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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 27, 1996
Concorde Gaming Corporation
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(Exact name of registrant as specified in its charter)
Colorado 0-8698 84-0716683
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3290 Lien Street
Rapid City, South Dakota 57702
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (605) 341-7738
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
See the Press Release attached hereto as Exhibit 20.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
2.3 Settlement Agreement, dated as of September 27,
1996, among The Three Affiliated Tribes of the Fort
Berthold Reservation and The Bruce H. Lien Company
20 Press Release dated September 30, 1996 announcing
signing of Settlement Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONCORDE GAMING CORPORATION
Date: October 14, 1996 By: /s/Jerry L. Baum
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Jerry L. Baum, President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description
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<S> <C>
2.3 Settlement Agreement, dated as of September 27, 1996, among The Three Affiliated Tribes of
the Fort Berthold Reservation and The Bruce H. Lien Company
20 Press Release dated September 30, 1996 announcing signing of Settlement Agreement
</TABLE>
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EXHIBIT 2.3
Settlement Agreement, dated as of September 27, 1996,
among The Three Affiliated Tribes of the Fort Berthold Reservation
and The Bruce H. Lien Company
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SETTLEMENT AGREEMENT
BETWEEN
THE THREE AFFILIATED TRIBES
OF THE FORT BERTHOLD RESERVATION
AND
THE BRUCE H. LIEN COMPANY
EXECUTED ON: SEPTEMBER 27, 1996
AT: NEW TOWN, NORTH DAKOTA
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TABLE OF CONTENTS OF SETTLEMENT AGREEMENT
<TABLE>
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Description Page
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I. RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. TERMS OF SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Conveyance of Management Contract Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Transfer of Management Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. Transfer of All Operation Files, Records and Other Documents . . . . . . . . . . . . . . . . . . . . . . 3
D. Transfer of All Operating Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
E. Transfer of all Leased Assets and Assets Subject to Purchase Agreements . . . . . . . . . . . . . . . . 3
F. Transfer of all Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
G. Agreement to Receive Tribal Buyout Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
H. Vacation of the Four Bears Casino and Lodge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I. Buyout Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. Lump Sum Payment and Gross Buyout Amount . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Interest Moratorium on Gross Buyout Amount . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Management Fee and Category I Principal
Offsets Against Gross Buyout Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Final Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
J. Stay and Dismissal of Pending Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
K. Waiver and General Release of All Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
L. Interim Licensing and Background Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
III. INTERIM MANAGEMENT AND OPERATION OF GAMING
FACILITIES AND MOTOR LODGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. Establishment of a Shadow Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Establishment of a Transition Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. Tribal Counter-Signature Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
D. Three-Month Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
E. Moratorium on New Hires, Terminations, Transfers and Demotions . . . . . . . . . . . . . . . . . . . . 13
IV. GENERAL AGREEMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
B. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
C. Amendments, Changes, and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
D. Waiver of Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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TABLE OF CONTENTS OF SETTLEMENT AGREEMENT - PAGE 2
<TABLE>
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Description Page
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IV. GENERAL AGREEMENT PROVISIONS
E. Cooperation on Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
F. Good Faith Participation in All Joint Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . 15
G. Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
H. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
I. Date of Closing Define . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
J. Preservation of Claims and Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
K. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
L. Management of the Agreement and Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
M. Warranties of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
N. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
V. APPROVAL OF SETTLEMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") made this 27th day of
September, 1996, by and between the Three Affiliated Tribes of the Fort
Berthold Reservation, a federally - recognized Indian Tribal Government,
organized under Section 16 of the Indian Reorganization Act of 1934
(the "Tribe"), and the Bruce H. Lien Company, a Colorado Corporation
("Lien"). The Tribe and Lien intend this Agreement to constitute a full
and final settlement of all outstanding claims and disputes between
them, arising from agreements to develop Class II and Class III Gaming
Facilities (the Gaming Facilities) and refurbish a Motor Lodge (the
Motor Lodge), and to manage the Gaming Facilities and the Motor Lodge,
which agreement was executed on December 7, 1992, and was amended by an
Addendum thereto executed on February 19, 1993, and all other ancillary
and related agreements between the Tribe and Lien.
I.
