Secured Party, and Debtor agrees to execute such
further evidence of such assignment of such insurance proceeds,
causes of action, claims, compensation, awards and recoveries as
Secured Party may require. Secured Party may (but shall not be
obligated to) participate in any suits or proceedings relating to
any such proceeds, causes of action,
-4-
claims, compensation, awards or recoveries and may join with Debtor
in adjusting any loss covered by insurance. Debtor hereby directs
the issuer of any such policy to pay any such money directly to
Secured Party. Both before and after the occurrence of an Event of
Default (defined below), Secured Party may (but need not) in Secured
Party's own name or in Debtor's name, execute and deliver proofs of
claim, receive all such money, endorse checks and other instruments
representing payment of such money and adjust, litigate, compromise
or release any claim against the issuer
of any such policy.
(d).2 In the event of loss, Secured Party is hereby authorized either (a)
to settle, adjust or compromise any claim under the above insurance
policies without consent of Debtor, which consent is hereby
expressly waived; or (b) to allow Debtor to agree with the insurance
company or companies on the amount to be paid upon the loss. In
either case, Secured Party is authorized to collect and receive any
such insurance money. Notwithstanding anything to the contrary
contained herein, Debtor may, without the consent of Secured Party,
so long as Debtor is not in default hereunder, settle, adjust or
compromise any claim in an original amount less than Fifty Thousand
Dollars ($50,000).
(d).3 Notwithstanding anything to the contrary herein contained, if (i)
the insurers do not deny liability as to the original amount of the
claim; (ii) no Event of Default exists and no event exists that,
with the passage of time or the giving of notice or both, would
constitute such an Event of Default; (iii) Secured Party has
received evidence, reasonably satisfactory to Secured Party in its
sole discretion, that there are sufficient funds available and/or
committed, including such insurance proceeds, to effectuate a
restoration and to cover the expenses of operating and maintaining
the Property, the Facility, the Leased Premises and/or the
Equipment, (iv) Secured Party has reasonably approved the plans and
specifications to be used in connection with such restoration; and
(v) the restoration will be completed within one (1) year (and in
any event prior to the last day of the seventy-eighth (78th) month
following the Commencement Date) and will return the Property, the
Facility, the Leased Premises and/or the Equipment to substantially
the same condition, character and utility and to at least the value
that existed immediately prior to such casualty; then such insurance
proceeds shall be used to pay Debtor for the cost of rebuilding,
replacing, restoring or repairing the Property, the Facility, the
Leased Premises and/or the Equipment so insured in accordance with
the disbursement procedures herein contained. The 31 day time period
set forth in Section 3(b) of the Note shall be extended by the
number of days in which the Enterprise is not operational as a
consequence of such restoration. In all other cases, such insurance
proceeds may at Secured Party's discretion, either be applied in
payment or reduction of the Indebtedness Secured Hereby (whether
then due or not)
-5-
or be held by Secured Party and used to reimburse Debtor or any
other party for the cost of the rebuilding, replacing, restoring or
repairing the Property, the Facility, the Leased Premises and/or the
Equipment so insured.
(d).4 In the event Debtor is entitled (whether pursuant to the terms
hereof or pursuant to Secured Party's election or otherwise) to
payment out of insurance proceeds for any repair, rebuilding,
restoration or replacement, such proceeds shall be made available,
from time to time, upon Secured Party being furnished with
satisfactory evidence of progress in such repair, rebuilding,
restoration or replacement, together with satisfactory evidence of
the estimated cost of completion thereof and together with any such
architect's certificates, waivers of lien, contractors' sworn
statements and other evidence of cost and payments as Secured Party
may require and approve. If the estimated cost of the work exceeds
ten percent (10%) of the original principal amount of the
indebtedness secured hereby, Secured Party shall also be furnished
with all plans and specifications for such rebuilding, replacement,
restoration or repair as Secured Party may require and reasonably
approve. At all times the undisbursed balance of said proceeds
remaining in the hands of Secured Party shall be at least sufficient
to pay for the cost of completion of the work free and clear of
liens. Any surplus that may remain out of said insurance proceeds
after payment of such cost of repair, rebuilding, restoration or
replacement shall, at the option of Secured Party, be applied on
account of the Indebtedness Secured Hereby (whether then due or
not).
(e) Upon the occurrence of an Event of Default and or any event that,
with the passage of time or the giving of notice or both, would constitute such
an Event of Default, Secured Party may require Debtor to establish a cash
management and depositary arrangement acceptable to Secured Party in its sole
and absolute discretion pursuant to which, among other things, (i) the
depositary bank shall enter into an agreement in form and substance acceptable
to Secured Party in its sole and absolute discretion acknowledging Secured
Party's first priority security interest in the Available Distributable Cash and
waiving all set off, banker's lien and similar rights, (ii) Debtor shall cause
all revenues of the Enterprise to be transferred to such depositary bank
pursuant thereto, and (iii) the parties shall agree as to use of revenues from
the Enterprise for the Debtor's continued operation of the Enterprise
(including, without limitation, the continued payment of normal and necessary
operating expenses thereof).
(f) Upon one (1) day's written notice, Debtor shall make available for
inspection and copying by Secured Party all present and future books, records,
accounting logs and stored data pertaining to the Collateral or to the
Enterprise, including, without limitation, computer programs, software and the
equipment containing said books, records, accounting logs and stored data.
-6-
(g) ().1 Upon the occurrence and during the continuance of an Event of
Default, the Secured Party or its designee may without demand, advertisement or
notice of any kind (except such notice as may be required under the UCC) all of
which are, to the extent permitted by law, hereby expressly waived:
(().1.1 Exercise any of the remedies available to a secured party under
the UCC or other applicable law;
(().1.2 Proceed immediately to exercise each and all of the powers,
rights, and privileges reserved or granted to Secured Party
hereunder and under the Note and the Sublease and the other Loan
Documents and the Transaction Documents;
(().1.3 Proceed to protect and enforce this Security Agreement by suits
or proceedings or otherwise, and for the enforcement of any
other legal or equity available to Secured Party; and/or
(().1.4 Realize upon the Collateral and hold, own or dispose of the same
as its own property to the extent permitted pursuant to
Applicable Law.
().2 Upon the occurrence of an Event of Default the Debtor shall make
the Collateral available to Secured Party or its designee at a place to be
designated by Secured Party or its designee which is reasonably convenient, and
authorizes Secured Party or its designee to enter the Property and/or the
Facility to assemble, possess, store and sell the Collateral. Debtor further
agrees to pay all costs and expenses of Secured Party or its designee, including
reasonable attorneys' fees, in the enforcement of any of Secured Party's rights
hereunder. If any notice of sale, disposition or other intended action by
Secured Party or its designee is required by law to be given to Debtor, such
notice shall be deemed reasonably and properly given if mailed to Debtor at the
notice address specified in accordance with the Loan Agreement at least ten (10)
days before such sale, disposition or other intended action. Waiver of any
default hereunder by Secured Party shall not be waiver of any other default or
of a same default on any other occasion. No delay or failure by Secured Party to
exercise any right or remedy shall be a waiver of such right or remedy and no
single or partial exercise by Secured Party of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy at any other time.
(h) Debtor agrees to execute such financing statements or other
instruments as may be required under the UCC or similar state, federal or tribal
laws to perfect the security interest hereunder and shall from time to time at
Debtor's expense execute and deliver such assignments and endorsements and file
such additional financing statements or other instruments as may be required to
create and continue to perfect the security interest intended to be created
herein. Debtor hereby authorizes Secured Party at Debtor's expense, to do all
reasonable acts and things which Secured Party may deem
-7-
necessary to perfect and continue perfected the security interest created by
this Security Agreement and to protect the Collateral.
(i) This Security Agreement shall be governed by federal law, if
applicable, then by the laws of the State of Washington.
(j) Without in any way limiting the waiver of sovereign immunity contained
herein, the Nation and the Debtor expressly authorize any governmental or other
agency authorities who have the right and duty under Applicable Law to take any
and all action authorized or ordered by any court, including without limitation,
entering Indian land within the Nation's jurisdiction for the purpose of
repossessing the Collateral or otherwise giving effect to any judgment entered.
It is the intent of the parties that the Secured Party or its designee will be
able to obtain possession of the Collateral in accordance with the rights
afforded it under applicable laws and/or any court order.
(k) This Security Agreement and each and every covenant and agreement and
other provisions hereunder shall be binding upon the Debtor and its successors
and assigns and shall inure to the benefit of Secured Party and its successors
and assigns.
(l) Any unenforceability or invalidity of any provision hereof shall not
render any other provision or provisions herein contained unenforceable or
invalid.
(m) Debtor hereby waives its sovereign immunity from suit and consents to
jurisdiction to the extent provided and as limited in the Loan Agreement.
(n) Any notice any party may hereto desire may be required to give to any
other party shall be sent in accordance with the Loan Agreement.
-8-
IN WITNESS WHEREOF, the undersigned have caused this Security Agreement to
be duly executed as of the date first above written.
HP YAKAMA, INC.,
a Delaware corporation
By:__________________________
Name:________________________
Title:_______________________
YAKAMA TRIBAL GAMING CORPORATION,
a tribal corporation established
under the laws of the Confederated
Tribes and Bands of the Yakama Indian Nation
By:__________________________
Name:________________________
Title:_______________________
THE CONFEDERATED TRIBES
AND BANDS OF THE YAKAMA INDIAN NATION
By:__________________________
Name:________________________
Title:_______________________
-9-
MASTER LEASE
by and between
THE CONFEDERATED TRIBES AND BANDS
OF THE YAKAMA INDIAN NATION
and
HP YAKAMA, INC.
September 11, 1997
U.S. Department of the Interior
Bureau of Indian Affairs
Lessee: HP Yakama, Inc. Lease No. ____________
Lessor: The Confederated Tribes and Bands
of the Yakama Indian Nation
-i-
Administrative
Fee: $ _______
UNITED STATES
DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
Yakama Agency
Yakama Reservation
Toppenish, Washington
Lease No._________
Approved:_________
Land:_____________
__________________
MASTER LEASE
This LEASE, handsigned and notarized in quadruplicate, is made and entered
into this 11th day of September, 1997 by and between the parties duly identified
below as "Lessor" and "Lessee":
Lessor: The Confederated Tribes and Bands
of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Lessee: HP Yakama, Inc.
c/o Hollywood Park, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
under the provisions of the Act of August 9, 1955 (69 Stat. 539; 25 U.S.C. (S)
415), as amended, and as supplemented by Part 162 - Leasing and Permitting, of
the Code of Federal Regulations, Title 25, INDIANS, and any amendments thereto
relative to Business Leases on restricted Indian lands, all of which by
reference are made a part hereof.
ARTICLE 1
---------
Unless otherwise defined herein, the capitalized words and terms used in
this Lease shall have the meanings set forth in Exhibit A hereto, "Master
Definitions List."
ARTICLE 2
LAND DESCRIPTION
----------------
For and in consideration of the rents and agreements hereinafter set out,
the Lessor hereby leases to the Lessee the lands described, and identified in
Exhibit B, together with all buildings and structures thereon and improvements
thereto (the "Leased Premises"). Said lands are a part of the lands held in
trust by the United States for the benefit of Lessor situated in Yakima County,
Washington, and subject to any prior, valid existing rights of way.
ARTICLE 3
---------
TERM
----
The initial term of this Lease shall begin on the Effective Date and shall
continue thereafter until the seventh (7th) anniversary of the Commencement
Date; provided, however, that (i) the term of this Lease shall be extended by
-------- -------
the number of days of any periods during which Lessor and/or the Tribal
Corporation is in material default under any of the Loan Documents and/or the
Transaction Documents, and no rent shall be payable hereunder during such
extension period and (ii) this Lease shall terminate and be of no force and
effect if the Effective Date has not occurred on or before August 1, 1998.
ARTICLE 4
---------
PURPOSE OF THIS LEASE
---------------------
For and on behalf of the Lessor Lessee shall use the Leased Premises for
the specific purposes of developing the Facility to be operated in accordance
with Applicable Law or other lawful uses not inconsistent with the customs and
practices of the Nation. If the Lessee uses the Leased Premises for any purpose
not set forth herein without the consent and written approval of the Lessor and
the Secretary, such use shall constitute grounds for cancellation of this Lease.
