Exhibit 10.5

 

THIRD AMENDED AND RESTATED
GAMING MANAGEMENT AGREEMENT

 

THIS AGREEMENT, made and entered into this 16 day of June, 1995, at Concho,
Oklahoma, by and between THE CHEYENNE AND ARAPAHO TRIBES OF OKLAHOMA, a
federally recognized Indian Tribe organized pursuant to Section 3 of the Act of
June 26, 1936 (49 Stat. 1967) by and through its duly elected Tribal Chairman,
Charles Surveyor (hereinafter referred to as “Tribe”), and SOUTHWEST CASINO AND
HOTEL CORP. (formerly Southwest Casino and Hotel Ventures, Inc.), a Minnesota
corporation with its principal place of business located in Minneapolis,
Minnesota (hereinafter referred to as “Manager”).

 

W I T N E S S E T H

 

WHEREAS, Tribe desires to become involved with Manager in the operation of a
Class II gaming facility at a location described on Exhibit A hereto; and

 

WHEREAS, Tribe is committed to the use of gaming activities as a primary means
of economic development and financial support of Tribe’s budget for tribal
programs and essential governmental services; and

 

WHEREAS, Tribe desires to contract for the management services of Manager, in
order to assure that the proposed gaming facility is well managed, marketed and
sufficiently funded for all initial costs of construction, rehabilitation,
equipping, staffing and training of all employees; and

 

WHEREAS, Manager agrees to secure monies to fund the project and assist the
Tribe in obtaining the capital investment necessary to the development of such
facility or facilities, and the management experience necessary to the
conducting of successful Tribal gaming operations pursuant to the terms and
conditions more fully set forth hereinafter; and

 

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WHEREAS, Tribe and Manager entered into a Gaming Management Agreement on January
5, 1993, and desire to amend this Agreement to comply with regulations adopted
under the Act defined herein; and

 

WHEREAS, Tribe and Manager hereby amend and fully restate their understanding in
this Third Amended and Restated Gaming Management Agreement;

 

IT IS THEREFORE AGREED by the parties hereto, that Tribe offers to hire Manager,
and Manager agrees to accept Tribe’s offer and to be employed as contract
manager to manage Tribe’s Class II gaming facilities under the terms and
conditions and for the consideration more fully described hereinbelow.

 

ARTICLE I
DEFINITIONS

 

As used in this Agreement, the following terms shall have the respective
meanings ascribed thereto below:

 

1.1           “BUSINESS COMMITTEE” SHALL MEAN THE LEGISLATIVE BODY ESTABLISHED
UNDER THE LAWS OF THE TRIBE WITH JURISDICTION TO OVERSEE THE ENTERPRISE ON
BEHALF OF THE TRIBE, AND TO CONTRACT FOR THE CONSTRUCTION AND OPERATION OF ANY
ENTERPRISE, INCLUDING THE ENTERPRISE THAT IS CONTEMPLATED HEREIN.

 

1.2           “CPA” SHALL MEAN AN ACCOUNTING-FIRM OF REGIONAL OR NATIONAL
RECOGNITION SELECTED BY TRIBAL REPRESENTATIVE.

 

1.3           “BUSINESS CORPORATION” SHALL MEAN THE CHEYENNE AND ARAPAHO
BUSINESS DEVELOPMENT CORPORATION, AN ENTERPRISE SUBSIDIARY OF THE TRIBE TO WHICH
THIS AGREEMENT SHALL BE ASSIGNED, AND THROUGH WHICH THE TRIBE SHALL ENGAGE IN
THE BUSINESS OF THE ENTERPRISE.

