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EXHIBIT 10.62
MANAGEMENT AGREEMENT
(Hinckley Facility)
THIS MANAGEMENT AGREEMENT is entered into on the Mille Lacs Indian Reservation,
located within the exterior boundaries of the State of Minnesota, as of October
__, 1996, by and between The Corporate Commission of the Mille Lacs Band of
Chippewa Indians (the "Corporate Commission"), and Mille Lacs Gaming
Corporation, a Minnesota corporation ("Manager"). Notwithstanding the execution
of this Agreement by the Corporate Commission and Manager, this Agreement shall
not be effective until the Effective Date (as defined in Section 2.7 below).
Words and phrases in this Agreement which are capitalized are defined in
Article II below.
In consideration of the following recitals, and the promises and agreements
stated below, the Corporate Commission and Manager hereby agree as follows:
ARTICLE I
RECITALS
1.1 Tribal Recognition. The Mille Lacs Band of Chippewa Indians (the "Band")
is recognized by the United States Secretary of the Interior as (i) eligible
for the special programs and services provided by the United States to Indians
because of their status as Indians, and (ii) having powers of self-government.
1.2 The Gaming Site. The property (the "Gaming Site") described in Exhibit A
attached hereto constitutes land over which the Band exercises governmental
power and which is held in trust by the United States for the benefit of the
Band. The Band has sovereign powers over the Gaming Site pursuant to the
Band's powers of self-government, the Indian Reorganization Act of 1934, the
Revised Constitution and By-laws of the Minnesota Chippewa Tribe as ratified on
November 23, 1963 and approved by the United States Secretary of the Interior
on March 3, 1964, and the statutes and
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ordinances of the Band. Pursuant to such powers, the Band has entered into a
Business Lease Agreement with the Corporate Commission, as amended, dated
November 26, 1991 and filed of record in the office of the Pine County Minnesota
Recorder as of December 2, 1991 as microfilm number 324855, by which the Band
leased the Gaming Site to the Corporate Commission.
1.3 Corporate Commission Powers. Pursuant to the Band's powers of
self-government, the Band enacted Band Statute 1022-MLC Chapter 16, creating
the Corporate Commission as an independent entity having the powers to approve
the construction of business facilities on behalf of the Band, and to enter
into and perform under contracts and/or agreements pertaining to such
facilities.
1.4 Existing Facility. Pursuant to such powers, the Corporate Commission
entered into those certain Amended and Restated Management and Construction
Agreements (the "1990 Management Agreement") with Manager. The 1990 Management
Agreement stated the terms and conditions pursuant to which (i) the Facility
was constructed on the Gaming Site and the Ancillary Facilities were
constructed on land adjacent to the Gaming Site; and (ii) the Corporate
Commission retained Manager to manage the Facility. Manager has been managing
and is now managing the Facility under authority granted in the 1990 Management
Agreement.
1.5 Applicable Law. The Corporate Commission entered into and is performing
under the 1990 Management Agreement pursuant to approval of the 1990 Management
Agreement by the United States Bureau of Indian Affairs. After the 1990
Management Agreement became effective, the National Indian Gaming Commission
(the "NIGC") adopted regulations pursuant to the Indian Gaming Regulatory Act
of 0000 (Xxxxx 00, Xxxxxx Xxxxxx Code, Sections 2701 et. seq.), as a result of
which responsibility for approval of management agreements for Indian gaming
facilities was transferred from the Bureau of Indian Affairs to NIGC. The
Indian Gaming Regulatory Act and the regulations adopted by the NIGC pursuant
thereto, as such act and regulations may be amended from time-to-time, are
collectively referred to in this Agreement as "IGRA".
1.6 Reason for Agreement. The Corporate Commission and Manager are entering
into this Agreement for the purpose of complying with IGRA, and to obtain the
approval of this Agreement by the NIGC as contemplated by IGRA.
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1.7 Economic Development. The Corporate Commission has determined that the
continued operation of the Enterprise under this Agreement will improve the
economic condition of the Band and its members, increase Band revenues, enhance
the Band's economic self-sufficiency, and enable the Band to better serve the
social, economic, educational and health needs of its members.
1.8 Technical Expertise and Training. The Corporate Commission desires to
continue to receive (i) the services of a qualified manager of the Enterprise
which has expertise in the management and operation of the Enterprise, and (ii)
training and instruction for the Band and its members in the operation of the
Enterprise.
1.9 Manager Experience and Expertise. Manager has experience and will
continue to provide to the Band expertise in the management and operation of
the Enterprise, and will continue to train and instruct the Band and its
members in the operation of the Enterprise.
1.10 Ancillary Agreements. In connection with the financing and development
of the Facility, the Corporate Commission and Manager entered into that certain
Amended and Restated Loan Agreement (the "Loan Agreement") dated as of
September 10, 1990, and that certain Restated and Amended Security Agreement
(the "Security Agreement") dated as of September 10, 1990. The Corporate
Commission executed and delivered to Manager that certain Amended and Restated
Adjustable Rate Promissory Note (the "Note") evidencing the loan contemplated
by the Loan Agreement.
In connection with the subsequent development of certain Ancillary Facilities,
Manager made additional loans to the Corporate Commission as described in (i)
that certain Promissory Note - Hinckley RV Park (the "RV Park Note") dated as
of July 1, 1992, and (ii) that certain Promissory Note - Hinckley Restaurant
(the "Restaurant Note") dated July 1, 1992.
This Agreement will become effective only upon the occurrence of the events
described in the definition of "Effective Date" in Section 2.7 below. Pursuant
to Section 19.2 below, the Corporate Commission and Manager have agreed that,
upon such occurrence and if any of the Note, the Restaurant Note or the RV Park
Note has not then been paid in full, the Corporate Commission and Manager will
enter into, execute and deliver (i) a Second Amended and
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Restated Loan Agreement (the "Restated Loan Agreement") in the form
attached hereto as Exhibit B, which will amend and restate the Loan Agreement
in a manner consistent with this Agreement; and (ii) a Second Amended and
Restated Security Agreement (the "Restated Security Agreement") in the form
attached hereto as Exhibit C, which will amend and restate the Security
Agreement in a manner consistent with this Agreement.
Pursuant to such Section 19.2, the Corporate Commission will, upon such
occurrence, execute and deliver to Manager (i) if the Note has not been paid in
full, a Second Amended and Restated Adjustable Rate Promissory Note (the
"Restated Note") in the form attached hereto as Exhibit D, which will amend and
restate the Note in a manner consistent with this Agreement; (ii) if the
Restaurant Note has not been paid in full, a Restated Promissory Note -
Hinckley Restaurant (the "Restated Restaurant Note") in the form attached
hereto as Exhibit E, which will amend and restate the Restaurant Note in a
manner consistent with this Agreement; and (iii) if the RV Park Note has not
been paid in full, a Restated Promissory Note - Hinckley RV Park (the "Restated
RV Park Note") in the form attached hereto as Exhibit F, which will amend and
restate the RV Park Note in a manner consistent with this Agreement.
Such of the Restated Loan Agreement, Restated Security Agreement, Restated
Note, Restated RV Park Note and Restated Restaurant Note as are required under
Section 19.2 below to be executed and delivered are collectively referred to
herein as the "Ancillary Agreements." Each of the Ancillary Agreements is an
essential and mutually dependent consideration for this Agreement. Nothing in
this Agreement is intended to or shall be construed to amend or modify any of
the Ancillary Documents.
1.11 Manager Rights. The Corporate Commission desires that Manager continue
to have, and Manager desires to continue to have, the exclusive right and
obligation to manage the Enterprise during the term of this Agreement in
conformance with and subject to the provisions of this Agreement.
1.12 Gaming Control Ordinance. The Band has adopted a Gaming Control
Ordinance (the "Gaming Control Ordinance") which complies with IGRA, and has
been approved by the NIGC. All Gaming will be conducted in accordance with the
Gaming Control Ordinance.
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1.13 Applicable Law. This Agreement is entered into pursuant to IGRA and
other federal law which pervasively regulates Indian gaming and the relations
between the parties hereto.
ARTICLE II
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
2.1 Affiliate. "Affiliate" shall mean, 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.
2.2 Ancillary Agreements. "Ancillary Agreements" is defined in Section 1.10
above.
2.3 Ancillary Facilities. "Ancillary Facilities" shall mean the structures or
portions thereof, landscaping, amenities, utilities and parking areas, if any,
which are not located on the Gaming Site but are connected to or used in
connection with the Facility and described in Exhibit G attached hereto,
together with such additions, expansions, replacements, deletions and
modifications thereto as are implemented during the term of this Agreement.
2.4 Chief Financial Officer. "Chief Financial Officer" shall mean the chief
financial officer designated by the Corporate Commission pursuant to Section
5.4 below.
2.5 Corporate Commission. "Corporate Commission" shall mean The Corporate
Commission of the Mille Lacs Band of Chippewa Indians, as identified in the
first paragraph of this Agreement, and its permitted successors and assigns.
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2.6 Commission Representative. "Commission Representative" shall mean the
representative of the Corporate Commission designated by the Corporate
Commission pursuant to Section 3.8 below.
2.7 Effective Date. "Effective Date" shall mean the first date after this
Agreement has been executed by the Corporate Commission and Manager on which
this Agreement has been approved in writing by the chair of the NIGC (or his or
her designee) pursuant to IGRA.
2.8 Enterprise. "Enterprise" shall mean the commercial enterprise of the
Corporate Commission authorized to conduct Gaming and any other lawful activity
at the Facility and Ancillary Facilities. The parties acknowledge that the
Enterprise is not a legal entity separate from the Corporate Commission.
2.9 Facility. "Facility" shall mean the structure constructed on the Gaming
Site in which Gaming and nongaming activities are conducted, and all other
structures, landscaping, amenities, utilities and parking areas on the Gaming
Site, together with such additions, expansions, replacements, deletions and
modifications thereto as are implemented during the term of this Agreement.
2.10 Fiscal Month. "Fiscal Month" shall mean a fiscal month for the Enterprise
as designated by the Management Committee pursuant to Section 5.14 below.
2.11 Gaming. "Gaming" shall mean activities defined as "Class II and III
Gaming" under IGRA which may lawfully be conducted at the Gaming Site.
2.12 Gaming Control Ordinance. "Gaming Control Ordinance" is defined in
Section 1.12 above.
2.13 Gaming Management Fee. "Gaming Management Fee" is defined in Section 7.1
below and is the management fee to be paid to Manager for managing Gaming.
