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EXHIBIT 10.61
FEE GUIDELINES AGREEMENT
(MILLE LACS FACILITY)
This Agreement is made effective October 1, 1996, by and between The Corporate
Commission of the Mille Lacs Band of Ojibwe Indians (the "Corporate
Commission"), and Mille Lacs Gaming Corporation, a Minnesota corporation
("Manager").
WHEREAS, the Corporate Commission and Manager are the parties to that certain
Management Agreement - Mille Lacs Facility dated as of October 1, 1996 (the
"Mille Lacs Management Agreement"); and
WHEREAS, the Mille Lacs Management Agreement states the terms and conditions
pursuant to which Manager will, from and after the Effective Date, manage
gaming and nongaming activities at the facility owned by the Corporate
Commission and known as Grand Casino Mille Lacs; and
WHEREAS, Section 7.1 of the Mille Lacs Management Agreement provides that the
Corporate Commission and Manager are to agree to criteria to be used in
periodically evaluating and adjusting the Nongaming Management Fee; and
WHEREAS, the Corporate Commission and Manager desire to evidence their
agreement to the criteria stated below;
NOW, THEREFORE, the Corporate Commission and the Manager hereby agree as
follows:
1. Definitions. Capitalized terms used in this Agreement but which are not
defined in this Agreement shall either have the meanings ascribed to them in
the Mille Lacs Management Agreement or in Section 4 below.
2. Criteria. The Nongaming Management Fee to be established by the Management
Committee pursuant to Section 7.1 of the Mille Lacs Management Agreement shall
be established for each Fiscal Month during the term of the Mille Lacs
Management Agreement prior to making the distributions and payments for such
Fiscal Month to be made pursuant to Article VII of the Mille Lacs Management
Agreement. The Nongaming Management Fee for such Fiscal Month shall be the
percentage (the "Nongaming Management Fee Percentage") of the Gross Nongaming
Revenues received by the Enterprise during such Fiscal Month as
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will produce a Nongaming Management Fee for such Fiscal Month which, when added
to or subtracted from the Gaming Management Fee to be paid for such Fiscal
Month, will equal the aggregate amount which would have been distributed for
such Fiscal Month under the 1990 Mille Lacs Management Agreement, as modified
by the Accounting Practices and Procedures (the "Accounting Practices")
described in Section 3 below, as the Original Mille Lacs Fee (had the 1990
Mille Lacs Management Agreement remained in effect). Each of the parties
hereto acknowledges that the Nongaming Management Fee for a given fiscal month
may, depending on the results of the calculation of such Nongaming Management
Fee, be either positive or negative.
The Nongaming Management Fee Percentage for a given Fiscal Month shall be
calculated as follows:
(a) First, the Original Mille Lacs Fee for such Fiscal Month
which would have been paid under the 1990 Mille Lacs Management
Agreement (as modified by the Accounting Practices) shall be
calculated;
(b) Second, the Gaming Management Fee under the Mille Lacs
Management Agreement shall be calculated;
(c) Third, the result of calculation (b) above shall be
subtracted from the result of calculation (a) above;
(d) Fourth, the result of calculation (c) above shall be divided
by the Nongaming Revenue for such Fiscal Month;
(e) Fifth, the result of calculation (d) above (expressed as a
decimal number) shall be converted into a percentage.
The percentage resulting from the conversion to which subparagraph (e) above
refers shall be the Nongaming Management Fee Percentage for such Fiscal Month.
3. Accounting Practices and Procedures. In determining the Original Mille Lacs
Fee and the amount which would have been distributed under the 1990 Mille Lacs
Management Agreement, "net profits" to be allocated between the Corporate
Commission and Manager shall mean income before income taxes determined
pursuant to generally accepted accounting principles, adjusted as follows:
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Additions:
(i) Add depreciation expense as recorded under generally accepted
accounting principles; and
(ii) Add insurance expense as recorded under generally accepted
accounting principles.
Subtractions:
(i) Subtract principal which would have been paid pursuant to
that certain Real Estate Construction and Term Note (the "1992
Note"), in the original principal amount of $5,500,000, dated
February 19, 1992 and given by the Corporate Commission to Peoples
Bank of Commerce had such 1992 Note been paid in accordance with its
(their) original amortization schedule;
(ii) Subtract principal paid pursuant to that certain Indenture of
Trust (the "1994 Indenture") between the Corporate Commission and
Colorado National Bank relating to the Corporate Commission of the
Mille Lacs Band of Chippewa Indians - Revenue Bonds - Series 1994;
(iii) Subtract principal paid under notes, and principal
reductions under asset leases accounted for as capital lease
obligations pursuant to generally accepted accounting principles,
which notes and leases pertain to Enterprise assets;
(iv) Subtract such capital expenditure reserves for the Enterprise
established by the Management Committee under the 1990 Mille Lacs
Management Agreement; and
(iv) Subtract such other costs and expenses of the Enterprise, if
any, as were designated by such Management Committee for such
subtraction.
4. Capitalized Terms. Capitalized terms and phrases which are not defined in
the preceding portions of this Agreement or in the Mille Lacs Management
Agreement shall have the following meanings:
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(a) 1990 Mille Lacs Management Agreement. "1990 Mille Lacs
Management Agreement" shall mean that certain Amended and Restated
Management and Construction Agreements between the Corporate
Commission and Manager dated as of September 10, 1990.
(b) Original Mille Lacs Fee. "Original Mille Lacs Fee" shall
mean the sum of all amounts which Manager would be entitled to
receive under the 1990 Mille Lacs Management Agreement (as adjusted
by the Accounting Practices) but excluding (i) all amounts payable
under Sections 11.4 and 27 of the 1990 Mille Lacs Management
Agreement, and (ii) all amounts payable under Section 11.1 of the
1990 Mille Lacs Management Agreement which are attributable to xxxx
acceptors attached to video slot machines, for the period from
October 1, 1996 to April 3, 1998 assuming the 1990 Mille Lacs
Management Agreement remained in full force and effect through April
3, 1998.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the
effective date stated above.
Corporate Commission of the
Mille Lacs Band of Ojibwe Indians
By s/ Xxxx Xxxx
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Name Xxxx Xxxx
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Title Interim Commssioner of
Corporate Affairs
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Mille Lacs Gaming Corporation
By /s/ Xxxxxx Xxxxxx
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Name Xxxxxx Xxxxxx
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Title President
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