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): August 28, 1995
FLORIDA GAMING CORPORATION
(Exact name of registrant as specified in charter)
Delaware 0-9099 59-1670533
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1750 South Kings Highway
Fort Pierce, Florida 34945-3099
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (407) 464-7500
(Former name or former address,
if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
As reported in the press release issued August 28, 1995
(attached as Exhibit 99.1), Florida Gaming Corporation (the
"Registrant") announced that it had entered into a Management
Agreement with the Ponca Tribe of Nebraska providing that the
Company would provide financing, develop, construct and manage
a casino for the Tribe as authorized by the Indian Gaming Regulatory
Act, to be located in the Omaha, Nebraska area. Under the Agreement,
the Company would receive 30% of the net revenues from gaming for
five years, beginning upon the commencement of gaming operations.
The Agreement is subject to approval by the National Indian Gaming
Commission, the acquisition of land that can be taken in trust
under the Indian Gaming Regulatory Act as the site for the facility,
the execution of definitive financing agreements, and certain other
conditions. There can be no assurance these events will occur.
Under the Act, certain gaming activities are also subject to the
negotiations of a compact between the Ponca Tribe and the State of
Nebraska.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit 10.1 -- Management Agreement dated August 28,
1995, among Ponca Tribe of Nebraska and Ponca Management,
Inc., a wholly owned subsidiary of Florida Gaming Corporation
Exhibit 99.1 -- Press Release dated August 28, 1995.
SIGNATURE
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.
FLORIDA GAMING CORPORATION
By /s/ Timothy L. Hensley
Timothy L. Hensley
Executive Vice President, Treasurer
and Chief Financial Officer
Date: August 31, 1995
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made and
entered into this 28th day of August, 1995, by and between the PONCA
TRIBE OF NEBRASKA, a federally recognized Indian tribe("TRIBE"),
and PONCA MANAGEMENT, INC., a Delaware corporation ("MANAGER"),
which is a wholly owned subsidiary of FLORIDA GAMING CORPORATION,
a Delaware corporation.
RECITALS
A. TRIBE is a federally recognized Indian tribe pursuant to
the Ponca Restoration Act, 104 Stat. 1167 (October 31, 1990).
B. TRIBE desires to engage in Class II and Class III gaming
as authorized by the Indian Gaming Regulatory Act of 1988, 25
U.S.C. Sections 2701-2721 (hereafter "IGRA") and the regulations
promulgated thereunder, to acquire beneficial ownership of land in
Douglas County, Nebraska, and to construct, own and operate a Class
II and Class III gaming facility thereon.
C. TRIBE requires the financial assistance to acquire real
estate as a site for, and to develop, construct, manage, operate
and maintain Class II and Class III gaming facilities on lands
subject to the jurisdiction of TRIBE so as to increase TRIBE'S
revenues and to fund Tribal government operations and programs,
including, but not limited to programs that provide for the general
welfare and self sufficiency of the Tribe and its citizens, promote
Tribal economic development, and provide employment and training
opportunities for Tribal citizens, Indians generally, and persons
who reside in the surrounding communities.
D. TRIBE desires to engage MANAGER to finance, construct,
improve, manage, operate and maintain Class II and Class III gaming
facilities as described below on an exclusive basis, in conformance
with the terms and conditions of this Agreement.
E. TRIBE, in the exercise of its governmental powers, has
enacted an ordinance and otherwise authorized the conduct of gaming
pursuant to IGRA and the compact as defined below, under the
auspices of TRIBE, which Ordinance has been approved by the
Chairman of the Commission.
F. MANAGER desires to perform the above-described functions
as exclusive manager (without a proprietary interest) of TRIBE for
such purposes.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby covenant and agree as
follows:
SECTION 1. DEFINITIONS
In addition to any other terms and phrases defined herein, the
following terms used in this Agreement shall have the definitions
set forth below:
1.1 CAPITAL ITEM. "Capital Item" means any property, plant,
or equipment necessary and proper for the operation of the Tribal
Gaming Operation with a cost of One Thousand Dollars ($1,000) or
more and a useful life of more than one year.
1.2 CHAIRMAN. "Chairman" means the Chairman of the National
Indian Gaming Commission.
1.3 CLASS II GAMING. "Class II Gaming" means games of chance
which meet the definition of "Class II gaming" contained in IGRA,
specifically 25 U.S.C. Section 2703(7), including without limitation the
games defined as Class II gaming in 25 C.F.R. Section 502.3.
1.4 CLASS III GAMING. "Class III Gaming" means games of
chance which meet the definition of "Class III gaming" contained in
IGRA, specifically 25 U.S.C. Section 2703(8), including without limita-
tion the games defined as Class III gaming in 25 C.F.R. Section 502.4.
1.5 CLOSING DATE. "Closing Date" means the date of any
closing for the disbursement of the proceeds of the Development
Loan, as provided in the Development Loan Agreements.
1.6 COMMISSION. "Commission" as used herein refers to the
National Indian Gaming Commission established by IGRA.
1.7 COMPACT. The "Compact" shall mean the Tribal-State
Compact to be negotiated by and between TRIBE and the State of
Nebraska pursuant to 25 U.S.C. Section 2710(d) relating to the conduct
of Class III Gaming activities.
1.8 CONCESSIONS. "Concessions" means any lodging,
entertainment, restaurant, retail space, snack bar, stand,
facility, station, area or any and all other non-gaming activities
operated as part of the Tribal Gaming Operation having the
exclusive authority to sell soft drinks, candies, alcoholic
beverages, foods and related items or to provide non-gaming
services on the Site. Concessions shall not include the sale of
souvenirs, tobacco products and motor fuels, which TRIBE shall have
exclusive authority to sell on the Site.
1.9 DEVELOPMENT EXPENSES. "Development Expenses" means the
Land, Construction and Equipment Expenses and Start-up Expenses set
forth in the Development Budget to be approved by TRIBE and MANAGER
as provided in Section 6.1(B) of this Agreement.
1.10 DEVELOPMENT LOAN. "Development Loan" means debt incurred
by TRIBE to finance Development Expenses and Initial Working
Capital of the Tribal Gaming Operation.
1.11 DEVELOPMENT LOAN AGREEMENTS. "Development Loan
Agreements" shall mean the loan agreement, security agreement,
promissory note, and other agreements and instruments evidencing
and relating to the Development Loan.
1.12 DISTRIBUTABLE NET REVENUES. "Distributable Net Revenues"
means the total monies remaining from monthly Net Revenues after
deducting the Operating Reserve and the Minimum Balance.
1.13 EFFECTIVE DATE. "Effective Date" means the date of the
approval of this Agreement by the Chairman of the Commission.
1.14 ELECTED OFFICIAL. "Elected Official of TRIBE" for
purposes of this Agreement, shall mean all officials of TRIBE
elected by the tribal membership, or appointed or selected by the
Tribal Council.
1.15 FACILITY. "Facility" shall mean the "permanent" facility
as described in Sections 4.1 and 6.2 herein in which Class II and
Class III Gaming will be conducted pursuant to this Agreement.
1.16 GAMING. "Gaming" means all forms of Class II Gaming that
are legal in the State of Nebraska and all forms of Class III
Gaming which TRIBE has or will have authority to conduct pursuant
to the Compact, any amendments or modifications thereof or any
other compacts or agreements which may be negotiated between TRIBE
and the State of Nebraska under IGRA.
1.17 GENERAL MANAGER. The "General Manager" shall be that
person hired as an employee of Tribal Gaming Operation pursuant to
Section 7.1(A) herein to be responsible for the day-to-day
operations of the Tribal Gaming Operation.
1.18 GROSS RECEIPTS. "Gross Receipts" means all income,
including money and any other things of value, received by or paid
to the Tribal Gaming Operation from business done, sales made, or
services rendered by the Tribal Gaming Operation as determined in
accordance with generally accepted accounting principles, including
but not limited to, revenue from all gaming operations and
Concessions, including sale of tickets or rights in any manner
connected with the participation in any gaming activity or the
right to participate therein, any admission fees, rental fees, or
other charges for participation in any gaming activities, revenues
from the sale of food, beverages, and other goods (other than
souvenirs, tobacco products and motor fuels), interest earned on
deposits, payment of any sums to the Tribal Gaming Operation from
any concessionaire or subcontractor, and receipts from any and all
other commercial activities conducted within the Facility.
1.19 INITIAL WORKING CAPITAL. "Initial Working Capital" means
the portion of the Development Loan used to fund the Tribal Gaming
Operations' initial working capital needs as set forth in the
Development Budget to be approved by TRIBE and MANAGER as provided
in Section 6.1(B) of this Agreement. The Initial Working Capital
shall at all times remain the property of the Tribal Gaming
Operation and shall be deposited into the Daily Expense Account
established pursuant to Section 8.3 of this Agreement.
1.20 KEY EMPLOYEE. "Key Employee" means:
(A) A person employed by the Tribal Gaming Operation
who performs one or more of the following
functions:
(1) Bingo callers, floor supervisors, etc.;
(2) Counting room supervisor;
(3) Chief of security;
(4) Custodian of gaming supplies or cash;
(5) Floor manager;
(6) Pit boss; and
(7) Custodian of gambling devices including
persons with access to cash and accounting
records within such devices;
(B) If not otherwise included, any other person
employed by the Tribal Gaming Operation whose total
cash compensation is in excess of Fifty Thousand
Dollars ($50,000) per year; or
(C) If not otherwise included, the four most highly
compensated persons employed by the Tribal Gaming
Operation.
1.21 LAND, CONSTRUCTION AND EQUIPMENT EXPENSES. "Land,
Construction and Equipment Expenses" means all costs incurred by
the Tribal Gaming Operation to acquire land for the Site of the
Tribal Gaming Operation, and to construct, supply, and equip the
Facility and ancillary facilities, including parking lots, utility
services, gaming and office equipment, signage, surveillance
equipment, gift shop and restaurant equipment, landscaping, and
other costs set forth as "Land, Construction and Development
Expenses" in the Development Budget to be approved by TRIBE and
MANAGER as provided in Section 6.1(B) of this Agreement.
1.22 MANAGEMENT FEE. "Management Fee" means the compensation
paid by TRIBE to Manager pursuant to Section 8.9(A) of this
Agreement.
1.23 MINI-GAMES. "Mini-Games" means Class II Gaming commonly
known as bingo, including pulltabs and floor games, played at a
rapid pace at intermission and immediately preceding or following
the Session.
1.24 MINIMUM BALANCE. "Minimum Balance" means such amount
recommended by MANAGER for working capital for the Tribal Gaming
Operation after distributions of Distributable Net Revenues
pursuant to Section 8.9.
1.25 MINIMUM GUARANTEED PAYMENT. "Minimum Guaranteed
Payment" means a minimum distribution to TRIBE of $10,000 per
month for Class II Gaming and an additional $25,000 per month for
Class III Gaming that shall be guaranteed by MANAGER as provided in
Section 8.9(C) of this Agreement.
1.26 NET REVENUES. "Net Revenues" means the total monies
remaining from monthly Gross Receipts following the payment and/or
accrual of related Operating Expenses, all as determined in
accordance with generally accepted accounting principles.
1.27 OPERATING EXPENSES. "Operating Expenses" means all
expenses reasonably necessary or expedient for the operation of the
Tribal Gaming Operation determined in accordance with generally
accepted accounting principles, including, without limitation, the
following: salaries, wages, payroll taxes, and benefits to
employees; materials, supplies, cost of goods sold, cost of
noncapital equipment, equipment lease payments, and interest on the
Development Loan and on any subsequent business loans, installment
contracts, or other indebtedness; depreciation and amortization
expenses on assets of the Tribal Gaming Operation, including those
purchased with the Development Loan; utilities, including all costs
of providing sewage treatment for the Facility; repairs and
maintenance; insurance, legal, and accounting fees and expenses
(including reasonable expenses for legal and accounting services
performed in-house by the staff of the MANAGER), and other
professional services fees and expenses; Tribal Gaming Commission
assessments to cover expenses directly related to the oversight of
the Tribal Gaming Operation not to exceed the maximum annual rate
of such assessment set forth in the Ordinance; trash removal;
advertising, marketing and promotional expenses; security and
surveillance, reasonable inspection and licensing fees charged by
regulatory authorities under the Compact and under federal or
tribal law; any payments to state and local government as may be
required by the Compact or any Class II Gaming fee payable to the
Commission pursuant to 25 U.S.C. Section 2717 and 25 C.F.R. Section
514.1; and such other costs and expenses as are designated as such
in the approved budget, as described herein, or as are otherwise
approved by the Tribal Gaming Commission and the MANAGER. Operating
Expenses shall not include the Management Fee.
1.28 OPERATING RESERVE. "Operating Reserve" means an amount
equal to the greater of (a) an amount agreed upon by TRIBE and
Manager, or (b) 2% of Net Revenues to be retained in the Tribal
Gaming Operation for the purpose of making improvements and repairs
and purchasing necessary Capital Items that are not considered
Operating Expenses under generally accepted accounting principles.
The Operating Reserve shall be reported on all financial statements
as a reserve from retained earnings or under another caption in
accordance with generally accepted accounting principles. Changes
to the Operating Reserve require approval of the TRIBE and the
MANAGER. Thirty percent (30%) of the amount of the Operating
Reserve will be distributed to MANAGER at the expiration of the
term of this Agreement.
1.29 OPERATION. "Operation" means any business of TRIBE that
operates Class II or Class III Gaming and the non-gaming operations
directly related to such gaming business, including all hotel,
resort, sports, Concessions and gaming support operations.
"Operation" shall not include the sale of souvenirs, tobacco
products, or motor fuels by TRIBE.
1.30 ORDINANCE. "Ordinance" means the laws passed by TRIBE to
regulate Class II and Class III Gaming, which are attached hereto
as Exhibit B.