 

1.4           THE “ENTERPRISE” IS A COMMERCIAL ENTERPRISE OF THE TRIBE
AUTHORIZED TO ENGAGE IN (A) GAMING OF EVERY VARIETY DEFINED AS CLASS II GAMING
BY THE ACT (AS DEFINED BELOW); AND

 

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(B) ANY OTHER LAWFUL COMMERCIAL ACTIVITY ALLOWED ON THE PROPERTY.  THE TRIBE
SHALL HAVE THE SOLE PROPRIETARY INTEREST IN AND RESPONSIBILITY FOR THE CONDUCT
OF ALL GAMING OPERATIONS (AS DEFINED BELOW) CONDUCTED BY THE ENTERPRISE, SUBJECT
TO THE RIGHTS AND RESPONSIBILITIES OF THE MANAGER UNDER THIS AGREEMENT.

 

1.5           “GAMING OPERATION” OR “GAMING” MEANS THE ECONOMIC ENTITY THAT IS
LICENSED BY THE TRIBE, OPERATES THE GAMES, RECEIVES THE REVENUES, ISSUES THE
PRIZES, AND PAYS THE EXPENSES.

 

1.6           “GAMING FACILITY” OR “FACILITY” MEANS THE BUILDING AND GROUNDS,
INCLUDING ANY PARKING AREAS AND DRIVES USED FOR INGRESS AND EGRESS AND
CONNECTING THE “FACILITY” TO THE CITY, COUNTY OR STATE ROADS AND HIGHWAYS. 
“FACILITY” INCLUDES ANY AND ALL BUILDINGS AND IMPROVEMENTS LOCATED OR
CONSTRUCTED ON THE PREMISES, AND REFERENCES AUTHORITY AND CONTROL OVER ALL
BUSINESS ACTIVITIES CONDUCTED WITHIN SUCH IMPROVEMENTS OR UPON THE SUBJECT
PREMISES OR IN ANY WAY RELATED OR CONNECTED THERETO.

 

1.7           “GAMING RELATED OPERATING EXPENSES” SHALL MEAN THOSE EXPENSES,
(EXCLUDING MANAGEMENT FEES), CALCULATED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (GAAP), NECESSARY FOR THE GAMING OPERATION, INCLUDING THE
FOLLOWING: (1) REPAYMENT OF INTEREST THEREON FOR LOANS -PROVIDED OR SECURED BY
OR WITH THE ASSISTANCE OF MANAGER TO THE TRIBE PURSUANT TO THIS AGREEMENT; (2)
THE PAYMENT OF SALARIES, WAGES, BENEFIT PROGRAMS, AND TRAINING FOR EMPLOYEES OF
THE GAMING OPERATION, INCLUDING MANAGER’S REPRESENTATIVE DEFINED IN SECTION 3.2
A HEREOF, AND CONTRACT LABOR OR SERVICES RETAINED ON BEHALF OF THE GAMING
OPERATION; (3) MATERIALS AND SUPPLIES FOR THE GAMING OPERATION; (4) UTILITIES;
(5) THE COST OF FIRE PROTECTION, EMERGENCY MEDICAL SERVICES AND LAW ENFORCEMENT;
(6) INTEREST ON INSTALLMENT CONTRACT PURCHASES OR LEASE-TYPE FINANCING BY THE
GAMING OPERATION; (7) INSURANCE AND BONDING; (8) ADVERTISING AND MARKETING,
INCLUDING BUSING AND TRANSPORTATION OF EMPLOYEES AND/OR CUSTOMERS TO THE
FACILITY AND

 