2.14 Gaming-Related Operating Expense. "Gaming-Related Operating Expense"
shall mean an Operating Expense, as determined in accordance with generally
accepted accounting principles, incurred by the Enterprise in conducting
Gaming.
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2.15 Gaming Site. "Gaming Site" shall mean the property described in Exhibit A
attached hereto as stated in Section 1.2 above.
2.16 General Manager. "General Manager" shall mean the general manager
designated by the Corporate Commission pursuant to Section 5.3 below.
2.17 Gross Gaming Revenues. "Gross Gaming Revenues" shall mean all revenues of
the Enterprise attributable to Gaming, as determined in accordance with
generally accepted accounting principles.
2.18 Gross Nongaming Revenues. "Gross Nongaming Revenues" shall mean Gross
Revenues minus Gross Gaming Revenues.
2.19 Gross Revenues. "Gross Revenues" shall mean all revenues of the
Enterprise.
2.20 IGRA. "IGRA" is defined in Section 1.5 above.
2.21 Loan Agreement. "Loan Agreement" is defined in Section 1.10 above.
2.22 Management Committee. "Management Committee" shall mean the committee of
two persons described in Section 3.8 below, consisting of the Manager
Representative and the Commission Representative.
2.23 Manager. "Manager" shall mean Mille Lacs Gaming Corporation, as
identified in the first paragraph of this Agreement, and its permitted
successors and assigns.
2.24 Manager Representative. "Manager Representative" shall mean the
representative of the Manager designated by the Manager pursuant to Section 3.8
below.
2.25 Net Gaming Revenues. "Net Gaming Revenues" shall mean the Gross Gaming
Revenues, less:
(i) amounts paid as or for prizes ; and
(ii) Gaming-Related Operating Expenses (excluding the Gaming
Management Fee).
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2.26 Net Revenues. "Net Revenues" shall mean Gross Revenues, less Operating
Expenses.
2.27 NIGC. "NIGC" is defined in Section 1.5 above, and is the National Indian
Gaming Commission and any successor thereto.
2.28 Nongaming Management Fee. "Nongaming Management Fee" is defined in
Section 7.1 below and is the management fee to be paid to Manager for managing
activities of the Enterprise other than Gaming.
2.29 Note. "Note" is defined in Section 1.10 above.
2.30 Operating Expense. "Operating Expense" shall mean any expense of the
Enterprise in managing and conducting Gaming and nongaming activities
(including any tax levied against the Ancillary Facilities), as determined in
accordance with generally accepted accounting principles. "Operating Expense"
shall also include expenses, if any, authorized in advance by the Management
Committee (with each member of the Management Committee acting in his or her
sole discretion) to educate or inform the public or any segment of the public
about Indian gaming or the Facility.
2.31 Restated Loan Agreement. "Restated Loan Agreement" is defined in Section
1.10 above, and shall be the Restated Loan Agreement, if any, entered into,
executed and delivered by the Corporate Commission and Manager under Section
19.2 below.
2.32 Restated Security Agreement. "Restated Security Agreement" is defined in
Section 1.10 above, and shall be the Restated Security Agreement, if any,
executed and delivered by the Corporate Commission and Manager under Section
19.2 below.
2.33 Restated Note. "Restated Note" is defined in Section 1.10 above, and
shall be the Restated Note, if any, executed and delivered by the Corporate
Commission under Section 19.2 below.
2.34 Restated Restaurant Note. "Restated Restaurant Note" is defined in
Section 1.10 above, and shall be the Restated Restaurant Note, if any, executed
and delivered by the Corporate Commission under Section 19.2 below.
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2.35 Restated RV Park Note. "Restated RV Park Note" is defined in Section 1.10
above, and shall be the Restated RV Park Note, if any, executed and delivered
by the Corporate Commission under Section 19.2 below.
2.36 RV Park Note. "RV Park Note" is defined in Section 1.10 above.
2.37 Restaurant Note. "Restaurant Note" is defined in Section 1.10 above.
2.38 Security Agreement. "Security Agreement" is defined in Section 1.10
above.
2.39 1990 Management Agreement. "1990 Management Agreement" is defined in
Section 1.4 above.
ARTICLE III
RETENTION OF MANAGER; LICENSING; MANAGEMENT
COMMITTEE
3.1 Manager Retained. The Corporate Commission hereby retains and engages
Manager to perform, during the term and in accordance with all of the provisions
of this Agreement, the management and other functions described in this
Agreement, and Manager hereby accepts such retention and engagement.
3.2 Term of Agreement. This Agreement shall become effective on the Effective
Date, and shall remain in effect until the earlier of (i) May 15, 1999, (ii)
the date on which this Agreement is terminated pursuant to Article XIV below,
or (iii) the date on which the Corporate Commission purchases Manager's rights
and obligations pursuant to Section 18.15 below.
3.3 Exclusivity as Applied to Corporate Commission. During the term of this
Agreement, the Corporate Commission and its Affiliates shall not, without the
prior written consent of Manager (which consent shall not be unreasonably
withheld), establish, conduct or participate in any Gaming, or enter into any
agreement with any other party to establish, conduct or participate in Gaming,
other than under this Agreement, within a 50 mile
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radius of the Gaming Site, except for the Grand Casino Mille Lacs facility which
is located in Onamia, Minnesota and is the subject of a separate agreement
between the Corporate Commission and Manager.
3.4 Exclusivity as Applied to Manager. During the term of this Agreement,
Manager and its Affiliates shall not, without the prior written consent of the
Corporate Commission (which consent shall not be unreasonably withheld),
establish, manage, conduct or participate in any Gaming, other than under this
Agreement, (i) within a 50 mile radius of the Gaming Site, or (ii) in the State
of Minnesota and north of a line located 20 miles south of the 45th meridian
north latitude, except for the Grand Casino Mille Lacs facility which is
located in Onamia, Minnesota and is the subject of a separate agreement between
the Corporate Commission and Manager.
3.5 Licensing. Manager acknowledges that Manager and Manager's (i) directors,
(ii) executive officers engaged in the management and operation of Gaming, and
(iii) shareholders holding at least 10% of the equity interest in Manager, will
be required to be licensed by the Corporate Commission under the Gaming Control
Ordinance. To the extent the required licenses have not already been applied
for and/or issued, Manager shall apply for such license and cause such
directors, executive officers and shareholders to apply for such licenses. If a
given applicant complies with the licensing standards stated in the Gaming
Control Ordinance, such applicant's application shall be granted, and shall not
thereafter be suspended, revoked or rescinded unless such applicant fails to
comply with such standards.
Manager acknowledges that the licensing application process with respect to
Manager and such directors, executive officers and shareholders may include
background investigations conducted by the Federal Bureau of Investigation or
other law enforcement agencies selected by the Corporate Commission. The
Corporate Commission shall cause any such investigation to be conducted in
accordance with the provisions of the Gaming Control Ordinance and IGRA.
Manager shall cause such directors, executive officers and shareholders to
disclose the information requested by such investigating entities, and to
cooperate with such investigations.
3.6 Compliance with Gaming Control Ordinance. Manager shall at all times
comply with the provisions and requirements of the Gaming Control Ordinance and
any license issued thereunder. The Corporate Commission and its Affiliates
shall not take any action which prevents Manager from
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complying, or interferes with Manager's ability to comply, with the Gaming
Control Ordinance.
3.7 Amendment of Gaming Control Ordinance. Any amendment to the Gaming Control
Ordinance made during the term of this Agreement will be made solely to ensure
that Gaming is conducted in a manner which adequately protects the public
health and safety, the environment and the integrity of Gaming. Except to the
extent required otherwise by applicable federal law or any Tribal-State Compact
between the State of Minnesota and the Band, no amendment to the Gaming Control
Ordinance or any other ordinance which prejudices or adversely affects
Manager's rights and benefits under this Agreement and/or the Ancillary
Agreements shall apply to or be enforceable against Manager.
3.8 Management Committee. During the term of this Agreement, the Corporate
Commission shall at all times have designated its Commission Representative and
Manager shall at all times have designated its Manager Representative.
The Corporate Commission's designation shall be by resolution adopted by the
Corporate Commission, a copy of which the Corporate Commission shall provide to
Manager. Manager's designation shall be by resolution adopted by the Manager's
Board of Directors, a copy of which Manager shall provide to the Corporate
Commission. The Corporate Commission and Manager shall each have the right to
from time-to-time change its designation by appropriate resolution, a copy of
which resolution shall be provided to the other party prior to the effective
date of the new designation.
The Commission Representative shall have the power and authority to act on
behalf of the Corporate Commission in the manner described in this Agreement.
The Manager Representative shall have the power and authority to act on behalf
of the Manager in the manner described in this Agreement.
The Commission Representative and Manager Representative so designated shall be
the two-person Management Committee contemplated by this Agreement, and the
Management Committee shall have and perform the rights and duties described in
this Agreement.
Any action or decision of the Management Committee shall require a unanimous
action or decision by the two members of the Management
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Committee. If such members are unable to agree on a given action or decision,
such action or decision shall, unless agreement on such action or decision may
pursuant to this Agreement be withheld in the sole discretion of either or both
of the members of the Management Committee, be submitted to arbitration as
provided in Article XIII below.
ARTICLE IV
WORKING CAPITAL
4.1 Ongoing Working Capital. To minimize the necessity for ongoing working
capital for the Enterprise, each of Manager and the Corporate Commission may
from time-to-time recommend to the Management Committee such reserves as it
deems appropriate. The Management Committee shall give reasonable
consideration to all such recommendations, and shall establish such reserves as
are reasonably required for the proper operation of the Enterprise.
To the extent that the Management Committee determines that ongoing working
capital in excess of the reserves so established should be obtained, the
Corporate Commission shall be responsible for providing such ongoing working
capital in such manner as the Corporate Commission, in its sole discretion,
deems appropriate.
ARTICLE V
MANAGEMENT OF ENTERPRISE
5.1 General Responsibility. During the term of this Agreement, Manager shall
be responsible for the day-to-day management of the Enterprise, and for
overseeing the ongoing maintenance and repair of the Facility. Manager is
hereby granted such power and authority on behalf of the Corporate Commission
as is necessary or appropriate to perform Manager's obligations under this
Article V, subject to the express limitations stated in this Agreement. The
various descriptions of Manager's powers and authority stated in this Article V
are not intended to limit or restrict other powers and
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authority which are necessary or appropriate for Manager to perform its
obligations under this Agreement.
5.2 Specific Responsibilities. Manager's general responsibility to manage the
Enterprise shall include (but not be limited to) the following:
(a) Operation. Manager shall manage the day-to-day operation and
administration of the Enterprise, including (but not limited to) all
Gaming.