-2-
ARTICLE 5
---------
RENTALS
-------
The Lessee, in consideration of the foregoing, agrees to pay directly to
the Lessor at the address set forth herein in lawful money of the United States
of America, rent of One Thousand Dollars ($1,000) per month. The parties hereto
agree and acknowledge that such rent is based on the appraised fair annual
rental as determined by the Bureau of Indian Affairs, after taking into account
the additional consideration from Lessee in the making of this Lease, including
Lessee's financing of the development of the Leased Premises and Lessee's
concurrence with the terms and conditions of the Loan Documents and the other
Transaction Documents. It is expressly agreed that the parties waive periodic
review of Lease consideration pursuant to 25 C.F.R. (S) 162.8.
ARTICLE 6
---------
PAYMENT OF RENTS
----------------
Rental payments due hereunder shall be paid in arrears with the first
monthly payment due on the first day of the first complete month following the
month in which the Commencement Date occurs. Rental payments shall be paid
directly to the Lessor at the address specified herein unless and until Lessee
is notified in writing by the Secretary to remit such payments elsewhere.
There is no additional consideration for this Lease based upon income
produced on the Leased Premises.
Upon receiving written notice from the Secretary, Lessee shall make rent
payments accordingly, commencing with the next rental due date and, if requested
------------
by the Secretary, will furnish surety bond as provided in Article 13 (Rental
Bond).
All rents shall be paid without prior notice or demand.
ARTICLE 7
---------
NONRESPONSIBILITY NOTICES
-------------------------
Prior to the commencement of the development of the Facility or
commencement or construction of each other improvement on the Property, or any
repair or alteration thereto, the Lessee shall give the Secretary ten (10) days
advance notice in writing of intention to begin said activity, in order that
nonresponsibility notices may be posted and recorded as provided by State and
local laws. Lessor hereby authorizes the Secretary to post said notices on
Lessor's behalf. Nothing contained herein shall be construed as a
-3-
waiver of immunity of trust property from mechanics' nonresponsibility notices
while the Leased Premises are in a trust status.
ARTICLE 8
---------
PUBLIC LIABILITY INSURANCE
--------------------------
At all times during the terms of this Lease, Lessee shall carry a public
liability insurance policy in commercially reasonable amounts. Said policy is to
be written jointly to protect Lessee and Lessor. Evidence, acceptable to the
Secretary, of such coverage or a change in coverage shall be furnished to Yakama
Agency Superintendent, as an authorized representative of the Secretary. Should
Lessee sublease the Leased Premises, the sublease therefor may contain a
provision shifting responsibility for carrying the insurance provided for in
this article to Lessee's lessee thereunder, provided that Lessee and Lessor
herein are named covered parties to such insurance.
ARTICLE 9
---------
FIRE AND DAMAGE INSURANCE
-------------------------
Lessee shall, from the date of approval of this Lease, carry fire insurance
with extended coverage endorsements, to include, without limitation, vandalism,
jointly in the names of Lessee and Lessor, covering the full value of all
improvements and buildings on the Leased Premises. Evidence, acceptable to the
Secretary, of such coverage or a change in coverage shall be furnished to an
authorized representative of the Secretary. Should Lessee sublease the Leased
Premises, the sublease therefor may contain a provision shifting responsibility
for carrying the insurance provided for in this Article to Lessee's lessee
thereunder, provided that Lessee and Lessor herein are named covered parties to
such insurance.
Premiums will be paid as an operating expense of the Enterprise. Lessee
shall deposit with the Secretary evidence, acceptable to the Secretary, that
said premiums or other charges have been paid.
Lessee hereby agrees that damage to or destruction of the Leased Premises
(or any portion thereof) where the proceeds received from insurance are being
applied towards reconstruction in accordance with the Security Agreement shall
not cause termination of this Lease or authorize the Lessee or those claiming
by, through, or under it to quit or surrender possession of said lands or any
part thereof, and shall not release the Lessee in any way from its liability to
pay Lessor the considerations hereinabove provided for or from any other
agreements, covenants, or conditions of this Lease.
If damage to or destruction of the Leased Premises (or any portion thereof)
occurs and there are no insurance proceeds or the insurance proceeds are not
being
-4-
applied toward reconstruction in accordance with the Security Agreement, Lessee
may elect to either terminate this Lease as of the date the damage occurred, or
repair the damage, in which case this Lease shall remain in full force and
effect.
The Term shall be extended to account for the time required to reconstruct
the portion of the Facility damaged and being reconstructed in accordance
herewith.
ARTICLE 10
----------
REMOVAL OF IMPROVEMENTS
-----------------------
All buildings and improvements, excluding removable personal property and
trade fixtures of Lessee and any sublessee (including, without limitation, any
Collateral in which Lessee continues to hold an interest pursuant to the
Security Agreement), on the Leased Premises shall remain on the Leased Premises
after termination of this Lease and shall thereupon become the property of the
Lessor. The term "removable personal property and trade fixtures" as used in
this Article shall not include property, other than the Collateral, which
normally would be attached or affixed to the buildings, improvements, or land in
such a way that it would become a part of the realty, regardless of whether such
property is in fact so placed in, or on, or affixed to the buildings,
improvements, or land in such a way as to legally retain the characteristics of
personal property. Personal property and trade fixtures of Lessee and any
sublessee (including, without limitation the Collateral) may be removed by
Lessee and/or any sublessee at any time during the term of this Lease or within
ninety (90) days after termination of this Lease or within such other reasonable
time after the termination of this Lease as may be agreed upon between Lessor
and Lessee and/or any sublessee. If Lessee and/or any sublessee fails to remove
the same within ninety (90) days after termination of this Lease, or such other
reasonable time as agreed upon, said fixtures and property shall be deemed
abandoned and shall become the property of Lessor.
ARTICLE 11
----------
CONSTRUCTION, MAINTENANCE, REPAIR, ALTERATION
---------------------------------------------
Subject to Article 7 (Nonresponsibility Notices) of this Lease and approval
of the Lessor, the Lessee shall have the right at any time during the term of
this Lease to make alterations, additions, or repairs to any improvement or
building on the Leased Premises with a cost not in excess of $100,000 in any
year or otherwise with the consent of Lessor. Except in connection with
alterations, additions or repairs pursuant to the preceding sentence the
development of the Facility in accordance with the plans and specifications
therefor, removal or demolition of any improvement or building on the Leased
Premises shall not be made without the prior approval of the Lessor. The Lessee
shall at all times during the term of this Lease maintain the Leased Premises in
good
-5-
order and repair and in a neat, sanitary and attractive condition and in
compliance with Applicable Laws.
ARTICLE 12
----------
RENTAL BOND
-----------
Upon the occurrence of an Event of Default under this Lease or if Lessee is
consistently delinquent in making its rental payments hereunder, the Secretary
may require the Lessee to post a bond satisfactory to the Secretary in a sum of
not less than the succeeding 3 months' rent, which bond shall be deposited with
the Secretary. Any other type of security which may be offered by Lessee to
satisfy the requirement of this Article will be given reasonable consideration
by the Secretary, but it is agreed that acceptance of other security shall be at
the sole discretion of the Lessor and the Secretary. It is agreed that bond
required by this provision will guarantee payment of rent only.
ARTICLE 13
----------
COMPANIES BONDING AND INSURING
------------------------------
All corporate surety bonds provided by Lessee in compliance with this Lease
shall be furnished by companies holding certificates of authority from the
Secretary of the Treasury as acceptable sureties of Federal bonds. Insurance
policies shall be furnished and maintained by such responsible companies as are
rate A plus--Class XI or better in the current edition of Best's Insurance
Guide.
ARTICLE 14
----------
SUBLEASE, ASSIGNMENT, TRANSFER
------------------------------
The Lessee shall not, unless otherwise expressly authorized herein,
sublease, assign or transfer any right to or interest in this Lease to any
Person other than an Affiliate without the written consent of the Lessor and
approval of the Secretary and sureties. No such sublease, assignment or
transfer shall be valid or binding without said consent and approval and then
only upon the condition that sublessee has agreed in writing that in the event
of conflict between the provisions of this Lease and of said sublease, the
provisions of this Lease shall prevail. The term of any sublease shall not
exceed the term of this Lease. No sublease shall release the Lessee from any
obligation under this Lease or substitute the sublessee for the Lessee
hereunder. Any sublease made, except as aforesaid shall be deemed a breach of
this Lease.
-6-
Lessor and the Secretary, in approving this Lease, acknowledge and consent
in advance to Lessee's sublease of the Leased Premises to the Tribal Corporation
pursuant to the Sublease. The parties acknowledge and agree that the Tribal
Corporation will assume Lessee's obligations under this Lease pursuant to the
Sublease submitted herewith to the Secretary for approval.
If a proposal to assign this Lease to a qualified assignee or other
successor in interest is submitted while a default in this Lease exists, neither
the Secretary nor the Lessor will be obligated to consider said proposal until
the Lease is restored to good standing.
ARTICLE 15
----------
STATUS OF SUBLEASES
-------------------
Termination of this Lease, by cancellation or otherwise, shall not serve to
cancel approved sublease and/or subtenancies (including, without limitation, the
Sublease), but shall operate as an assignment to Lessor of any and all such
subleases and/or subtenancies.
ARTICLE 16
----------
AGREEMENTS FOR UTILITY FACILITIES
---------------------------------
Upon entering into any agreements with public utility companies and the
State or any of its political subdivisions to provide utility services to the
Leased Premises, the Lessee shall furnish the Lessor and the Secretary with
executed copies thereof together with a plat or diagram showing the true
location of the utility lines to be constructed.
ARTICLE 17
----------
RIGHTS OF WAY FOR STREETS AND UTILITY EASEMENTS
-----------------------------------------------
Any rights of way for streets and utility facilities for the enjoyment and
development of the Lease Premises shall be granted by the Secretary in
accordance with the approved general development plan and pursuant to the Act of
February 5, 1948 (62 Stat. 17), and any amendment thereto, and as implemented by
regulations appearing in Title 25, INDIANS, Code of Federal Regulations, at Part
169.
-7-
ARTICLE 18
----------
ENCUMBRANCE
-----------
This Lease, or any right to or interest in this Lease, or any of the Leased
Premises, may not be encumbered by the Lessee without the written approval of
the Secretary and the Lessor.
ARTICLE 19
----------
IMPOSITIONS
-----------
Lessee shall pay all taxes, license and permit fees, charges for public
utilities of any kind including, both utilities supplied by Governmental
authorities and utilities supplied by private companies, and obligations for any
and all other Governmental charges, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind and nature
whatsoever, including, but not limited to, assessments for sidewalks, streets,
sewers, water, or any public improvements, and any other improvements or
benefits which shall, prior to the Effective Date, be made, assessed, levied, or
imposed upon, or become due and payable in connection with or a lien upon, the
Leased Premises, or any part thereof, (all of such items being herein referred
to as "Impositions") prior to any fine, penalty, interest or other charge which
may be added thereto for the nonpayment thereof being assessed. Impositions
shall be deemed to be operating expenses of the Enterprise and shall be paid and
accounted for as such.
Any Imposition, or part thereof properly allocable to periods before or
after the Term, shall be equitably apportioned between Lessor and Lessee. The
parties agree to send promptly to the other party copies of any notices in
respect of any Imposition, and to furnish to the other party, upon specific
request in each instance, official receipts of the proper taxing or other
Governmental authorities or other satisfactory proof, evidencing the full
payment of that party's share any and all such Impositions.
ARTICLE 20
----------
DEFAULT
-------
In the event of default by Lessee in any of the terms and provisions of
this Lease, Lessee shall be given notice citing the defaults in the Lease and
allowing Lessee, thirty (30) days from receipt of said notice to cure such
default or show cause (including, without limitation, pursuant to Article 34
(Sublessee Responsibility) hereof why this Lease should not be cancelled.
Lessor and the Secretary may grant a reasonable extension of time is Lessee so
requests.
-8-
If Lessee fails to cure such default or show cause why this Lease should
not be cancelled, the Secretary may terminate the Lease and the Lessee shall
quit and surrender the Leased Premises to Lessor. The Secretary may proceed by
suit or otherwise to enforce collection or rents or compliance with other
obligations or provisions of the Lease.