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INCLUDING SUCH PORTION OF ANY LOSS REALIZED FROM NON-GAMING OPERATIONS
DETERMINED BY MANAGER AND TRIBE TO BE A PROPER ALLOCATION TO THE MARKETING
BUDGET; (9) FEES, COSTS, DUES AND CONTRIBUTIONS ASSOCIATED WITH TRIBAL AND
GAMING OPERATION MEMBERSHIP AND PARTICIPATION IN TRADE ASSOCIATIONS, POLITICAL
ACTION ASSOCIATIONS AND RELATED ASSOCIATIONS; (10) SECURITY COSTS AND BACKGROUND
CHECKS OF EMPLOYEES OF THE GAMING OPERATION; (11) REASONABLE TRAVEL EXPENSES FOR
OFFICERS OF THE MANAGER TO INSPECT AND OVERSEE THE GAMING OPERATION, AND FOR THE
CHAIRMAN OF THE TRIBE AND MEMBERS OF THE BUSINESS COMMITTEE AND KEY EMPLOYEES OF
TRIBE WHEN SUCH TRAVEL IS REASONABLY RELATED TO THE GAMING OPERATION, SUBJECT TO
THE BUDGET AGREED UPON BY THE MANAGER AND THE BUSINESS COMMITTEE; (12) TRASH
REMOVAL; (13) COSTS OF GOODS SOLD; (14) OTHER EXPENSES DESIGNATED AS OPERATING
EXPENSES IN THE ANNUAL BUDGET OF THE GAMING OPERATION AS APPROVED BY THE
BUSINESS COMMITTEE AND MANAGER; (15) PROFESSIONAL FEES AND EXPENSES, INCLUDING
LEGAL AND ACCOUNTING FEES INCURRED ON BEHALF OF THE GAMING OPERATION; (16)
NATIONAL INDIAN GAMING COMMISSION FEES; (17) AMORTIZATION OF START UP EXPENSES;
(18) ANY FEDERAL, STATE OR TRIBAL TAXES OR ASSESSMENTS WHICH ARE PROPERLY
ASSESSED AGAINST THE GAMING OPERATION; AND (19) REASONABLE ACCRUALS ESTABLISHED
BY MANAGER AFTER CONSULTATION WITH TRIBE TO PROVIDE FOR FUTURE PAYMENT OF
OPERATING EXPENSES AND JACKPOT TYPE PRIZES.

 

1.8           “GENERAL CONTRACTOR” SHALL MEAN KRAUS-ANDERSON CONSTRUCTION
COMPANY OR SUCH OTHER PERSON OR ENTITY RECOMMENDED BY MANAGER AND SELECTED BY
THE TRIBAL REPRESENTATIVE, ON BEHALF OF THE TRIBE, ACCEPTABLE TO MANAGER, WHO IS
A LICENSED GENERAL CONTRACTOR, EXPERIENCED IN THE CONSTRUCTION OF COMMERCIAL
BUILDINGS AND APPURTENANT STRUCTURES AND SERVICE FACILITIES, AND IS CAPABLE OF
FURNISHING A PERFORMANCE AND PAYMENT BOND OF NOT LESS THAN THREE MILLION DOLLARS
($3,000,000.00).

 

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1.9           “GENERAL MANAGER” SHALL MEAN THE PERSON SELECTED BY MANAGER AND
APPROVED BY THE TRIBAL REPRESENTATIVE, WHO IS EXPERIENCED IN THE OPERATION,
MAINTENANCE AND ACCOUNTING FOR A GAMING OPERATION.  SUCH GENERAL MANAGER SHALL
BE EMPLOYED BY THE MANAGER AND SHALL BE THE PERSON RESPONSIBLE FOR AND WITH THE
NECESSARY AUTHORITY FOR CARRYING OUT THE DUTIES AND RESPONSIBILITIES OF MANAGER
AS SET FORTH HEREIN IN CONNECTION WITH THE OPERATION OF THE FACILITY.  THE
GENERAL MANAGER SHALL BE ENGAGED DURING THE TERM OF THIS AGREEMENT.

 

1.10         “MANAGEMENT AGREEMENT” SHALL MEAN THIS AGREEMENT.

 

1.11         “NET REVENUES” SHALL MEAN GROSS GAMING REVENUES OF THE GAMING
OPERATIONS LESS (A) AMOUNTS PAID OUT AS, OR PAID FOR, PRIZES; AND (B) TOTAL
GAMING-RELATED OPERATING EXPENSES, EXCLUDING MANAGEMENT FEES.

 

1.12         “NON-GAMING NET REVENUES” SHALL MEAN GROSS REVENUES FROM ALL
NON-GAMING SOURCES, INCLUDING WITHOUT LIMITATION, RESTAURANT, FOOD SERVICE AND
GIFT SHOP ACTIVITIES, LESS TOTAL NON-GAMING RELATED OPERATING EXPENSES
CALCULATED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).