(b) Maintenance. Manager shall arrange for and manage the
maintenance and repair of the Facility and Ancillary Facilities,
including all cleaning, maintenance, repair, redecorating and
grounds care reasonably required to maintain the Facility and
Ancillary Facilities in a first-class condition. All costs and
expenses incurred in maintaining and repairing the Facility and
Ancillary Facilities shall be Operating Expenses.
(c) Improvements. Manager shall manage such improvements,
alterations and additions to the Facility and Ancillary Facilities
as are approved pursuant to Article XVI below.
(d) Hours of Operation. Manager shall cause Gaming to be
conducted at the Facility during such hours as are from time-to-time
established by the Management Committee; provided, however, that
Manager shall have the right to temporarily close or suspend any
operations of the Enterprise, including Gaming, when deemed
appropriate by Manager to respond to conditions such as weather,
limited availability of utilities, emergency or any other condition
which reasonably warrants such closure or suspension.
(e) Employees. Manager shall, on behalf of the Corporate
Commission, manage the hiring, termination, training and promotion
of employees of the Corporate Commission assigned to the Enterprise
in accordance with Sections 5.6, 5.7 and 5.8 below. All wages,
salaries and benefits paid or provided to such employees, and all
costs and expenses incurred in such hiring, firing, training and
promoting shall be Operating Expenses.
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(f) Books and Records. Manager shall manage the maintenance of
the books and records of the Enterprise in accordance with Section
5.14 below. All costs and expenses incurred in maintaining such
books and records shall be Operating Expenses.
(g) Financial Reports. Manager shall cause to be prepared
financial statements and reports of the Enterprise in accordance
with Section 5.15 below. All costs and expenses incurred in
preparing such statements and reports shall be Operating Expenses.
(h) Security. Manager shall, on behalf of the Corporate Commission,
manage the hiring or retention, training and supervision of such
security personnel as are reasonably required to provide for the
safety of customers, employees, property and funds of the Enterprise.
Security personnel shall be hired as employees of the Corporate
Commission assigned to the Enterprise and who report, directly or
indirectly, to the General Manager. Each such employee shall be
bonded in such amount and under such terms as are from time-to-time
reasonably required by the Management Committee. All costs and
expenses incurred in providing such security shall be Operating
Expenses.
(i) Fire Protection; Public Safety Services. Manager shall, on
behalf of the Corporate Commission, arrange for a contract or
contracts with one or more governmental entities to provide to the
Facility and Ancillary Facilities fire protection services and other
public safety services reasonably deemed necessary by the Management
Committee. Such contract or contracts shall be approved by the
Management Committee and shall provide for the fire protection and
other public safety services reasonably required for the safety of
customers, employees and property of the Enterprise. All costs and
expenses incurred in providing such fire protection and other public
safety services shall be Operating Expenses.
(j) Advertising. The budgets and revisions thereof to be
prepared by Manager and submitted to the Management Committee
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pursuant to Section 5.11 below shall provide for advertising and
marketing expenses of the Enterprise.
Manager shall manage the placement of advertising on behalf of the
Enterprise, which placement shall be implemented by employees of the
Corporate Commission assigned to the Enterprise. All costs and
expenses incurred in preparing and placing such advertising shall be
Operating Expenses.
(k) Accounts Payable. Manager shall manage and administer the payment of
bills and expenses of the Enterprise pursuant to Section 5.13 below.
(l) Employment Practices. Manager shall establish and administer
written employment practices for the employees of the Corporate
Commission assigned to the Enterprise; provided, however, that such
practices shall be consistent with the provisions of Sections 5.6,
5.8 and 5.9 below.
(m) Insurance. Manager shall, on behalf of the Corporate Commission,
arrange for insurance coverage for the Enterprise, in such amounts
and with such coverages as are designated by the Management Committee
pursuant to Article X below. All costs and expenses incurred in
obtaining and maintaining such insurance shall be Operating Expenses.
(n) IRS Requirements. In performing its obligations under this
Agreement, Manager shall, on behalf of the Corporate Commission,
comply with rules and regulations of the United States Internal
Revenue Service applicable to the Enterprise.
(o) National Environmental Policy Act. Manager shall provide to
the Corporate Commission such information as is in the possession or
under the control of Manager and requested in writing by the
Corporate Commission to be provided to the NIGC under IGRA and/or
the National Environmental Policy Act and the regulations adopted
pursuant thereto. The Corporate Commission shall be responsible for
providing such information to NIGC. Manager shall make reasonable
efforts to cooperate with the Corporate Commission in responding to
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inquiries or requests for information from NIGC regarding the
environmental effects of Enterprise activities.
(p) Manager/Customer Disputes. Manager shall implement and
administer the Customer Dispute Policy stated in the regulations
establishing a customer dispute policy, which regulations are
adopted by the Corporate Commission pursuant to the Gaming
Ordinance.
(q) Nongaming Activities. Manager shall implement and manage
such nongaming activities at the Facility and Ancillary Facilities
as the Management Committee may from time-to-time reasonably
require.
5.3 General Manager. Manager shall, from time-to-time during the term of this
Agreement, recommend to the Corporate Commission for approval a general manager
(the "General Manager") of the Enterprise. Upon receipt of Manager's
recommendation, the Corporate Commission shall, unless there is a reasonable
basis for the Corporate Commission to reject Manager's recommendation, accept
Manager's recommendation and approve the General Manager designated by Manager.
If there is a reasonable basis for the Corporate Commission to reject such a
recommendation by Manager, and the Corporate Commission rejects such
recommendation, the Corporate Commission shall notify Manager of such rejection
and the basis for such rejection. Manager shall then submit additional
recommendations until the Corporate Commission approves a General Manager
recommended by Manager.
Manager shall from time-to-time during the term of this Agreement recommend in
the manner described above a successor to any General Manager who is
discharged, resigns or otherwise does not perform the responsibilities of the
General Manager.
The General Manager shall be an employee of the Corporate Commission and shall,
unless otherwise determined by the Management Committee, be assigned to the
management and operation of Enterprise on a full-time basis. All compensation
provided to the General Manager, including wages, salary, bonuses and benefits,
shall be an Operating Expense.
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The General Manager shall be bonded in such amount and under such terms as are
from time-to-time reasonably required by the Management Committee.
5.4 Chief Financial Officer. Manager shall, from time-to-time during the term
of this Agreement, recommend to the Corporate Commission for approval a chief
financial officer (the "Chief Financial Officer") for the Enterprise. Upon
receipt of the Manager's recommendation, the Corporate Commission shall, unless
there is a reasonable basis for the Corporate Commission to reject the
Manager's recommendation, accept the Manager's recommendation and approve the
Chief Financial Officer recommended by Manager.
If there is a reasonable basis for the Corporate Commission to reject such a
recommendation by the Manager and the Corporate Commission rejects such
recommendation, the Corporate Commission shall notify Manager of such rejection
and the basis for such rejection. Manager shall then submit additional
recommendations until the Corporate Commission approves a Chief Financial
Officer designated by Manager.
The Chief Financial Officer shall be an employee of the Corporate Commission,
shall report to and be supervised by the General Manager. The Chief Financial
Officer shall be assigned to the Enterprise on a full-time basis (unless
determined otherwise by the Management Committee), and shall be responsible for
the accounting and auditing of all Enterprise receipts and disbursements and
for the management of Enterprise funds. All compensation paid to the Chief
Financial Officer, including wages, salary, bonuses and benefits, shall be an
Operating Expense.
5.5 Training Personnel. Manager shall, on behalf of the Corporate Commission,
arrange for training personnel to implement training programs for new employees
of the Enterprise. Such training personnel shall be employees of the Corporate
Commission assigned to the Enterprise and report, directly or indirectly
through various supervisors, to the General Manager. All wages, salaries and
benefits paid to such personnel shall be Operating Expenses.
5.6 Enterprise Employees; Indian Preference. Manager shall, on behalf of the
Corporate Commission, manage the hiring, termination, training, promotion and
supervision of employees of the Enterprise. Such employees shall be employees
of the Corporate Commission assigned to the Enterprise
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and shall report, directly or indirectly through various supervisors, to the
General Manager.
To maximize the benefits of the Enterprise to the Corporate Commission, Manager
shall, in accordance with such preference policies and procedures as are from
time-to-time adopted by the Management Committee, manage the implementation of
preference in recruiting, hiring, training and promotion of all Corporate
Commission employees assigned to the Enterprise, including management
employees, to qualified Band members. Such preference policies and procedures
shall include a provision requiring written notice to the Corporate Commission
of each employment opportunity before applications for that opportunity are
accepted. Unless otherwise required by such preference policies and
procedures, to the extent no qualified Band member is available to fill a given
position, preference shall first be given to qualified members of any other
Indian tribe, and then to qualified spouses of Band members.
To implement the preference policies adopted by the Management Committee,
Manager shall (unless otherwise directed by the Management Committee):
(i) specify the preference described in this Section 5.6 in
advertising for Enterprise employment;
(ii) use reasonable efforts to place Enterprise employment ads in
publications which circulate among members of the Band and members
of other Indian tribes; and
(iii) provide employment training programs for Band members,
members of other Indian tribes and spouses of Band members.
For the purposes of this Section 5.6, Manager shall have the right, in its sole
discretion, to determine whether a given candidate is qualified.
5.7 Employee Background Investigations; Bonding. Manager shall, for each
applicant for employment at the Enterprise for whom a background investigation
is required by the Gaming Control Ordinance, cause to be conducted a background
investigation of such applicant before such applicant is hired. Such
investigation shall comply with the Gaming Control
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Ordinance, IGRA and any other applicable local, state or federal law or
regulation.
The cost and expenses incurred in conducting such an investigation shall be
Operating Expenses.
No applicant for which such investigation discloses any prior criminal record
or association which poses a threat to the effective regulation of Gaming, or
whose employment at the Enterprise is prohibited by the Gaming Control
Ordinance, IGRA or any applicable local, state or federal law, shall be hired
for employment at the Enterprise.
The Management Committee shall from time-to-time determine which employees at
the Enterprise are to be bonded, and the amounts and terms of such bonds.
5.8 Personnel Policy. Manager shall prepare and submit to the Management
Committee for approval written policies and procedures for the employees of the
Corporate Commission assigned to the Enterprise. Such written policies and
procedures shall include:
(i) job classifications and descriptions;
(ii) compensation programs;
(iii) reporting relationships; and
(iv) a grievance procedure for the resolution of employee
grievances and any other dispute between any employee and Manager
and/or the Corporate Commission.