Any action taken or suffered by Lessee as a debtor under any insolvency or
bankruptcy act shall constitute a breach of this Lease, and in such event,
subject to the provisions of the Bankruptcy Act of the United States, the Lessor
or the Secretary may enter the premises and remove all persons and property
therefrom, excluding the persons and property belonging to authorized sublessees
and may relet the premises without terminating this Lease.
ARTICLE 21
----------
LESSEE'S OBLIGATIONS
--------------------
Because the Leased Premises are held in trust by the United States, all of
the Lessee's obligations under this Lease and the obligations of Lessee's
sureties, are to the United States as well as to the Lessor.
Lessee shall furnish the Secretary and Lessor documentary evidence of any
change in name or structure of its organization within thirty (30) days of such
change. Lessee shall also keep the Lessor and the Secretary informed of any
change of person and/or persons authorized to represent Lessee and execute
documents on behalf of Lessee and shall furnish the Secretary documentary
evidence of such change in authority within ten (10) days of any such change.
ARTICLE 22
----------
NOTICES
-------
Any notice required to be given pursuant to this Lease shall be delivered
by overnight courier or U.S. Express Mail with notice deemed effective on the
later of the first business day after deposit or the day on which the courier
confirms delivery, addressed as follows:
(a) If to Lessor:
The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
-9-
With a copy to:
Xxxxxx & Associates
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
(b) If to Lessee:
c/o Hollywood Park, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
With simultaneous copies to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
or to such other address(es) as the parties provide to each other in writing.
ARTICLE 23
----------
INSPECTION
----------
The Secretary and the Lessor or their authorized representative shall have
the right, at any reasonable times upon one (1) day's advance written notice
during the term of this Lease to enter upon the Leased Premises to inspect the
same.
ARTICLE 24
----------
DELIVERY OF PREMISES
--------------------
At the termination or expiration of this Lease, Lessee will peaceably and
without legal process deliver up the possession of the Leased Premises in good
condition. Holding over by Lessor after the termination or expiration of this
Lease shall not constitute a renewal or extension thereof.
-10-
ARTICLE 25
----------
LEASE BINDING AND PRIORITY OF LEASE
-----------------------------------
This Lease and the covenants, conditions and restrictions hereof shall
extend to, be binding upon and inure to the benefit of the successors, heirs,
assigns, executors and administrators of the parties hereto, and the provisions
of such agreement(s) conflict with this Lease, the terms of this Lease shall
prevail.
ARTICLE 26
----------
INTEREST OF MEMBER OF CONGRESS
------------------------------
No member of, or delegate to, Congress, shall be admitted to any share or
part of this Lease or to any benefit that may arise herefrom, but his provision
shall not be construed to extend to this contract if made with a corporation or
company for its general benefit.
ARTICLE 27
----------
VALIDITY
--------
This Lease, and any modification or amendment to this Lease, shall not be
valid or binding upon either party hereto until approved by the Secretary.
Additionally, approval of any proposed modification or amendment to this Lease
may not be considered by the Lessor or the Secretary unless the Lease is in good
standing.
ARTICLE 28
----------
APPROVAL BY LESSOR AND/OR SECRETARY
-----------------------------------
Whenever under the terms of this Lease the acceptance, consent or approval
of the Lessor and/or the Secretary is required, said acceptance, consent or
approval shall not be unreasonably withheld.
ARTICLE 29
----------
FORCE MAJEURE
-------------
Whenever under this instrument a time is stated within which or by which
original construction, repairs or reconstruction of said improvements shall be
completed, and if during such period a general or sympathetic strike or lockout,
war or rebellion or
-11-
some other event occurs that is beyond Lessee's power to control, the period of
delay so caused shall be added to the period allowed herein for the completion
of such work. This provision is in no way intended to extend the term of this
Lease.
ARTICLE 30
----------
ENVIRONMENTAL PROTECTION REQUIREMENTS
-------------------------------------
It is agreed that it shall be the responsibility of the Lessee to satisfy
all applicable environmental protection requirements as set forth in the
National Environmental Policy Act of 1969 and its implementing regulations. It
is further agreed that Lessee will furnish the Secretary, at Lessee's sole cost
and expense, a copy of all environmental assessments and/or environmental impact
statements received by Lessee with respect to the Property.
ARTICLE 31
----------
ARCHAEOLOGICAL, CULTURAL AND HISTORIC RESOURCES PROTECTION
----------------------------------------------------------
Lessee agrees that whenever in the course of construction on the Leased
Premises involving ground disturbing activities, a qualified archaeologist
(specified at 43 C.F.R. 7.8) will monitor to insure that if archaeological or
historical resources are uncovered, the construction activity shall immediately
be halted and the involved area evaluated regarding the significance of the
discovered resource. Within 12 hours of the discovery, the Superintendent of
the Yakama Agency shall immediately be notified by the Lessee's archaeologist.
Upon notification of the discovery, the Superintendent, or his designee, will
initiate a preliminary resource assessment. At the completion of the
assessment, the Bureau of Indian Affairs will initiate consultation with the
State Historic Preservation Officer and the Advisory Council on Historic
Preservation pursuant to the required procedures at 36 C.F.R. 800 (Protection of
Historic Properties) and specifically at 36 C.F.R. 800.11 (Properties discovered
during implementation of an undertaking) to determine the disposition of the
resource. The Lessee will comply with any mitigation measures determined
appropriate as a result of the consultation completed pursuant to 36 C.F.R.
800.11. The cost of any required archaeological evaluation, mitigation,
analysis, and curation shall be borne by the Lessee. To the extent that
performance of the obligations contained in this Article results in any
suspension of development of the Facility or the Enterprise, the Term shall be
extended by a like amount.
-12-
ARTICLE 32
----------
TERMINATION OF FEDERAL TRUST
----------------------------
Nothing contained in this Lease shall operate to delay or prevent a
termination of Federal trust responsibilities with respect to the land by the
issuance of a fee patent or otherwise during the term of the Lease; however,
such termination shall not serve to abrogate the Lease. The owners of the land
and the Lessee and his surety or sureties shall be notified of any such change
in the status of the land.
ARTICLE 33
----------
UNLAWFUL USE
------------
The Lessee agrees not to use or cause to be used any part of the Leased
Premises for any unlawful conduct or purpose.
ARTICLE 34
----------
SUBLESSEE RESPONSIBILITY
------------------------
Should Lessee sublease the Leased Premises (including, without limitation,
pursuant to the Sublease), the sublease therefor may contain a provision
shifting all of the responsibilities of Lessee hereunder to Lessee's lessee
thereunder. To the extent that any failure to comply with this Lease arises as
a consequence of Sublessee's failure to perform such shifted responsibilities,
such failure shall not constitute an Event of Default hereunder.
ARTICLE 35
----------
TERMINATION BY LESSEE
---------------------
Upon the occurrence of an Event of Default by Lessor and/or Sublessee under
any of the Loan Documents and/or the Transaction Documents, Lessee, in addition
to and without limitation of any rights it may have pursuant hereto, thereto or
Applicable Laws shall be entitled to terminate and cancel this Lease and from
and after such termination shall have no further liability hereunder.
-13-
ARTICLE 36
----------
LIMITED WAIVER OF SOVEREIGN IMMUNITY
------------------------------------
1. Retention of Sovereign Immunity. By this Agreement, Lessor does
-------------------------------
not waive, limit or modify its sovereign immunity from unconsented suit or
proceedings in arbitration, except as provided in this Article.
2. Scope of Waiver. Subject to the provisions of this Article,
---------------
Lessor hereby expressly grants to Lessee and the other Persons within the scope
of Article 36, Section 5, a limited waiver of its sovereign immunity from
unconsented suit and proceedings in arbitration, its right to require exhaustion
of Tribal remedies, its right to seek Tribal remedies and its right to be sued
in the Courts of the Nation, as such Courts are or may be established, and
consents to suit in accordance with this Article.
3. Procedural Requirements. Lessor grants a limited waiver of its
-----------------------
sovereign immunity as to suit involving a claim if, and only if, each and every
one of the following conditions is met:
a. The claim is made by a party designated under Article 36,
Section 5, and not by any other Person;
b. The claim alleges a breach by Lessor of one or more of the
specific obligations or duties expressly assumed by Lessor under the terms of
this Agreement or the other Transaction Documents;
c. The claim seeks:
(i) some specific action, or discontinuance of some
action, by Lessor or the Enterprise to bring Lessor into full compliance with
the duties and obligations expressly assumed by Lessor under this Agreement or
the other Transaction Documents; or
(ii) money damages for noncompliance with the terms and
provisions of this Agreement or the other Transaction Documents.
d. The claim is made in a detailed written statement to Lessor
stating the specific action or discontinuance of action by Lessor or the
Enterprise which would cure the alleged breach or non-performance, or the sum of
money claimed to be due and owing from Lessor to Lessee by reason of such
specific breach or non-performance, and, except where Lessee is seeking
injunctive relief, Lessor shall have thirty (30) calendar days to cure such
breach or non-performance or to make such payment before arbitration or judicial
proceedings may be instituted.
4. Time Period. With respect to any claim authorized in this
-----------
Article, initial judicial proceedings, as authorized herein, shall be commenced
within the
-14-
later of two (2) years after the claim accrues or one year after the claim is
discovered, or such claim shall be forever barred. The waiver granted herein
shall commence on the Execution Date and shall continue for two years following
the expiration, termination, or cancellation of this Agreement or the other
Transaction Documents (whichever is later), except that the waiver shall remain
effective for any proceedings then pending, and all appeals therefrom.
5. Recipient of Waiver. The recipients of the benefit of this
-------------------
waiver of sovereign immunity are limited to Lessee, its successors and assigns.
6. Federal Question. The parties agree that any dispute raised
----------------
under the provisions of this Article shall be resolved first pursuant to
applicable federal law, and if no federal law applies, pursuant to the
applicable laws of the State.
7. Service of Process. In any proceeding brought pursuant to this
------------------
Article, Lessor consents to service made in accordance with the notice
provisions of this Agreement.
8. Enforcement. Lessor waives its sovereign immunity from a
-----------
judgment or order consistent with the terms and provisions of this Article,
which is final because either the time for appeal thereof has expired or the
judgment or order is issued by a court having final appellate jurisdiction over
the matter. Lessor consents to the jurisdiction of the United States District
Court for the Eastern District of Washington and any court having appellate
jurisdiction thereover, consistent with the terms and conditions of this
Article. None of the parties shall object to the jurisdiction or venue of said
federal court. Without in any way limiting the generality of the foregoing,
Lessor expressly authorizes any Governmental authorities who have the right and
duty under Applicable Law to take any action authorized by any court, to take
such action to give effect to any judgment entered against Lessor, including,
without limitation, entering on to the Property, or any other lands within
Lessor's jurisdiction, and the Facility to seize possession of any Collateral
for the purpose of giving effect to any judgment entered against Lessor pursuant
to this Article.
9. Assets Pledged to Satisfy Enforcement Proceedings. The foregoing
-------------------------------------------------
limited waiver of sovereign immunity is expressly conditioned on the parties'
agreement, set forth herein, that the only assets, including property and funds,
which shall be available, and which are thus specifically pledged and assigned
hereby, to satisfy any enforcement proceedings or judgment in connection with
this Agreement, or any other Transaction Document, shall be limited to (i) the
Collateral, and (ii) possession of the Leased Premises as provided herein.
10. Limitation Upon Enforcement. Damages awarded against Lessor or
---------------------------
the Enterprise shall be satisfied solely from assets specified in Article 36,
Section 9, and shall not constitute a lien upon or be collectible from any other
income or assets of Lessor, except with the written consent of Lessor.
-15-
11. Expenses of Judicial Enforcement. Except as ordered by a court
--------------------------------
of competent jurisdiction, all parties shall bear their own costs, including
attorneys' fees, in connection with any judicial proceedings authorized under
this Agreement. The parties expressly agree that this provision shall survive
the termination, for any reason, or expiration of this Agreement.