RECITALS
WHEREAS, the Tribe is a federally-recognized Indian tribe; and,
WHEREAS, the Tribe desired to develop Class II and Class III Gaming
Facilities and to refurbish a defunct Motor Lodge so as to
increase tribal revenues and enhance the Tribe's economic
self-sufficiency and self-government; and,
WHEREAS, the Tribe and Lien have been involved in ongoing disputes
regarding the validity, terms and responsibilities under those
agreements relating to the development and the management of the
Gaming Facilities and Motor Lodge; and,
WHEREAS, the National Indian Gaming Commission undertook to review the
agreements to determine their compliance with federal law, and
has both assigned deficiencies to the terms of the agreements and
threatened an enforcement action based on the operation of the
casino and lodge; and,
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WHEREAS, the Tribe and Lien have determined it is in their best interests
to resolve all disputes which have arisen between them by the
execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Tribe and Lien and Lien agree as follows:
II.
TERMS OF SETTLEMENT
The Tribe and Lien agree to the following terms of settlement, to wit:
A. CONVEYANCE OF MANAGEMENT CONTRACT RIGHTS.
In consideration of the Tribe's covenants herein contained, Lien hereby
conveys all right, title, and interest in and to the following agreements, to
wit:
1. Management Agreement dated December 7, 1992 (Exhibit 1);
2. Addendum to Management Agreement dated February 19, 1993
(Exhibit 2);
3. Memorandum of Understanding between the Tribe and Lien
dated September 8, 1993 (Exhibit 3),
and any and all other agreements existing by and between the Tribe and Lien
(hereinafter collectively referred to as the "Management Agreement").
B. TRANSFER OF MANAGEMENT RESPONSIBILITY
Lien agrees to transfer management responsibility for the Gaming
Facilities and the Motor Lodge, and all other tribal facilities it manages on
behalf of the Tribe to the Tribe no later than the date of closing (See, IV(I),
p. 16 for a definition of Date of Closing).
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C. TRANSFER OF ALL OPERATION FILES, RECORDS AND OTHER DOCUMENTS.
Lien agrees to transfer all files, records and other documents
related to the development and operation of the Gaming Facilities and Motor
Lodge to the Tribe no later than the date of closing of the Agreement, and to
provide the Tribal Shadow Management Team (See III.A for a description of the
Tribal Shadow Management Team) access to and a full and detailed explanation of
the organization of those files.
D. TRANSFER OF ALL OPERATING ACCOUNTS.
Lien agrees to assign or transfer, as appropriate, all accounts, the
funds from which are used for the operation of the Gaming Facilities and the
Motor Lodge (hereinafter referred to as "the Operating Accounts"), to the Tribe
no later than the date of closing. Lien further agrees to leave all of the
accounts and funds of the Gaming Facilities and the Motor Lodge intact to be
transferred to the Tribe at the date of closing of this Agreement, subject to
expenditures incurred during the Interim Period in the normal and ordinary
course of business. These accounts are identified at Appendix A which is
attached hereto.
E. TRANSFER OF ALL LEASED ASSETS AND ASSETS SUBJECT TO PURCHASE
AGREEMENTS
Lien agrees to assign all leased assets and assets subject to purchase
agreements used in the operation of the Gaming Facilities and Motor Lodge which
are held in the name of Lien, Four Bears Limited Liability Corporation,
Concorde Holdings Corporation or Concorde Gaming Corporation, or any other
entity, to the Tribe no later than the date of closing of this Agreement. The
Parties agree that
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the foregoing companies and Mr. Bruce H. Lien, individually, shall be released
from all obligations under any lease or purchase agreements. All outstanding
asset leases are set forth at Appendix B which is attached hereto.
In the event any third party lessor or vendor refuses to allow the
release of the companies or Mr. Bruce H. Lien from all obligations under a
lease or purchase agreement, the Tribe agrees to indemnify and hold harmless
the companies and Mr. Bruce H. Lien from and against any and all losses,
damages, liabilities, claims, demands, judgments, settlements, costs and
expenses of any nature whatever (including reasonable attorney's fees)
resulting from or arising out of any breach of any purchase agreement or lease,
or default in the performance of any obligations arising under any purchase
agreement or lease transferred or assigned to the Tribe, except for those
breaches or defaults which have resulted from the conduct of Lien.
F. TRANSFER OF ALL TITLES.
Lien agrees to transfer titles to all property, plant and equipment,
used in the operation of the Gaming Facilities and Motor Lodge and which are
held in the name of Lien, Four Bears Limited Liability Company, Concorde
Holdings Corporation, or Concorde Gaming Corporation, or any other entity, to
the Tribe no later than the date of closing of this Agreement. A list of all
titled property, plant and equipment to be transferred hereunder is set forth
at Appendix C which is attached hereto.