1.31 PERSONS HAVING A DIRECT OR INDIRECT FINANCIAL INTEREST IN
THIS AGREEMENT. "Persons having a direct or indirect financial
interest in this Agreement" means the directors of MANAGER and
shareholders holding, directly or indirectly, applying the
attribution rules of Section 318 of the Internal Revenue Code, ten
percent (10%) of or more, directly or indirectly, of the issued and
outstanding stock of MANAGER ("Parties-in-Interest"), and their
respective interests therein, as well as that information required
by 25 U.S.C. Section 2711(a)(1)(A), (B), and (C), are set forth in
Exhibit A attached hereto.
1.32 PRIMARY MANAGEMENT OFFICIAL. "Primary Management
Official" means:
(A) The Person having management responsibility for
this Agreement, including the General Manager;
(B) Any person who has authority:
(1) To hire and fire employees; or
(2) To set up working policy for the gaming
operations; or
(C) The chief financial officer or other person who has
financial management responsibility.
1.33 PROJECT. "Project" means the process of planning,
developing, constructing and equipping any Facility or Operation.
1.34 RELATIVE. "Relative" means an individual who is related
as a father, mother, son, daughter, brother, sister, husband or
wife.
1.35 SECRETARY. "Secretary" means the Secretary of the
Interior or his designee.
1.36 SESSION. "Session" means a series of bingo games
conducted during which time the purchaser of a set of bingo cards
is an eligible participant, including any series of single card
bingo games conducted at intermission and immediately preceding or
following the Session.
1.37 SITE. "Site" shall mean that tract of land upon which
the Facility will be located and which location shall be mutually
agreed to by MANAGER and TRIBE.
1.38 START-UP EXPENSES. "Start-up Expenses" means all
expenses necessary to prepare for the commencement of business
operations set forth as "Start-up Expenses" in the Development
Budget to be approved by TRIBE and MANAGER as provided in Section
6.1(B) of this Agreement to be financed by the Development Loan.
Start-up Expenses shall be properly substantiated by books and
records and such other documentation satisfactory to the parties
and shall be limited to amounts approved by the TRIBE and the
MANAGER. Start-up Expenses shall include all reasonable costs
incurred for pre-opening planning of the Facility, including
feasibility studies, architectural design of the Facility,
engineering costs, contract building inspection services, salaries
and fringe benefits of tribal employees to the extent their
services were directly relating to casino planning and development,
legal costs, licensing and certification fees for the Tribal Gaming
Operation, including licensing and certification of Tribal Gaming
Operation staff, staff training, and pre-opening Tribal Gaming
Operation staff salaries, wages and benefits, development and
production of operating manuals, pre-opening advertising and
promotion, facilities rentals related to staff training, out-of-pocket
costs for travel and incidental office expenses, and other
reasonable and necessary pre-opening start-up expenses agreed to by
the parties. Start-up Expenses shall also include the necessary
pre-opening costs incurred by MANAGER after the date the parties
enter into this Agreement, including salaries, benefits and travel
expenses of MANAGER's agents and employees, and the cost of
obtaining necessary certification and licensing of MANAGER as
required under the IGRA and the Compact.
1.39 SUBCONTRACT. "Subcontract" means any contractual
arrangement between MANAGER and a third party wherein the third
party is to provide non-gaming services related to the operation of
the Tribal Gaming Operation.
1.40 TRIBAL COUNCIL. "Tribal Council" means the Tribal
Council of TRIBE, which is the governing body of TRIBE as
recognized by the United States.
1.41 TRIBAL GAMING COMMISSION. "Tribal Gaming Commission"
means the commission established by the Tribal Council pursuant to
the Ordinance to regulate Class II and Class III Gaming within the
jurisdiction of TRIBE.
1.42 TRIBAL GAMING OPERATION. "Tribal Gaming Operation" means
the Class II and Class III Gaming Enterprise, including without
limitation Concessions and any and all gaming and non-gaming
related activities, which will be owned by TRIBE and operated by
MANAGER pursuant to the terms and conditions of this Agreement.
SECTION 2. PARTIES
2.1 TRIBE. TRIBE is the PONCA TRIBE OF NEBRASKA, a federally
recognized Indian tribe. TRIBE, in the exercise of its governmental
powers, authorizes and regulates Class II and Class III Gaming in
accordance with the Ordinance, Compact and IGRA.
2.2 MANAGER. MANAGER is Ponca Management, Inc., a Delaware
corporation and wholly owned subsidiary of Florida Gaming
Corporation, a Delaware corporation.
2.3 SOLE PROPRIETARY INTEREST BY TRIBE. TRIBE shall have
sole proprietary interest and responsibility for conduct of any
gaming activity. Regardless of the fact that the terms for
disbursement of profits are on a percentage basis, TRIBE and
MANAGER are not in partnership.
2.4 COMMUNICATIONS BETWEEN PARTIES. The parties hereto agree
that full and frequent communications between MANAGER and TRIBE are
essential to the proper operation of the Tribal Gaming Operation.
Therefore, MANAGER and a designated representative of the Tribal
Gaming Commission shall meet as often as is necessary, but not less
frequently than weekly during the term of this Agreement, to
discuss matters of mutual concern and interest. MANAGER shall
communicate with TRIBE exclusively through the designated
representatives of the Tribal Gaming Commission in order to
facilitate operations hereunder and avoid the appearance of any
interference in TRIBE's government or affairs, with the following
exceptions:
(A) when the Tribal Council and/or the Tribal Gaming
Commission requests in writing such communications
in order to perform its functions as set forth by
the Ordinance or Compact;
(B) when communications by attorneys for the Tribal
Gaming Operation, TRIBE and MANAGER are necessary;
(C) when TRIBE authorizes communications with another
agent of TRIBE; or
(D) when the Tribal Council and/or the Tribal Gaming
Commission requests in writing that a principal or
an agent of MANAGER report directly to the Tribal
Council or appear before that body for a specified
purpose.
2.5 TRIBAL APPROVAL. Any approval, consent or authorization
of TRIBE required by any term or condition of this Agreement herein
shall be accomplished by either of the following two methods:
(A) delivery to MANAGER of a resolution or other action
duly enacted by the Tribal Council setting forth
the terms of such approval or authorization; or
(B) delivery to MANAGER of a written approval signed by
a person to whom the Tribal Council has delegated
such approval authority, along with the resolution
or other action of the Tribal Council authorizing
such delegation.
2.6 EXCLUSIVE RIGHT OF MANAGER. During the term of this
Agreement and any and all extensions thereof, neither TRIBE nor any
agent or member of TRIBE shall operate any gaming-related Project,
Operation, Facility or Enterprise or shall negotiate with respect
to or enter into any other management agreements or agreements of
any kind related to any gaming-related Project, Operation, Facility
or Enterprise with any person or entity other than the MANAGER
within the following Nebraska counties: Valley, Greeley, Nance,
Platte, Colfax, Dodge, Washington, Douglas, Saunders, Butler, Polk,
Merrick, Howard, Sherman, Buffalo, Hall, Hamilton, York, Seward,
Sarpy, Cass, Otoe, Lancaster, Saline, Fillmore, Clay, Adams,
Kearney, Franklin, Webster, Nuckolls, Thayer, Jefferson, Gage,
Johnson, Nemaha, Richardson and Pawnee. MANAGER agrees that TRIBE
shall have the right to operate Gaming Operations in any other
county of Nebraska, provided that TRIBE shall not enter into any
contract for, seek approval of, develop, construct, or operate any
such Gaming Operation until the Tribal Gaming Operation has
commenced operations on the Site.
2.7 COVENANT OF MANAGER. During the term of this Agreement
and any and all extensions thereof, neither MANAGER nor any
affiliate of MANAGER shall enter into any contract for, nor take
any other action to plan, seek approval of, develop, construct, or
operate a tribal gaming operation within the State of Nebraska
other than with TRIBE.
SECTION 3. PURPOSE: COVENANTS AND AGREEMENTS OF TRIBE
3.1 OPERATION OF CLASS II AND CLASS III TRIBAL GAMING
OPERATION; SITE. The purpose of this Agreement is to provide for
the management and operation of a Class II and Class III tribal
gaming operation, with such name as may be agreed to in writing by
MANAGER and TRIBE, to be located on the Site. The Tribal Gaming
Operation shall operate on the Site during the term of this
Agreement. Upon the selection by TRIBE and MANAGER of the land
constituting the Site as provided in Section 6.1(A), TRIBE shall
immediately commence and use its best efforts to pursue, with the
cooperation of MANAGER, the affirmation or recognition of such land
as trust land by the United States for the benefit of TRIBE
pursuant to 25 C.F.R. Part 151, for the purpose of Class II and/or
Class III Gaming.
3.2 OPERATIONS TO COMPLY WITH FEDERAL LAW, THE ORDINANCE AND
THE COMPACT. TRIBE shall, in the operation of the Tribal Gaming
Operation, promote the public order, peace, safety and welfare of
all persons coming within the jurisdiction of TRIBE to provide a
safe and wholesome means of recreational activity in a community
setting and to provide a source of revenue for the operations,
programs and departments of the government of TRIBE. This
Agreement shall be subject to the requirements of IGRA, the
Ordinance and the Compact.
3.3 COMPACT. TRIBE shall use its available technical
expertise to cause the execution of the Compact for Class III
Gaming with the State of Nebraska by the Governor of the State of
Nebraska and a majority of the Tribal Council of the Tribe and
shall use its available technical expertise to cause the Compact to
be approved by the Secretary pursuant to 25 U.S.C. Section 2710(d)(8).
3.4 LICENSING. MANAGER shall have the reasonable opportunity
to review any and all licensing statutes and regulations, and any
and all amendments thereto, and to provide comments to TRIBE prior
to the passage thereof. TRIBE and MANAGER agree that the adoption
of licensing statutes and regulations shall be at the discretion of
TRIBE, provided all such statutes and regulations shall be
reasonable and consistent with NIGC gaming standards.
3.5 NO LICENSING FEE, TAXES AND IMPOSITIONS ON MANAGER.
Notwithstanding any other provision contained herein, TRIBE hereby
expressly covenants, agrees, represents and warrants that at any
time prior to the valid termination of this Agreement, including
without limitation the time of negotiation, construction, or
operation of this Project, neither TRIBE, nor the Tribal Gaming
Commission, nor any other tribal agency shall levy, impose or
charge any taxes, duties, licensing or registration fees, transfer
or assignment fees, or any other fees or impositions of any sort to
or upon MANAGER, the Tribal Gaming Operation, or any Facility,
Site, Project or Operation directly or indirectly related to the
Tribal Gaming Operation (collectively, the "Enterprise"), or any
officers, directors, shareholders, partners, affiliates, employees,
or independent contractors, agents or vendors of MANAGER or the
Tribal Gaming Operation, except for (i) Tribal Gaming Commission
assessments (which shall be Operating Expenses), and (ii)
reasonable licensing or registration fees on employees and vendors
of the Tribal Gaming Operation, consistent with NIGC gaming
standards. The assessments and fees provided in (i) and (ii) above
will be for the sole purpose of covering expenses of the Tribal
Gaming Commission in connection with the oversight of the Tribal
Gaming Operation and will be in amounts not to exceed actual costs
incured therein. TRIBE, the Tribal Gaming Commission or any other
tribal agency shall not, at any time, pass any law, rule, or
regulation that shall adversely affect the Enterprise, directly or
indirectly, including any activity or action directly or indirectly
related to the Enterprise. The terms and conditions contained in
this Section shall survive any termination of this Agreement.
SECTION 4. SCOPE OF TRIBAL GAMING OPERATION.
4.1 FACILITY. TRIBE and MANAGER hereby covenant and agree
that the Facility shall contain a minimum of 20,000 square feet of
space for gaming operations, plus such additional space for
sanitary facilities, office space, Concessions and "back-of-house"
support areas as may be contained in plans approved by the TRIBE
and the MANAGER, as well as provide sufficient parking on Site.
4.2 ECONOMIC DEVELOPMENT AGREEMENT. In conjunction with any
expansion of the Facility, MANAGER shall have the exclusive right
of first refusal to negotiate an "Economic Development Agreement"
with TRIBE that shall cover the various non-gaming aspects
(including without limitation hotel, restaurant and resort
facilities) of any Operation contemplated by TRIBE and MANAGER
located on the Site.
4.3 FUTURE COMPACTS; GAMING ACTIVITIES. If TRIBE and the
State of Nebraska enter into any amendments of or modifications of
any sort to the Compact, or any other compact or agreement
permitting the operation of any additional gaming activities not
included in the Compact as originally enacted (including without
limitation slot machines and electronic gaming devices) on lands
subject to the jurisdiction of TRIBE, then MANAGER shall have the
right of first refusal to develop, operate and maintain such gaming
activities in the Nebraska counties listed in Section 2.6 pursuant
to the terms and conditions of this Agreement, and the Ordinance
and Compact then in effect.
SECTION 5. MANAGER'S TERM AND SCOPE OF AUTHORITY
5.1 TERM. TRIBE hereby retains and engages MANAGER for a
term of five (5) years commencing on the date the Tribal Gaming
Operation is open for business to the public in a permanent
Facility, to manage, administer and operate all Class II and Class
III Gaming of the Tribal Gaming Operation. TRIBE and MANAGER shall
jointly certify in writing the date the Tribal Gaming Operation is
open for business, and such writing shall by reference become a
part of this Agreement.