 

1.13         “PROJECT APPROVAL” MEANS APPROVAL OF THIS GAMING MANAGEMENT
AGREEMENT AND AUTHORIZATION BY MANAGER TO CONDUCT CLASS II GAMING (AS DEFINED IN
THE ACT) BY THE CHAIRMAN OF THE NATIONAL INDIAN GAMING COMMISSION (“NIGC”).

 

1.14         “PROJECT” MEANS THE GAMING FACILITY DEVELOPED AND CONSTRUCTED BY
MANAGER FOR THE CONDUCT OF GAMING OPERATIONS DEFINED AS “CLASS II GAMING” IN
SECTION 2703, SUBSECTION 7(A} OF THE ACT.

 

1.15         THIS SECTION INTENTIONALLY LEFT BLANK.

 

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1.16         “PROPERTY” SHALL MEAN A PARCEL OF LAND, MORE PARTICULARLY DESCRIBED
IN EXHIBIT A ATTACHED AS A PART HEREOF, ON WHICH THE BUSINESS COMMITTEE, ON
BEHALF OF THE TRIBE, WILL BUILD THE FACILITY, WHICH PARCEL IS HELD BY THE UNITED
STATES IN TRUST FOR THE TRIBE.

 

1.17         “START-UP EXPENSES” SHALL MEAN ALL EXPENSES NECESSARY TO PREPARE
FOR THE COMMENCEMENT OF GAMING INCURRED WHICH ARE NOT OTHERWISE OPERATING
EXPENSES INCURRED UNDER SECTION 1.6 OF THIS AGREEMENT.  START-UP EXPENSES SHALL
INCLUDE COSTS TO THE BUSINESS COMMITTEE, ON BEHALF OF THE TRIBE AS SET FORTH IN
SECTION 2.2 A HEREOF, AND THE COST TO MANAGER FOR LEGAL AND OTHER PROFESSIONAL
FEES INCURRED ON BEHALF OF THE GAMING OPERATION WITH THE SPECIFIC APPROVAL OF
THE MANAGER, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, INCURRED FOR
PURPOSES OF ENTERING INTO OR OBTAINING APPROVAL OF THIS AGREEMENT.  START-UP
EXPENSES ALSO SHALL INCLUDE, BUT NOT BE LIMITED TO, NECESSARY SALARIES,
CONSULTING FEES, EMPLOYEE BACKGROUND CHECKS AND TRAINING, MARKETING EXPENSES,
SUPPLIES, INVENTORIES, UNIFORMS, UTILITY COSTS, TRAVEL AND SIMILAR EXPENSES
NECESSARY TO PREPARE FOR THE COMMENCEMENT OF GAMING, TOGETHER WITH SUCH OTHER
EXPENSES INCURRED WITH THE APPROVAL OF THE TRIBAL REPRESENTATIVE AND MANAGER.

 

1.18         “TRIBAL LAND” MEANS ANY PROPERTY WHICH MAY IN THE FUTURE, OR WHICH
PRESENTLY FITS WITHIN THE DEFINITION OF “INDIAN LAND” AT CONCHO, OKLAHOMA, FOR
PURPOSES OF ESTABLISHING TRIBAL OR FEDERAL JURISDICTION AND REGULATORY AUTHORITY
OVER GAMING ACTIVITIES.

 

1.19         “TRIBE” MEANS THE CHEYENNE AND ARAPAHO TRIBES OF OKLAHOMA, ACTING
BY AND THROUGH ITS THEN DESIGNATED BUSINESS COMMITTEE.

 

1.20         “TRIBAL REPRESENTATIVE” SHALL MEAN THE PERSON APPOINTED IN
ACCORDANCE WITH THIS AGREEMENT BY THE BUSINESS COMMITTEE.