G. AGREEMENT TO RECEIVE TRIBAL BUYOUT PAYMENT.
Lien agrees to receive the Tribe's Buyout Payment (See, II(H) for a
description of the Tribe's Buyout Payment), in full and final payment for all
of its right, title and interest in the Management Agreement, as well as all
of its covenants contained herein.
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H. VACATION OF THE FOUR BEARS CASINO AND LODGE.
Lien and its officers, employees, personnel, and agents agree to leave
the Four Bears Casino and Lodge no later than 8:00 a.m. the morning following
the Date of Closing.
I. BUYOUT PAYMENT
1. LUMP SUM PAYMENT AND GROSS BUYOUT AMOUNT.
In consideration for Lien's conveyance of rights specified above and its
covenants herein contained, the Tribe agrees to pay to Lien in immediately
available funds the total sum of $8,650,000 (hereinafter referred to as "the
Gross Buyout Amount"), less offsets as provided in subdivision 3, infra, in a
lump sum due at the Date of Closing. In order to effect the closing, the lump
sum due at closing shall be wired directly to a bank account for the benefit of
Bruce H. Lien Company by 5:00 p.m. CST on the Date of Closing.
The Tribe and Lien agree the Tribe shall have 150 days from the date of
the execution of this Agreement to secure financing of the Gross Buyout Amount.
In the event the Tribe is unable to secure financing within the 150 day period,
the Tribe shall continue to use its efforts to secure financing. The Tribe's
inability to secure financing within the 150 day period shall not constitute a
breach of this Agreement.
In the event the Parties do not close on this Agreement on or before
April 30, 1997, this Agreement shall be null and void, unless the Parties
mutually agree, in writing, to extend this deadline.
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In the event the Tribe does not secure financing as envisioned by this
Agreement, either party fails to abide by the terms of this Agreement, this
Agreement is declared to be void by the National Indian Gaming Commission, the
Secretary of Interior or his designee or by the final judgment of any court of
competent jurisdiction, or becomes null and void by function of the April 30,
1997 deadline described above, or any other event prevents the completion of
this Agreement, then the Management Agreement shall be deemed to have been
unaffected by this Agreement and the Parties' rights and claims asserted with
respect to the Management Agreement shall be deemed to have been preserved.
2. INTEREST MORATORIUM ON GROSS BUYOUT AMOUNT.
For 150 days from the date of the execution of this Agreement the Tribe,
shall not be liable for the payment of interest accrued on the $8,650,000.00
Gross Buyout Amount. In the event the Parties close within 150 days from the
date of the execution of this Agreement, Lien will waive the Tribe's
responsibility for the interest accrued on the Gross Buyout Amount.
If the Tribe has not secured financing within the 150 day period, the
Tribe shall be required to pay the interest accrued on the Gross Buyout Amount
from the date of the execution of this Agreement through the Date of Closing,
at an interest rate equal to Lien's blended cost of capital not to exceed 18%
APR. If the Tribe becomes responsible for the payment of interest accrued on
the Gross Buyout Amount, said accrued interest shall be to the Gross Buyout
Amount and shall be paid to Lien when financing is secured and the closing of
this Agreement is completed.
In the event the Parties do not close on or before April 30, 1997, this
Agreement shall be null and void, unless the Parties mutually agree, in
writing, to extend the deadline. In the event that this Agreement becomes
null and void by function of this deadline, the Management Agreement shall be
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deemed to have been unaffected by this Agreement, and the Parties's rights and
claims asserted relative to the Management Agreement shall be deemed to have
been preserved.
Further, in the event the Parties do not close on or before April 30,
1997, the moratorium on interest accrued on the principal balance of Category
I Costs ("Category I Principal Balance") shall be rescinded as of September 30,
1996. The monthly payments of $194,412.00 as payment on the Category I
principal balance made by the Tribe to Lien from and after October 15, 1996
shall be retroactively reallocated to provide for the payment of interest on
the Category I Principal Balance at an interest rate which is equal to Lien's
blended cost of capital (calculated on the basis of actual days elapsed in a
365 day year). Each such payment shall be reallocated to apply first to the
payment of accrued interest on the Category I Principal Balance with the
remainder applied to the Category I Principal Balance.