5.2 EXPIRATION OF TERM. Nine months before the expiration of
the term of this Agreement, TRIBE shall provide MANAGER with
written notice duly authorized by the Tribal Council as to whether
TRIBE plans to assume full or partial management responsibility
over the Tribal Gaming Operation utilizing a salaried manager, or
whether TRIBE plans to contract for the management of the Tribal
Gaming Operation, with MANAGER to receive a percentage of the Net
Revenues or Distributable Net Revenues. If TRIBE plans to contract
for full or partial management of the Tribal Gaming Operation on
the basis of a percentage of the Net Revenues or Distributable Net
Revenues, MANAGER shall have the right, but not the obligation, to
submit its proposal to TRIBE.
5.3 TRIBE'S OPTION TO NEGOTIATE ADDITIONAL TERM. At the
beginning of the final year of the term of this Agreement, TRIBE
shall have the option, at its sole discretion, of offering MANAGER
the exclusive right to negotiate a management contract for an
additional three-year term, and shall notify MANAGER whether it
chooses to do so; provided, that if TRIBE so elects to negotiate
exclusively with MANAGER, and the parties are unable to reach
agreement on terms and conditions that are mutually acceptable at
least six months before the expiration of this Agreement, TRIBE
shall not be precluded from commencing negotiations with other
potential management contractors.
5.4 MANAGER'S RESPONSIBILITIES. All of the day-to-day
operations of the Tribal Gaming Operation shall be under the
exclusive control of MANAGER, subject to all requirements of IGRA,
the Ordinance and the Compact. TRIBE hereby grants and delegates
to MANAGER the necessary power and authority to act in order to
fulfill its responsibilities pursuant to this Agreement, including
the authority to construct, manage, administer, operate, maintain
and improve the gaming facilities for the conduct of Class II and
Class III Gaming on the Site, as well as such other activities as
are reasonably related thereto. MANAGER hereby accepts such
obligations. MANAGER is hereby assigned the specific
responsibility to establish operating days and hours and shall have
the right to operate the Tribal Gaming Operation on the Site
twenty-four (24) hours per day on every day of the year. MANAGER
shall use reasonable measures for the orderly management and
operation of the Tribal Gaming Operation, including cleaning, and
such repair and maintenance work as is necessary; provided that all
maintenance expenses shall be in accordance with MANAGER'S annual
operating budget. As a further description of MANAGER'S duties and
obligations hereunder and not in limitation of the same, MANAGER
shall have the duty and responsibility to:
(A) Collect, receive, and receipt, for all gross sales,
revenues, and/or rentals that become due and
payable and collected in connection with and/or
arising from the operation and management of the
Tribal Gaming Operation, and shall deduct from such
gross amounts expenses hereinafter provided; and
(B) pay all sums that MANAGER deems necessary or proper
for the maintenance and operation of the building
and facilities, including water, insurance, heat,
light, payrolls, repairs, and the like; pay all
charges which become due and payable on Tribal
Gaming Operation pursuant to the terms and condi-
tions of this Agreement, or as may be determined by
MANAGER; and pay such amounts as may be necessary
or appropriate for Capital Items to the Tribal
Gaming Operation pursuant to this Agreement.
SECTION 6. LAND, CONSTRUCTION, FINANCING
AND USE OF GAMING FACILITY
6.1 SITE; DEVELOPMENT BUDGET, FINANCING.
(A) Site. MANAGER and the TRIBE shall cooperate to
identify, select and enter into appropriate
agreements for the acquisition of land suitable as
the Site of the Tribal Gaming Operation, which
shall be placed in trust with the Secretary of
Interior for the benefit of the TRIBE. The parties
shall fully cooperate in obtaining all permits and
approvals needed to construct the Facility on the
Site and to operate the gaming activities thereon.
(B) Development Expenses. MANAGER and the TRIBE
shall prepare and approve a Development Budget
identifying and quantifying in reasonable detail
the Development Expenses. Payment of the
Development Expenses will be financed from the
proceeds of the Developmental Loan as provided in
Section 6.1(C) of this Agreement. The approved
Development Budget may be amended only with the
written consent of the TRIBE and the MANAGER.
(C) Development Loan. MANAGER agrees to provide
financing for Development Expenses and Initial
Working Capital for the Tribal Gaming Operation
through the Development Loan to TRIBE in a
principal amount not to exceed Fifty Million
Dollars ($50,000,000) on substantially the terms
and conditions set forth below; provided, however,
that MANAGER's obligation to provide financing
shall be conditioned on the negotiation and
execution of the definitive Development Loan
Agreements incorporating the terms and conditions
set forth below and in Section 9.11 and containing
certain representations and warranties and other
provisions customary for a commercial financing
transaction, and the approval of the Development
Loan Agreements by the Chairman of the Commission.
(1) Interest. The outstanding principal balance
of the Development Loan shall bear interest at
an annual rate equal to the "prime rate," as
published in the Midwest edition of The Wall
Street Journal on the first business day of
each calendar quarter, plus two percent (2%),
and shall be adjusted quarterly.
(2) Development Loan Payments. The Tribal Gaming
Operation shall, on behalf of the TRIBE, make
the monthly payments on the Development Loan
during the term of this Agreement as provided
in Section 8.9(B). Interest on the
Development Loan and depreciation of assets
acquired with the proceeds of the Development
Loan shall be Operating Expenses of the Tribal
Gaming Operation.
(3) Security. The Development Loan will be
secured by a first priority security interest
in all assets, accounts, and revenues of the
Tribal Gaming Operation and its gaming and
other enterprises on Site except for land and
other real property. TRIBE shall not pledge,
encumber, or grant a security interest in any
assets, accounts and revenues of the Tribal
Gaming Operation in connection with any
indebtedness other than the Development Loan
without the prior written consent of MANAGER.
TRIBE agrees to subordinate its interest in
the Tribal Gaming Operation to the interest of
any lender providing financing to MANAGER and
TRIBE for the Development Loan, subject to
payment of the Minimum Guaranteed Payment as
provided in Section 8.9(c).
6.2 CONSTRUCTION OF FACILITIES. TRIBE hereby grants MANAGER
the authority to supervise the construction of all the development,
improvements, and related activities with regard to the Tribal
Gaming Operation as set forth below:
(A) Facility. Within thirty (30) days after the last
to occur of (a) the Effective Date, (b) written
approval of the Development Loan Agreements by the
Chairman, (c) approval of the Compact (if
required), and (d) the transfer of the Site into
trust for the benefit of TRIBE, MANAGER shall
undertake all preliminary steps necessary to
construct the Facility, including selection of an
architect and selection of a general contractor.
The Facility shall contain a minimum of 20,000
square feet of space for gaming operations, plus
such additional space for sanitary facilities,
office space and Concessions and back-of-house
support areas, as may be contained in the design
approved by the Tribe and the MANAGER in accordance
with Section 6.3, as well as provide sufficient
parking on the Site.
(B) Standards. The design, construction and maintenance
of the Facility and Site shall meet or exceed the
minimum standards set by the TRIBE'S building code
or the Compact or which would be imposed on such
facility by existing state or federal statutes or
regulations that would be applicable if such
facilities were located outside of the territorial
boundaries of TRIBE, although those requirements
would not otherwise apply within TRIBE'S
territorial boundaries; provided further, that
nothing in this Section shall grant any
jurisdiction over the Site or its development and
management to the State of Nebraska, or any
political subdivision thereof.
(C) National Environmental Policy Act. If applicable,
MANAGER will supply the Commission with all
information necessary for the Commission to comply
with the regulations of the Commission issued
pursuant to the National Environmental Policy Act.
6.3 ARCHITECT. The architect shall be chosen by MANAGER and
shall be approved by TRIBE, such approval not to be unreasonably
withheld. At the direction of MANAGER, the architect shall have
the responsibility to design the Facility, with such design to be
subject to the approval of TRIBE, which approval shall not be
unreasonably withheld. Further, at the direction of MANAGER, the
architect shall supervise the completion of all the construction,
development, improvements and related activities undertaken
pursuant to the terms and conditions of the contract with the
general contractor as described below.
6.4 GENERAL CONTRACTOR. The general contractor shall be
responsible for providing all materials, equipment and labor to
construct and initially equip the Facility, as necessary, including
site development, and shall supervise the construction of such
facilities. The allowable costs and compensation of the general
contractor shall be on terms and in an amount to be negotiated by
MANAGER, said terms and amount to be approved by TRIBE. MANAGER'S
contract with the general contractor shall provide as follows: (i)
construction of the Facility shall commence within ninety (90) days
following the last to occur of (a) the Effective Date, (b) written
approval of the Development Loan Agreements by the Chairman, (c)
approval of the Compact (if required), and (d) the transfer of the
Site into trust for the benefit of TRIBE; (ii) the general
contractor shall exert his best efforts to complete construction
within one year of the commencement of construction; (iii) the
general contractor shall warrant the construction to be free of
defects and unworkmanlike labor for a period of one year subsequent
to the date the architect certifies the facility is complete.
MANAGER'S contract with the general contractor shall contain such
other provisions for the protection of the parties to this
Agreement as deemed appropriate by MANAGER.
6.5 SUPERVISION OF CONSTRUCTION. TRIBE may employ an
inspector to observe the construction of the Facility, and MANAGER
shall allow the inspector full access to the construction site and
shall allow the inspector to inspect all construction materials and
financial records relating to construction costs. The salary and
benefits of the inspector not to exceed $36,000 shall be a
Development Expense.
6.6 NO LIENS. MANAGER shall keep the Facility and the Site
free and clear of all mechanics' and other liens resulting from the
construction of the Facility, which shall at all times remain the
property of TRIBE. If such lien is claimed or filed, it shall be
the duty of MANAGER, within thirty (30) days after having been
given written notice of such a claim having been filed, to cause
the property to be discharged from such claim, either by payment to
the claimant, or by the posting of a bond, and the payment into
court of the amount necessary to relieve and discharge the premises
from such claim, or in any other manner which will result in the
discharge of such claim.
6.7 FIRE AND SAFETY. TRIBE shall provide fire protection
services. The pro rata costs attributable to the Tribal Gaming
Operation of any charges by local governments for the provision of
fire protection services that are assessed to TRIBE under any
Compact shall be an Operating Expense. The Facility shall be
constructed and maintained in compliance with all fire and safety
statutes, ordinances, and regulations which would be applicable if
the Facility were located outside the exterior boundaries of the
territory of TRIBE, although those requirements would not otherwise
apply on that territory; provided, that nothing in this Section
shall grant any jurisdiction to the State of Nebraska or any
political subdivision thereof over the Tribal Gaming Operation
site. Further, the construction and maintenance shall be in
compliance with and subject to the standards that may be set forth
in the Compact, if enacted.
6.8 OWNERSHIP OF PROPERTY. Title to the Site and the
Facility, as well as furniture, fixtures and equipment acquired
pursuant to Section 6.1 herein or purchased as an Operating Expense
of the Tribal Gaming Operation shall vest solely in TRIBE. Prior
to opening of the Facility, a complete physical inventory of all
separate property of TRIBE and MANAGER shall be taken by both
parties and initial acceptance and approval shall be given by both
parties. All property acquired after the opening of the Facility
shall be recorded on the respective inventory records of each party
when acquired. An annual inventory shall be conducted for all
property located on the premises of the Facility. Any furniture,
fixtures, gaming machines, or equipment purchased or provided by
MANAGER that are not purchased as part of the initial capital
expenses described in Section 6.1 herein, that are not included in
the Development Expenses, Capital Items or Operating Expenses, and
that are not permanently affixed to the Facility shall be the
property of MANAGER and shall be removable by MANAGER upon
expiration or termination of this Agreement, provided that at no
time during the term of this Agreement shall MANAGER charge TRIBE
for use of any property owned solely by MANAGER.
6.9 USE OF FACILITY. MANAGER shall not conduct or allow to
be conducted at the Facility any illegal activities or any
activities not allowed by TRIBE under the Ordinance or the Compact,
including the use or possession of illegal drugs or other
substances or firearms. MANAGER shall maintain an orderly, clean,
and healthy atmosphere. MANAGER shall not conduct illegal
activities at any of its business locations that would in any
manner adversely affect TRIBE.
6.10 NON-INTERFERENCE WITH MANAGER'S USE. During the term of
this Agreement, TRIBE covenants and agrees that any amendments to
the Ordinance shall be a legitimate effort to ensure that Gaming is
conducted in a manner that adequately protects the environment, the
public health and safety, and the integrity of the Tribal Gaming
Operation. TRIBE covenants and agrees that it shall not adopt any
amendments to the Ordinance, or revoke or modify the ordinance in
any manner, which will adversely affect MANAGER's rights under this
Agreement or any amendments hereof. TRIBE further covenants and
agrees not to enact any laws or regulations of any sort that would
make MANAGER's operations authorized in this Agreement herein
illegal, and agrees not to enact any laws or regulations of any
sort or take any other action that would unduly interfere with,
obstruct, prevent, delay or otherwise impede MANAGER from
conducting its legitimate operation and normal management duties
under this Agreement. During the term of this Agreement, TRIBE
agrees that MANAGER shall have lawful access to the Site at all
times.
SECTION 7. GENERAL OPERATIONS
7.1 PERSONNEL AND TRAINING. MANAGER is hereby assigned the
specific responsibility to establish and administer employment
practices. Further, TRIBE and MANAGER hereto covenant and agree
that MANAGER shall have the responsibility on behalf of TRIBE, to
employ, direct, control, and discharge all personnel performing
regular services in or on the Site in connection with the
construction, administration, maintenance, operation and management
of the Tribal Gaming Operation, and any activity connected with the
Tribal Gaming Operation, as follows:
(A) General Manager. MANAGER, after consultation with
the Tribal Gaming Commission and the Tribal
Council, shall select a General Manager who shall
be an employee of the Tribal Gaming Operation, and
his salary shall be an Operating Expense.