Manager may from time-to-time prepare and submit to the Management Committee
for approval such written revisions and/or updates of such policies and
procedures as Manager deems appropriate.
5.9 Compensation Limited. No director or officer of Manager, or shareholder
holding more than five percent of the common shares of Manager, shall receive
any wages, salaries or other compensation from the Enterprise.
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5.10 Enterprise Contracts; Indian Preference. Manager shall prepare and
submit to the Management Committee for approval written policies and procedures
for procurement of goods and services for the Enterprise. Such policies and
procedures shall give preference to qualified Band members, qualified spouses
of Band members and qualified entities controlled by one or more Band members
or one or more spouses of Band members. Manager may from time-to-time prepare
and submit to the Management Committee for approval such written revisions or
updates of such policies and procedures as Manager deems appropriate.
On behalf of the Corporate Commission and subject to the provisions of Section
5.20 below, Manager shall arrange for and manage contracts and agreements for
such goods and services as Manager determines are appropriate for the operation
of the Enterprise.
Manager shall, upon approval of a given proposed improvement, alteration or
addition to the Facility and Ancillary Facilities pursuant to Article XVI
below, arrange for contracts and agreements on behalf of the Corporate
Commission for such improvement, alteration or addition. To maximize the
benefits of the Enterprise to the Corporate Commission and Band, Manager shall
give preference in awarding contracts and agreements for such improvements,
alterations and additions to qualified Band members, qualified spouses of Band
members and qualified entities controlled by one or more Band members or one or
more spouses of Band members.
For the purposes of this Section 5.10, "qualified" shall mean a Band member, a
spouse of a Band member or an entity certified by the Corporate Commission to
be controlled by one or more Band members or one or more spouses of Band
members who or which, in Manager's sole discretion:
(i) is able to provide quality goods or services at competitive
prices;
(ii) has experience in providing such goods or services or
completing similar improvements, alterations or additions; and
(iii) with respect to improvements, alterations or additions, can
comply with reasonable bonding requirements established by Manager.
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5.11 Budgets. Manager shall prepare and submit to the Management Committee
for approval each fiscal year of the Enterprise such annual budget as the
Manager deems appropriate, which budget shall provide for Operating Expenses
and capital expenditures. Manager may from time-to-time prepare and submit to
the Management Committee for approval such revisions to such budget as Manager
deems appropriate. The budget to be approved by the Management Committee
pursuant to this Section 5.11 shall include such classifications and detail as
the Management Committee from time-to-time deems appropriate.
Manager and the Corporate Commission acknowledge that the financial performance
of the Enterprise will be affected by unpredictable factors such as changes in
the gaming market and the existence and efforts of competitors. Manager shall
monitor the financial performance of the Enterprise and use its best efforts to
manage such financial performance consistent with both the most recent approved
budget and such unpredictable factors.
Manager shall have the authority to make expenditures or incur obligations on
behalf of the Enterprise to prevent, respond to or minimize the damage or
liability resulting from any emergency or any unanticipated circumstance which
may threaten the safety of customers, employees or property of the Enterprise,
whether or not such expenditures or obligations are included in or contemplated
by the approved budget.
5.12 Enterprise Funds Management. Manager shall select, and submit to the
Management Committee for approval, systems for tracking and monitoring all
Enterprise monies consistent with applicable provisions of regulations
promulgated by the NIGC and the Gaming Control Ordinance. Manager may from
time-to-time submit to the Management Committee for approval such revisions to
such systems as Manager deems appropriate.
Following approval of such systems by the Management Committee, Manager shall
install and maintain such systems.
The Commission Representative and each member of the Corporate Commission shall
have the right to at any time (i) inspect such systems and observe the
operation thereof; and (ii) be present to observe the counting of Enterprise
monies; provided, however, that the Commission Representative and each such
member shall be accompanied by the Manager Representative or his or her
designee.
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5.13 Bank Accounts; Funds. The Management Committee shall, on behalf of the
Corporate Commission, designate depositories for Enterprise monies. The
Management Committee shall establish such depository accounts at designated
depositories as the Management Committee deems appropriate for the deposit,
holding and disbursement of Enterprise monies. The Management Committee may
from time-to-time establish a xxxxx cash fund and such contingency and other
reserve funds as the Management Committee deems appropriate.
Manager shall administer the deposit, holding and disbursement of Enterprise
monies using the accounts and funds established by the Management Committee.
Manager's administration shall be in accordance with the following:
(a) Deposits. Manager shall collect all Enterprise monies and shall, at
such intervals as are from time-to-time established by the Management
Committee, deposit the same into the account(s) designated by the
Management Committee for such purpose.
(b) Counting. All monies received by the Enterprise shall be
counted at (i) the close of each business day on which the
Enterprise closes, or (ii) at least once every 24 hours for each
period of time during which the Enterprise does not close.
(c) Security. The Management Committee shall from time-to-time
either (i) designate a bonded courier service to transport
designated monies to the Enterprise depositories, or (ii) designate
another secure means of transporting such monies to such
depositories. Manager shall implement such designation. All costs
of such transportation shall be Operating Expenses.
(d) Disbursements. Manager shall make disbursements of
Enterprise monies from the account(s) designated by the Management
Committee for disbursements.
Except for the payment of cash prizes to customers, Manager shall not
make any cash disbursement from any account, and all such
disbursements shall be by check drawn on the appropriate account.
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(e) IRS Reports. Manager shall as requested by the Chief Financial
Officer assist the Chief Financial Officer in timely filing on behalf
of the Enterprise any reports of gaming winnings and other matters
required by the United States Internal Revenue Service.
5.14 Books and Records. Manager shall prepare and maintain accurate books and
records for the Enterprise. Such books and records shall be maintained at the
Facility or at such other location designated by the Management Committee.
Manager shall from time-to-time recommend to the Management Committee for
approval (which approval shall not be unreasonably withheld) accounting
practices and procedures for the Enterprise consistent with generally accepted
accounting principles. Such practices and procedures shall include procedures
for the allocation of Operating Expenses between Gaming-Related Operating
Expenses and other expenses, and a designation of the fiscal months of the
Enterprise (each a "Fiscal Month").
The Commission Representative and each member of the Corporate Commission shall
have the right, during the Enterprise's normal office hours, to inspect,
examine and copy all such books and records; provided, however, that the
Manager Representative or his or her designee shall have the right to be
present at any such inspection, examination or copying. The Corporate
Commission's inspection, examination and copying rights may also be exercised
by any agent, employee, attorney or accountant designated in writing by the
Commission Representative.
5.15 Financial Statements. Manager shall cause to be prepared and provided to
the Management Committee and the Corporate Commission monthly and annual
financial statements of all Enterprise revenues and disbursements. Such
statements shall be prepared in accordance with generally accepted accounting
principles.
5.16 Independent Audits. The Corporate Commission shall select and engage an
independent certified public accountant, reasonably acceptable to Manager, to
provide an annual audit of the financial statements of the Enterprise and such
other audits as may from time-to-time be required by the Management Committee.
Such audit shall be conducted in accordance with
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generally accepted auditing standards. All costs incurred by the Corporate
Commission in obtaining such audit shall be Operating Expenses.
The Corporate Commission shall be responsible for providing copies of such
audits to such local, state, and federal governmental entities as require such
audits from the Corporate Commission or in connection with the Enterprise. The
Corporate Commission shall cause a copy of such audit to be provided to
Manager, and Manager shall have the right to disclose such audit under state
and federal securities laws.
5.17 Alcoholic Beverages. Manager shall permit alcoholic beverages to be
served at the Gaming Site, Facility and Ancillary Facilities only in compliance
with such guidelines as are from time-to-time established by the Management
Committee, applicable law and the Band Assembly of the Band; provided, however,
that each member of the Management Committee shall have the right to withhold
approval of any such guideline in such member's sole discretion.
The Corporate Commission and Manager acknowledge that the Band has previously
established and collects a tax in the amount of $0.50 per drink on each
alcoholic beverage drink sold at the Facility. Such tax shall be paid by the
Enterprise directly to the Band. Revenue from the sale of alcoholic beverages
at the Facility shall be included in Gross Revenues, and the amount of such tax
shall be an Operating Expense.
The parties further acknowledge that the Band has agreed that the amount of
such tax levied on each alcoholic beverage drink sold at the Facility will not
be increased without the prior written consent of both the Corporate Commission
and Manager.
5.18 Tobacco Products. Manager shall permit tobacco products to be sold at
the Gaming Site, Facility and Ancillary Facilities only in compliance with
applicable law and any applicable agreement between the Corporate Commission or
Band or any agency thereof and any other governmental entity having
jurisdiction over such sales.
Gross Revenues shall include (i) all revenues received from the sale of tobacco
products by the Enterprise, and (ii) all tax rebates received from the State of
Minnesota with respect to tobacco products purchased by the Enterprise;
provided, however, that the first $9,000 of such tax rebates
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received during each fiscal quarter of the Enterprise shall be excluded from the
aggregate sum of (a) the Gross Revenues for such quarter under this Agreement,
and (b) the "Gross Revenues" for such quarter under that certain Management
Agreement - Mille Lacs Facility of even date herewith between the Corporate
Commission and Manager and pertaining to that certain facility commonly known as
Grand Casino Mille Lacs.
5.19 Unlawful Activity. Manager shall not knowingly conduct or knowingly
allow to be conducted at the Facility or Ancillary Facilities any unlawful
activity, including any unlawful use of controlled substances.
5.20 Limited Agency. Manager shall have the right to enter into contracts and
agreements in the name and on behalf of the Corporate Commission in the
following (and only the following) circumstances:
(i) the contract or agreement pertains only to the provision of
goods and/or services to the Enterprise;
(ii) the contract or agreement either has a term of 12 months or
less, or may be terminated for any or no reason upon not more than
30 days' notice of termination if the contract or agreement has a
term in excess of 12 months; and
(iii) the contract or agreement provides for total payments of
less than $25,000.
ARTICLE VI
TAXES AND LIENS
6.1 Band Taxes. During the term of this Agreement, except for taxes levied
pursuant to that certain written tax agreement between the Band and the
Minnesota Department of Revenue which became effective on ________, 1996, the
Band shall not impose any tax, fee or other charge on or against (i) Manager,
the Enterprise or the Facility and/or Ancillary Facilities; (ii) Gaming; (iii)
the provision of goods or services to customers of the Enterprise; (iv) the
labor of or compensation paid to employees of Manager or the Corporate
Commission performing work at the Enterprise; (v) goods or
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services purchased by or on behalf of, or otherwise provided to, the Enterprise;
or (vi) any property (including real property, furnishings, equipment, supplies
and inventory) held or used by Manager or the Corporate Commission in connection
with the Enterprise, which tax, fee or charge was not already in existence on
September 10, 1990.