3. MANAGEMENT FEE AND CATEGORY I PRINCIPAL OFFSETS AGAINST
GROSS BUYOUT AMOUNT.
All Category I payments and management fee distributions accrued between
October 1, 1996 and Date of Closing, it being understood that payment of the
Category I payment and distributions are actually made on the 15th day of the
following month, shall be offset against the Gross Buyout Amount of
$8,650,000.00 to arrive at the Net Buyout Amount due to Lien on the Date of
Closing. Interest on the Category I remaining balance shall be computed
through September 30, 1996 and paid in full with the October 15, 1996 payment
to Lien. The amount of the Category I payment to be paid on October 15, 1996,
and on the 15th day of each month thereafter until the Date of Closing shall be
equal to $194,412.00.
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4. FINAL ACCOUNTING.
The Net Buyout Amount due to Lien at the Date of Closing of this
Agreement will be determined by a Final Accounting to be performed by the
Parties, which will be performed on the Final Accounting Form, attached hereto
as Appendix D. The Final Accounting Form shall be executed by the persons
executing this Agreement on behalf of the parties and shall be attached to and
made a part of this Agreement.
J. STAY AND DISMISSAL OF PENDING PROCEEDINGS.
The Tribe and Lien recognize that numerous documents will have to be
signed and filed in order to resolve all outstanding disputes between them.
The Tribe and Lien agree to stay all pending proceedings until the closing of
this Agreement, or until the Tribe secures financing, whichever is later. The
Tribe and Lien agree to stay the following proceedings:
1. A Review by the NIGC of the Management Agreement (Exhibit
4);
2. A Federal District Court action entitled Bruce H. Lien
Company v. Three Affiliated Tribes, et al., Civ. No.
A4-95-135 (D. North Dakota) (Exhibit 5);
3. A Tribal Court action entitled Three Affiliated Tribes
v. Bruce H. Lien Co., Case No. 96-C-0001 (Fort Berthold
District Court)(Exhibit 6);
4. A Tribal Court action entitled Bruce H.. Lien Co. v.
Three Affiliated Tribes' Tribal Gaming Commission, Case
No. 95-C-00096 (Fort Berthold District Court) (Exhibit 7);
5. A Tribal Court action, as it relates to Lien and its
officers or employees, entitled Bruce H. Lien Co.,
Jerry Baum and Thomas K. Schoppert v. Three Affiliated
Tribes' Tribal Gaming Commission, Case No. 95-C-00154
(Fort Berthold District Court) (Exhibit 8);
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6. An Arbitration action entitled Bruce H. Lien Co. v. Three
Affiliated Tribes, Case No. 53 133 00057 95 (AAA
Arbitration Association) (Exhibit 9);
7. A Tribal Court action entitled Gene Christensen, et al. v.
Marcus Wells, Jr. et al., (Jerry Long case)(Exhibit 10);
8. A Tribal Employment Rights Office case entitled Marcus
Wells, Jr. v. Gene Christensen, et al., (Jerry Long case
(Exhibit 11);
9. A Tribal Court action entitled Marcus Wells, Jr. v. Jerry
Baum, et al., Civ. No. (Devon Gordon case) (Exhibit 12);
10. A Tribal Employment Rights Office case entitled Marcus
Wells, Jr. v. Jerry Baum, et al., (Devon Gordon case)
(Exhibit 13);
11. A Tribal Court action entitled Marcus Wells, Jr. v.
Jerry Baum, et al., Civ. No. (Brenda Keller case)
(Exhibit 14); and,
12. A Tribal Employment Rights Office case entitled
Marcus Wells, Jr. v. Jerry Baum, et al., (Brenda
Keller case) (Exhibit 15).
The Tribe and Lien further agree that on the Date of Closing, they will
execute and file all documents necessary to secure the dismissal with
prejudice, or formal withdrawal, of the proceedings listed in J(l)-(12).
K. WAIVER AND GENERAL RELEASE OF ALL OTHER CLAIMS.
The Tribe and Lien agree that neither party shall have any claims
against the other for agreements or transactions between them. To date hereof,
and furthermore, each party covenants and agrees to release, and does hereby
release, the other from any and all claims, known or unknown, now existing or
hereafter arising, as a result of the Management Agreement.
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L. INTERIM LICENSING AND BACKGROUND INVESTIGATIONS.