(B) General Hiring Authority. All employees shall be
employees of the Tribal Gaming Operation and shall
be listed under the Tribal Gaming Operation's
federal employee identification number. It is
hereby understood and agreed that MANAGER shall,
after consulting with the Gaming Commission, have
the sole responsibility, on behalf of the Tribal
Gaming Operation, to hire, employ, direct, control
and discharge all personnel performing regular
services in and on the Site in connection with
maintenance, operation, and management of the
Tribal Gaming Operation, subject to the
requirements of IGRA and, if enacted, the Compact.
MANAGER shall indemnify and hold TRIBE harmless
from any and all liability associated with the
payment of federal and state withholding taxes for
employees of the Tribal Gaming Operation.
(C) Employee Background Checks. Background checks
shall be conducted by TRIBE on each employee and
job applicant pursuant to the terms of IGRA, the
Ordinance and the Compact. If feasible, such check
shall be conducted in advance of employment.
Nonetheless, nothing herein shall prevent the
hiring of a qualified applicant under a temporary
license if allowed by the Compact, as enacted,
pending such background check if immediate
personnel requirements demand the same. MANAGER
shall cooperate with TRIBE to expedite such checks.
Expenses of background checks (including fees
payable to the Commission pursuant to 25 C.F.R.
Section 537.3), if occurring before the opening of
the Tribal Gaming Operation to the public, shall
be a Development Expense, and if occurring after
the opening to the public, shall be an Operating
Expense.
(D) Hiring Preference; Reports. Preference in employ-
ment of qualified persons shall be extended in the
following order of priority: First, members of
TRIBE; second, children and spouses of members of
TRIBE; and third, Native Americans other than
members of TRIBE; provided, that in no instance
shall an Elected Official of TRIBE or a person who
has been an Elected Official of Tribe during the
preceding twelve months be hired or otherwise
employed by MANAGER as an employee of the Tribal
Gaming Operation. MANAGER shall provide the Tribal
Gaming Commission annually, commencing with the
first anniversary date of this Agreement, with a
report showing the following information for the
preceding twelve month period: total number of
employees who worked that year, number of employees
in each of the preference categories who worked
that year, number of employees in the preference
categories who worked in middle or upper
management, number of employees hired that year,
number of employees in each of the preference
categories hired that year.
(E) Employee Recruitment Plan. Throughout the term of
this Agreement, MANAGER shall make active efforts
to recruit, train and employ members of TRIBE,
their spouses and their children, and to place such
persons into middle and upper level management
positions, provided that such recruitment efforts
and training shall be a Development Expense, if
incurred prior to the commencement of Gaming under
this Agreement, and an Operating Expense, if
incurred subsequent to the commencement of Gaming.
MANAGER shall develop and present a written plan
for recruitment to the Tribal Council and the
Tribal Gaming Commission. Such recruitment plan
shall require MANAGER to make continuing active
efforts to recruit, train and employ members of
TRIBE, their spouses and their children during the
entire term of this Agreement.
(F) Recruitment Training. As a recruitment measure,
MANAGER shall hold employee training sessions for
members of TRIBE, their children and their spouses
prior to the commencement of Gaming operations and
shall note such training on the trainees', applica-
tions for employment. MANAGER shall notify TRIBE
in advance of all employee training to be given
after commencement of operations by the Tribal
Gaming Operation, and shall permit any member of
TRIBE, his spouse or his children who desires (but
who is not ineligible for employment pursuant to
Section 7.1(D) herein) employment at the Tribal
Gaming Operation to attend employee training and to
have the same noted on his employment application.
All training required herein shall be a Development
Expense, if incurred prior to the commencement of
Gaming under this Agreement, and an Operating
Expense, if incurred subsequent to the commencement
of Gaming; provided that TRIBE shall make
reasonable efforts to provide to the Tribal Gaming
Operation any job training services or job training
funding that it may have available for use in
recruitment and training of Tribal Gaming Operation
employees.
(G) Employee Training. MANAGER shall provide initial
training and periodic regular training for all
Tribal Gaming Operation employees in compliance
with the Compact. All training required herein
shall be a Development Expense, if incurred prior
to the commencement of Gaming under this Agreement,
and an Operating Expense, if incurred subsequent to
the commencement of Gaming; provided that TRIBE
shall make reasonable efforts to provide to the
Tribal Gaming Operation any job training services
or job training funding which it may have available
for use in recruitment and training of Tribal
Gaming Operation employees.
(H) Bonds for Employees in Positions of Trust. MANAGER
may, from time to time, designate as positions of
trust certain Tribal Gaming Operation personnel
positions. Upon MANAGER'S designation of a
personnel position as one of trust, MANAGER shall
require the person holding such position to obtain
a bond to assure the trust. The nature and amount
of such bond shall be within the discretion of
MANAGER and may, from time to time, be changed in
nature and/or amount. The cost of such bonds shall
be an Operating Expense.
7.2 INTERFERENCE IN TRIBAL AFFAIRS. MANAGER, including any
partner, employee, independent contractor, or agent of MANAGER,
whether or not members of TRIBE, shall not, directly or indirectly,
attempt to or unduly interfere with, or attempt to influence the
internal affairs of TRIBE, its members or its government, including
but not be limited to any attempt to influence the tribal election
process, offer cash incentives, or make written or oral threats to
the personal or financial status of any person, entity, or thing.
Nothing contained herein shall be construed as preventing MANAGER
from meeting with the Tribal Council, or TRIBE'S representatives
with regard to the normal performance of MANAGER'S rights, duties
and obligations as allowed or contemplated by this Agreement. This
provision shall not inhibit the right of any member of TRIBE to
vote in tribal elections.
7.3 SECURITY. MANAGER shall be responsible for providing a
security force consisting of security officers sufficient to
reasonably assure the safety of the customers, personnel, monies
and property of the Tribal Gaming Operation in accordance with a
plan of safety and security to be developed by MANAGER in
consultation with TRIBE. The costs of the security force provided
by the Tribal Gaming Operation shall be an Operating Expense. Such
security officers shall be employees of the Tribal Gaming Operation
and shall report directly to the General Manager, in accordance
with the plan of safety and security prepared by MANAGER and
approved by the Tribal Gaming Commission. The security personnel
shall cooperate with law enforcement officers of TRIBE and the
State of Nebraska, and shall coordinate their activities with said
officers when feasible. The costs of any state law enforcement
officers, who are located on the Site to provide additional
security to the Tribal Gaming Operation, if required by the
Compact, shall be an Operating Expense; provided, however, that if
tribal law enforcement officers undertake and assume the duties of
and replace any such state officers under the provisions of the
Compact, the costs of such tribal law enforcement officers, who
shall be located on the Site, shall become an Operating Expense.
All other increased costs and expenses, if any, including without
limitation (i) the costs of any tribal law enforcement agency
and/or officers or (ii) any public safety or other governmental
services that TRIBE may incur as a result of the operation of the
Tribal Gaming Operation, shall be neither an Operating Expense, nor
a Development Expense, of the Tribal Gaming Operation, nor shall
any such costs be passed on to MANAGER, directly or indirectly.
7.4 COOPERATION BETWEEN SECURITY PERSONNEL AND LAW OFFICERS.
Subject to the provisions of the Compact, MANAGER and TRIBE may
develop mutually agreed upon policies and procedures related to
security and law enforcement to ensure that the security personnel
subject to MANAGER's control as set forth in Section 7.3 of this
Agreement, the law enforcement officers subject to TRIBE's control,
and the state law enforcement officers work together in a
cooperative and coordinated manner.
7.5 COMPLIANCE WITH TRIBAL AND FEDERAL LAW. The parties
hereto agree to conduct gaming activities pursuant to this
Agreement in accordance with the Ordinance, the Compact and IGRA.
7.6 TAXES BY NON-TRIBAL GOVERNMENT. If any non-tribal
government attempts to impose any possessory interest tax or other
tax on either party to this Agreement regarding the Tribal Gaming
Operation, the parties shall jointly resist such attempt through
legal action. The costs of such action and the compensation of
legal counsel shall be an Operating Expense of the Tribal Gaming
Operation. If a court of competent jurisdiction finally determines
that any such tax is legal, such tax shall be an Operating Expense
of the Tribal Gaming Operation.
7.7 COMMISSION FEES; SELF-REGULATION. TRIBE and MANAGER
understand that Class II Gaming at the Tribal Gaming Operation is
subject to a fee to be paid to the Commission pursuant to IGRA.
TRIBE and MANAGER shall use their best efforts to establish
regulation of the Tribal Gaming Operation by TRIBE in order that
such fee is kept to a minimum. Such annual fee to the Commission
shall be an Operating Expense of the Tribal Gaming Operation. The
Tribal Gaming Operation's accounting procedures shall be maintained
so as to allow the calculation of the Commission's annual fee.
7.8 LEGAL REPRESENTATION OF TRIBAL GAMING OPERATION. MANAGER
shall select and employ an attorney to represent the Tribal Gaming
Operation in the general legal affairs of the Tribal Gaming
Operation, and shall select and employ such other attorneys as are
necessary to represent the Tribal Gaming Operation in any specific
legal matters requiring specialized legal knowledge or expertise.
Said attorney or attorneys shall be subject to review by the Tribal
Gaming Commission and the approval of the Tribal Council, which
approval shall not be unreasonably withheld, and shall be employed
pursuant to written agreement executed by the authorized
representative of each party. All legal fees, costs and expenses
incurred pursuant to such attorney employment agreements shall be
an Operating Expense. Nothing contained herein shall prevent
either party from engaging an attorney to represent its separate
interests arising from this Agreement at each party's separate
expense.
7.9 ADVERTISING. MANAGER shall have the responsibility to
set a budget for advertising. MANAGER shall routinely advertise
the Tribal Gaming Operation locally so that no more than two weeks
at a time shall pass without some form of local advertising being
placed before the public. In addition, MANAGER shall routinely
advertise the Tribal Gaming Operation outside the said local area
in a manner designed to increase Tribal Gaming Operation revenues.
Advertising shall be considered an Operating Expense of the Tribal
Gaming Operation included in the annual operating budget.
7.10 DISPUTE RESOLUTION BETWEEN MANAGER AND CUSTOMERS. MAN-
AGER shall have the responsibility to establish and implement
procedures to resolve complaints received from any customer or
member of the general public who is or claims to be adversely
affected by any act or omission of the Tribal Gaming Operation.
MANAGER shall receive and hear any such complaints and maintain
complete records of any such complaint and the disposition thereof.
Subsequent to the final disposition of any such complaint by the
Tribal Gaming Operation, the customer or member of the public shall
have any right provided by the Ordinance to have such complaint
heard by the Tribal Gaming Commission. In conjunction with such
action, MANAGER shall submit to the Tribal Gaming Commission the
complete record of such complaint and disposition to be utilized by
the Tribal Gaming Commission in its review and disposition thereof.
In addition, MANAGER shall have the right to investigate any and
all complaints and correct problems, if any, identified in
complaints as determined by MANAGER.
7.11 DISPUTE RESOLUTION BETWEEN MANAGER AND EMPLOYEES.
MANAGER shall have the responsibility to establish and implement
procedures to resolve complaints or grievances received from any
employee of the Tribal Gaming Operation who is or claims to be
adversely affected by any act or omission of the Tribal Gaming
operation. Subject to the specific provisions of the "Employee
Grievance Procedure" to be developed by MANAGER, MANAGER shall
receive and hear any such complaint or grievance and maintain
complete records of any such complaint or grievance and the
disposition thereof. Subsequent to the final disposition of any
such complaint or grievance by the Tribal Gaming Operation, the
employee of the Tribal Gaming Operation shall have any right
provided by the Ordinance to have such complaint or grievance heard
by the Tribal Gaming Commission. In conjunction with such action,
MANAGER shall submit to the Tribal Gaming Commission the complete
record of such complaint or grievance and the disposition thereof
to be utilized by the Tribal Gaming Commission in its review and
disposition thereof. In addition, MANAGER shall have the right to
investigate any and all complaints or grievances and correct
problems, if any, identified in such complaints or grievances as
determined by MANAGER.
SECTION 8. FINANCIAL OPERATIONS
8.1 ANNUAL OPERATING AND CAPITAL BUDGETS. Not less than sixty
(60) days prior to commencement of operations and not less than
sixty (60) days prior to each year of the term of this Agreement,
MANAGER shall prepare both (i) an annual operating budget for the
Tribal Gaming Operation and (ii) an annual capital budget for the
purpose of funding Capital Items for the Tribal Gaming Operation,
and shall submit said budgets to the Tribal Council for approval.
The approved annual budgets may be amended only upon the written
consent of MANAGER and TRIBE. MANAGER, at its sole discretion, may
increase the amount of any line item contained in an approved
annual budget provided that the amount of such increase is entirely
offset by a decrease in the amount of another line item of the
approved budget. In addition, MANAGER may vary the amount of any
individual line item contained in an approved annual operating
budget by up to 10% provided that a written explanation is provided
in advance to TRIBE. MANAGER may vary the amount of a line item by
more than 10% of the amount of the approved budget only with the
advance approval of TRIBE.
If TRIBE and MANAGER cannot agree upon an annual budget, the
parties agree to submit any disputed items to binding arbitration
in accordance with Section 10.8. Pending a final determination of
disputed items, the Tribal Gaming Operation shall continue
operations based on an annual budget including all undisputed
budget items as agreed upon and all disputed budget items in an
amount equal to the amount included in the annual budget for the
preceding year, as adjusted in an amount equal to the annual change
in the consumer price index for the preceding year.
8.2 [Intentionally Omitted].