12. Guaranty. Lessor agrees not to revoke or limit, in whole or in
--------
part, the limited waiver of sovereign immunity of Lessor contained in this
Article or in any way attempt to revoke or limit, in whole or in part, such
limited waiver of sovereign immunity. In the event of any such revocation or
attempted revocation, the parties expressly recognize and agree that there
remains no adequate remedy at law available to Lessee, and Lessor hereby
consents to the entry of appropriate injunctive relief consistent with the terms
and conditions of this Agreement, as may be granted by any court of competent
jurisdiction.
-16-
IN WITNESS WHEREOF, the parties hereto sign and execute this document, as
of the date first noted above, as authorized representative of their respective
parties:
THE CONFEDERATED TRIBES AND BANDS
OF THE YAKAMA INDIAN NATION,
a federally-recognized Indian Tribe
By: __________________________________
Name:_________________________________
Title: _______________________________
SECRETARY OF INTERIOR
By: __________________________________
Name:_________________________________
Title: ______________________________
HP YAKAMA, INC.,
a Delaware corporation
By: __________________________________
Name:_________________________________
Title:________________________________
-17-
ACKNOWLEDGMENTS TO LEASE
------------------------
State of Washington :
: SS
County of Yakima :
On this ____ day of _______________, 1997, before me, the undersigned
Notary Public, appeared The Confederated Tribes and Bands of the Yakama Indian
Nation, by and through _______________, its _______________, personally known to
be, or proved to me on the basis of satisfactory evidence to be, the person who
executed the attached document as the authorized representative of The
Confederated Tribes and Bands of the Yakama Indian Nation, who swore that the
same was an act of his own free will and of the free will of The Confederated
Tribes and Bands of the Yakama Indian Nation.
____________________________
Notary Public
State of __________ :
: SS
County of _________ :
On this ____ day of _______________, 1997, before me, the undersigned
Notary Public, appeared HP Yakama, Inc., a _______ corporation, by and through
_______________, its ______________________, personally known to be, or proved
to me on the basis of satisfactory evidence to be, the person who executed the
attached document as the authorized representative of HP Yakama, Inc., who swore
that the same was an act of his own free will and of the free will of HP Yakama,
Inc.
____________________________
Notary Public
-18-
SUBLEASE
By and Between
HP YAKAMA, INC.
and
YAKAMA TRIBAL GAMING CORPORATION
September 11, 1997
SUBLEASE
This SUBLEASE (this "Sublease") is made this 11th day of September, 1997,
by and between HP YAKAMA, INC., a Delaware corporation ("Sublessor"), and Yakama
Tribal Gaming Corporation (the "Tribal Corporation"), a tribal corporation
established under the laws of THE CONFEDERATED TRIBES AND BANDS OF THE YAKAMA
INDIAN NATION (the "Nation"), a federally recognized Indian tribe located in the
State of Washington, with reference to the following facts and circumstances:
A. Sublessor is leasing the Leased Premises (as defined in the Master
Lease (as defined hereinafter)) from the Tribal Corporation pursuant to that
certain Master Lease dated as of the date first set forth above by and between
the Nation and the Sublessor (the "Master Lease") (all capitalized terms used
herein without definition shall have the respective meanings ascribed thereto in
the Master Lease).
B. Sublessor is subleasing the Leased Premises to the Tribal Corporation
upon the terms and conditions set forth herein, including, without limitation,
the Nation's assumption of all of Sublessor's obligations under the Master
Lease.
NOW, THEREFORE, Sublessor, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, for the execution and
performance of the Loan Documents and the other Transaction Documents and the
covenants, agreements and conditions contained in this Sublease to be performed
and kept by the Tribal Corporation, does hereby let and rent to the Tribal
Corporation, and the Tribal Corporation does hereby take and hire as tenant of
Sublessor, the Leased Premises, upon the terms and conditions set forth in this
Sublease.
ARTICLE I
PRELIMINARY PROVISIONS
1.1 The Tribal Corporation. The Tribal Corporation represents and warrants
----------------------
that it has full right, power and authority to enter into this Sublease.
1.2 Notices. Any notice required to be given pursuant to this Sublease shall
-------
be delivered by overnight courier or U.S. Express Mail with notice deemed
effective on the later of the first business day after deposit or the day on
which the courier confirms delivery, addressed as follows:
(a) If to the Tribal Corporation:
YAKAMA TRIBAL GAMING CORPORATION
c/o The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
-1-
With a copy to:
The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chairperson, Tribal Council
and:
Xxxxxx & Associates
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
(b) If to Sublessor:
c/o Hollywood Park, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
With simultaneous copies to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
or to such other address(es) as the parties provide to each other in writing.
1.3 Assumption of Master Lease Obligations. The Tribal Corporation hereby
--------------------------------------
assumes each and every obligation of Sublessor, as lessee, under the Master
Lease. Without limitation of the foregoing, the Tribal Corporation hereby
acknowledges and agrees that all responsibilities under the Master Lease have
shifted to the Tribal Corporation and the Tribal Corporation has full
responsibility with respect thereto (including, without limitation, all
obligations with respect to payment of rents, completion of development of the
Facility, insurance, indemnification, accounting and audits, bonding,
maintenance, environmental conditions and reports and encumbrances).
ARTICLE II
TERM
2.1 Term. The term of this Sublease (the "Term") shall commence on the
----
Effective Date and shall continue thereafter, unless sooner terminated in
accordance with the
-2-
provisions hereof, through and including the seventh (7th) anniversary of the
Commencement Date (the "Lease Termination Date"); provided, however, that the
-------- -------
Term (i) shall be extended to the same extent that the term of the Master Lease
is extended pursuant to Article 9 thereof, (ii) shall, at Sublessor's option, be
extended by the number of days of any period during which the Tribal Corporation
and/or Nation is in material default under any of the Loan Documents and/or the
Transaction Documents and rent shall continue to be payable hereunder during
such extension period, and (iii) this Sublease shall terminate and be of no
force and effect if the Effective Date has not occurred on or before August 1,
1998.
2.2 Surrender of the Leased Premises. On the Lease Termination Date, or upon
--------------------------------
the sooner termination of this Sublease pursuant to the provisions hereof, the
Tribal Corporation shall peaceably and quietly leave, surrender and yield up to
Sublessor the Leased Premises, broom clean and in good order and condition,
reasonable wear and tear excepted; provided, however, that the Tribal
-------- -------
Corporation shall have the right to remove personal property to the extent such
property is not required to remain on the Leased Premises pursuant to the Master
Lease.
ARTICLE III
RENTALS
3.1 Rent.
----
(a) During the Term, the Tribal Corporation shall pay to Sublessor, at the
address set forth herein and in lawful money of the United States, monthly
payments ("Sublease Rent") in an amount equal to the applicable percentage of
Net Revenues for the preceding month set forth below:
(i) Twenty-eight percent (28%), until such time as the aggregate
Net Revenues which have accrued since the Commencement Date
equal $26,000,000;
(ii) Twenty-five percent (25%), until such time as the aggregate Net
Revenues which have accrued since the Commencement Date equal
$41,000,000; and
(iii) Twenty-two percent (22%) after such time as the aggregate Net
Revenues exceed $41,000,000;
provided, however, that in the event that the Tribal Corporation fully repays
-------- -------
the Loan before the maturity thereof, the applicable percentage of Net Revenues
payable as Sublease Rent shall be reduced from the date of such repayment by
three percent (3%); provided, further, that no such reduction shall be made in
-------- -------
the applicable percentage of Net Revenues payable as Sublease Rent prior to the
fifth anniversary of the Commencement Date.
-3-
(b) Rental payments due hereunder shall be payable, in arrears, with the
first monthly rental payment due on the twentieth (20th) day of the first
complete month following the month in which the Commencement Date occurs, and
continuing on the twentieth (20th) day of each month thereafter. Sublease Rent
shall be payable solely out of and to the extent of Available Distributable
Cash. Sublease Rent which is earned but not paid shall be accrued without
interest. Payments of Sublease Rent shall be based on the following priority of
payments: (i) principal amounts on the Loan that were previously accrued but
unpaid; (ii) principal amounts on the Loan that are currently due and payable;
(iii) Sublease Rent that was previously accrued but unpaid; and (iv) Sublease
Rent that is currently due and payable.
(c) All Sublease Rent accrued but unpaid because of insufficient Available
Distributable Cash and still unpaid more than thirty-one (31) days (extended by
the number of days of any period during which the Tribal Corporation and/or
Nation is in material default under any of the Loan Documents and/or the
Transaction Documents) after the seventh anniversary of the Commencement Date
shall no longer be payable.
ARTICLE IV
USE and OCCUPANCY
4.1 Use of the Facility. The Tribal Corporation shall use the Leased Premises
-------------------
solely for the establishment and operation of the Enterprise in accordance with
the provisions of Applicable Laws and the Master Lease.
4.2 Maintenance and Repairs. The Tribal Corporation shall make or cause to be
-----------------------
made all necessary repairs, alterations and/or replacements thereto, interior,
exterior, structural and nonstructural, reasonable wear and tear excepted. All
such repairs, alterations and replacements shall be equal in quality to the
original work. Further, the Tribal Corporation shall keep the sidewalks, curbs,
entrances, passageways and areas adjoining or appurtenant to the Facility in a
clean and orderly condition, free of snow, ice, rubbish and obstruction. Any and
all expenses incurred in connection with the performance of the obligations
imposed under this Section shall be deemed an operating expense of the
Enterprise.
4.3 Right to Enter. Sublessor shall have access to the Facility in company
--------------
with an agent of the Tribal Corporation at any and all reasonable times for the
purpose of inspecting the Facility, or for the purpose of carrying out
Sublessor's rights described in this Sublease, subject to the security
requirements of the Enterprise.
ARTICLE V
IMPROVEMENTS
-4-
5.1 Quality. Any construction, maintenance and repair work, alterations, or
-------
replacements to the Facility shall be of first class quality in accordance with
the Master Lease.
5.2 Liens. The Tribal Corporation shall have no authority, express or implied
-----
to create or place any lien or encumbrance, of any kind or nature whatsoever,
upon, or in any manner to bind the interest of Sublessor in the Leased Premises.
Sublessor will pay promptly all sums legally due and payable by Sublessor on
account of any labor performed, or on account of any material supplied, to the
Leased Premises as to which any lien is or legally can be asserted against the
Leased Premises.
ARTICLE VI
INSURANCE
The parties agree that at all times during the Term, the Tribal Corporation
shall obtain and maintain such insurance coverage for the Facility as is
required pursuant to the Loan Agreement and the Master Lease.
ARTICLE VII
ENCUMBRANCES
The Tribal Corporation shall have no right or privilege to mortgage or
otherwise encumber its interest, in whole or in part in the Leased Premises
without the express, written consent of Sublessor, which consent, or the denial
thereof, shall be in Sublessor's sole and absolute discretion.
ARTICLE VIII
ASSIGNMENT AND SUBLETTING.
The Tribal Corporation shall not, unless otherwise expressly authorized
herein, sublease, assign or transfer any right to or interest in this Sublease
to any Person other than an Affiliate without the written consent of the Lessor
and approval of the Secretary and sureties. No such sublease, assignment or
transfer shall be valid or binding without said consent and approval and then
only upon the condition that sublessee has agreed in writing that in the event
of conflict between the provisions of this Sublease and of said sublease, the
provisions of this Sublease shall prevail. The term of any sublease shall not
exceed the term of this Sublease. No sublease shall release the Tribal
Corporation from any obligation under this Sublease or substitute the sublessee
for the Tribal Corporation hereunder. Any sublease made, except as aforesaid
shall be deemed a breach of this Sublease.
-5-
ARTICLE IX
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.1 Event of Default. Any one or more of the following events shall constitute
----------------
an Event of Default hereunder:
(a) Failure to pay any amount or any part thereof payable by the Tribal
Corporation under this Sublease or the Master Lease (including, without
limitation, rental payments hereunder, payments of Impositions and payment of
rent owing under the Master Lease) within five (5) days of when due and payable.
(b) Any set of facts which would cause the Secretary to cancel this Sublease,
pursuant to any Applicable Law (including, without limitation, 25 U.S.C. (S) 415
and regulations promulgated thereunder).