The Parties agree that Lien shall submit applications to the Tribal
Gaming Commission for the licensure of Lien, Four Bears Casino and Lodge and
Four Bears Bingo Hall, and that licenses shall be issued to the Casino and
Bingo Hall and that a temporary license shall be issued to Lien which license
shall be valid through the term of this Agreement. The Parties further agree
that no fee will be required for the issuance of the said licenses.
The Tribe further agrees that it shall provide Lien and the National
Indian Gaming Commission with evidence of the issuance of said licenses, and
that it will continue to expeditiously investigate and license, where
appropriate, all Key Employees and Primary Management Officials and will
provide all necessary reports to the National Indian Gaming Commission
regarding the results of those investigations and licensing processes.
III.
INTERIM MANAGEMENT AND OPERATION
OF GAMING FACILITIES AND MOTOR LODGE
The Tribe and Lien agree to cooperate to the fullest extent to assure a
smooth transition of management responsibilities over, and the effective and
profitable operation of, the Gaming Facilities and the Motor Lodge during the
term of this Agreement (hereinafter referred to as "the Interim Period"). In
furtherance of that goal the Tribe and Lien agree to the following with regard
to the interim management and operation of the Gaming Facilities and Motor
Lodge, to wit:
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A. ESTABLISHMENT OF A SHADOW MANAGEMENT TEAM
Tribe and Lien agree that the Tribe immediately may designate up to four
individuals to constitute a "Shadow Management Team". Immediately following
the execution of this Agreement, the members of that team shall be assigned to
key management persons and permitted to observe and participate in the
day-to-day management and operation of the Gaming Facilities and the Motor
Lodge.
The Tribe and Lien further agree that the Tribe may replace members of
the Shadow Management Team as the Tribe may deem prudent or necessary.
B. ESTABLISHMENT OF A TRANSITION TEAM.
The Tribe and Lien agree that the Tribe shall designate three (3)
persons and Lien designate two (2) persons to serve on a "Transition Team"
which will coordinate the transfer of titles, leases and fixed assets, and
otherwise direct and coordinate the transition of the management of the Gaming
Facilities and Motor Lodge during the Interim Period.
The Transition Team's authority shall include, but not be limited to the
following:
1. Oversee and approve all Transfers envisioned by II(C)(D)(E)
and (F);
2. Oversee and approve the acquisition of fixed assets and any
debt incurred on behalf of the Gaming Facilities and the
Motor Lodge;
3. Oversee the Shadow Management Team to assure that effective
management training is occurring, and to provide reports to
the Tribal Business Council on at least a monthly basis
regarding the progress of said management training;
4. Oversee expenditures of the Gaming Facilities and the Motor
Lodge to assure compliance with the 1996-1997 operating budget
(Exhibit 16) reports on which review shall be provided to the
Tribal Business Council on at least a monthly basis;
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5. Review all checks issued and to be issued from the operating
accounts of the Gaming Facilities and Motor Lodge;
6. Oversee all casino operating accounts, reports on which shall
be provided to the Tribal Business Council on at least a
monthly basis;
7. Organize and Supervise the Three-Month Audit (See, III.D. for
the description of the Three Month Audit) and the "Final
Accounting" (See, II(I)4 for a description of the Final
Accounting);
8. Review and plan for the implementation of the Tribal Personnel
Policy (Exhibit 17) at the Gaming Facilities and the Motor
Lodge, and be informed of all Interim Period personnel matters;
9. Be informed of the termination of all Primary Management
Officials and Key Employees during the Interim Period;
10. To the extent financially feasible, direct and supervise the
implementation of remedial measures recommended in the Internal
Security Audit prepared by Schechter, Dokken, Kantor and Andrews
(Exhibit 18), except for transfer of the surveillance department
to the Tribe's Gaming Commission, which shall occur after Date
of Closing; and,
11. Ensure operation compliance with the Tribal Employment Rights
Ordinance (Exhibit 19), the Tribal Gaming Ordinance
(Exhibit 20), the Tribal State Compact (Exhibit 21), the
Indian Gaming Regulatory Act and all other federal, state and
Tribal laws, regulations, rules, ordinances and policies and to
report any instances of non-compliance to the appropriate
regulatory authority with a recommendation for action.