8.3 BANK ACCOUNTS. TRIBE and MANAGER shall select banks
convenient to the location of the Facility for the deposit and
maintenance of funds. All such depositories and the accounts
therein shall be federally insured, and when possible, such
accounts shall be interest-earning. TRIBE and MANAGER shall
initially establish four (4) bank accounts, one for the Tribal
Gaming Operation Revenue Account (the "Revenue Account"), one for
the Tribal Gaming Operation Daily Expense Account (the "Daily
Expense Account"), one for the Tribal Gaming Operation Payroll
Account (the "Payroll Account") and one for the Tribal Gaming
Operation Prize Account (the "Prize Account"). Each bank account
shall be listed under the federal identification number for the
Tribal Gaming Operation. MANAGER shall provide the designated
representative of the Tribal Gaming Commission with a monthly
report on all expenditures from the accounts. Said accounts shall
be maintained in accordance with the following requirements:
(A) Daily Expense Account. MANAGER shall establish the
Daily Expense Account within ten (10) working days
following the Effective Date of this Agreement.
Such account shall be listed with the bank as held
in trust for TRIBE by MANAGER as agent of TRIBE.
Prior to the opening date of the Tribal Gaming
Operation, MANAGER shall deposit sufficient funds
(as determined by MANAGER) in the Daily Expense
Account for initial preopening and development
costs and expenses and make additional deposits as
may be required from time to time, which shall be a
Development Expense as specified in Section 6.1(B)
herein. After the opening date of the Tribal
Gaming Operation, MANAGER shall periodically
deposit into the Daily Expense Account from the
Revenue Account an amount sufficient to cover all
Operating Expenses of the Tribal Gaming Operation,
including prizes. MANAGER shall, consistent with
and pursuant to the approved annual budget, have
responsibility and authority for making all
payments for Operating Expenses from the Daily
Expense Account that MANAGER deems necessary and
proper. MANAGER shall promptly pay said operation
bills as they come due.
(B) Revenue Account. MANAGER shall establish the
Revenue Account no less than ten (10) working days
before the opening date of the Tribal Gaming
Operation.
Distribution of Distributable Net Profits to TRIBE
and MANAGER shall be made monthly from the Revenue
Account in accordance with the provisions of
Section 8.9 herein.
(C) Payroll Account. MANAGER shall establish the
Payroll Account within ten (10) working days
following the Effective Date of this Agreement.
Such account shall be listed with the bank as held
in trust for TRIBE by MANAGER as agent of TRIBE.
MANAGER shall periodically deposit into the Payroll
Account funds from the Daily Expense Account.
MANAGER shall, consistent with and pursuant to the
approved annual budget, have responsibility and
authority for making all necessary payments
relating to payroll, including employment taxes,
from the Payroll Account.
(D) Prize Account. MANAGER shall establish the Prize
Account no less than ten (10) working days prior to
the opening date of the Tribal Gaming Operation.
Such account shall be listed as held in trust for
TRIBE by MANAGER as agent of TRIBE. MANAGER shall
periodically deposit into the Prize Account from
the Daily Expense Account an amount sufficient to
cover payment of prizes. MANAGER shall have
responsibility and authority for making all
payments for prizes that MANAGER deems necessary
and proper. A minimum balance shall be maintained
in the Prize Account at all times for payment of
prizes. A check shall be written from the Prize
Account for the payment of each prize in excess of
Five Thousand Dollars ($5,000).
(E) Authorized Signatures. Payments from the Revenue
Account, other than transfers by MANAGER to the
Daily Expense Account, and payments from or checks
drawn on the Daily Expense Account, the Payroll
Account or the Prize Account in an amount greater
than Ten Thousand Dollars ($10,000) or which are
payable to MANAGER, shall require two (2)
signatures as follows:
(1) the signature of the designated representative
of the Tribal Gaming Commission, and
(2) the signature of the General Manager or other
duly authorized representative of MANAGER.
The signature of the General Manager or other
authorized representative of MANAGER shall
otherwise be required on checks or to authorize
payment from the accounts of the Tribal Gaming
Operation.
If MANAGER determines additional bank accounts are necessary
for operational purposes, MANAGER may establish such accounts with
the consent of the Tribal Gaming Commission.
8.4 PETTY CASH FUND. MANAGER is authorized to withdraw from
time to time no more than Five Thousand Dollars ($5,000) per month
from the Daily Expense Account for the establishment and
maintenance of a petty cash fund to be used for miscellaneous small
expenditures of the Tribal Gaming Operation, which shall be
maintained at the Facility, provided that all petty cash funds used
shall be properly receipted.
8.5 CASH BANK. MANAGER is authorized to maintain a cash bank
on the Tribal Gaming Operation premises for the purposes of day-to-
day operations provided that such cash bank is adequately
safeguarded from theft and embezzlement.
8.6 CASH DISBURSEMENTS; COMPLIMENTARY SERVICES.
(A) Cash Disbursements. MANAGER shall not make any
cash disbursements from any Tribal Gaming Operation
funds for any reason whatsoever, except for
payments from the petty cash fund, the redemption
of gaming chips of equal value and except for the
payment of cash prizes in amounts less than Five
Thousand Dollars ($5,000). Any and all other
payments or disbursement by MANAGER shall be made
by check drawn against the Daily Expense Account,
the Payroll Account or the Prize Account. MANAGER
shall have the obligation to promptly file any
reports of gaming winnings and the names of winners
that may be required by the Internal Revenue
Service of the United States.
(B) Complimentary Services. The Tribal Gaming
Operation shall maintain a record of all
complimentary services provided to patrons of the
Facility or their guests, including either the full
retail price of such service or item if the same
service or item is normally offered for sale to
patrons in the ordinary course of business at the
Facility, or the cost of the service or item to the
Tribal Gaming Operation if not offered for sale to
patrons in the ordinary course of business. If the
complimentary service or item is provided to a
patron by a third party on behalf of the Tribal
Gaming Operation, such service or item shall be
recorded as an Operating Expense at the actual cost
to the Tribal Gaming Operation of having the third
party provide such service or item. If and to the
extent required by the Compact, a log shall be
available for inspection by the gaming agency of
the State of Nebraska.
8.7 DAILY DEPOSITS TO REVENUE ACCOUNT. MANAGER shall
collect, receive, and receipt all gross sales, revenues, and any
other proceeds connected with or arising from the operation of the
Tribal Gaming Operation, the sale of all products, food and
refreshments, and all other activities on the Site, and deposit
them daily into the Revenue Account maintained jointly by the
parties as soon as reasonably possible after the close of business
for the day. All monies received by the Tribal Gaming Operation on
each day it is open for business, less any amount necessary to
restore the cash bank on the premises to its required amount, must
be delivered daily to a bonded courier service for deposit in the
bank by the bonded courier service prior to the close of the next
banking day.
8.8 DAILY REPORTS; WEEKLY REPORTS. MANAGER shall provide the
designated representative of the Tribal Gaming Commission with a
report following each day of gaming which contains, at a minimum,
the total amount of "drop, hold and win" from the gaming operation
and Concession revenue, the total amount deposited, and the total
amount remaining in the cash bank. Further, within two (2) days
following the previous week, MANAGER shall provide the designated
representative of the Tribal Gaming Commission with a weekly report
which contains, at a minimum, the same types of information set
forth in the daily reports.
8.9 COMPENSATION AND DEVELOPMENT LOAN PAYMENTS. In
consideration of the performance of its duties by MANAGER as
described herein, and in consideration of the contributions of
TRIBE, the proceeds of the Tribal Gaming Operation shall be
distributed in accordance with the following provisions:
(A) Compensation. TRIBE shall receive seventy percent
(70%) of the Distributable Net Revenues of the
Tribal Gaming Operation. The MANAGER shall receive
thirty percent (30%) of the Distributable Net
Revenues of the Tribal Gaming Operation for the
five-year period as its Management Fee.
(B) Development Loan Payments. Interest on the
Development Loan shall be paid as an Operating
Expense of the Tribal Gaming Operation. Monthly
payments of principal shall be paid from TRIBE's
share of Distributable Net Revenues of the Tribal
Gaming Operation before payment of any distribution
pursuant to Section 8.9(A). If the TRIBE's share
of Distributable Net Revenues is insufficient in
any month to fund the principal payment then due
the MANAGER will make up any shortfall from its
share of Distributable Net Revenues. To the extent
that MANAGER is required to make up any shortfall,
MANAGER shall be entitled to recoup such funds,
without interest, from the TRIBE's share of
Distributable Net Revenues for subsequent periods,
before payment of any distribution pursuant to
Section 8.9(A), but not before payment of the
Minimum Guaranteed Payment pursuant to Section
8.9(C).
(C) Minimum Guaranteed Payment. Notwithstanding the
provisions of Sections 8.9(A) and 8.9(B), MANAGER
guarantees to TRIBE that if the amount of
Distributable Net Revenues distributed to the TRIBE
under Section 8.9(A) is less than the Minimum
Guaranteed Payment in any month, MANAGER will make
up any shortfall from its own funds, such that
TRIBE shall never receive less than the Minimum
Guaranteed Payment for any month from the operation
of the Tribal Gaming Operation.
8.10 REPORTS, PAYMENTS AND DISTRIBUTIONS. Within twenty (20)
days after the end of each calendar month after the date on which
the Tribal Gaming Operation opens to the public the following shall
be completed:
(A) MANAGER shall calculate and provide the TRIBE with
written reports showing the Gross Receipts,
Operating Expenses, Net Revenues, and Distributable
Net Revenues, of the Tribal Gaming Operation for
the preceding month, as provided in Section 8.9;
(B) MANAGER shall provide any additional funds
necessary to cover the Minimum Guaranteed Payment,
as provided for in Section 8.9(C);
(C) The Tribal Gaming Commission shall authorize the
payments to the TRIBE and MANAGER, and the payment
of the debt service on the Development Loan, as
provided for in this Section 8.10; and
(D) The payments provided for in this Section 8.10
shall be made from the Revenue Account. Payments to
the TRIBE under this Agreement shall be submitted
to the Tribal Treasurer, PONCA TRIBE OF NEBRASKA,
P.O. Box 288, Niobrara, Nebraska 68760.
8.11 ACCOUNTING AND BOOKS OF ACCOUNT.
(A) Table Games Revenue. All revenue from table games
shall be recorded on a shift by shift basis for
each gaming table. MANAGER shall maintain such
records and provide them to the designated
representative of the Tribal Gaming Commission on a
daily basis.
(B) Bingo and Mini-Game Receipts. All revenue from
bingo and related Class II games shall be recorded
on a Session-by-Session basis. MANAGER shall
maintain such records and provide them to the
designated representative of the Tribal Gaming
Commission on a daily basis. MANAGER shall
maintain and provide TRIBE with an adequate
accounting acceptable to TRIBE and MANAGER for
income from Mini-Games pursuant to generally
accepted accounting principles.
(C) Cash Register Revenue Receipts. Receipt forms for
all revenue from Concessions shall be based upon a
cash register system. All transactions shall be
recorded on a receipt given to the customer and on
a duplicate tape or electronic storage media inside
the cash register. The following information shall
appear upon the receipt and duplicate tape or
electronic storage media: the name of the Tribal
Gaming Operation operating the activity; the date
the transaction took place; the receipt number; the
amount of money paid, or a description of other
consideration paid for the opportunity to play.
The cash register receipt rolls or electronic
storage media maintained in the machine showing
those transactions shall be retained with the
records of the Tribal Gaming Operation for a period
of not less than five (5) years.
(D) Internal Revenue Service Reporting. MANAGER shall
be responsible for compliance with the Internal
Revenue Service Code of 1986, as amended, including
Sections 1441, 3402(q), 6041 and 6050 I and Chapter
35 of such Code, requirements concerning the
reporting and withholding of taxes with respect to
the winnings from the Tribal Gaming Operation.
(E) Tribe's Designated Agent Responsible for Financial
Oversight. The Tribal Gaming Commission shall be
responsible for oversight of compliance with this
Agreement, and of MANAGER'S records, pursuant to
the Ordinance and the Compact. MANAGER shall
permit the Tribal Gaming Commission and its
authorized representatives to have full, immediate
and unrestricted access to the operations of the
Tribal Gaming Operation, and the right to verify
the daily gross revenue and income of the Tribal
Gaming Operation, including without limitation the
right to install, at TRIBE's sole expense, any
additional electronic surveillance equipment and to
employ personnel to operate such system and to take
reports directly to the Tribal Gaming Commission,
the right to attend all gaming activities, inspect
the cash register receipt system, inspect
inventory, be present when receipts are counted,
and participate in all aspects of the operation for
monitoring purposes.
(F) Monthly Statements. MANAGER shall provide monthly
statements to the Tribal Gaming Commission showing
revenues and expenses of the gaming operation as
attachments to the monthly payment to TRIBE, as
required in section 8.10 herein.
(G) Records. MANAGER shall maintain full and accurate
books of account at its principal office. The
books shall be kept on an accrual basis, and the
records shall be prepared and maintained by using
generally accepted accounting principles. The
Tribal Gaming Commission and its authorized
representatives shall have full, immediate and
unrestricted access to, and the full, immediate and
unrestricted right to inspect and examine all books
and financial records concerning the Tribal Gaming
Operation at all times.
(H) Accounting Services. MANAGER, after consultation
with the Tribal Gaming Commission, shall hire a
certified public accounting firm to perform
accounting services for the Tribal Gaming
Operation, provided that the form and manner of
maintenance of the books of account for the Tribal
Gaming Operation are consistent with generally
accepted accounting principles. Such accounting
services shall be an Operating Expense.
(I) Audit. An independent audit by a certified public
accountant selected by TRIBE shall be performed
annually, and shall meet the standards of 25 C.F.R.
Section 571.12. Such audit costs shall be an Operating
Expense. TRIBE, at its own expense, shall have the
right at any time to secure an independent audit of
the Tribal Gaming Operation. All contracts for
supplies, services or concessions for a contract
amount in excess of Twenty-five Thousand Dollars
($25,000) annually relating to such gaming shall be
included within the scope of such independent
audits.