(c) Any other act or omission in breach of the terms hereof which act or
omission shall continue for a period of fifteen (15) days after written notice
specifying such omission or breach and requesting that it be remedied, unless
Sublessor has agreed in writing to an extension of such time prior to its
expiration, or for such longer period as may be reasonably necessary to remedy
such act or omission, provided that the Tribal Corporation is proceeding with
reasonable diligence to remedy the same.
(d) An Event of Default under any of the Loan Documents or the other
Transaction Documents.
9.2 Notice of Termination. In the event that an Event of Default occurs and is
---------------------
not cured, then the Term shall expire and terminate with the same force and
effect as though the date so specified were the Lease Termination Date, and
Sublessor shall have the remedies with respect to the Leased Premises set forth
below.
9.3 The Tribal Corporation's Obligations upon Termination. Upon the expiration
-----------------------------------------------------
or termination of this Sublease, without limitation of any and all rights and
remedies available to Sublessor pursuant to Applicable Laws (including, without
limitation, the right to evict Tribal Corporation from the Leased Premises)
which rights are expressly reserved by and made available to Sublessor hereby,
the Tribal Corporation shall quit and peaceably surrender the Leased Premises,
without any payment by Sublessor, without further notice, any and all notice to
quit, notice of intention to re-enter or any other notices and any institution
of legal proceedings being hereby waived.
ARTICLE X
LIMITED WAIVER OF SOVEREIGN IMMUNITY
10.1 Limited Waiver of Sovereign Immunity.
------------------------------------
-6-
10.1.1 Retention of Sovereign Immunity. By this Agreement, the
-------------------------------
Tribal Corporation does not waive, limit or modify its sovereign immunity from
unconsented suit or proceedings in arbitration, except as provided in this
Article.
10.1.2 Scope of Waiver. Subject to the provisions of this
---------------
Article, the Tribal Corporation hereby expressly grants to Sublessor and the
other Persons within the scope of Article X, Section 10.1.5, a limited waiver of
its sovereign immunity from unconsented suit and proceedings in arbitration, its
right to require exhaustion of Tribal remedies, its right to seek Tribal
remedies and its right to be sued in the Courts of the Nation, as such Courts
are or may be established, and consents to suit in accordance with this Article.
10.1.3 Procedural Requirements. the Tribal Corporation grants
-----------------------
a limited waiver of its sovereign immunity as to suit involving a claim if, and
only if, each and every one of the following conditions is met:
(a) The claim is made by a party designated under
Article X, Section 10.1.5, and not by any other Person;
(b) The claim alleges a breach by the Tribal
Corporation of one or more of the specific obligations or duties expressly
assumed by the Tribal Corporation under the terms of this Agreement or the other
Transaction Documents (including, without limitation, all indemnification
obligations hereunder);
(c) The claim seeks:
(i) some specific action, or discontinuance of
some action, by the Tribal Corporation or the Enterprise to bring the Tribal
Corporation into full compliance with the duties and obligations expressly
assumed by the Tribal Corporation under this Agreement or the other Transaction
Documents; or
(ii) money damages for noncompliance with the
terms and provisions of this Agreement or the other Transaction Documents
(including, without limitation, all indemnification obligations hereunder).
(d) The claim is made in a detailed written statement to the
Tribal Corporation stating the specific action or discontinuance of action by
the Tribal Corporation or the Enterprise which would cure the alleged breach or
non-performance, or the sum of money claimed to be due and owing from the Tribal
Corporation to Sublessor by reason of such specific breach or non-performance,
and, except where Sublessor is seeking injunctive relief, the Tribal Corporation
shall have thirty (30) calendar days to cure such breach or non-performance or
to make such payment before arbitration or judicial proceedings may be
instituted.
10.1.4 Time Period. With respect to any claim authorized in
-----------
this Article, initial judicial proceedings, as authorized herein, shall be
commenced within the
-7-
later of two (2) years after the claim accrues or one year after the claim is
discovered, or such claim shall be forever barred. The waiver granted herein
shall commence on the Execution Date and shall continue for two years following
the expiration, termination, or cancellation of this Agreement or the other
Transaction Documents (whichever is later), except that the waiver shall remain
effective for any proceedings then pending, and all appeals therefrom.
10.1.5 Recipient of Waiver. The recipients of the benefit of
-------------------
this waiver of sovereign immunity are limited to Sublessor, its successors and
assigns and any and all Persons covered by the indemnification provisions
hereof.
10.1.6 Federal Question. The parties agree that any dispute
----------------
raised under the provisions of this Article shall be resolved first pursuant to
applicable federal law, and if no federal law applies, pursuant to the
applicable laws of the State.
10.1.7 Service of Process. In any proceeding brought pursuant
------------------
to this Article, the Tribal Corporation consents to service made in accordance
with the notice provisions of this Agreement.
10.1.8 Enforcement. the Tribal Corporation waives its
-----------
sovereign immunity from a judgment or order consistent with the terms and
provisions of this Article, which is final because either the time for appeal
thereof has expired or the judgment or order is issued by a court having final
appellate jurisdiction over the matter. the Tribal Corporation consents to the
jurisdiction of the United States District Court for the Eastern District of
Washington and any court having appellate jurisdiction thereover, consistent
with the terms and conditions of this Article. None of the parties shall object
to the jurisdiction or venue of said federal court. Without in any way limiting
the generality of the foregoing, the Tribal Corporation expressly authorizes any
Governmental authorities who have the right and duty under Applicable Law to
take any action authorized by any court, to take such action to give effect to
any judgment entered against the Tribal Corporation, including, without
limitation, entering on to the Property, or any other lands within the Tribal
Corporation's or the Nation's jurisdiction, and the Facility to seize possession
of any Collateral for the purpose of giving effect to any judgment entered
against the Tribal Corporation pursuant to this Article.
10.1.9 Assets Pledged to Satisfy Enforcement Proceedings. The
-------------------------------------------------
foregoing limited waiver of sovereign immunity is expressly conditioned on the
parties' agreement, set forth herein, that the only assets, including property
and funds, which shall be available, and which are thus specifically pledged and
assigned hereby, to satisfy any enforcement proceedings or judgment in
connection with this Agreement, or any other Transaction Document, shall be
limited to (i) the Collateral, and (ii) possession of the Leased Premises as
provided in the Master Lease.
10.1.10 Limitation Upon Enforcement. Damages awarded against
---------------------------
the Tribal Corporation or the Enterprise shall be satisfied solely from assets
specified in Article X, Section 10.1.9, and shall not constitute a lien upon or
be collectible from any
-8-
other income or assets of the Tribal Corporation, except with the written
consent of the Tribal Corporation.
10.1.11 Expenses of Judicial Enforcement. Except as ordered by
--------------------------------
a court of competent jurisdiction, all parties shall bear their own costs,
including attorneys' fees, in connection with any judicial proceedings
authorized under this Agreement. The parties expressly agree that this provision
shall survive the termination, for any reason, or expiration of this Agreement.
10.1.12 Guaranty. the Tribal Corporation agrees not to revoke
--------
or limit, in whole or in part, the limited waiver of sovereign immunity of the
Tribal Corporation contained in this Article or in any way attempt to revoke or
limit, in whole or in part, such limited waiver of sovereign immunity. In the
event of any such revocation or attempted revocation, the parties expressly
recognize and agree that there remains no adequate remedy at law available to
Sublessor, and the Tribal Corporation hereby consents to the entry of
appropriate injunctive relief consistent with the terms and conditions of this
Agreement, as may be granted by any court of competent jurisdiction.
ARTICLE XI
NO MERGER
It is the intention of the parties hereto that the leasehold interest
created by this Sublease shall not merge into fee title to the Leased Premises
by reason of such interests coming into common or related ownership.
ARTICLE XII
MISCELLANEOUS
12.1 Indemnification by the Tribal Corporation.
-----------------------------------------
12.1.1 Indemnification by The Tribal Corporation. The Tribal
-----------------------------------------
Corporation agrees to indemnify and hold harmless Sublessor, its directors,
officers, agents and employees, against any and all claims of or losses, damages
or liability to third parties to which Sublessor, its directors, officers,
agents and employees, may become subject under any law in connection with the
carrying out of the transactions contemplated by this Agreement or the other
Transaction Documents, or the conduct of any activity on the Property (other
than as a result of gross negligence or willful misconduct of any such party)
and to reimburse Sublessor, its directors, officers, agents and employees, for
any out-of-pocket legal and other expenses (including reasonable attorneys'
fees) incurred by Sublessor, its directors, officers, agents and employees, in
connection with investigating any such losses, claims, damages or liabilities or
in connection with defending any actions relating thereto. Sublessor agrees, at
the request and reasonable expense of the Tribal Corporation, to cooperate in
the making of any investigation in defense of any such claim and promptly to
assert any or all of the rights
-9-
and privileges and defenses which may be available to Sublessor. The Tribal
Corporation further releases and agrees to hold harmless Sublessor, its
directors, officers, agents and employees, from any claims of or losses, damages
or liability to third parties arising out of any covenant, representation or
undertaking of the Tribal Corporation contained in this Agreement, or the other
Transaction Documents. The provisions of this Section shall survive the
termination of this Agreement and the other Transaction Documents.
12.1.2 Indemnification by Sublessor. Sublessor agrees to
----------------------------
indemnify and hold harmless the Tribal Corporation and its directors, officers,
agents and employees, against any and all claims of or losses, damages or
liability to third parties to which the Tribal Corporation and its directors,
officers, agents and employees, may become subject under any law as a result of
the gross negligence or willful misconduct of the directors, officers, agents or
employees of the Sublessor, and to reimburse the Tribal Corporation and its
directors, officers, agents and employees, for any out-of-pocket legal and other
expenses (including reasonable attorneys' fees) incurred by the Tribal
Corporation and its directors, officers, agents and employees, in connection
with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions relating thereto. The Tribal Corporation
agrees, at the request and reasonable expense of the Sublessor, to cooperate in
the making of any investigation in defense of any such claim and promptly to
assert any or all of the rights and privileges and defenses which may be
available to the Tribal Corporation. Sublessor further releases and agrees to
hold harmless the Tribal Corporation and its directors, officers, agents and
employees, from any claims of or losses, damages or liability to third parties
arising out of any covenant, representation or warranty of the Sublessor
contained in this Agreement or the other Transaction Documents. The provisions
of this Section shall survive the termination of this Agreement and the other
Transaction Documents.
12.1.3 Rights of Persons Covered. The Persons covered by the
-------------------------
indemnification provisions hereof shall be third party beneficiaries of this
Agreement and shall have the right, subject to the provisions of this Agreement,
to enforce such indemnification provisions.
12.2 Recording. This Sublease shall be filed and recorded in the
---------
appropriate branch of the Land Titles and Records Office of the Department of
the Interior. Sublessor agrees that if so requested by the Tribal Corporation,
Sublessor will execute in recordable form for purposes of recordation at the
Tribal Corporation's expense a short form of Sublease containing the names of
the parties, the description of the Leased Premises and the Facility, the Term
of the Sublease, a statement regarding the use of the Facility, and such other
provisions as either party may require.
12.3 Right to Perform. If the Tribal Corporation defaults in the making of
----------------
any payment required to be made by the Tribal Corporation and which is capable
of being made or done by Sublessor, then Sublessor may, but shall not be
required to, make such payment, and the amount of such payment, if made by
Sublessor, with interest thereon at
-10-
the rate of ten percent (10%) per annum, shall be paid by the Tribal Corporation
to Sublessor. The making of such payment by Sublessor shall not operate to cure
such default or to estop Sublessor from the pursuit of any remedy to which
Sublessor may be entitled because of any breach on the part of the Tribal
Corporation of any covenant or condition herein, nor the acceptance of rent
herein by Sublessor either from the Tribal Corporation or any tenant, whether or
not such delay or acceptance be with knowledge on the part of Sublessor of such
breach, shall prejudice Sublessor's privilege to invoke such remedy, which
privilege shall continue until such breach is cured.
12.4 No Partnership. The Tribal Corporation shall not be construed or held
--------------
to be a partner or associate of Sublessor in the conduct of Sublessor's
business, it being expressly understood and agreed that the relationship between
the parties hereto is and shall at all times remaining during the Term, that of
lessor and lessee.