Action taken by the Transition Team must be by unanimous vote. Disputes
between Transition Team members shall be resolved, to the extent possible, by
the Team members. In the event disputes are irresolvable by the Team members,
the disputes shall immediately be referred to counsel for the Tribe and Lien
who shall endeavor to resolve them within 48 hours of notification of the
disputes.
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C. TRIBAL COUNTER-SIGNATURE AUTHORITY.
The Tribe and Lien agree that during the Interim Period, the Tribe shall
have counter-signature authority on all checks issued from the Operating
Accounts of the Gaming Facilities and Motor Lodge in excess of five thousand
dollars ($5,000), except for monthly distribution checks which shall only
require the signature of authorized Lien representatives. The Tribe shall
immediately designate one member from the Transition Team to exercise Tribal
counter- signature authority. Lien shall immediately provide the Tribe with
the necessary documents, including signature card, before the Interim Period
commences.
D. THREE-MONTH AUDIT.
The Tribe and Lien agree that they shall cause to be conducted a
Three-Month Audit of the Gaming Facilities and Motor Lodge covering July 1,
1996 through September 30, 1996. The Tribe and Lien agree that Joseph Eve and
Company shall conduct the Audit, and that they will share the cost of the Three
Month Audit consistent with the handling of Category II Expenses (60% by the
Tribe and $40% by Lien).
E. MORATORIUM ON NEW HIRES, TERMINATIONS, TRANSFERS AND DEMOTIONS.
The Tribe and Lien agree that, during the Interim Period, Lien will not
alter the current employee structure, nor interfere with or disrupt the
functions of current employees. Lien specifically agrees to impose a
moratorium on new hires, except as is required to replace existing Key
Employees, on terminations, unless for good cause shown, and on all transfers
or demotions of all Key Employees and Primary Management Officials. Lien
further agrees to report all new hires, terminations, transfers and demotions
and to the Transition Team.
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IV.
GENERAL AGREEMENT PROVISIONS
A. COMPLIANCE WITH LAWS.
The Tribe and Lien covenant and agree that this Agreement complies with
all applicable laws and regulations, including, but not limited to, federal
laws, including the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et. seq and
any policies, rules, regulations or orders issued by the National Indian Gaming
Commission, any applicable rules, regulations, resolutions or ordinances passed
by the Tribe and any North Dakota laws.
B. ASSIGNMENT.
Neither the Tribe nor Lien may assign this Agreement, or any rights
thereunder, or delegate obligations and duties imposed by this Agreement to any
individual or entity unless the other party gives prior written approval of
such delegation or assignment, and such assignment is approved by the National
Indian Gaming Commission.
C. AMENDMENTS, CHANGES AND MODIFICATIONS.
This Agreement cannot be amended or modified without the prior written
consent of both parties. Consent to amend, change, or modify this Agreement
may be given only by duly authorized individuals.
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D. WAIVER OF REQUIREMENTS.
The failure to enforce an obligation imposed by this Agreement is not a
waiver of the right to require that the obligation be satisfied or that
modification of this Agreement occur.
E. COOPERATION ON FINANCING
Lien agrees to exercise its best effort to assist the Tribe in the
Tribe's efforts to obtain financing of the Buyout which is envisioned by this
Agreement, and covenants not unreasonably to refuse to cooperate with, or
unreasonably to withhold requested documents or information from the Tribe or
any prospective financing institutions.
F. GOOD FAITH PARTICIPATION IN ALL JOINT RESPONSIBILITIES.
Lien and the Tribe agree to participate in good faith in all joint
responsibilities which are more fully described at III, supra.
G. CONFIDENTIAL INFORMATION.
The Tribe and Lien agree that any information received concerning the
other during the performance of this Agreement, regarding either party's
organization, financial matters, marketing plans or other information of a
proprietary nature, shall be treated by both parties in full confidence, and
except in response to legal process or appropriate and necessary governmental
inquiry shall not be revealed to any other persons, firms or organizations
without the written permission of the other Party.
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H. SEVERABILITY
To the extent any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted herefrom and the remainder of
such provision of this Agreement shall be and unaffected and shall continue in
full force and effect.
I. DATE OF CLOSING DEFINED.
The Date of Closing, as used in this Agreement, shall mean the date on
which the Tribe transfers the Net Buyout Amount to a bank account for the
benefit of the Bruce H. Lien Company and the Parties execute all documents
necessary to secure a full purchase of Lien's interest in the Management
Agreement and to fully and finally resolve all outstanding disputes between
them.