(J) Compact/Miscellaneous. The accounting, books of
account and audits of the Tribal Gaming Operation
shall conform to the requirements of the Compact.
Further, MANAGER shall provide for the
establishment and maintenance of satisfactory
accounting systems and procedures, as required by
25 C.F.R. Section 531.1(c), that shall (i) include an
adequate system of internal accounting controls;
(ii) be susceptible to audit; (iii) permit the
calculation and payment of the Management Fee and
the Class II Gaming fee payable to the Commission,
if any; and (iv) provide for the allocation of
operating expenses among TRIBE, MANAGER and any
other user of shared facilities.
8.12 INSURANCE AND BONDS. MANAGER shall obtain public
liability insurance in the amount of at least One Million Dollars
($1,000,000) per occurrence for all activities on the subject
property. MANAGER shall also keep the buildings, improvements, and
contents therein insured for their full replacement value against
loss or damage by fire, with extended coverage endorsement to
include robbery, theft, malicious mischief and vandalism coverage.
The exact nature and extent of such coverage shall be jointly
agreed upon by the parties. TRIBE and MANAGER shall be named as
the insured in all policies to the extent of their interests and
MANAGER shall supply written evidence of such coverage to TRIBE and
to the Commission. The costs of said insurance shall be deemed a
part of the operating Expenses of the Tribal Gaming Operation.
8.13 SUBCONTRACTS; ASSIGNMENTS. MANAGER may, with the written
consent of the Tribal Gaming Commission, subcontract with other
businesses to provide non-gaming services directly related to the
operation of the Tribal Gaming Operation; provided, however that no
subcontract or assignment shall transfer or in any other manner,
convey any interest in land or other real property. All vendors
under such subcontracts shall comply with any applicable provisions
of the Compact. This Agreement shall be assignable by MANAGER with
the consent of TRIBE, subject to the approval of the Chairman
pursuant to 25 C.F.R. Section 535.2.
SECTION 9. DISCLOSURES, REPRESENTATIONS AND WARRANTIES
9.1 PROVISION OF INFORMATION TO THE COMMISSION AND THE STATE
OF NEBRASKA. MANAGER agrees to provide all information required by
IGRA, 25 U.S.C. Section 2711 and 25 C.F.R. Part 533, to TRIBE for
transmission to the Secretary or his authorized representative,
and/or the Chairman or his authorized representative as soon as
practicable after the date of execution of this Agreement. MANAGER
shall also provide all information as may be required from time to
time by the Compact to the gaming agency of the State of Nebraska.
9.2 DISCLOSURES REGARDING PERSONS HAVING DIRECT OR INDIRECT
FINANCIAL INTEREST IN CONTRACT. MANAGER agrees that as soon as
practicable after the execution date of this Agreement all persons
having a direct or indirect financial interest in this Agreement,
and all pertinent information regarding said persons, shall be
listed in Exhibit A herein.
9.3 APPROVAL OF CHANGE IN OPERATIONAL CONTROL OF MANAGER.
Any substantial change in the operational control of MANAGER,
including any change in the ownership of MANAGER in which any
person or entity not previously disclosed pursuant to Section 9.2
herein becomes a partner of MANAGER, shall be submitted as a
modification of this Agreement for consent of TRIBE and the written
approval the Chairman of the Commission under 25 C.F.R. Part 535.
Approval of any such change in control or ownership of MANAGER must
be preceded by a complete background investigation of such person
or entity.
9.4 FINANCIAL INTERESTS. MANAGER shall comply with the
provisions of 25 C.F.R. Part 537, including without limitation
requirements that the principals referenced in Section 9.2: (1)
disclose as soon as practicable after the date of execution of this
Agreement all sources of financial contribution to them and declare
that they have not received any gifts, loans, investments or other
funds for the purpose of investing in MANAGER'S agreement with
TRIBE from any source that has not been named in said written
disclosure; (2) declare that they have no management, financial or
ownership interests other than the interests, if any, that have
been disclosed in writing to TRIBE; and (3) declare that they have
not been arrested, indicted for, convicted of, or pleaded nolo
contendere to any felony, or had any association with individuals
or entities connected with organized crime. For the purposes of
this Section, any management, financial, or ownership interests
that are set forth in a written document shall be considered
"undisclosed" until a copy of such document is provided to TRIBE.
9.5 BACKGROUND INVESTIGATIONS. MANAGER agrees that all
Parties-in-Interest referenced in Section 9.2 herein shall be
required to consent to background investigations to be conducted
pursuant to the terms of IGRA, the Ordinance and the Compact.
MANAGER shall require all Key Employees and Primary Management
officials to submit to such investigations prior to permanent
employment of said employees and shall ensure that TRIBE and the
Commission or its duly authorized representative may inspect
reports regarding said investigations. All other employees of the
Tribal Gaming Operation shall also submit to such investigations
pursuant to the applicable provisions of the Ordinance or Compact.
MANAGER may hire any employee of the Tribal Gaming Operation before
the conduct of required investigation, subject to the satisfactory
completion of the investigation. MANAGER further agrees that all
Persons-in-Interest listed in Exhibit A herein shall disclose any
information requested by TRIBE that would facilitate in the
background and financial investigations and will cooperate fully
with such investigations.
9.6 DISCLOSURE OF INFORMATION. Any false or deceptive
disclosures or failure to cooperate fully with such investigations
by an employee of MANAGER or an employee of the Tribal Gaming
operation shall result in the immediate dismissal of such employee.
MANAGER agrees that whenever there is any material change in the
information disclosed pursuant to this Agreement, MANAGER shall
immediately notify the Tribal Gaming Commission of such change not
later than thirty (30) days following MANAGER'S actual knowledge of
such change.
9.7 NO PAYMENT MADE. MANAGER hereby specifically represents
that no payment whatsoever has been paid to any Elected Official of
TRIBE or Relative of an Elected Official of TRIBE nor has promise
of payment been made by MANAGER to any Elected Official of TRIBE or
Relative of an Elected Official of TRIBE to secure, obtain or
maintain this Agreement or any other privilege associated with this
Agreement. No payments will be made in the future to such persons
for the purpose of obtaining or maintaining this Agreement, or any
other privilege associated herein.
9.8 NO PARTY INTEREST. MANAGER hereby specifically
represents that no person or entity having a direct or indirect
financial interest in, or management responsibility for this
Agreement is an Elected Official of TRIBE or Relative of an Elected
Official of TRIBE. If any person or entity having a direct or
indirect financial interest in, or management responsibility for
this Agreement becomes an Elected Official of TRIBE or Relative of
an Elected Official of TRIBE, said person shall immediately divest
himself of his interest in this Agreement.
9.9 BROKERS' OR FINDERS' FEES. No agent, broker or other
person or entity acting on behalf of MANAGER or TRIBE, or under the
authority of either party, is or shall be entitled to any
commission, broker's or finder's fee from MANAGER or TRIBE in
connection with any of the transactions contemplated by this
Agreement.
9.10 TRIBE'S REPRESENTATIONS AND WARRANTIES. TRIBE represents
and warrants that:
(A) Organization and Qualification. TRIBE is a
federally recognized Indian tribe, recognized
pursuant to the Ponca Restoration Act; that is a
non-taxable entity for purposes of federal income
taxation under the Code, with full power and
authority to own its properties and to transact the
business of the Tribal Gaming Operation
contemplated hereby. The Tribal Gaming Operation
is a wholly owned, unincorporated instrumentality
of TRIBE.
(B) Authority and Authorization. TRIBE has full
corporate power and authority to execute, deliver
and carry out the provisions of this Agreement and
the Development Loan Agreements, to make the
borrowing and to create the security interest in
personal property provided for therein, and to
perform its obligations under the Development Loan
Agreements, and all such action has been duly and
validly authorized by all necessary proceedings on
its part.
(C) Execution and Binding Effect. This Agreement has
been duly and validly executed and delivered by
TRIBE and constitutes a legal, valid and binding
obligation of TRIBE enforceable in accordance with
its terms, subject to IGRA and the rules
promulgated thereunder and 25 U.S.C. Section 81, and
the Development Loan Agreements, when duly and validly
executed and delivered by TRIBE, will constitute
legal, valid and binding agreements and obligations
of TRIBE enforceable in accordance with their
terms, subject to IGRA and the rules promulgated
thereunder and 25 U.S.C. Section 81.
(D) Authorizations and Filings. Except for the filing
of financing statements in connection with the
Development Loan Agreements and the approval of
this Agreement, the Development Loan Agreements and
any other collateral agreement (within the meaning
of 25 C.F.R. Section 502.5) by the Chairman of the
Commission, no authorization, consent, approval,
license, exemption or other action by, and no
registration, qualification, designation,
declaration or filing with, any federal, state,
tribal or local agency is or will be necessary or
advisable in connection with the execution and
delivery of the Development Loan Agreements by
TRIBE, consummation by TRIBE of the transactions
therein contemplated, or performance by TRIBE of or
compliance by TRIBE with the terms and conditions
hereof or thereof.
(E) Absence of Conflicts. Neither the execution and
delivery of this Agreement nor consummation of the
transactions therein contemplated nor performance
of or compliance with the terms and conditions
thereof will (a) violate any provision of TRIBE's
Constitution, charter, by-laws or other
organizational documents, the Ordinance or any law,
including, without limitation, IGRA, the Compact
(if and when enacted), or any order, rule or
regulation of any court or governmental or tribal
agency or body having jurisdiction over TRIBE, the
Tribal Gaming Operation or any of their property;
(b) result in the creation or imposition of any
security interest upon any property (now owned or
hereafter acquired) of TRIBE or the Tribal Gaming
Operation, except for the security interests
contemplated by this Agreement and created by the
Development Loan Agreements; or (c) materially
violate, conflict with, or result in any breach of
any provision of any agreement, instrument or other
contractual obligation of TRIBE.
(F) Accurate and Complete Disclosure. No
representation or warranty made by TRIBE in this
Agreement or any other Development Loan Agreements
and no statement made by TRIBE or the Tribal Gaming
Operation in any financial statement, certificate,
report, exhibit or document furnished by TRIBE or
the Tribal Gaming Operation to MANAGER pursuant to
or in connection with this Agreement or any
Development Loan Agreement is false or misleading
in any material respect (including by omission of
material information necessary to make such
representation, warranty or statement not
misleading).
9.11 CONDITIONS TO DEVELOPMENT LOAN. The obligations of the
parties to close the transactions contemplated hereby, and the
obligation of MANAGER to provide financing for the Development Loan
as provided in Section 6.1(C) hereunder, are subject to the
accuracy in all material respects, as of the date hereof and each
Closing Date, of the representations and warranties herein
contained, to the performance by TRIBE of its obligations to be
performed hereunder on or before such Closing Date and to the
satisfaction of the following further conditions.
(A) Representations and Warranties. The
representations and warranties contained in Section
9.10 and 9.12 hereof shall be true on and as of the
date of this Agreement and as of each Closing Date
with the same effect as if made on and as of such
date, and on such dates no "Event of Default" and
no "Potential Default" (as such terms may be
defined in the Development Loan Agreements) shall
have occurred and be continuing or exist or shall
occur or exist after giving effect to disbursement
of proceeds from the Development Loan with respect
to such date.
(B) Tribal Action. On the initial Closing Date, TRIBE
shall deliver to MANAGER a certificate in form and
substance satisfactory to MANAGER, dated the
Closing Date, signed by a duly authorized officer
of TRIBE, certifying as to (a) true copies of the
Constitution and by-laws of TRIBE as in effect on
such date, (b) true copies of all action taken by
TRIBE relative to the Development Loan Agreements,
including but not limited to that stated in Section
9.10(D) hereof, and (c) the names, true signatures
and incumbency of the officer or officers of TRIBE
authorized to execute and deliver the Development
Loan Agreements (and MANAGER may conclusively rely
on such certificate unless and until a later
certificate revising the prior certificate has been
furnished to MANAGER). Such certificate shall
include a copy of the Ordinance and shall state,
with respect thereto, that the copy of the
Ordinance attached (i) is a true and correct copy
of the Ordinance, (ii) is the sole ordinance of
TRIBE within the meaning of Sections 2710(b)(1)(B)
and 2710(d)(1)(A)(i) of IGRA which is presently in
force governing the conduct of gaming activities on
Tribal lands, (iii) is in full force and effect,
(iv) except as set forth on such certificate, has
not been amended, modified, supplemented or
revoked, and (v) complies with Section
2710(d)(1)(A) of IGRA, except to the extent
described by any attachments to said Certificate.
(C) Opinion of Counsel. On the initial Closing Date,
(i) MANAGER shall have received a favorable written
opinion of Watkins and Scott, Lincoln, Nebraska,
special counsel for TRIBE, dated the Closing Date
and in form and substance satisfactory to MANAGER
and its counsel and (ii) TRIBE shall have received
a favorable written opinion of Brown, Todd &
Heyburn PLLC, Louisville, Kentucky, counsel for
MANAGER, in form and in substance satisfactory to
TRIBE and its counsel, as to the matters set forth
in Section 9.12 (A) and (B).
(D) No Change of Law. No change shall have occurred
after the date of execution and delivery of this
Agreement in applicable law or regulations
thereunder or interpretations thereof by
appropriate regulatory authorities which, in the
opinion of MANAGER or its counsel, would make it
illegal for MANAGER to provide financing through
the Development Loan.
(E) Licenses and Permits. All appropriate action shall
have been taken prior to the Closing Date in order
to permit consummation of the transactions
contemplated herein and all licenses, permits,
waivers, exemptions, authorizations and approvals
of the United States Government, any agency or
instrumentality thereof (including the approvals
required by 25 U.S.C. Section 81 and 25 U.S.C. 2711),
required (or, in the opinion of MANAGER or its
counsel, advisable) to be in effect on the Closing
Date shall have been issued and shall be in full
force and effect on such date, and copies thereof
shall have been delivered to MANAGER; provided,
however, that the conditions contained in this
Section 9.11(E) shall not be a condition to
MANAGER's obligation to provide financing for those
Development Costs necessary for the submission of
this Agreement, the Development Loan Documents, and
any related collateral agreements for approval by
the Commission pursuant to the IGRA, or to obtain
any other such license, permit, waiver exemption,
authorization or approval.