In addition, the Band has waived and shall continue during the term of this
Agreement to waive the following taxes, fees or charges with respect to the
categories described in clauses (i) through (vi) of the preceding paragraph:
(a) The 5% commercial transaction tax with regard to Gaming and
the 4% commercial transaction tax on vending machines (1085 MLC-31,
Section 20);
(b) The tribal employment rights training assessment (1085
MLC-36, Section 55.01); and
(c) All Band tobacco taxes (1085 MLC-30).
6.2 No Liens. Nothing in this Agreement shall be deemed to subject the Gaming
Site or the Facility to any lien or encumbrance.
Neither party hereto shall, without the prior written consent of the other
party hereto (and the prior written consent of the United States of America if
required by law or title restriction), grant to any third party any lien
against, right in or encumbrance against the Gaming Site or the Facility.
ARTICLE VII
MANAGER COMPENSATION;
GUARANTEED MONTHLY PAYMENTS
7.1 Management Fees.
(a) Gaming Management Fee. As compensation for Manager's
management of Gaming under this Agreement, the Enterprise shall pay
to Manager a gaming management fee (the "Gaming Management Fee")
for each Fiscal Month equal to thirty percent
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(30%) of the Net Gaming Revenues received by the Enterprise during
such Fiscal Month.
(b) Nongaming Management Fee. Manager's management obligations under
this Agreement include the management of activities and operations
other than Gaming. The nongaming activities and operations to be
managed by Manager shall be determined by the Management Committee
from time-to-time, and shall initially include the management of
restaurant, retail, entertainment and lodging facilities located at
the Facility and Ancillary Facilities.
The parties hereto acknowledge that the economic uses of Gaming
activities conducted at the Facility will, in part, be attributable
to such nongaming activities, and that such nongaming activities will
substantially increase the number of customers for, and the amounts
customers spend on, Gaming activities. Accordingly, such nongaming
activities are essential to the Enterprise as a means of increasing
Gross Gaming Revenues.
The parties anticipate that nongaming activities will be conducted in
a manner which is designed to increase Gross Gaming Revenues, but may
not maximize Gross Nongaming Revenues. Accordingly, the parties
desire to establish a mechanism by which the nongaming management fee
(the "Nongaming Management Fee") to be paid to Manager as
compensation for Manager's management of such nongaming activities
and operations may be periodically evaluated and adjusted pursuant to
criteria agreed to by the Corporate Commission and Manager. The
Nongaming Management Fee for each Fiscal Month is therefore initially
agreed to be 11.9% Gross Nongaming Revenues received by the
Enterprise during such Fiscal Month.
The Management Committee shall, pursuant to criteria agreed to from
time-to-time in writing by the Corporate Commission and Manager,
evaluate the Nongaming Management Fee monthly during the term of this
Agreement, and shall implement any
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adjustment to the Nongaming Management Fee required by such criteria.
7.2 Guaranteed Monthly Payment to Tribe.
(a) Amount. For each Fiscal Month during the term of this Agreement, Manager
shall pay to the Corporate Commission a guaranteed monthly payment equal to the
amount by which the Net Revenues for such Fiscal Month (or portion thereof)
actually distributed to the Corporate Commission pursuant to Section
7.3(b)(iii) below are less than $25,000; provided, however, that if the
Effective Date is other than the first day of a Fiscal Month, the guaranteed
monthly payment for the Fiscal Month of the Effective Date shall be prorated.
(b) Timing. Such payment shall be paid by Manager to the Corporate Commission
either (i) in advance pursuant to the following paragraph, or (ii) if not so
paid in advance, with the distribution to the Corporate Commission for such
Fiscal Month made by Manager pursuant to Section 7.3(b)(iii) below, and shall be
an advance against future monthly distributions to the Corporate Commission made
pursuant to Section 7.3 below. Such advances shall be repaid by the Corporate
Commission from future Net Revenues in the manner described in Section
7.3(b)(vi) below.
(c) Excess Revenue Applied. To the extent that the Net Revenues for a given
Fiscal Month distributed to the Corporate Commission exceed $25,000, the excess
shall be considered an advance payment of all or part of the guaranteed monthly
payment or payments for the Fiscal Month or Fiscal Months during the then
current fiscal year of the Enterprise for which payment of the guaranteed
monthly payment has not been made. Such excess shall be allocated to such
advance payments until the Corporate Commission has received the guaranteed
monthly payment for each Fiscal Month of such fiscal year. Any such excess
which is thereafter distributed to the Corporate Commission during such fiscal
year shall not be considered an advance payment of any guaranteed monthly
payment.
7.3 Distribution of Revenues.
(a) Report. Within 15 days after the end of each Fiscal Month during which
Gaming is conducted, Manager shall calculate and report in writing to the
Commission Representative the Gross Revenues, Operating Expenses,
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Gross Gaming Revenues, Gross Nongaming Revenues, Gaming-Related Operating
Expenses, Net Gaming Revenues, Gaming Management Fee and Nongaming Management
Fee for such Fiscal Month.
(b) Priority. The Gross Revenues for such Fiscal Month shall be applied and
distributed by Manager in the following order, with such revenues to be applied
to or distributed for each category until all amounts due and payable under
that category are fully paid:
(i) First, to pay unpaid Operating Expenses other than the Gaming
Management Fee, the Nongaming Management Fee, and Operating Expenses
described in clauses 7.3(b)(ii) and (iv) below;
(ii) Second, to third-party lenders as payment of interest, principal and
other amounts then due and payable under third-party loans to the
Enterprise;
(iii) Third to the Corporate Commission as payment for any portion
of the guaranteed monthly payment for such Fiscal Month pursuant to
Section 7.2(a) above not previously prepaid pursuant to such Section
7.2(a);
(iv) Fourth, to Manager as payment of interest, principal and
other amounts then due and payable under the Ancillary Agreements
(in such order as Manager in its sole discretion determines);
(v) Fifth, to Manager as repayment of any unpaid advance of a
guaranteed monthly payment previously made by Manager pursuant to
Sections 7.2(a) and (b) above (in the order advanced);
(vi) Sixth, to Manager as payment of any Gaming Management Fee
earned but not then paid (in the order incurred);
(vii) Seventh, to Manager as payment of any Nongaming Management
Fee earned but not then paid (in the order incurred);
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(viii) Eighth, to such reserves as have been established by the Management
Committee in such amounts as have been determined by such
committee;
(ix) Ninth, for such other items and in such amounts as the Management
Committee may from time-to-time reasonably require; and
(x) Tenth, the remainder to the Corporate Commission as a
distribution of net profits of the Enterprise.
To the extent that the funds available for distribution for a given Fiscal
Month are not sufficient to make any of the distributions required by the items
listed in clauses (i) through (viii) above, distribution for or payment of such
items (together with any additional interest, fees or other charges
required as a result of the failure to make a distribution for or payment of
such item) shall be made from future distributions when funds are available for
distribution in accordance with the priority stated above.
Nothing in this Agreement is intended to or shall be deemed to be inconsistent
with or otherwise affect the Corporate Commission's and the Manager's deposit
obligations under that certain Master Trust Indenture dated October 1, 1996
between the Corporate Commission and First Trust National Association.
Distributions to be made pursuant to Section 7.03(b)(ii) above shall (i) to the
extent required by such Master Trust Indenture, be made in the manner required
by the Master Trust Indenture, and (ii) to the extent not governed by such
Master Trust Indenture, be made in such order as Manager in its reasonable
discretion determines.
Except to the extent prohibited by contractual obligations of the Corporate
Commission pertaining to the Enterprise, the Management Committee may from
time-to-time amend the priority stated above , but only upon agreement of both
members of the Management Committee (which agreement may be withheld in the
sole discretion of either member).
ARTICLE VIII
LITIGATION
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8.1 Defense. If the Manager and/or the Corporate Commission and/or the Band
is sued or named a party to any action brought by a third-party as a result of
or in connection with this Agreement or any activity or operations conducted or
to be conducted under this Agreement, the defense of or response to such suit
or action shall be as follows:
(a) Manager. Manager shall have the right to defend or respond
to any claim in such a suit or action made against Manager by
counsel selected by Manager. The cost of such defense or response
shall be an Operating Expense.
(b) The Corporate Commission. The Corporate Commission shall have the
right to defend or respond to any claim in such a suit or action made
against the Corporate Commission (including any action or suit which
attempts to name the Enterprise as a party even though the Enterprise
is not a separate legal entity) by counsel selected by the Corporate
Commission. The cost of such defense or response shall be an
Operating Expense.
The Corporate Commission shall have the absolute right, based on the
Corporate Commission's sovereign immunity from suit, to decline to
participate in the defense of or response to any such claim.
(c) The Band. The Band shall have the right to defend or respond
to any claim in such a suit or action made against the Band by
counsel selected by the Band. The cost of such defense or response
shall be an Operating Expense.
The Band shall have the absolute right, based on the Band's sovereign
immunity from suit, to decline to participate in the defense of or
response to any such claim.
8.2 No Waiver of Sovereign Immunity. Nothing in this Article VIII shall be
deemed or construed to be a waiver of the either the Corporate Commission's or
the Band's sovereign immunity to suit by any third-party.
ARTICLE IX
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PERFORMANCE; APPROVALS
9.1 Manager's Best Efforts. Manager shall use its best efforts to perform and
fulfill Manager's obligations under this Agreement in the manner required by
this Agreement.
9.2 Compliance. Manager shall, in performing its obligations under this
Agreement, comply with applicable laws, ordinances and regulations adopted by
the Band; provided, however, that:
(a) Neither the Band nor the Corporate Commission shall adopt or enforce
against Manager any law, ordinance or regulation which materially and
adversely affects Manager's economic benefits, or Manager's remedies,
under this Agreement;
(b) Neither the Band nor the Corporate Commission shall adopt or
enforce against Manager any law, ordinance or regulation which
violates IGRA or the Indian Civil Rights Act (Title 25, United
States Code, Sections 1301 through 1303); and
(c) Neither the Band nor the Corporate Commission shall amend any
land use or zoning law, regulation or ordinance in a manner which
materially and adversely affects the use of the Gaming Site or the
Facility for the purposes contemplated by this Agreement.