12.5 No Waiver. No failure by the Tribal Corporation to insist upon the
---------
performance of any covenant, agreement, provision or condition of this Sublease
or to exercise any right or remedy consequent upon a default hereunder, and no
acceptance of full or partial rent during the continuance of any such default
shall constitute a waiver of any such default or of such covenant, agreement,
provision or condition.
12.6 Execution in Counterparts, in Quadruplicate. This Sublease is being
-------------------------------------------
executed in counterparts in four (4) originals, one to be retained by each party
and one each for the Secretary and the Chairman.
12.7 Covenants to Run with the Land. During the Term, the covenants
------------------------------
contained herein shall run with the land and be binding on and inure to the
benefit of the parties, their heirs, successors and assigns.
12.8 Entire Agreement. This Sublease cannot be changed or terminated
----------------
orally. This Sublease, along with the Loan Documents and the other Transaction
Documents, contain the entire agreement between the parties; any prior agreement
(including, without limitation, the MOU) is hereby superceded and any agreement
hereafter made shall be ineffective to change, modify or discharge this Sublease
in whole or in part, unless such subsequent agreement is in writing and signed
by the party against whom enforcement of the change, modification or discharge
is sought.
12.9 No Third Party Beneficiary Rights. Except as provided in Section
---------------------------------
12.1.3, nothing contained in this Sublease is intended nor shall be construed as
creating any third party beneficiary rights.
-11-
IN WITNESS WHEREOF, on the day and year first above written, the Tribal
Corporation and Sublessor have duly executed this Sublease as their free act and
deed, by and through their authorized representatives.
YAKAMA TRIBAL GAMING CORPORATION,
a tribal corporation established under the laws
of THE CONFEDERATED TRIBES AND BANDS OF THE
YAKAMA NATION
By:____________________________
Name:__________________________
Title:_________________________
HP YAKAMA, INC.,
a Delaware corporation
By:____________________________
Name:__________________________
Title:_________________________
-12-
ACKNOWLEDGMENTS TO SUBLEASE
---------------------------
State of Washington :
: SS
County of__________ :
On this ____ day of ________, 1997, before me, the undersigned Notary
Public, appeared Yakama Tribal Gaming Corporation, by and through
_______________________, its __________, personally known to be, or proved to me
on the basis of satisfactory evidence to be, the person who executed the
attached document as the authorized representative of the Yakama Tribal Gaming
Corporation, who swore that the same was an act of his own free will and of the
free will of the Yakama Tribal Gaming Corporation.
_____________________________
Notary Public
State of __________ :
: SS
County of__________ :
On this ____ day of _______________, 1997, before me, the undersigned
Notary Public, appeared HP YAKAMA, INC., a _______________ , by and through
__________________, its __________________ personally known to be, or proved to
me on the basis of satisfactory evidence to be, the person who executed the
attached document as the authorized representative of HP YAKAMA, Inc., who swore
that the same was an act of his own free will and of the free will of HP YAKAMA,
INC.
_____________________________
Notary Public
-13-
CONSTRUCTION AND DEVELOPMENT AGREEMENT
By and Between
YAKAMA TRIBAL GAMING CORPORATION
and
HP YAKAMA CONSULTING, INC.
Dated: September 11, 1997
CONSTRUCTION AND DEVELOPMENT AGREEMENT
THIS CONSTRUCTION AND DEVELOPMENT AGREEMENT ("Agreement") is entered into
this 11th day of September 1997 by and between YAKAMA TRIBAL GAMING CORPORATION
(the "Tribal Corporation"), a tribal corporation established under the laws of
The Confederated Tribes And Bands Of The Yakama Indian Nation (the "Nation"), a
federally recognized Indian tribe located in the State of Washington and having
a mailing address of X.X. Xxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000, and HP
CONSULTING, INC. ("Consultant"), a Delaware corporation, having a mailing
address of c/o Hollywood Park, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000.
RECITALS
--------
A. The Tribal Corporation wishes to engage Consultant and Consultant is
willing to provide certain services in connection with the construction and
development of the Enterprise as contemplated herein and in the Transaction
Documents executed concurrently herewith. Simultaneously with the execution of
this Agreement, the Tribal Corporation has borrowed certain monies from
Consultant's Affiliate, HP Yakama, Inc., to finance the construction and
development of the Enterprise. All of such agreements are more particularly set
forth in the Transaction Documents and the Loan Documents, all of which have
been executed concurrently with one another. The parties expressly acknowledge
and agree that each of the Transaction Documents shall serve as essential and
mutually interdependent consideration for each of the other agreements.
B. Nation has determined that the construction of the Facility and the
development and operation of the Enterprise is an important tribal governmental
project which is intended to improve the economic condition of the Nation and
its members, increase tribal revenues, enhance the Nation's economic self-
sufficiency, and enable the Nation's government to better serve the social,
economic, educational and health needs of the Nation's members.
C. This Agreement is intended only to be for pre-Commencement Date
construction and development services with respect to the Facility and
Enterprise. Nothing in this Agreement is intended or shall be construed as
authorizing Consultant to engage in gaming on Nation's reservation or in
connection with the Enterprise, either directly or indirectly, as a manager or
otherwise. This Agreement is not intended to be and shall not be construed as
constituting a contract for management services as contemplated by IGRA.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged by the parties, the parties
hereby agree, as of the date first stated above, as follows:
13. Defined Terms. Unless otherwise defined herein, the capitalized words
-------------
and terms used in this Agreement shall have the meanings set forth in Exhibit A
hereto, "Master Definitions List."
13.1 Appointment of the Consultant as Development Manager.
----------------------------------------------------
13.2 Consultant Retained. The Tribal Corporation hereby retains
-------------------
and appoints the Consultant as development manager to perform, during the term
and in accordance with all of the provisions of this Agreement, the design,
development, construction, and other functions described in this Agreement, and
the Consultant hereby accepts such appointment. It shall be the Consultant's
duty to cause, as owner's agent, the construction of the Facility subject to
Tribal Corporation's approval rights hereunder. Said development and
construction shall be on the terms set forth herein, and the Consultant shall
use commercially reasonable efforts to ensure that the Commencement Date occurs
no later than six (6) months after the Effective Date.
13.3 No Gaming Management Functions. Nothing herein is intended to
------------------------------
confer on the Consultant and this Agreement shall not be construed as conferring
on the Consultant, any rights, duties or obligations as a manager of any Gaming
activity.
14. Term of Agreement. This Agreement shall become effective on the
-----------------
Effective Date and shall remain in effect until the earlier of (i) one (1) month
after the Commencement Date or (ii) the date on which this Agreement is
terminated. If the Effective Date has not occurred on or before August 1, 1998,
this Agreement shall terminate and be of no further force and effect.
Regardless of the cause of termination, the warranties included or incorporated
herein shall survive termination of this Agreement.
15. Construction Management. Following the Effective Date and prior to
-----------------------
the Commencement Date, the Consultant shall serve as the Tribal Corporation's
construction manager, and shall be responsible for supervision of the
development and construction of the Facility on a day-to-day basis. In
discharging its duties, the Consultant shall use commercially reasonable efforts
to ensure that (i) the Facility shall have no less than 45,000 sq. ft. in floor
space and shall be finished generally in a quality equal to that of the
Muckleshoot Indian Casino in Auburn, Washington; (ii) the Facility shall be
constructed on time and within the Development Budget (as hereinafter defined),
in accordance with all approved plans and specifications as contemplated in the
Transaction Documents and under Applicable Law; (iii) all contractors shall
carry out in all material respects the duties and responsibilities prescribed
under their respective contracts, and will follow the Nation's Indian preference
and subcontractor bidding guidelines, and (iv) such development and construction
complies in all material respects with applicable codes and building standards.
-1-
16. Consultation. The parties hereby agree to designate one or more
------------
individuals who shall serve as their representatives (the "Representatives") and
who shall meet as often as necessary (but no less frequently than once per week
unless the parties otherwise agree) to provide ongoing supervision, information
and consultation with respect to the construction and development of the
Enterprise and Facility. All decisions shall be reached by consensus whenever
possible, and disagreements shall be resolved if necessary through arbitration
(or such other means to expedite the process as the parties shall agree) as set
forth herein.
17. Construction Management Responsibilities. The Consultant shall
----------------------------------------
have responsibility for the following:
17.1 Selection of Architect and Engineer. It is acknowledged that
-----------------------------------
a project architect has already been selected. Such architect, and any
replacement or substitute architect hired in accordance with this Agreement, is
referred to herein as the "Architect." Consultant shall provide advice and
assistance to the Tribal Corporation in determining the terms of and causing to
be prepared an owner/architect agreement with an Architect (such agreement and
any substitute agreement therefor shall be referred to as the "Owner/Architect
Agreement"). The Owner/Architect Agreement shall provide that the Architect
shall provide the following services (the "Architect Services"):
(1) design the Facility;
(2) prepare plans and specifications for the construction of
the Facility;
(3) inspect the Facility and review the appropriateness of
requests for payments submitted by the Contractor (as
hereinafter defined) during the construction of the
Facility; and
(4) notify the Tribal Corporation of the substantial
completion of the Facility and determine the timing of
the final payment to the Contractor.
In the event it should become necessary to replace said architect or engage
an additional architect, the following shall apply:
17.1.1 Recommendation and Scope. Consultant shall recommend to
---------------------------
the Tribal Corporation an architect and, if deemed appropriate by the
Consultant, a civil engineer to provide the Architect Services (to the extent
such services have not previously been provided).
17.1.2 Acceptance of Recommendation. Upon receipt of
----------------------------
Consultant's recommendation, the Tribal Corporation's Representative shall
review the recommendation and if acceptable forward it to the Tribal Corporation
for formal
-3-
acceptance. Unless there is no reasonable basis for Tribal Corporation to reject
Consultant's recommendation, Tribal Corporation shall designate the recommended
architect as the "Architect" under this Agreement, and designate the recommended
engineer, if any, as the "Engineer" under this Agreement, and enter into such
agreements as may be necessary to acquire their
services.
17.1.3 Rejection of Recommendation. If there is a reasonable
---------------------------
basis for Tribal Corporation to reject a recommendation by Consultant, and the
Tribal Corporation rejects such recommendation, the Tribal Corporation shall
notify Consultant of such rejection and provide a written description of the
basis for such rejection. Consultant shall then submit additional
recommendations to the Tribal Corporation's Representative until the Tribal
Corporation accepts a recommendation and designates the Architect under this
Agreement and the Engineer under this Agreement.
17.1.4 Preparation of New Owner/Architect Agreement. Upon the
--------------------------------------------
Tribal Corporation's acceptance of an Architect, the Tribal Corporation shall
cause to be prepared a new Owner/Architect Agreement between the Tribal
Corporation and the Architect to be signed by the Tribal Corporation and the
Architect. The new Owner/Architect Agreement shall be consistent with this
Agreement and approved by the Tribal Corporation's legal counsel. Consultant
and its counsel shall have a reasonable opportunity to review, and give comments
on, the new Owner/Architect Agreement prior to its execution.
17.1.5 Preparation of Engineer's Agreement. Upon the Tribal
-----------------------------------
Corporation's acceptance of an Engineer, the Tribal Corporation shall cause to
be prepared an owner/engineer agreement (the "Owner/Engineer Agreement") between
the Tribal Corporation and the Engineer to be signed by the Tribal Corporation
and the Engineer. The Owner/Engineer Agreement shall be consistent with this
Agreement and approved by the Tribal Corporation's legal counsel. Consultant
shall have a reasonable opportunity to review, and give comments on, the
Owner/Architect Agreement prior to its execution.
17.2 Designation of Consultant Reports. The Tribal Corporation hereby
------------------------------------
designates and appoints Consultant as the owner's representative for the purpose
of the administration and implementation of the Owner/Architect Agreement and
Owner/Engineer Agreement (the "Architect and Engineering Agreements").
Consultant shall have the authority as the owner's representative, to exercise
all of the powers of the owner in its reasonable business judgment under the
Architect and Engineering Agreements, including, without limitation, supervising
the completion of all construction, renovation, development and related
activities undertaken on the Facility pursuant to the terms and conditions of
such agreements; provided, however, that Consultant shall not amend or terminate
-------- -------
either such agreement without the prior approval of the Tribal Corporation,
which shall not be unreasonably withheld. Consultant shall provide the Tribal
Corporation with written progress reports on the implementation of such
agreements on a weekly basis, and shall confer and consult with the Tribal
Corporation over any material disputes or developments with respect to the
administration of such
-4-
agreements provided such consultation will not unreasonably delay progress on
the construction. Consultant shall be responsible for completing all
construction and project preparation development as set forth herein.