J. PRESERVATION OF CLAIMS AND DISPUTE RESOLUTION.
The Tribe and Lien agree to use their best efforts and good faith to
defend the validity of this Agreement before any administrative or judicial
tribunal or forum, and covenant to use their best efforts to bring about a
completion of the terms of this Agreement. However, in the event the Tribe
cannot secure financing as envisioned by this Agreement, either party fails to
abide by the terms of this Agreement, this Agreement is declared to be void by
the National Indian Gaming Commission, or the Secretary of Interior or his
designee, or by the final judgment of any court of competent jurisdiction, or
any other event prevents the completion of the terms of this Agreement, then
the Management Agreement shall be deemed to have been unaffected by this
Agreement and the Parties' rights and claims asserted with respect to the
Management Agreement shall be deemed preserved.
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The Tribe and Lien further agree that prior to suspending or terminating
this Agreement, or seeking any other remedy authorized by law for failure of
one party to abide by its terms, the parties agree to deliver written notice to
the offending party which identifies the conduct which violates this
Agreement, describes the action which would cure the offending conduct and
specifies the date on which notice will end. The notice must provide the
offending party a minimum of ten calendar days to cure the offending conduct.
If the offending conduct is not cured by the expiration of the notice or if the
offending party has not presented a plan to cure such conduct which is
acceptable to the other, the other party way suspend or terminate this
Agreement by providing written notice of suspension or termination to the
offending party and/or may seek any other remedy authorized by law.
The Tribe and Lien further agree that this Agreement, and all
discussions and negotiations relating thereto, shall be treated as offers of
compromise of disputed claims pursuant to Rule 408 of the Federal Rules of
Evidence, and will not be admissible in any proceeding which might occur in the
event this Agreement is breached, declared void or otherwise is rendered
invalid.
K. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the Tribe and Lien,
and all understandings and agreements heretofore had between them are merged
into this Agreement.
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L. MANAGEMENT OF THE AGREEMENT AND NOTICES.
Each party shall designate one individual responsible for the
administration of this Agreement to be contacted by the other party in
reference to all matters concerning this Agreement. All notices, payments,
reports, documents, or other information required by this Agreement shall be
delivered to the designated individuals either in person, by telefax, or
through the United States Mail. All notices other than notices of a change in
the designated individual and address will be effective when received, unless
mailed, in which case, the notice will be effective five days after deposit in
the United States Mail, correctly addressed to the designated individual at the
address indicated below. Either party may change the designated individual,
address, or telephone number by providing the other party with a written notice
of the change. The change of a designated individual or address is effective
only when received by the other party. The parties make the following
designations to be effective with this Agreement:
For the Tribe:
Hon. Russell D. Mason, Sr.
Chairman of the Three Affiliated Tribes
Box HC3
New Town, ND 58763-9402
For Lien:
Jerry L. Baum
President of the Bruce R. Lien Company
3290 Lien Street
Rapid City, South Dakota 57702
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M. WARRANTIES OF AUTHORITY AND OPINIONS OF COUNSEL.
The Tribe and Lien warrant that the signatures of the individuals
signing this Agreement are sufficient to bind the Tribe and Lien to the terms
of this Agreement, and that no further approval or signature is necessary to
render this Agreement a binding document on the Tribe and Lien. Three
Affiliated Tribes' Tribal Business Council Resolution No. 96-196-DSB,
specifically authorizing the Honorable Russell D. Mason, Sr. to execute this
Agreement on behalf of the Tribe, is attached as Exhibit 22. The Corporate
Resolution of the Board of Directors of the Bruce E. Lien Company, specifically
authorizing Mr. Jerry L. Baum to execute this Agreement on behalf of Lien, are
attached as Exhibit 23.
Counsel for each party shall provide a written opinion stating that the
individual executing this Agreement on behalf of a respective party has full
power and authority to execute and deliver this Agreement; that such respective
party has full power and authority to carry out the terms of this Agreement;
and, that upon execution and delivery, this Agreement shall constitute a lawful
and binding agreement upon the parties hereto, subject to the appropriate
approval, if such approval is necessary, of the National Indian Gaming
Commission and Secretary of Interior or his designee.