(F) Proceedings and Documents. All legal details and
proceedings in connection with the transactions
contemplated by this Agreement, the Development
Loan Agreements and any related agreement shall be
in form and substance reasonably satisfactory to
counsel for MANAGER and MANAGER shall have received
all such counterpart originals or certified or
other copies of such documents and proceedings in
connection with such transactions, in form and
substance as to certification and otherwise,
reasonably satisfactory to counsel for MANAGER, as
MANAGER or counsel for MANAGER may reasonably
request.
(G) Financing. It is contemplated that one or more
third parties may provide financing for the
Development Loan. This Agreement, the Development
Loan Agreements, and any related agreement
contemplated hereby shall be in form and substance
reasonably satisfactory to any party providing
financing in connection with the Development Loan,
subject to approval of the NIGC. MANAGER and TRIBE
agree to make such changes to this Agreement as may
be necessary to accomodate the reasonable
requirements of third parties providing such
financing.
(H) TRIBE agrees that this Agreement is in compliance
with 25 U.S.C. Section 81.
9.12 MANAGER'S REPRESENTATIONS AND WARRANTIES. MANAGER
represents and warrants that:
(A) Organization and Qualification. MANAGER is a
Delaware corporation, duly organized, validly
existing and in good standing under the laws of the
State of Delaware. The Company has all requisite
power and authority to own and lease its property
and to conduct its business as it is now being
conducted. MANAGER is a wholly owned subsidiary of
Florida Gaming Corporation, a Delaware corporation.
(B) Absence of Conflicts. Neither the execution and
delivery of this Agreement nor consummation of the
transactions contemplated herein nor performance of
or compliance with the terms and conditions hereof
by MANAGER will (a) violate any provision of
MANAGER's certificate of incorporation, by-laws or
other organizational documents, or any order, rule
or regulation of any court or governmental agency
applicable to MANAGER; or (b) materially violate,
conflict with, or result in any breach of any
provision of any agreement, instrument or other
contractual obligation of MANAGER.
(C) Financial Capacity. MANAGER has the resources and
capability to provide financing for Development
Expenses, Initial Working Capital, and MANAGER's
other financial commitments provided in this
Agreement.
SECTION 10. ENFORCEMENT AND TERMINATION OF AGREEMENT
10.1 NOTICE. To be effective, all notices, consents,
agreements or other communications required or permitted hereunder
shall be in writing. A written notice or other communication shall
be deemed to have been given hereunder (i) if delivered by hand,
when the notifying party delivers such notice or other
communication to all other parties to this Agreement, (ii) if
delivered by facsimile or overnight delivery service, on the first
business day following the date such notice or other communication
is transmitted by telecopier or timely delivered to the overnight
courier, or (iii) if delivered by mail, on the third business day
following the date such notice or other communication is deposited
in the U.S. mail by certified or registered mail addressed to the
other party. Mailed or telecopied communications shall be directed
as follows unless written notice of a change of address or
facsimile number has been given in writing in accordance with this
Section:
If to the MANAGER: Ponca Management, Inc.
1750 South Kings Highway
Fort Pierce, FL 34945-3099
ATTN: W. Bennett Collett
Chairman and Chief Executive
Officer
Facsimile No.: (407)464-0099
With a copy to: R. James Straus
Brown, Todd & Heyburn PLLC
3200 Providian Center
Louisville, KY 40202-3363
Facsimile No.: (502)581-1087
If to TRIBE: Ponca Tribe of Nebraska
P. O. Box 288
Niobrara, NE 68760
ATTN: Chairman of Tribal Council
Facsimile No.: (402)857-3736
With a copy to: Brian R. Watkins
Watkins & Scott
1115 K Street, Suite 104
Lincoln, NE 68508
Facsimile No.: (402)474-3330
10.2 EXPIRATION OF TERM. The term of this Agreement shall
expire upon the date five (5) years after the commencement of Class
II and Class III Gaming at the permanent Facility of the Tribal
Gaming Operation, unless mutually extended pursuant to Section 5.2.
10.3 VOLUNTARY TERMINATION OF AGREEMENT. This Agreement may
be terminated upon mutual written consent of both parties.
10.4 TERMINATION DUE TO MATERIAL BREACH. Either party may
terminate this Agreement, following the provisions for notice of
cure required in Section 10.5 herein, if the other party commits,
or allows to be committed, any material breach of this Agreement.
Notice of the termination shall be provided by TRIBE to the
Chairman of the Commission within ten (10) days after termination.
Material breach of this Agreement shall include, but not be limited
to, the following:
(A) Subject to the provisions of Sections 10.5 and
10.9, breach of warranty or failure of either party
to perform any material duty or obligation for a
period of thirty (30) consecutive business days
after the required date of performance as set forth
by the terms of this Agreement;
(B) The conviction of any person or entity having a
direct financial interest in, or management
responsibility for this Agreement of any felony, or
any crime involving any aspect of the gaming
operation or involving a gaming law violation, or
of any crime involving moral turpitude, by a court
of competent jurisdiction provided, however that
the conviction of any such person or entity shall
not constitute a material breach of this Agreement
if the financial interest or management
responsibility of such person or entity is
terminated within ten (10) days of conviction;
(C) The dissolution, insolvency or bankruptcy of
MANAGER;
(D) A final unappealable decision by the Commission of
any material violation of IGRA;
(E) Revocation of or refusal to renew any license which
may hereafter be required by TRIBE pursuant to
applicable tribal law in effect at the time of
issuance or renewal of the license, provided that
such revocation or refusal to renew license shall
be for cause. TRIBE shall not unreasonably seek
such revocation and shall not unreasonably refuse
to renew license, and shall provide MANAGER with
due process at every phase of any proceeding
relating to revocation of license or refusal to
renew license; and
(F) Revocation of or refusal to renew any license that
may hereafter be required by the State of Nebraska,
if required, under the terms of the Compact,
provided that such revocation or refusal to renew
license shall be for cause.
10.5 NOTICE PRIOR TO TERMINATION FOR MATERIAL BREACH. Neither
party may terminate this Agreement on the grounds of a material
breach unless (i) written notice is provided by the nondefaulting
party to the alleged defaulting party identifying the nature of the
material breach and its intention to terminate this Agreement, and
(ii) the defaulting party fails to cure or take steps to
substantially cure such breach within thirty (30) days after
receipt of such notice. Discontinuance or substantial correction
of the material breach within such thirty (30) day notice period
shall constitute a cure thereof.
10.6 TERMINATION OR EXPIRATION OF AGREEMENT; DISPOSITION OF
PROPERTY RECORDS, DISTRIBUTABLE NET REVENUES. Upon the expiration
of the term of this Agreement, or if this Agreement is terminated
or the Tribal Gaming Operation ceases operations before the
expiration of the term of this Agreement or is ordered to cease
operations by a court of competent jurisdiction, all funds
contained in the Daily Expense Account, the Payroll Account and the
Prize Account shall be transferred into the Revenue Account, and
all financial records, including financial reports, lists of
inventory, bank statements, canceled checks, prize receipts, and
all other financial records required to be kept by MANAGER pursuant
to this Agreement shall be immediately placed in the possession of
TRIBE. Following an audit of the Tribal Gaming Operation by an
independent certified public accountant, and satisfaction by TRIBE
and MANAGER that all operating Expenses and Development Expenses,
plus interest, for the Tribal Gaming operation have been paid,
TRIBE shall distribute to MANAGER the remaining Distributable Net
Profits accrued as of the date of the cessation of operations
payable to MANAGER in accordance with the provisions of this
Agreement. The terms and conditions contained in this Section
shall survive any termination of this Agreement.
10.7 TERMINATION FOR CAUSE: RETURN OF MANAGER'S FINANCIAL
CONTRIBUTIONS. If this Agreement is terminated for cause due to
the fault of either party and any outstanding principal of, plus
interest payable on, the Development Loan has not been repaid by
TRIBE pursuant to Section 8.9(B) of this Agreement, TRIBE shall
make monthly payments in such amounts and as otherwise provided in
the Development Loan Agreements from TRIBE's share of "net
revenues" (as defined by IGRA and the regulations thereunder) and
non-gaming related net revenues from the Tribal Gaming Operation,
if any, until the outstanding principal balance of, and interest
payable on the Development Loan has been repaid in full. The terms
and conditions contained in this Section shall survive any
termination of this Agreement.
10.8 RESOLUTION OF DISPUTES: LIMITED WAIVER OF SOVEREIGN
IMMUNITY. TRIBE does not waive its sovereign immunity from
uncontested suit in connection with tribal affairs except as
provided in this Section 10.8.
(A) Arbitration. Any controversy or claim arising out
of or relating to this Agreement or that relates to
or affects in any way the ability of MANAGER to
engage in gaming under this Agreement, whether
sounding in contract, tort, or otherwise, including
without limitation claims asserting the breach or
invalidity of this Agreement, or arising under any
laws, ordinances, regulations, licensing procedures
or enactments of any sort by TRIBE, the Tribal
Gaming Commission or any other agency of TRIBE, or
seeking review of or appeal from any decision by
any such Tribal agency, and which cannot be
resolved by the parties in good faith, shall be
adjudicated exclusively by binding arbitration
conducted by the American Arbitration Association
(the "AAA") in accordance with the Commercial
Arbitration Rules of the AAA then in effect. The
arbitration shall take place in Omaha, Nebraska, or
such other place as the parties may agree. In any
arbitration proceeding, each party shall appoint an
arbitrator within ten (10) days of the commencement
of the arbitration and the two arbitrators shall
mutually appoint a third arbitrator within ten (10)
days of their appointment. If either party fails
or refuses to appoint an arbitrator, the arbitrator
appointed by the other party shall be the sole
arbitrator. If the two arbitrators are unable to
agree on the appointment of a third arbitrator
within ten (10) days, the third arbitrator will be
appointed by the AAA's Omaha office. The decision
of a majority of the members of the arbitration
panel shall be final, binding, and unappealable.
The costs of the arbitration shall be borne equally
by the parties, unless the arbitration panel rules
otherwise.
(B) Judicial Enforcement of Arbitration Decision;
Waiver of Immunity and Consent to Suit. An
arbitration decision rendered under Section 10.8(A)
may be enforced through appropriate judicial
proceedings brought before any federal court that
has jurisdiction over the subject matter and
parties or in the event that a federal court fails
to exercise jurisdiction before the appropriate
state court. In accordance with the provisions of
the resolution of the Tribal Council, dated August
21, 1995, TRIBE does not waive its sovereign
immunity (and any defense based thereon) from any
suit, action or proceeding in any forum, except as
required to enforce any arbitration decision
rendered under Section 10.8(A), including any legal
process (whether through service of notice,
attachment prior to the judgment, attachment in aid
of execution, execution, exercise of contempt
powers or otherwise), with respect to this
Agreement, the Development Loan Agreements, or any
of the agreements or transactions contemplated
hereby or thereby, and MANAGER with respect thereto
shall have all available legal and equitable
remedies, including, without limitation, the right
of MANAGER to specific performance, money damages
and/or injunctive and declaratory relief and TRIBE
expressly consents to the exercise of jurisdiction
over such action and over TRIBE and to the extent
permitted by federal law, by the Federal District
Court for the District of Nebraska or in the event
said courts fail to exercise jurisdiction by court
of general jurisdiction.
(C) Personal Jurisdiction and Service of Process.
TRIBE and MANAGER hereby irrevocably consent to
personal jurisdiction and venue in any Federal
Court sitting in the State of Nebraska. In the
event that said federal court fails to exercise
jurisdiction, and only in that event, the parties
agree to submit and consent to personal
jurisdiction of venue and any court of general
jurisdiction, and hereby waive any claim either may
have that such court is an inconvenient forum for
the purposes of any suit, action or other
proceeding arising out of this Agreement, the
Development Loan Agreements, or any of the
agreements or transactions contemplated hereby or
thereby, including any action or proceeding to
enforce any arbitration decision rendered under
Section 10.8(A), which is brought against TRIBE or
by TRIBE against MANAGER, as the case may be, and
hereby agree that all claims in respect of any such
suit, action or proceeding may be heard or
determined in any such court; and TRIBE and MANAGER
each further consent to the service of process of
any of the aforementioned courts in any such suit,
action or proceeding by the mailing of copies
thereof by registered or certified mail, postage
prepaid, to TRIBE or MANAGER at its address set
forth herein for the giving of notices, such
service to become effective ten days after such
mailing.
(D) Damages. Any award of money damages in connection
with a claim arising pursuant to this Agreement
shall be payable solely from the assets and
revenues from the Tribal Gaming Operation and not
from any other source or any other asset or revenue
of TRIBE.
(E) Survival. The waivers contained in this Section
shall survive any termination of this Agreement.
(F) This space left blank intentionally.
10.9 MUTUAL INDEMNIFICATION.
(A) By TRIBE. TRIBE shall indemnify and hold MANAGER
harmless from and against, and shall promptly pay
to MANAGER the full amount of, any loss, claim,
damage, liability or expense (including reasonable
attorneys' fees) incurred by MANAGER after the date
of this Agreement as a result of (i) any material
inaccuracy in any representation or warranty or any
breach by TRIBE of any covenant or agreement of
TRIBE contained in this Agreement, or (ii) any
third Person claim (as defined in Section 10.9(c)
below) arising from the execution of this
Agreement.