 

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1.21         “TRIBAL GAMING BOARD” SHALL MEAN THE BODY OF THE TRIBE AUTHORIZED
TO REGULATE THE GAMING OPERATION PURSUANT TO THE CHEYENNE-ARAPAHO TRIBES OF
OKLAHOMA GAMING ORDINANCE ADOPTED APRIL 3, 1993.

 

ARTICLE II
EMPLOYMENT OF MANAGER

 

2.1           GENERAL RESPONSIBILITIES OF MANAGER.  TRIBE HEREBY RETAINS AND
ENGAGES MANAGER COMMENCING AS OF THE EFFECTIVE DATE (AS DEFINED IN SECTION 19.8
HEREOF).  MANAGER’S RESPONSIBILITIES INCLUDE ASSISTING TRIBE WITH THE OBTAINING
OR SELECTION OF DESIRABLE LOCATIONS AND FACILITIES FOR THE CONDUCTING OF CLASS
II AND OTHER DESIRED GAMING BY TRIBE BOTH WITHIN AND OUTSIDE THE TRIBE’S LAST
RESERVATION BOUNDARY, INCLUDING THE FUNDS NEEDED FOR ANY NECESSARY CONSTRUCTION,
REMODELING, EQUIPPING OF THE FACILITY WITH GAMING EQUIPMENT AND MACHINERY,
STAFFING, STAFF TRAINING, MARKETING AND PROMOTION AND TO FUND AN INITIAL HOUSE
BANK SUFFICIENT TO BEGIN OPERATION AND SAFELY COVER ALL INITIAL WAGERS AND
PAYOUTS.  MANAGER SHALL ESTABLISH AN ADEQUATE ADVERTISING AND MARKETING BUDGET
AND SHALL PLACE ALL NECESSARY ADVERTISING.  MANAGER SHALL THEREAFTER HAVE THE
EXCLUSIVE RIGHT TO MANAGE SAID GAMING FACILITY ON BEHALF OF TRIBE IN COMPLIANCE
WITH (I) THE TERMS OF THIS AGREEMENT; (II) IN ACCORDANCE WITH THE ACT OR OTHER
APPLICABLE TRIBAL AND/OR FEDERAL LAW; AND (III) IN ACCORDANCE WITH THE
CHEYENNE-ARAPAHO GAMING ORDINANCE.  MANAGER SHALL MAINTAIN AND PROVIDE FOOD AND
BEVERAGE SERVICES FOR PATRONS OF THE FACILITY.  SUCH FOOD AND BEVERAGE SERVICES
SHALL BE MAINTAINED AND ACCOUNTED FOR SEPARATELY.  MANAGER SHALL PROMPTLY PAY
ALL BILLS OF THE GAMING OPERATION WHEN THEY BECOME DUE WITH FUNDS OF THE GAMING
OPERATION.  MANAGER, AFTER CONSULTATION WITH THE TRIBAL REPRESENTATIVE, SHALL
ESTABLISH A SCHEDULE DURING WHICH THE FACILITY SHALL BE OPEN FOR BUSINESS. 
MANAGER SHALL USE ACTUAL MARKET EXPERIENCE AFTER OPENING TO ASCERTAIN WHETHER
THE SCHEDULE NEEDS TO BE MODIFIED AFTER TAKING INTO CONSIDERATION THE COST OF
OPERATION DURING ANY GIVEN PERIOD

 

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AND THE REVENUES TO BE EXPECTED DURING THAT SAME PERIOD.  ADDITIONALLY, THE
MANAGER SHALL BE RESPONSIBLE, IF APPLICABLE, TO SUPPLY NIGC WITH ALL INFORMATION
NECESSARY FOR THE COMMISSION TO COMPLY WITH THE REGULATIONS OF THE COMMISSION
ISSUED PURSUANT TO THE NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”).  THIS
AGREEMENT SHALL NOT TRANSFER OR, IN ANY OTHER MANNER, CONVEY ANY INTEREST IN
LAND OR OTHER REAL PROPERTY.