N. CONDITIONS PRECEDENT.
The parties understand approval of this Agreement from the National
Indian Gaming Commission may be a requirement of the Indian Gaming Regulatory
Act of 1988, 25 U.S.C. 2701 et seq., and that certain approvals may be required
from the Secretary of the Interior or the Secretary's designee, and hereby
agree that receipt of such approvals, if they are required, is a condition
precedent to this Agreement becoming a binding legal document, enforceable
against the Tribe or Lien, and that prior
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<PAGE> 24
to the receipt of such approval neither party will have a legal duty to perform
hereunder, but that both parties shall proceed in good faith as though this
Agreement had already received the requisite approvals. The parties further
agree that if such approvals, if they are required, are not received by April
30, 1997, both the Tribe and Lien shall be released from all duty to perform
hereunder and may declare this Agreement void.
V.
APPROVAL OF SETTLEMENT AGREEMENT
In accordance with Article III, Section 1, Article VI, Section 1, and
Article VI, Section 3 of the Constitution of the Three Affiliated Tribes, and
Three Affiliated Tribes' Tribal Business Council Resolution No. 96-196-DSB, the
Three Affiliated Tribes, by and through its Chairman, the Honorable Russell D.
Mason, Sr., does herewith approve the foregoing Agreement:
/s/ Russell D. Mason, Sr.
-----------------------------------
Russell D. Mason, Sr.
Chairman, Three Affiliated Tribes
In Accordance with Article IV, Section 2 of the Corporate Bylaws of the
Bruce H. Lien Company, and the express delegation of authority evidenced
by the Corporate Resolution of the Bruce H. Lien Company dated September
12, 1996, by and through its President, Mr. Jerry L. Baum, does
herewith approve the foregoing Agreement,
/s/ Jerry L. Baum
-----------------------------------
Jerry L. Baum
President, Bruce H. Lien Company
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EXHIBIT 20
Press Release dated September 30, 1996
announcing signing of Settlement Agreement
<PAGE> 2
FOR IMMEDIATE RELEASE Contact: Jerry Baum, President and COO
or
David L. Crabb, CFO
at
(605) 341-7738
September 30, 1996
(Rapid City, SD) Concorde Gaming Corporation (OTC:CGAM) today announced
that its wholly-owned subsidiary, Bruce H. Lien company, and the Three
Affiliated Tribes (the "Tribe") have entered into a settlement agreement to
resolve disputes arising out of the parties' management contract. The
settlement agreement provides for the termination of the management contract
upon the Tribe's payment of $8.65 million by April 30, 1997. The agreement
also requires the dismissal of all litigation between the parties on the
closing date. The closing of this transaction is contingent upon the Tribe's
ability to obtain financing, and may be subject to approval by the National
Indian Gaming Commission and/or the Secretary of the Interior. Upon receipt of
the $8.65 million, the Company will relinquish to the Tribe control of the 4
Bears Casino & Lodge, a class III gaming facility located on the Fort Berthold
Reservation, near New Town, North Dakota. The Company will continue to manage
the 4 Bears Casino & Lodge, and receive monthly distributions, until the $8.65
million has been paid in full.
"After lengthy negotiations the parties have resolved their disputes by
agreeing to a buyout." said Jerry L. Baum, President. "I believe the terms of
this agreement create a win-win situation for both parties. This settlement
will transfer management of the 4 Bears Casino & Lodge to the Tribe, while
providing equitable compensation to the Company for its development and
management of the 4 Bears project. This agreement will also eliminate the
legal uncertainty that has plagued the Company since we initiated arbitration
proceedings against the Tribe almost two years ago. More importantly, a
successful closing of this agreement will provide approximately $5 million of
available capital, after repayment of certain debts related to the management
agreement, which will enable the Company to actively pursue other gaming
opportunities."
As part of its efforts to receive licensing in Missouri, the Company
recently presented to the Missouri Gaming Commission its market-share analysis
of its proposed riverboat project in Lexington, Missouri. Last week, the
Commission conducted a public hearing in Jefferson City, Missouri to receive
testimony concerning the issuance of new riverboat licenses. The Company was
one of nine gaming companies to present to the Commission an analysis of what
effect its proposed project will have on the Missouri gaming market. Lexington
is a rural community of 4,800 located approximately 40 miles east of Kansas
City, Missouri. If licensed, the Company will proceed with developing an
estimated $17 million riverboat project in Lexington. The Commission is
expected to make a decision on whether to issue any new licenses in November of
this year.