9.3 Non-interference in Tribe Affairs. Manager shall not interfere with the
internal affairs of the Corporate Commission or the Band, or any subdivision,
department or agency of the Band. For the purposes of this Section 9.3,
"interfere" shall mean any attempt by Manager to influence a decision of the
governing body or any officer of the Corporate Commission or the Band, or to
influence any Band election, by doing any of the following in connection with
such decision or election:
(i) offering any cash incentive;
(ii) making any written or oral threat against any person or
thing; or
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(iii) any similar act;
provided, however, that neither Manager's assertion of its rights under this
Agreement nor any recommendation, suggestion or assertion of opinion made by
Manager regarding the Enterprise shall be "interference" for the purpose of
this Section 9.3.
If the Band believes that Manager has violated the provisions of this Section
9.3 by engaging in prohibited interference, the Band shall give the Manager
written notice describing the incident which the Band claims constitutes
prohibited interference and identifying the person or persons claimed to have
acted on Manager's behalf in engaging in such interference. Manager shall have
the right to cure any breach of this Agreement claimed to be prohibited
interference by terminating the involvement of such person or persons with the
Enterprise.
9.4 Approvals and Consents. If this Agreement requires or contemplates an
approval or consent by a party hereto, that party shall not unreasonably
withhold or delay such approval or consent unless a specific provision of this
agreement states that such approval or consent may be withheld in such party's
sole discretion.
Each approval or consent required or contemplated by this Agreement shall be
evidenced by the following:
(a) Manager. If the approval or consent is by Manager, by
written approval signed by the Manager Representative;
(b) Management Committee. If the approval or consent is by the
Management Committee, by written approval signed by the Commission
Representative and the Manager Representative;
(c) Commission Representative. If the approval or consent is by
the Commission Representative, by written approval signed by the
Commission Representative; and
(d) Corporate Commission. If the approval or consent is by the
Corporate Commission, by written resolution of the Corporate
Commission signed by the Commissioner of the Corporate
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Commission and attested to by the Secretary or Assistant Secretary of
the Corporate Commission.
ARTICLE X
INSURANCE
10.1 Manager to Obtain. Manager shall, during the term of this Agreement,
obtain and maintain in effect on behalf of the Corporate Commission and Manager
the following insurance coverages:
(a) Casualty. Casualty insurance for the Facility and Ancillary
Facilities providing coverage against fire, wind, theft, vandalism,
malicious mischief, sprinkler leakage and such other casualties, and
with such limits, as the Management Committee from time-to-time
reasonably requires;
(b) Liability. Commercial liability insurance against claims for
injury, death and property damage occurring on, in or about the
Gaming Site, Facility or Ancillary Facilities, or in connection with
the Enterprise or any operation thereof, with such limits as the
Management Committee from time-to-time reasonably requires;
(c) Worker's Compensation. Worker's compensation insurance to
the extent deemed appropriate by the Management Committee;
(d) Business Interruption Insurance. Business interruption
and/or continuing expense insurance providing such coverage as the
Management Committee from time-to-time reasonably requires; and
(e) Other. Such other insurance coverages as the Management
Committee from time-to-time reasonably requires.
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10.2 Nature of Coverages. The Management Committee shall from time-to-time
determine the appropriate limits, deductibles and endorsements for the
coverages to be obtained pursuant to Section 10.1 above.
10.3 No Jurisdiction. Nothing in this Article X shall be deemed a waiver of
the sovereign immunity of either the Corporate Commission or the Band or
construed to subject the Corporate Commission or employees of the Corporate
Commission (including Corporate Commission employees assigned to the
Enterprise) to any jurisdiction of the State of Minnesota or any political
subdivision of such state, which jurisdiction does not exist independent of
this Agreement.
10.4 Policy Requirements. Each policy of insurance obtained pursuant to this
Article X shall be issued by an entity reasonably acceptable to the Management
Committee. The Corporate Commission shall be named as insured and Manager and
any parent of Manager shall be named as additional insureds in all such
policies. Manager shall be a loss payee (as Manager's interest appears) with
respect to the coverages described in Sections 10.1 (a), (c) and (d) above.
10.5 Enterprise Expenses. The premiums and other charges to obtain and
maintain insurance coverage pursuant to this Article X shall be Operating
Expenses.
10.6 Business Interruption Proceeds. Proceeds actually received from or under
the business interruption insurance obtained and maintained by Manager pursuant
to Section 10.1 above shall be deemed revenues and receipts of the Enterprise
for the purposes of this Agreement.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 Manager's Representations and Warranties. Manager hereby represents and
warrants to the Corporate Commission, as of the date of execution of this
Agreement by Manager, as follows:
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(i) Manager has the full authority to execute, enter into and
perform its obligations under this Agreement, and the persons who
execute this Agreement on behalf of Manager are duly authorized
signatories of Manager;
(ii) the persons or entities which individually own or hold at
least 10% of the common equity of Manager are as follows:
Name Federal Identification Percent of Common Equity
Number Owned
------------------ ---------------------------- ----------------------------
Grand Casinos, Inc. 00-0000000 100%
(iii) the board of directors of Manager consists of the following persons:
Name
----
Xxxx Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
(iv) no director, officer or person or entity owing 5% or more of the
common equity of Manager has been convicted of or pleaded nolo
contendre to any felony or gaming offense.
Manager shall notify the Corporate Commission in writing of any future material
change to the representations and warranties stated in this Section 11.1. Such
notice shall be given by Manager within 30 days after the later of (i) the date
of such change, or (ii) the date on which Manager becomes aware of such change.
Each such notice shall be a representation and warranty by Manager, as of the
date of such notice, of the change described therein.
The Corporate Commission shall be responsible for providing notice of any such
change to the NIGC in compliance with IGRA and any regulations adopted pursuant
to IGRA.
11.2 Corporate Commission's Representations and Warranties. The Corporate
Commission hereby represents and warrants to Manager, as of the date of
execution of this Agreement by the Corporate Commission, the
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Corporate Commission has the full authority to execute, enter into and (subject
to approval by the NIGC) perform its obligations under this Agreement, and the
persons who execute this Agreement on behalf of the Corporate Commission are
duly authorized signatories of the Corporate Commission.
ARTICLE XII
CESSATION OF ENTERPRISE
12.1 By Law. If, during the term of this Agreement, Gaming cannot be lawfully
conducted at the Gaming Site by reason of the application of any legislation or
court or administrative agency order or decree adopted or issued by a
governmental entity having the authority to do so, Manager shall, within 60 days
after such legislation, order or decree becomes effective, elect to:
(i) retain Manager's interest in this Agreement and suspend
Gaming operations until such date, if any, during the term of this
Agreement on which Gaming at the Gaming Site becomes lawful;
(ii) retain Manager's interest in this Agreement, suspend Gaming
operations until such date, if any, during the term of this
Agreement on which Gaming at the Gaming Site becomes lawful, and
with the prior approval of the Corporate Commission, which approval
shall not be unreasonably withheld, use the Facility and Ancillary
Facilities for any other lawful purpose pursuant to a use agreement
containing terms reasonably acceptable to Manager and the Corporate
Commission; or
(iii) terminate Gaming operations and terminate this Agreement.
Manager shall give the Corporate Commission written notice of Manager's
election within such 60-day period.
(a) Election to Suspend Gaming. If Manager elects to retain its interest in
this Agreement under clause (i) or (ii) above, Manager shall have the right
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(but not the obligation) to commence Gaming operations within 60 days after the
date on which Gaming becomes lawful. Manager may exercise such right by giving
the Corporate Commission written notice of such exercise within 30 days after
the date on which Gaming becomes lawful.
During any suspension of Gaming pursuant to this Section 12.1, the Corporate
Commission shall remain liable under the Ancillary Agreements in accordance with
the provisions of the Ancillary Agreements to the extent of the Gross Revenues
derived from the Facility and any Ancillary Facilities. Any reasonable payment
to any third party made during the period during which Gaming is unlawful to
preserve or eliminate any leasehold or purchase contract rights of the
Enterprise shall be paid by the Enterprise (or reimbursed by the Enterprise if
paid by Manager) after Gaming is recommenced.
(b) Election to Terminate Agreement. If Manager elects to terminate this
Agreement under this Section 12.1, the provisions of Section 14.5 below shall
apply.
12.2 By Casualty. If, during the term of this Agreement, the Facility and/or
Ancillary Facilities are damaged by casualty or other occurrence to the extent,
as reasonably determined by Manager, that Gaming cannot be conducted at the
Gaming Site, Manager shall, within 60 days after such casualty or occurrence,
elect to:
(i) retain Manager's interest in this Agreement pending repair or
reconstruction, suspend Gaming operations pending the repair or
reconstruction of the Facility and/or Ancillary Facilities, and
arrange for such repair or reconstruction in the manner described in
this Section 12.2; or
(ii) terminate Gaming operations and terminate this Agreement.
Manager shall give the Corporate Commission written notice of Manager's
election within such 60-day period.
(a) Election to Suspend Gaming. If Manager elects to retain its interest in
this Agreement under clause (i) above, Manager shall promptly verify the amount
of insurance proceeds available to pay the cost of repair or reconstruction.
Manager is hereby granted the authority to submit, adjust and settle, on behalf
of the Corporate Commission, all insurance claims associated
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with the casualty or occurrence; provided, however, that Manager shall obtain
the Commission Representative's prior written consent (which consent shall not
be unreasonably withheld) to any settlement. Manager shall provide copies of
all settlement documents to the Commission Representative.
All insurance proceeds received as a result of such settlement shall be applied
to the cost of such repair or reconstruction, and any surplus after paying all
such costs shall be revenues of the Enterprise.
Any repair or reconstruction shall be performed by a contractor selected by the
Management Committee, and shall be completed in accordance with such plans and
specifications or other documents describing the work to be performed as are
approved by the Management Committee.
If the Manager determines, or if the parties hereto otherwise discover, that
available insurance proceeds and Enterprise monies are not sufficient to pay
the costs of the repair or reconstruction, Manager shall:
(i) arrange, on behalf of the Corporate Commission, for
third-party financing of the amount required to pay such costs on
commercially reasonable terms and conditions; or
(ii) loan the amount required to pay such costs to the Corporate
Commission on commercially reasonable terms and conditions; or
(iii) terminate this Agreement.
Manager shall have the right to elect, in its sole discretion, which of the
foregoing actions the Manager will take. The Corporate Commission hereby
agrees to accept, and shall execute and deliver all documents required or
appropriate to evidence and implement, any such third-party or Manager
financing on terms and conditions which are commercially reasonable. If such
financing is provided by a third-party or Manager, such documents shall include
such waiver of the Corporate Commission's sovereign immunity to suit as is
reasonably required by the third-party lender or Manager.