17.3 Amendments. The Tribal Corporation shall not amend the
----------
Architect and Engineering Agreements without first obtaining Consultant's
written approval of the amendment.
17.4 Design Standards. Neither the State of Washington nor any
----------------
of the state's political subdivisions has the power to enforce any building,
fire, energy or life/safety code or requirements which would apply if such state
or political subdivision had jurisdiction over the Property. The Tribal
Corporation, however, hereby finds and determines that the application of the
standards and methods included in such codes and requirements will be in the
best interest of the Tribal Corporation. Accordingly, Consultant and Tribal
Corporation shall cause the Architect and Engineering Agreements to require the
Architect and any Engineer to design the Facility to comply in all material
respects with state and local standards and methods that would otherwise be
applicable, provided that if for any reason an applicable standard cannot be
determined as provided, then the parties shall apply standards and methods set
forth in the applicable and current Uniform Building Code. Using qualified
inspectors, Consultant shall conduct such inspections as are necessary to ensure
compliance in all material respects with these standards. Nothing in this
Section shall be deemed to grant the State of Washington or any of such state's
political subdivisions any jurisdiction over any property owned by or held for
the benefit of the Tribal Corporation, or the right to apply or enforce any such
building, fire, energy or life/safety code or requirements with respect to such
property.
17.5 Approval of Plans and Specifications. Upon receipt from
------------------------------------
the Architect and any Engineer of plans and specifications for the Facility
(which plans and specifications may be submitted in stages, rather than all at
one time), Consultant shall promptly submit such plans and specifications to the
Representatives for discussion and approval. Upon the approval of such plans and
specifications by the Tribal Corporation, Consultant shall, as the owner's
representative, notify the Architect and any Engineer that such plans and
specifications have been approved. No construction shall begin until all plans
and specifications for such construction shall have been approved under this
Section.
18. Selection of Contractor. It is acknowledged that a project contractor
-----------------------
has already been selected. Such contractor, and any replacement or substitute
therefor hired in accordance with this Agreement, is referred to herein as the
"Contractor." Consultant shall provide advice and assistance to the Tribal
Corporation in determining the terms of and causing to be prepared an
owner/contractor agreement consistent with the Loan Documents and the
Transaction Documents and the budgets thereunder (such agreement and any
substitute therefor shall be referred to as the "Owner/Contractor Agreement").
-5-
18.1 Replacement of Contractor. In the event it should become
-------------------------
necessary to replace said Contractor or engage an additional contractor, the
following shall apply:
18.1.1 Recommendation. Consultant shall recommend to the Tribal
--------------
Corporation's Representative one or more contractors to construct the Facility
in accordance with the plans and specifications approved or to be, approved
pursuant to Section 17.5 above.
18.1.2 Acceptance of Recommendation. Upon receipt of
----------------------------
Consultant's recommendation, the Tribal Corporation's Representative shall
review the recommendation and if acceptable forward it to the Tribal Corporation
for formal acceptance. Unless there is a reasonable basis for the Tribal
Corporation to reject Consultant's recommendation, the Tribal Corporation shall
designate the recommended general contractor as the Contractor under this
Agreement, and enter into an agreement to acquire the Contractor's services.
18.1.3 Rejection of Recommendation. If there is a reasonable
---------------------------
basis for the Tribal Corporation to reject Consultant's recommendation, and the
Tribal Corporation rejects such recommendation, the Tribal Corporation shall
notify Consultant of such rejection and provide a written description of the
basis for such rejection. Consultant shall then submit additional
recommendations until the Tribal Corporation accepts a recommendation and
designates the Contractor under this Agreement.
18.1.4 Contract with Contractor. Upon the Tribal Corporation's
------------------------
designation of a Contractor, the Tribal Corporation shall cause to be prepared a
new Owner/Contractor Agreement between the Tribal Corporation and the Contractor
to be signed by the Tribal Corporation and the Contractor. The Owner/Contractor
Agreement, including any general and special conditions, shall be consistent
with this Agreement and approved by the Tribal Corporation's legal counsel.
18.2 The Owner/Contractor Agreement shall provide for commencement
and completion of construction as soon as practicable after said agreement is
executed, but no later than six (6) months after the Effective Date. The Tribal
Corporation shall cause the Owner/Contractor Agreement to provide that the
Contractor warrants that the work performed under the Owner/Contractor Agreement
will be completed in a workmanlike manner and be free of defects for a period
ending thirty-six (36) months after the Architect provides a certificate of
substantial completion.
18.3 The Tribal Corporation hereby designates and appoints Consultant
as the owner's representative for the purpose of the administration and
implementation of the Owner/Contractor Agreement and agrees that, with the
Tribal Corporation's approval, which shall not be unreasonably withheld,
Consultant may enter into the Owner/Contractor Agreement (or any agreement to be
entered into in connection therewith) directly as "Owner" thereunder, provided
that the representations, warranties and indemnities contained therein also run
in favor of the Tribal Corporation and the
-6-
Nation. Consultant shall have the authority as the owner's representative to
exercise all of the powers of the owner under the Owner/Contractor Agreement,
including, without limitation, supervising the completion of all construction,
renovation, development and related activities undertaken on the Facility
pursuant to the terms and conditions of such agreements; provided, however, that
-------- -------
Consultant shall not exceed the construction budget and items therein approved
by Tribal Corporation, without Tribal Corporation's prior written consent, which
shall not be unreasonably withheld, or amend or terminate such agreement without
the prior written approval of the Tribal Corporation, which approval shall not
be unreasonably withheld. Consultant shall provide the Tribal Corporation's
Representative with written progress reports on the implementation of such
agreement on a weekly basis.
18.4 Amendments. The Tribal Corporation shall not amend the
----------
Owner/Contractor Agreement without first obtaining Consultant's written approval
of the Amendment.
18.5 Payment and Performance Bonds. Unless the parties determine
-----------------------------
otherwise, the Owner/Contractor Agreement shall require the Contractor to
provide to the Tribal Corporation a payment bond and a performance bond (the
"Contractor's Bonds") in the full amount of the costs of construction of the
work and performance of the work under the Owner/Contractor Agreement and issued
by a surety reasonably acceptable to the Tribal Corporation. The form of the
Contractor's Bond shall be approved by the Tribal Corporation's legal counsel
and by Consultant's legal counsel.
18.6 Contract Terms. The parties have estimated that the total cost
--------------
of developing and constructing the Facility and commencing operation of the
Enterprise will not exceed Nine Million Dollars ($9,000,000). To enable
Consultant to maintain total costs within said amount, Consultant shall have the
right to require that any Architect and Engineering Agreements and any
Owner/Contractor Agreement provide for either a fixed fee or a guaranteed
maximum fee in an amount reasonably established by the parties.
18.7 Development Budget. Prior to the commencement of
------------------
construction, and in conjunction with the Loan Agreement, Consultant shall
submit to the Tribal Corporation's Representative, and the Tribal Corporation
shall approve, a proposed construction budget for the construction of the
Facility ("Development Budget"). Consultant shall supervise the progress of
construction and take such action as may be necessary to maintain construction
costs within said budget. In doing so, Consultant shall have the following
powers and duties:
18.7.1 Consultant shall, as the owner's representative, receive
and review requests for payments from the Architect, any Engineer and each
Contractor under the Architect and Engineering Agreements and the
Owner/Contractor Agreement, respectively, and if in conformity with the
applicable agreement, shall promptly authorize payment of same. Expenditures
made under contracts previously approved and within the Development Budget shall
not require further approval. In reviewing such
-7-
requests, Consultant shall be entitled to reasonably rely on any certification
by the Architect, Engineer or Contractor regarding such request, including any
certification regarding the extent of work completed. Consultant shall maintain
accurate records regarding each authorization for such payment, and shall
provide the Tribal Corporation with a written monthly report of all such
payments.
18.8 Compensation of the Consultant. In consideration of its
------------------------------
services hereunder, the Consultant shall be entitled to receive annual
compensation equal to One Dollar ($1.00).
18.9 Reimbursement of Expenses to Consultant. The Consultant shall
---------------------------------------
be reimbursed, if approved by the Tribal Corporation, for all actual, reasonable
and necessary out-of-pocket expenses, incurred in connection with the discharge
of its duties hereunder as Consultant, and previously approved as estimated
costs by the Tribal Corporation, provided, however, that any such out-of-pocket
-------- -------
expense shall not exceed two thousand dollars ($2,000) per month unless the
Tribal Corporation has approved the same prior to the occurrence thereof. Such
reimbursement shall be made on a regular basis within thirty (30) days after
submission of a reimbursement request by the Consultant and consistent with the
formal procedural requirements of the Tribal Corporation for reimbursement of
expenses.
19. Revisions to Plans; Change Orders; Additional Work or Time Claims.
-----------------------------------------------------------------
19.1 Consultant shall, as the owner's representative, submit to the
Tribal Corporation for approval or disapproval:
(1) material revisions to the plans and specifications approved
pursuant to Section 17.5 above and Section 7.2 below,
(2) material change orders under the Owner/Contractor Agreement; and
(3) any material claim by the Contractor for payment for additional
work or for additional time to complete the work described in
the Owner/Contractor Agreement.
19.2 Consultant shall submit to the Tribal Corporation with each
request for approval of such revision, change order or claim, a written
statement of the amount, if any, by which the cost of the development and
construction of the Facility will increase or decrease if such revision, change
order or claim is approved, which approval shall not be unreasonably withheld.
19.3 Notwithstanding Section 7.2 hereof, the Tribal Corporation shall
approve any reasonable revision, change order or claim which is attributable to
any delay or failure of the Tribal Corporation, the Nation, Tribal Council or
the Representative to make in a timely manner any decision or selection required
under this
-8-
Agreement or required to administer the Architect and Engineering Agreements or
the Owner/Contractor Agreement and the work contemplated therein.
20. Multiple Shifts. The budgets for the Facility assume that the
---------------
Contractor may use multiple shifts to complete the Facility and the Tribal
Corporation may approve the use of multiple shifts to expedite the construction
process.
21. Selection, Delivery and Installation of Equipment and Furnishings.
-----------------------------------------------------------------
Consultant shall select furniture, fixtures, furnishings, machinery and
equipment, including gaming equipment, to be installed in the Facility (the
"FF&E"). Consultant shall arrange for and coordinate the delivery to the
Facility and installation in the Facility of such FF&E, ensuring that delivery
thereof is in conformity with the specifications and orders for such FF&E and is
in time for the Commencement Date and any training that must precede such date.
Subject to approval by the Tribal Corporation, FF&E may be leased, but the
capital cost thereof shall be included in any Maximum Loan Amount and shall
appear on the Cost Breakdown (as defined in the Loan Agreement).
22. Disclosure of Proposed Transactions with Related Companies. Any
----------------------------------------------------------
transaction between Consultant and any vendor or lessor to acquire FF&E shall be
a commercially reasonable, arms-length transaction. Any existing or prior
relationship or direct or indirect financial transaction between Consultant or
its Affiliates and the vendor or lessor, or to the extent known by Consultant,
any of the principal shareholders, directors or executive officers of such
vendor or lessor, shall be disclosed in writing to the Tribal Corporation prior
to the time the proposed transaction is presented to the Tribal Corporation for
approval.
23. Indian Preference. To maximize the benefits of the Enterprise to
-----------------
the Nation, all contracts and subcontracts relating to this Agreement shall give
preference to qualified Nation members and other Native Americans in accordance
with the Nation's standard tribal employment policies.
24. Compliance. Consultant shall, in performing its obligations under
----------
this Agreement, comply in all material respects with Applicable Laws, ordinances
and regulations adopted by the Tribal Corporation.
25. Non-interference in Nation Affairs. In performing its duties
----------------------------------
hereunder, Consultant shall not intentionally interfere with the internal
affairs of the Nation or its government, or any subdivision, department or
agency of the Nation (including, without limitation, the Tribal Corporation).