(B) By MANAGER. MANAGER shall indemnify and hold TRIBE
harmless from and against, and shall promptly pay
to TRIBE the full amount of, any loss, claim,
damage, liability or expense (including reasonable
attorneys' fees) incurred by TRIBE after the date
of this Agreement as a result of any material
inaccuracy in any representation or warranty or any
breach by MANAGER of any covenant or agreement of
MANAGER contained in this Agreement.
(C) Third Person Claims. Promptly after any party
hereto (hereinafter the "Indemnified Party") has
received notice of or has knowledge of any claim by
a person not a party to this Agreement or a Party-in-
Interest hereunder (a "third Person") or the
commencement of any action or proceeding by a third
Person, the Indemnified Party shall, as a condition
precedent to a claim with respect thereto being
made against any party obligated to provide
indemnification pursuant to this Section 10.9
(hereinafter the "Indemnifying Party"), give the
Indemnifying Party written notice of such claim or
the commencement of such action or proceeding. The
Indemnifying Party's obligation hereunder shall be
reduced to the extent that its rights were impaired
by the Indemnified Party's failure to give such
notice to the Indemnifying Party within seven days
of the Indemnified Party's first having notice or
knowledge of a claim. Such notice shall state the
nature and the basis of such claim and a reasonable
estimate of the amount thereof. The Indemnifying
Party shall have the right to defend and settle, at
its own expense and by its own counsel, any such
matter so long as the Indemnifying Party pursues
the same in good faith and diligently. If the
Indemnifying Party undertakes to defend or settle,
it shall promptly notify the Indemnified Party of
its intention to do so, and the Indemnified Party
shall cooperate with the Indemnifying Party and its
counsel in the defense thereof and in any
settlement thereof. Such cooperation shall
include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records or
information and access to personnel reasonably
requested by the Indemnifying Party that are in the
Indemnified Party's possession or control.
Notwithstanding the foregoing, the Indemnified
Party shall have the right to participate in any
matter through counsel of its own choosing at its
own expense; provided that the Indemnifying Party's
counsel shall always be lead counsel and shall
determine all litigation and settlement steps,
strategy and the like. After the Indemnifying
Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such
asserted liability, and for so long as the
Indemnifying diligently pursues such defense, the
Indemnified Party shall not be liable for any
additional legal expenses incurred by the
Indemnifying Party in connection with any defense
or settlement of such asserted liability, except to
the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified
Party shall be reimbursed by the Indemnifying Party
for reasonable additional legal expenses, out-of-pocket
expenses and allocable share of employee
compensation incurred in connection with such
participation for any employee whose participation
is so requested. If the Indemnifying Party desires
to accept a final and complete settlement of any
such third Person claim and the Indemnified Party
refuses to consent to such settlement, then the
Indemnifying Party's liability under this Section
with respect to such third Person claim shall be
limited to the amount so offered in settlement by
said third Person and the Indemnified Party shall
reimburse the Indemnifying Party for any additional
costs of defense which it subsequently incurs with
respect to such claim. If the Indemnifying Party
does not undertake to defend such matter to which
the Indemnified Party is entitled to
indemnification hereunder, or fails diligently to
pursue such defense, the Indemnified Party may
undertake such defense through counsel of its
choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such
matter, without the consent of the Indemnifying
Party, and the Indemnifying Party shall reimburse
the Indemnified Party for the amount paid in such
settlement and any other liabilities or expenses
incurred by the Indemnified Party in connection
therewith. Except as above provided, under no
circumstances shall the Indemnified Party settle
any third Person claim without the written consent
of the Indemnifying Party, which consent shall not
be reasonably withheld.
(D) Settlement of Claims. At any time and from time to
time, a party entitled to indemnification under
this Section 10.9 (an "Indemnified Party") may give
to the party from whom it seeks such
indemnification (an "Indemnifying Party") notice of
a claim for indemnification (a "Claim") setting
forth the amount of the Claim, the provisions of
this Agreement upon which the Indemnified Party
bases its Claim, and a brief description of the
facts and circumstances which the Indemnified Party
asserts give rise to the Claim. If the Indemnified
Party does not, within fifteen (15) days of its
giving notice of a Claim, receive notice from the
Indemnifying Party (a "Reply") reasonably objecting
to all or a part of the Claim and setting forth a
satisfactory description of the facts,
circumstances and reasons upon which the objection
is based, or if such a Reply is withdrawn by the
Indemnifying Party or the individual making the
Reply, then the Indemnifying Party shall promptly
pay the Indemnified party an amount equal to the
amount claimed, or the amount of any part of a
Claim with respect to which the Indemnified Party
has received no objection in a Reply. Any such
partial payment shall in no way limit or adversely
affect any other right, power or remedy that an
Indemnified Party may have.
10.10 FORCE MAJEURE: INTERRUPTION OR FRUSTRATION OF
PURPOSE OF THIS AGREEMENT.
(A) Force Majeure. Neither TRIBE nor MANAGER shall be
considered in default or in breach of any terms or
conditions of this Agreement in the event
performance of one or both of such parties'
obligations hereunder is delayed because of an
unforeseeable cause beyond the parties' control and
without the parties' fault and/or negligence,
including, but not limited to, acts of God,
earthquakes, weather, war, riots, acts of a public
enemy, acts of the federal government, acts of the
state government, acts of another party, fines,
floods, epidemics, strikes, or for delays of any
suppliers due to such causes. If any such delay
occurs at any time, the completion or delivery
under this Agreement shall be extended for the
period of such delay upon written notice from the
party seeking the extension to the other party.
(B) Interruption or Frustration of Purpose of this
Agreement. If any governmental entity by means of
police, judicial, legislative or administrative
action, whether federal, state, county, municipal
or tribal, or any group of individuals through the
use of force or physical intimidation effectively
inhibit regularly scheduled gaming activities from
proceeding on a reoccurring basis, MANAGER may, in
its judgment, suspend the performance of its
obligations hereunder for such time as the Tribal
Gaming Operation is so prevented from operating.
If the Tribal Gaming Operation is not permitted to
operate for any period of time exceeding fourteen
(14) days, then no payment whatsoever shall be made
to TRIBE or MANAGER from the Net Revenues. If such
interruption, which in the opinion of either party
hereto, effectively prevents the Tribal Gaming
Operation from regularly engaging in the business
intended hereunder, it is agreed that legal counsel
shall be engaged, the selection of which shall be
jointly agreed upon by TRIBE and MANAGER (such cost
and expense for counsel shall be deemed an
operating Expense of the Tribal Gaming Operation)
to defend the interests of MANAGER and TRIBE.
If at any time during the term of this Agreement such counsel
advises that, in its legal opinion, neither TRIBE nor MANAGER is
likely to prevail in legal proceedings or it is impractical to
continue the venture as contemplated hereunder, the purpose of this
Agreement shall be deemed to be frustrated. If, at the time such
decision is made, the premises for Tribal Gaming Operation have
been partially completed or substantial monies as have been
committed or expended in anticipation of construction, TRIBE and
MANAGER hereby covenant and agree to modify this Agreement and the
use of Site to convert the Tribal Gaming Operation into another
economic enterprise, of a nature suitable to MANAGER and not
inconsistent with TRIBE'S known social, cultural and economic needs
in order to recoup Development Expenses, plus interest, in
accordance with the percentages to be negotiated between TRIBE and
MANAGER for the balance of the term of this Agreement or as per the
agreement of the parties hereto.
The preceding paragraph shall not constitute a transfer or
assignment of any present interest in land to MANAGER, nor shall it
be considered an alienation of the ownership interest of TRIBE.
10.11 COMPLIANCE WITH 25 U.S.C. Section 81.
(A) In compliance with 25 U.S.C. Section 81, the residence
and occupation of the Parties-in-Interest are
stated on Exhibit A. The residence and occupation
of TRIBE are as follows:
Party-in-Interest: Ponca Tribe of Nebraska
Residence:
Occupation: Federally recognized Indian tribe.
(B) Scope of Authority:
The Chairman of the Tribal Council of TRIBE is
authorized to execute this Agreement by resolution
of the Tribal Council of TRIBE, said resolution
adopted at a Tribal Council meeting at Niobrara,
Nebraska on August 21, 1995. The Chairman of the
Tribal Council exercises his authority in this
instance because he believes that the Agreement is
in the best interests of TRIBE.
(C) This Agreement was executed by TRIBE on August 21,
1995, at Niobrara, Nebraska for the particular
purposes set forth above, and by MANAGER on
August 28, 1995, at New Albany, Indiana for the
particular purposes set forth above.
(D) This Agreement shall expire on or before January 1,
2006.
SECTION 11. EFFECTIVE DATE: MISCELLANEOUS
11.1 EFFECTIVE DATE. This Agreement shall be effective and
binding as of date of the approval of this Agreement by the
Chairman of the Commission, as provided by 25 C.F.R. Section 533.1(n).
11.2 CONSENT. Whenever the consent of a party shall be
required to be obtained by the other party under any provision of
this Agreement, such consent shall not be unreasonably withheld.
11.3 INTEGRATION. This Agreement embodies the entire
agreement and understanding among the parties hereto relating to
the subject matter hereof and supersedes all prior agreements,
understandings, representations, and discussions.
11.4 AMENDMENT. TRIBE and MANAGER shall not amend, modify, or
waive any provision of this Agreement without the written consent
of both parties unless expressly permitted under the terms of this
Agreement.
11.5 SEVERABILITY. If any one or more of the provisions
contained in this Agreement, or any application hereof, shall be
invalid, illegal, or unenforceable in any respect, the validity,
legality, or enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
11.6 GOVERNING LAW. This Agreement shall be governed by the
laws of the United States of America, and where such laws are
nonexistent or inapplicable, the laws of the State of Nebraska.
This Section 11.6 does not grant jurisidiction to the State of
Nebraska over tribal affairs.
11.7 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which together shall constitute one and
the same instrument.
11.8 SURVIVAL. The terms and conditions contained in Sections
11.1 through 11.8 shall survive any termination of this Agreement.
TRIBE represents and warrants that the terms and conditions of
this Agreement shall become binding and enforceable upon TRIBE upon
the execution of this Agreement by the Chairman of the Tribal
Council, subject to the approval of the Chairman of the Commission.
PONCA TRIBE OF NEBRASKA
By:_____________________________________
Fred LeRoy, Chairman of the Council
PONCA MANAGEMENT, INC.
By:_____________________________________
W. Bennett Collett
Chairman and Chief Executive Officer
FOR IMMEDIATE RELEASE
FLORIDA GAMING CORPORATION AGREES TO BUILD AND OPERATE A
NATIVE AMERICAN CASINO IN THE OMAHA AREA
Ft. Pierce, FLA, August 28, 1995. Florida Gaming Corporation
(NASDAQ-Small Cap-"BETS") today announced the signing of a
Management Agreement with the Ponca Indian Tribe of Nebraska to
build and operate a casino in Douglas County (Omaha) for Class II
and Class III gaming as authorized by the Indian Gaming Regulatory
Act. Under the Agreement, the Ponca Tribe will receive 70% of the
net revenues from gaming, with Florida Gaming receiving 30%. The
Management Agreement has a 5-year term beginning upon the
commencement of gaming at the facility.
Florida Gaming will assist the Ponca Tribe in acquiring land in
trust to be used in the development of a gaming and entertainment
complex. The first phase of the complex will include a 30,000
square foot building for bingo and other types of Class II gaming.
W. Bennett Collett, Chairman of Florida Gaming, commented: "We
negotiated without a partner, and we are very pleased to be able to
participate with the Ponca Tribe and nearby communities in an
extremely exciting business opportunity. Florida Gaming is
entering an especially attractive market which, I believe, could
significantly enhance shareholder value."
Chairman of the Ponca Tribe Council, Fred LeRoy, commented on the
Ponca Tribe's search for alternative sources of income in light of
possible U.S. Government program cutbacks: "The Ponca Tribal
Council believes that our agreement with Florida Gaming is a
significant first step in providing an important alternative source
of income and assistance to the Ponca Tribe."
The Agreement, is subject to approval by the National Indian Gaming
Commission, the acquisition of land that can be taken in trust
under the Indian Gaming Regulatory Act as the site for the
facility, the execution of definitive financing agreements, and
certain other conditions. Under the Indian Gaming Regulatory Act,
certain gaming activities are also subject to the negotiation of a
compact between the Ponca Tribe and the State of Nebraska.
Florida Gaming announced on June 26, 1995, an Agreement with
Centrum X Corporation that gives Florida Gaming right of first
refusal in a joint venture to build and manage a casino on the
Tonkawa Indian Tribe reservation in Oklahoma. If Florida Gaming
exercises its right of refusal, the Tonkawa Management Agreement
with Centrum X will be transferred to a newly formed corporation to
be 80% owned by Florida Gaming and 20% owned by Centrum X and its
associates.
On August 17, 1995, Florida Gaming announced an Agreement in
Principle to acquire EagleVisions Gaming Group of the Americas,
Inc. of Minneapolis, Minnesota, the closing date of which has been
extended from August 31 to September 30, 1995. EagleVisions is
headed by Leonard Prescott, former CEO of the Mystic Lake Casino
Complex near Minneapolis, the second largest and second most
profitable Native American Casino (Second only to the Foxwoods
Casino at Ledyard, Connecticut). Mystic Lake, which earned over
$96,000,000 in 1994, is a 375,000 square foot complex, housing more
than 2500 slot machines, 125 table games, a large bingo hall, and
other support and entertainment facilities.
Florida Gaming Corporation owns and operates Jai-Alai and Inter-Track
Wagering (I.T.W.) Pari-Mutuel facilities in Fort Pierce, Florida.
Contact: W. Bennett Collett, Chairman, or Timothy L. Hensley,
Executive Vice President, (502)589-2000 or (407)464-7500.