 

2.2

 

A.            MANAGER’S ROLE IN NEGOTIATING TRIBAL COMPACT.  MANAGER WILL
PROVIDE, ON BEHALF OF THE TRIBE, LEGAL COUNSEL OF TRIBE’S CHOICE TO WORK WITH
THE TRIBE AT A COST NOT TO EXCEED SEVENTY-SIX THOUSAND AND NO/100 DOLLARS
($76,000.00) IN NEGOTIATING THIS MANAGEMENT AGREEMENT AND RELATED DOCUMENTS AND
A TRIBAL COMPACT WITH THE STATE OF OKLAHOMA OR OTHER APPROPRIATE GOVERNMENTAL
BODY.  MANAGER SHALL PARTICIPATE IN SUCH NEGOTIATIONS AT ITS SOLE COST.  ALL
SUCH PARTICIPATION SHALL BE UNDER THE SUPERVISION OF LEGAL COUNSEL TO THE TRIBE
AND THE TRIBAL REPRESENTATIVE.  THE FUNDS ADVANCED SHALL BE START-UP EXPENSES. 
IN ADDITION, MANAGER SHALL PAY ALL REASONABLE COSTS INCURRED BY THE BUSINESS
COMMITTEE IN DOING DUE DILIGENCE, INCLUDING ONE TRIP TO MINNEAPOLIS, MINNESOTA. 
THE COST OF THE DUE DILIGENCE TRIP TO MINNESOTA SHALL BE PAID BY MANAGER AND
SHALL NOT BE A START-UP EXPENSE OR AN OPERATING EXPENSE, AND SHALL NOT BE
INCLUDED IN THE LOAN FROM MANAGER.

 

B.            CONSTRUCTION OF FACILITY.  FOLLOWING THE EFFECTIVE DATE OF THIS
AGREEMENT, THE BUSINESS COMMITTEE, ON BEHALF OF THE TRIBE, SHALL UNDERTAKE ALL
STEPS NECESSARY TO CONSTRUCT THE FACILITY, INCLUDING, WITHOUT LIMITATION, THE
FOLLOWING:

 

1.             ARCHITECT, ENGINEERING AND DESIGN.  THE MANAGER SHALL RETAIN THE
ARCHITECTURAL FIRM OF KORSUNSKY KRANK ERICKSON ARCHITECTS, INC. AND THE CIVIL
ENGINEERING FIRM OF FOX & DRECHSLER, INC. TO DESIGN THE FACILITY, INCLUDING THE
WATER AND SEWAGE

 

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FACILITIES AND SITE DEVELOPMENT; PROVIDED THAT THE DESIGN, CONSTRUCTION AND
MAINTENANCE OF SUCH FACILITIES AND SITE SHALL MEET OR EXCEED ALL REASONABLE
MINIMUM STANDARDS WHICH WOULD BE IMPOSED ON SUCH FACILITIES BY EXISTING STATE OR
FEDERAL STATUTE OR REGULATION WHICH WOULD BE APPLICABLE IF THE FACILITY WERE
LOCATED OUTSIDE OF THE TERRITORIAL BOUNDARIES OF THE TRIBE, ALTHOUGH THOSE
REQUIREMENTS WOULD NOT OTHERWISE APPLY WITHIN THOSE TERRITORIAL BOUNDARIES
SUBJECT TO SUCH LESSER STANDARDS AS MAY BE APPROVED BY THE TRIBAL
REPRESENTATIVE; PROVIDED FURTHER, THAT NOTHING IN THIS SUBSECTION SHALL GRANT
ANY JURISDICTION OVER THE PROPERTY OR ITS DEVELOPMENT AND MANAGEMENT TO THE
STATE OF OKLAHOMA OR ANY POLITICAL SUBDIVISION THEREOF.  DESIGN OF THE PROJECT
SHALL COMMENCE IMMEDIATELY.  THE GENERAL CONTRACTOR EMPLOYED BY THE TRIBE SHALL
BE RESPONSIBLE FOR BUILDING THE FACILITY IN ACCORDANCE WITH THE PLANS AND
SPECIFICATIONS AND FOR PROVIDING ALL MATERIALS, EQUIPMENT AND LABOR TO CONSTRUCT
AND INITIALLY EQUIP THE GAMING OPERATION AS NECESSARY, INCLUDING SITE
DEVELOPMENT, AND FOR SUPERVISING THE CONSTRUCTION, RENOVATION OR MODIFICATION OF
THE FACILITY SO AS TO COMPLY WITH THE TERMS OF ANY LOAN AGREEMENT TO BE
EXECUTED.  THE DESIGN AND CONSTRUCTION OF THE FACILITY WILL ADEQUATELY PROTECT
THE ENVIRONMENT AND THE PUBLIC HEALTH AND SAFETY.