For the purposes of this Section, "interfere" shall mean any attempt by
Consultant to influence a decision of the Tribal Council or any
-9-
officer or employee of the Nation or the Tribal Corporation, or to influence any
Tribal election, by doing any of the following in connection with such decision
or election:
(1) offering any incentive; or
(2) making any written or oral threat against any person or thing;
provided, however, that neither Consultant's assertion of its rights under this
-------- -------
Agreement nor any recommendation, suggestion or assertion of opinion made by
Consultant regarding the Enterprise or any action of Consultant at a meeting of
any committee, officers, agency or council of the Nation or the Tribal
Corporation or to any employee of the Nation in the ordinary course of such
employee's duties, shall be deemed to be "interference" for the purpose of this
Section.
25.1 Remedies. If the Nation believes that Consultant has
--------
violated the provisions of this Section by engaging in prohibited interference,
the Nation shall give Consultant written notice describing the incident which
the Nation claims constitutes prohibited interference and identifying the person
or persons claimed to have acted on Consultant's behalf in engaging in such
interference. Consultant shall have ten (10) business days from the date of
receipt of such notice to respond to such notice.
26. Insurance. Consultant shall, during the term of this Agreement,
---------
recommend to and assist the Tribal Corporation in obtaining on a timely basis on
behalf of the Tribal Corporation and Consultant the following insurance
coverages:
26.1 Builder's Risk. During the construction of the Facility,
--------------
builder's risk insurance with such limits as the parties from time-to-time agree
upon;
26.2 Casualty. After the substantial completion of the Facility
--------
as determined by Consultant in its reasonable discretion, casualty insurance for
the Facility and all FF&E, providing coverage against fire, wind, theft,
vandalism, malicious mischief, sprinkler leakage and such other casualties, for
their full replacement cost, without depreciation;
26.3 Liability. During the term of the Transaction Documents,
---------
commercial liability insurance against claims for injury, death and property
damage occurring on, in or about the Property, the Facility, or in connection
with the Enterprise or any operation thereof, with such limits in excess of an
annual aggregate limit as the parties from time-to-time may agree upon;
26.4 Worker's Compensation. During the term of this Agreement,
---------------------
worker's compensation insurance to the extent (i) deemed appropriate by the
parties or (ii) required by Applicable Law.
26.5 Other. During the term of this Agreement, such other insurance
-----
coverages as the parties from time-to-time may agree upon.
-10-
26.6 Nature of Coverages. The parties shall from time-to-time
-------------------
determine the appropriate limits, deductibles and endorsements for the coverages
to be obtained pursuant to this section.
26.7 No Jurisdiction. Except as specifically provided herein,
---------------
nothing in this Agreement or the other Transaction Documents shall be deemed or
construed to subject the Tribal Corporation or its officers, agents, employees
or representatives (including Tribal Corporation employees assigned to the
Enterprise) to the jurisdiction of the State of Washington or any political
subdivision thereof.
26.8 Policy Requirements. Each policy of insurance obtained by
-------------------
Consultant pursuant to this Section shall be issued by an entity reasonably
acceptable to the Tribal Corporation. The Tribal Corporation shall be named as
insured and Consultant and any parent of Consultant shall be named as additional
insureds in all such policies.
26.9 Enterprise Expenses. The premiums and other charges required
-------------------
to obtain and maintain insurance coverage pursuant to this Agreement shall be
paid in advance for the first year from Loan proceeds, and thereafter as
operating expenses of the Enterprise.
27. Condition Precedent to the Consultant's Duties. It shall be a
----------------------------------------------
condition precedent to Consultant's duties hereunder that the Effective Date
shall have occurred. Within five (5) business days following the Execution Date,
the Tribal Corporation shall seek the approval of the NIGC that the Loan
Documents and the Transaction Documents, or any of them taken individually, do
not constitute a management contract as defined under IGRA, 25 U.S.C. (S) 2711,
and if such verification is not obtained within ninety (90) days after such
approval is sought, this Agreement and the other Transaction Documents shall
terminate and be of no further force and effect; provided further that the
parties shall negotiate in good faith regarding any modifications to the
Transaction Documents or the Loan Documents which may be required or suggested
by the NIGC or BIA in order to receive the approvals referred to herein.
In addition, within five (5) business days following the Execution Date,
the Tribal Corporation shall seek the approval of the Loan Documents and the
Transaction Documents, to the extent required by Applicable Law, from the Bureau
of Indian Affairs, and if such approval is not obtained within sixty (60) days
after such approval is sought, this Agreement and the other Transaction
Documents shall terminate and be of no further force and effect, subject to the
good faith negotiation requirements set forth above.
-11-
Each of the parties hereto agrees to execute, deliver and, if necessary,
record any and all additional instruments, certifications, amendments,
modifications and other documents as may be required by the Secretary, the BIA,
the NIGC, or any applicable statute, rule or regulation in order to effectuate,
complete, perfect, continue or preserve the respective rights, obligations,
liens and interests of the parties thereto to the fullest extent permitted by
law; provided, however, that any such additional instrument, certification,
amendment, modification or other document shall not materially change the
respective rights, remedies or obligations of the Tribal Corporation or
Consultant under this instrument or any other agreement or document related
hereto.
28. Termination and Suspension.
--------------------------
28.1 By Mutual Agreement. This Agreement may be terminated at any
-------------------
time by written agreement executed on behalf of both parties.
28.2 Consultant Default. If the Consultant defaults in any
------------------
material way in the performance of its obligation under this Agreement or
breaches in any material way any representation or warranty made by it herein,
and such default or breach is not cured within 10 days after the Tribal
Corporation gives the Consultant written notice of such default or breach, then
the Tribal Corporation shall have the right to terminate this Agreement by
giving the Consultant written notice of termination (except that the Tribal
Corporation may not exercise such right if such default or breach cannot be
cured within such 10-day period and the Consultant commences a cure within such
10-day period and diligently pursues such cure to completion).
28.3 Default of Nation or Tribal Corporation. If the Nation
---------------------------------------
and/or the Tribal Corporation default in any material way in the performance of
any obligation under this Agreement, and such default is not cured within 10
days after the Consultant gives the defaulting party written notice describing
such default, then Consultant shall have the right to seek specific enforcement
of the provisions of this Agreement or terminate this Agreement by giving the
Tribal Corporation written notice of termination (except that the Consultant may
not exercise such right if such default cannot be cured within such 10-day
period and the defaulting party commences a cure within such 10-day period and
diligently pursues such cure).
28.4 Termination by Consultant. Consultant may terminate this
-------------------------
Agreement in the event that the Nation and/or the Tribal Corporation breach or
are in default under any of the Loan Documents or the Transaction Documents and
such default is not cured within the applicable cure period.
28.5 Suspension by Consultant. Consultant may suspend the
------------------------
performance of its services hereunder pursuant to the terms and subject to the
limitations of Section 1 of the Exhibit B attached hereto.
-12-
29. Incorporation by Reference. The parties hereby incorporate into this
--------------------------
Agreement by this reference Exhibit B attached hereto, which provisions shall
apply as if set forth in full herein.
30. Notices. Any notice required to be given pursuant to this Agreement
-------
shall be delivered by overnight courier or U.S. Express Mail with notice deemed
effective on the later of the first business day after deposit or the day on
which the courier confirms delivery, addressed as follows:
(a) If to the Tribal Corporation:
YAKAMA TRIBAL GAMING CORPORATION
c/o The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
with a copy to:
The Confederated Tribes and
Bands of the Yakama Indian Nation
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chairperson, Tribal Council
and:
Xxxxxx & Associates
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
(b) If to Consultant:
HP YAKAMA CONSULTING, INC.
c/o Hollywood Park, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
-13-
with a copy to:
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
31. Miscellaneous Provisions.
------------------------
31.1 Captions. The captions in this Agreement are inserted for
--------
convenience of reference only; they are not part of this Agreement and shall not
affect its interpretation.
31.2 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the parties hereto and their respective permitted
successors and permitted assigns, provided neither party hereto shall assign or
encumber its interest in this Agreement without the prior written consent of the
other party, which consent may be withheld in the sole discretion of that party.
31.3 Entire Agreement; Modifications. This Agreement and the
-------------------------------
Transaction Documents contain the entire understanding of the parties regarding
their subject matter, and supersede all prior negotiations, understandings and
agreements of the parties with respect thereto (including, without limitation,
the MOU). The express terms of this Agreement shall control and supersede any
course of performance and/or customary practice inconsistent with such terms.
Any subsequent agreement between the parties hereto shall not change or modify
this Agreement unless in writing and signed by the party against whom
enforcement of such change or modification is sought.
31.4 No Waiver. No failure or delay by either party to this
---------
Agreement to exercise any right, remedy, power or privilege under this Agreement
shall be a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege with respect to any
occurrence. No waiver shall be effective unless it is in writing and signed by
the party asserted to have granted such waiver.
31.5 No Joint Venture. Consultant shall be an independent
-----------------
contractor engaged by the Tribal Corporation to perform the duties and
obligations described in this Agreement. Accordingly, nothing in this Agreement
shall be deemed or construed to create a joint venture or other partnership
relationship between the Tribal Corporation and the Consultant.
31.6 No Conveyance. Nothing in this Agreement shall be deemed or
-------------
construed to transfer or convey to the Consultant any lien on or interest in the
Property or Facility, or to transfer or convey to the Consultant any proprietary
interest in the Enterprise.
-14-
31.7 Time of Essence. Time is of the essence in the performance
---------------
by the parties hereto of their respective obligations under this Agreement.
31.8 Execution. Four original copies of this Agreement are being
---------
executed on behalf of each of the parties hereto. Each such party is retaining
two original copies of this Agreement. Each of the four original copies of this
Agreement shall be equally valid.
31.9 Tribal Corporation's Obligations Limited. Nothing in this
----------------------------------------
Agreement shall obligate the Tribal Corporation to encumber or make any payment
from assets of the Tribal Corporation other than (i) revenues and receipts and
personal property of the Enterprise; and (ii) the revenues and receipts of any
other Gaming operation conducted by the Tribal Corporation, during the term of
this Agreement.
31.10 Severability. If any part, term or provision of this
------------
Agreement is invalid, unenforceable, illegal, or in conflict with any federal,
state or local laws, such part, term or provision shall be considered severable
from the rest of this Agreement and the remaining portions of this Agreement
shall not be thereby affected or impaired and this Agreement shall be construed
and enforced as if this Agreement did not contain such part, term or provision,
provided that the removal of such part, term or provision does not materially
and adversely alter the ability of the parties to achieve the intended of the
transactions contemplated by this Agreement.
-15-
31.11 Choice of Law. This Agreement shall be governed first by
-------------
federal law, if applicable, then by the laws of the State of Washington.
31.12 Binding Effect. This Agreement shall be binding upon, and
--------------
inure to the benefit of and be enforceable by the parties and by their
successors and assigns as permitted herein.
31.13 Further Assurances. Each party hereto shall from time-to-
------------------
time, at the reasonable request of the other party (i) execute and deliver or
cause to be executed and delivered such additional documents and papers, and
(ii) take or cause to be taken such additional actions as may be reasonably
required to effectively evidence and implement the transactions described in and
contemplated by this Agreement.
31.14 Interpretation. No provision of this Agreement shall be
--------------
interpreted for or against either party because that party or that party's legal
representative or counsel drafted such provision.
31.15 Attorneys' Fees. The prevailing party in any arbitration
---------------
proceeding relating to this Agreement shall recover from the other party
reasonable attorneys' fees and all costs and expenses incurred by the prevailing
party in such proceeding or action.
IN WITNESS WHEREOF, the parties hereto have executed this Construction and
Development Agreement as of the date stated in the introduction hereof.
YAKAMA TRIBAL GAMING CORPORATION,
a tribal corporation established under the laws of
The Confederated Tribes And Bands Of
The Yakama Nation
By:__________________________________
Name:________________________________
Title:_______________________________
HP YAKAMA CONSULTING, INC.,
a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
-16-
The undersigned hereby agrees to be
bound by the terms and provisions of
Section 17 hereof.
CONFEDERATED TRIBES AND BANDS OF
THE YAKAMA INDIANS, a federally
recognized Indian Tribe
By:___________________________
Name:_________________________
Title:________________________
-17-