(b) Election to Terminate Agreement. If Manager elects to terminate this
Agreement under this Section 12.2, the provisions of Section 14.5 below shall
apply. If Manager elects to terminate this Agreement under this Section 12.2
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before any insurance claim associated with the casualty or occurrence is
settled, the Corporate Commission shall adjust and settle such claim; provided,
however, that if there is any amount unpaid under the Ancillary Agreements, the
Corporate Commission shall either pay such amount prior to settlement or obtain
Manager's prior written consent (which consent shall not be unreasonably
withheld) to any settlement. If there is any amount unpaid under the Ancillary
Agreements when proceeds from such settlement are received by the Corporate
Commission, such proceeds shall be first applied to amounts unpaid under the
Ancillary Agreement until all such amounts are paid. Such proceeds shall be
deemed revenues and receipts of the Enterprise.
12.3 Guaranteed Payment, Term Suspended. If Gaming operations are suspended
pursuant to Section 12.1 or Section 12.2 above, Manager's obligation to make
guaranteed monthly payments to the Corporate Commission pursuant to Section 7.3
above shall be suspended so long as Gaming operations are suspended.
If Manager has not elected to terminate this Agreement and Gaming operations
are suspended pursuant to Section 12.1 or Section 12.2 above, the term of this
Agreement (or any renewal thereof if the suspension occurs during such renewal)
shall be extended by a period equal to the period of such suspension.
ARTICLE XIII
ARBITRATION
13.1 Arbitration Required. Any claim, controversy or dispute arising out of
or relating to this Agreement, or any alleged default hereunder or breach of
any provisions hereof, except decisions by a party hereto or a member of the
Management Committee which this Agreement specifically states that such party
or member may make in its sole discretion, shall be submitted to binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time of submission. Judgment on any
arbitration award may be entered in any court having jurisdiction over the
parties pursuant to Article XV below.
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13.2 Place of Arbitration. Unless the parties hereto otherwise agree in
writing prior to the submission of such claim, controversy or dispute to
arbitration, arbitration proceedings under this Article XIII shall be held in
the State of Minnesota.
13.3 Selection of Arbitrators. Either party may, at any time prior to the
selection of an arbitrator or arbitrators, require that the arbitrator or
arbitrators selected be an attorney or attorneys licensed to practice law in
the State of Minnesota or in the United States District Court for the District
of Minnesota.
Unless the parties hereto otherwise agree in writing, any matter to be
arbitrated shall be submitted to a panel of three arbitrators. If such a panel
is to be selected, one arbitrator shall be designated by the Corporate
Commission, one arbitrator shall be designated by Manager and the third
arbitrator shall be designated by the two arbitrators designated by the parties
hereto.
13.4 Award. The arbitration award shall be in writing signed by each of the
arbitrators, and shall state the basis for the award.
13.5 Enforcement. Except to the extent such enforcement will be inconsistent
with a specific provision of this Agreement, arbitration awards made pursuant
to this Article XIII shall be enforceable under Title 9 of the United States
Code and any applicable state law governing the enforcement of arbitration
awards.
13.6 Appeal. In addition to any basis for appeal of an arbitration award
stated in Title 9 of the United States Code or any applicable state law
governing the enforcement of arbitration awards, either party hereto may appeal
an arbitration award on the basis that the arbitrator or arbitrators
incorrectly decided a question of law in making the award.
13.7 Injunctive Relief. Either party hereto shall have the right to seek and
obtain a court order from a court having jurisdiction over the parties
requiring that the circumstances specified in the order be maintained pending
completion of the arbitration proceeding.
ARTICLE XIV
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DEFAULTS; TERMINATION
14.1 Termination by Mutual Agreement. This Agreement may be terminated at any
time by written agreement executed on behalf of each of the parties hereto and
stating the terms and conditions pursuant to which this Agreement is to be
terminated.
14.2 Manager's Termination Following Cessation of Gaming. Manager shall have
the right to terminate this Agreement pursuant to and in the manner provided in
Article XII above.
14.3 Manager Default: If:
(i) Manager fails to make any payment to the Corporate Commission
within 5 days after such payment is due and payable, and such
failure is not cured within 10 days after the Corporate Commission
gives Manager written notice of such failure; or
(ii) Manager defaults in any material way in the performance of
any other obligation of Manager under this Agreement or breaches in
any material way any representation or warranty made by Manager in
this Agreement, and such default or breach is not cured within 60
days after the Corporate Commission gives Manager written notice of
such default or breach (provided that if such default or breach
cannot be cured within such 60-day period and Manager commences a
cure within such 60-day period and diligently pursues such cure,
then if such default or breach is not cured within 90 days);
then the Corporate Commission shall have the rights to (i) terminate this
Agreement by giving Manager written notice of termination, or (ii) seek relief
through arbitration under Article XIII above. Manager shall not be in default,
or breach any of Manager's obligations, under this Agreement by reason of any
act or omission by any employee of the Corporate Commission at the Enterprise
unless (i) Manager specifically instructed such employee to perform such act or
omission, or (ii) Manager had actual knowledge of a similar act or omission by
such employee prior to the act or omission claimed
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to have caused such default or breach and Manager failed to request the
supervisor of such employee to take disciplinary action with respect to such
prior act or omission.
14.4 Corporate Commission Default. If the Corporate Commission defaults in any
material way in the performance of any obligation of the Corporate Commission
under this Agreement, and such default is not cured within 60 days after Manager
gives the Corporate Commission written notice describing such default (provided
that if such default cannot be cured within such 60-day period and the Corporate
Commission commences a cure within such 60-day period and diligently pursues
such cure, then if such default is not cured within 90 days), then Manager shall
have the rights to (i) terminate this Agreement by giving the Corporate
Commission written notice of termination, or (ii) seek relief through
arbitration under Article XIII above.
14.5 Effects of Termination. Following any termination of this Agreement, in
addition to and notwithstanding any other right or remedy available to either
party to this Agreement:
(i) the Corporate Commission shall remain liable under the
Ancillary Agreements in accordance with the provisions of the
Ancillary Agreements;
(ii) each party hereto shall be entitled to retain any amounts
distributed or paid under this Agreement to such party prior to the
termination date; and
(iii) amounts to be distributed or paid under this Agreement which
accrued through the date of termination shall be distributed or paid
in accordance with the provisions of this Agreement.
ARTICLE XV
LIMITED WAIVER OF SOVEREIGN IMMUNITY
15.1 Limited Waiver. To induce Manager to enter into this Agreement, the
Corporate Commission hereby waives the Corporate Commission's sovereign
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immunity to suit to the extent (and only to the extent) stated in this Article
XV.
The Corporate Commission hereby waives its sovereign immunity from suit, and
hereby consents to be sued or named a party, in any action brought or pursued in
the United States District Court for the District of Minnesota, the United
States Court of Appeals and the United States Supreme Court; provided, however,
that such waiver shall apply only to actions arising under or related to this
Agreement and/or the Ancillary Agreements. Manager hereby agrees and submits to
the jurisdiction of the United States District Court for the District of
Minnesota, the United States Court of Appeals and the United States Supreme
Court, hereby waives any objection to the jurisdiction of such courts and hereby
agrees not to object to or contest the jurisdiction of such courts. Each of
Manager and the Corporate Commission hereby agrees to forcefully assert and
argue that such courts have jurisdiction in such actions. If Manager challenges
the jurisdiction of such courts in any action, such challenge shall render the
limited waiver of sovereign immunity stated in the Article XV ineffective with
respect to the action in which such challenge occurs.
If the United States District Court for the District of Minnesota is determined
not to have jurisdiction over an action arising under or related to this
Agreement and/or the Ancillary Agreements, then the Corporate Commission's
waiver of sovereign immunity from suit, and the Corporate Commission's consent
to be sued or named a party, in an action arising under or related to this
Agreement and/or the Ancillary Agreements shall also apply to any such action
brought in the state court system of the State of Minnesota.
The Corporate Commission also waives the Corporate Commission's sovereign
immunity to suit, and agrees that the Corporate Commission may be sued or named
a party, in any action arising under or related to this Agreement and/or the
Ancillary Agreements brought in the Court of Central Jurisdiction of the Mille
Lacs Band of Chippewa Indians.
The limited waiver stated in this Article XV shall be effective only for the
following:
(a) Order for Arbitration. Any action seeking to compel
arbitration under Article XIII above.
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(b) Monetary Damages. Any action seeking to enforce an arbitration award
of money damages made pursuant to Article XIII above; provided,
however, that any collection action or execution shall be only
against (i) undistributed or future assets of the Enterprise (other
than the Facility), and (ii) if the arbitration award includes a
determination that the Corporate Commission or the Band prejudiced
Manager's rights under this Agreement or any of the Ancillary
Agreements, or caused in a material way the lack of business success
of the Enterprise, future proceeds of any other gaming operations
conducted by or on behalf of the Corporate Commission or Band. In no
instance shall any such collection action or execution be against any
asset of the Corporate Commission or Band other than those assets
described in the preceding sentence.
(c) Consent/Approval. Any action seeking to enforce an arbitration award
made pursuant to Article XIII above, which award requires that the
Corporate Commission and/or the Commission Representative consent to
or approve an action, request or recommendation, and includes a
determination that the Corporate Commission and/or the Commission
Representative unreasonably withheld such consent or approval
contrary to the provisions of this Agreement.
(d) Injunctive Relief; Specific Performance. Any action seeking
to enforce an arbitration award made pursuant to Article XIII above,
which award requires that the Corporate Commission and/or the
Commission Representative take or refrain from taking any action
(other than the payment of monetary damages) under this Agreement.
ARTICLE XVI
FUTURE IMPROVEMENTS
16.1 Improvements. Manager may from time-to-time recommend to the Management
Committee capital improvements to the Facility and/or Ancillary Facilities.
Any such recommendation shall include Manager's recommendation for financing
the cost of such improvement from existing
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cash flow, existing or future reserves, third-party financing, or funds to be
provided by the Corporate Commission.
The Management Committee shall determine whether any capital improvement is to
be made, the nature and cost of such improvement, and the method of paying for
or financing such improvement. Manager shall not have any obligation to
provide financing for any such improvement.
The plans for such improvement shall be prepared and approved, and the
construction of such improvement shall be completed, in such manner as the
Management Committee deems appropriate.
ARTICLE XVII
NOTICES
17.1 Form and Addresses. All notices, demands, requests or other
communications from one party to the other required or permitted under this
Agreement shall be in writing and, until otherwise specified in a written
notice given in the manner specified in this Section 17.1, shall be sent to the
following addresses:
(a) if to the Corporate Commission:
Mille Lacs Band of Chippewa Indians Corporate Commission
XXX 00, Xxx 000
Xxxxxx, Xxxxxxxxx 00000
Attention: Commissioner of Corporate Affairs
(b) if to Manager:
Mille Lacs Gaming Corporation
00000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
Attention: Chairman of the Board
with a copy to:
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Grand Casinos, Inc.
00000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
Attention: General Counsel
17.2 Manner of Giving. Each such communication shall be given (i) by
registered or certified mail of the United States Postal Service, return
receipt requested, postage prepaid, (ii) by overnight delivery service
guaranteeing next business day delivery, or (iii) via telecopier or facsimile
transmission to the facsimile number listed above; provided, however, that if
such communication is given by telecopier or facsimile transmission, an
original counterpart of such communication shall concurrently be sent in the
manner specified in clause (ii) above.
17.3 Deemed Given. Each such communication given under Section 17.1 above
shall be deemed to have been given (i) seven (7) days following the deposit of
such communication in the United States mail if mailed; (ii) on the date of
delivery if delivered by overnight delivery service; or (iii) on the day of the
transmission of such communication if sent by telecopier or facsimile
transmission.
ARTICLE XVIII
MISCELLANEOUS
18.1 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.
18.2 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.
Neither party hereto shall assign or encumber its interest in this Agreement
without the prior written consent of the other party, which consent shall not
be unreasonably withheld; provided that no such assignment shall release the
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Corporate Commission or Manager from its respective obligations under this
Agreement.
If IGRA or any regulation adopted thereto requires approval by the NIGC or any
official thereof of an assignment of Manager's interest, no assignment by
Manager under this Section 18.2 shall become effective until the required
approval is obtained.
18.3 Entire Agreement; Modifications. This Agreement and the Ancillary
Agreements contain the entire understanding of the parties regarding their
subject matter, and shall, as of the Effective Date, supersede all prior
negotiations, understandings and agreements of the parties with respect
thereto.
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.
18.4 Provisions Separable. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or
rendered invalid or unenforceable by the invalidity or unenforceability of any
other provision.
18.5 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.
18.6 No Joint Venture. Manager shall be an independent contractor and agent
engaged by the Corporate Commission 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 between the Corporate Commission
and Manager.
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18.7 No Conveyance. Nothing in this Agreement shall be deemed or construed to
transfer or convey to Manager any lien on or interest in the Gaming Site or
Facility, or to transfer or convey to Manager any proprietary interest in the
Enterprise.
18.8 Time of Essence. Time is of the essence in the performance by the
parties hereto of their respective obligations under this Agreement.
18.9 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.
18.10 Corporate Commission's Obligations Limited. Nothing in this Agreement
shall obligate the Corporate Commission to encumber or make any payment from
assets of the Corporate Commission or Band 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 Corporate Commission or Band.
18.11 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.
18.12 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.
18.13 Attorneys' Fees. The prevailing party in any arbitration proceeding
under Article XIII above or any action under Article XV above shall recover
from the other party the prevailing party's reasonable attorneys' fees and all
costs and expenses incurred by the prevailing party in such proceeding or
action.
18.14 Corporate Commission's Use of Facility. The Corporate Commission shall
have the right to use the Facility, at the sole cost of the Corporate
Commission, for a reasonable number and reasonable periods of times to hold
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community and any other events; provided, however, that the Corporate
Commission's exercise of such right shall be only following reasonable notice
to Manager and in a manner which does not materially interfere with the
operation and business of the Enterprise.
18.15 Buyout Option. At any time after the later of (i) May 15, 1997 (if Gaming
operations have not been suspended under Article XII above), or (ii) the date
which is the number of days after May 15, 1997 equal to the number of days
Gaming operations have been suspended (if such operations have been suspended
under Article XII above), the Corporate Commission shall have the option to
purchase all of Manager's rights and obligations under this Agreement. The
Corporate Commission may exercise such option by giving Manager at least 90 days
written notice of such exercise, accompanied by payment of the purchase price
for such rights and obligations (as described in the following paragraph) in
immediately available funds.
The purchase price for such rights and obligations shall be an amount equal to
the amount which Manager would have received under the 1990 Management
Agreement, excluding any amounts due under Section 27 of the 1990 Management
Agreement, as adjusted to reflect the accounting practices and procedures
stated in Exhibit H attached hereto, the Note, the RV Park Note and the
Restaurant Note for the period from the date of closing of such purchase to May
15, 1999 if:
(i) the 1990 Management Agreement as adjusted to reflect the
accounting practices and procedures stated in Exhibit H attached
hereto remained in full force and effect through May 15, 1999; and
(ii) the daily profit for the period from the date of the Corporate
Commission's purchase through May 15, 1999 is assumed to be 1/365 of
the aggregate net profits of the Enterprise (calculated as provided
in the 1990 Management Agreement as adjusted to reflect the
accounting practices and procedures stated in Exhibit H attached
hereto) for the twelve months preceding the first day of the month
during which the Corporate Commission gives written notice the
Corporate Commission's exercise of its option,
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less any interest on the Note, the RV Park Note and the Restaurant Note which
would have occurred after the date of closing of such purchase. In addition,
the Corporate Commission shall pay to Manager the amount described in Section
18.16 below.
18.16 Recapture of Certain Amounts. Within 30 days after the termination of
this Agreement, the Corporate Commission shall pay to Manager (i) all Gaming
Management Fees and Nongaming Management Fees earned but not then paid, and (ii)
forty percent of the then fair market value of all purchases of video slot
machines, but not including any xxxx acceptors attached to such slot machines,
by or on behalf of the Enterprise during the term of this Agreement and during
the term of the 1990 Management Agreement, which purchases were accounted for as
Operating Expenses under this Agreement or the 1990 Management Agreement.
For the purposes of this Section 18.16, the term "fair market value" shall mean
the fair market value as agreed to by the parties hereto or by arbitration
pursuant to Article XIII above.
ARTICLE XIX
TERMINATION OF PRIOR AGREEMENT
19.1 Management Agreement. The 1990 Management Agreement as adjusted to
reflect the accounting practices and procedures stated in Exhibit H attached
hereto shall remain in full force and effect, and shall not be amended,
modified or affected by this Agreement, until such time as the Effective Date
occurs. The 1990 Management Agreement shall apply to all events and incidents
which occur, all claims which arise, and all revenues and expenses of the
Enterprise received or incurred prior to the Effective Date.
Upon the occurrence of the Effective Date and this Agreement becoming
effective, the 1990 Management Agreement shall without further action be
terminated as of the Effective Date. If, however, the Effective Date does not
occur, the 1990 Management Agreement as adjusted to reflect the accounting
practices and procedures stated in Exhibit H attached hereto shall remain in
full force and effect.
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19.2 Notes; Loan Agreements. The Loan Agreement, Security Agreement, Note, RV
Park Note and Restaurant Note shall remain in full force and effect, and shall
not be amended, modified or affected by this Agreement, until such time as the
Effective Date occurs and the Corporate Commission executes and delivers the
Restated Loan Agreement, Restated Security Agreement, the Restated Note,
Restated RV Park Note and Restated Restaurant Note. The Loan Agreement,
Security Agreement, Note, RV Park Note and Restaurant Note shall apply to all
events and incidents which occur prior to the Effective Date. If the Effective
Date does not occur, or if the Corporate Commission does not comply with the
requirements of the following paragraph, the Loan Agreement, Security Agreement,
Note, RV Park Note and Restaurant Note shall remain in full force and effect.
Upon the occurrence of the Effective Date and this Agreement becoming
effective, the Corporate Commission and Manager shall do the following:
a. If at the time of such occurrence the Note is not fully paid,
(i) the Corporate Commission shall immediately execute and deliver
to Manager the Restated Note, with the principal amount of the
Restated Note being the then unpaid principal balance of the Note,
and (ii) the Corporate Commission and Manager shall execute and
deliver the Restated Loan Agreement and the Restated Security
Agreement.
Upon Manager's receipt of the Restated Note, Manager shall xxxx
the Note "canceled by restated note" and deliver the Note so
marked to the Corporate Commission.
b. If at the time of such occurrence the RV Park Note is not fully paid,
(i) the Corporate Commission shall immediately execute and deliver to
Manager the Restated RV Park Note, with the principal amount of the
Restated RV Park Note being the then unpaid principal balance of the
RV Park Note, and (ii) the Corporate Commission and Manager shall
execute and deliver the Restated Loan Agreement and the Restated
Security Agreement.
Upon Manager's receipt of the Restated Restaurant Park Note, Manager
shall xxxx the RV Park Note "canceled by restated
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note" and deliver the RV Park Note so marked to the Corporate
Commission.
c. If at the time of such occurrence the Restaurant Note is not fully
paid, (i) the Corporate Commission shall immediately execute and
deliver to Manager the Restated Restaurant Note, with the principal
amount of the Restated Restaurant Note being the then unpaid
principal balance of the Restaurant Note, and (ii) the Corporate
Commission and Manager shall execute and deliver the Restated Loan
Agreement and the Restated Security Agreement.
Upon Manager's receipt of the Restated Restaurant Note, Manager shall
xxxx the Restaurant Note "canceled by restated note" and deliver the
Restaurant Note so marked to the Corporate Commission.
IN WITNESS WHEREOF, the parties hereto have executed this Management Agreement
as of the date stated in the introduction hereof.
The Corporate Commission of the
Mille Lacs Band of Chippewa Indians
By s/ Xxxx Xxxx
-----------------------
Name Xxxx Xxxx
---------------------
Title Interim Commissioner
of Corporate Affairs
----------------------
MANAGER
Mille Lacs Gaming Corporation,
a Minnesota corporation
By s/ Xxxx Xxxxxx
-----------------------
Name Xxxx Xxxxxx
---------------------
Title CEO
----------------------
The foregoing Management Agreement is hereby ratified and approved by the
Mille Lacs Band of Chippewa Indians (the "Band"), and, to induce Mille Lacs
Gaming Corporation to enter into such Agreement, the Band hereby
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agrees to be bound by the provisions of Sections 3.3, 3.6, 3.7, 5.17, 6.1 and
9.3 of such Management Agreement as such provisions pertain to the Band.
Mille Lacs Band of Chippewa Indians
By s/ Xxxxx Xxxxxxxx
-----------------------
Name Xxxxx Xxxxxxxx
---------------------
Title Chief Executive
----------------------
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Exhibits omitted
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