 

2.             SUPERVISION AND CONSTRUCTION.  THE ARCHITECT SHALL HAVE THE
RESPONSIBILITY TO 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.  THE TRIBE HAS RETAINED
THE FIRM OF MCKINNEY PARTNERSHIP AS INSPECTING ARCHITECT TO APPROVE THE PLANS
AND INSPECT THE FACILITY DURING CONSTRUCTION, PROVIDED THAT THE INSPECTING
ARCHITECT’S FEE SHALL NOT EXCEED FOURTEEN THOUSAND AND NO/100 DOLLARS
($14,000.00).  MANAGER SHALL LOAN TO THE BUSINESS

 

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CORPORATION A SUM NOT TO EXCEED FIVE MILLION EIGHT HUNDRED THOUSAND AND NO/100
DOLLARS ($5,800,000.00) TO BUILD, EQUIP AND OPERATE THE FACILITY.  SUCH LOAN
SHALL BEAR INTEREST AT THE RATE OF 9.25% PER ANNUM AND SHALL BE AMORTIZED OVER
SEVEN (7) YEARS.  ANY BALANCE REMAINING SHALL BE DUE AND PAYABLE ON OR BEFORE
MAY 31, 2001 (SEVEN (7) YEARS FROM COMMENCEMENT OF OPERATION).  OUT OF SUCH LOAN
PROCEEDS, MANAGER SHALL PROVIDE ALL FUNDS NECESSARY FOR SUCH ARCHITECTURAL AND
ENGINEERING SERVICES AND CONSTRUCTION.

 

3.             CONSTRUCTION COMMENCEMENT AND COMPLETION.  THE CONTRACT WITH THE
GENERAL CONTRACTOR SHALL CONTAIN SUCH PROVISIONS FOR THE PROTECTION OF THE TRIBE
AS IT SHALL DEEM APPROPRIATE, AND SHALL PROVIDE THAT CONSTRUCTION OF THE
FACILITY SHALL COMMENCE WITHIN NINETY (90) DAYS FOLLOWING THE LATER OF THE
PROJECT APPROVAL AND THE GRANTING OF ALL APPROVALS NECESSARY TO COMMENCE
CONSTRUCTION, AND SHALL ALSO PROVIDE THAT THE GENERAL CONTRACTOR SHALL EXERT ITS
BEST EFFORTS TO COMPLETE CONSTRUCTION WITHIN TEN (10) MONTHS AFTER COMMENCEMENT
OF CONSTRUCTION.  THE GENERAL CONTRACTOR SHALL WARRANT THE CONSTRUCTION TO BE
FREE OF DEFECTS AND UNWORKMANLIKE LABOR FOR A REASONABLE PERIOD TO BE AGREED
UPON BY MANAGER, TRIBAL REPRESENTATIVE AND GENERAL CONTRACTOR.  THE MANAGER IS
AUTHORIZED TO SIGN THE CONTRACT WITH THE GENERAL CONTRACTOR AND ALL NECESSARY
SUBCONTRACTORS, AND TO MAKE PROVISION FOR PERIODIC PAYMENTS DURING CONSTRUCTION.

 

C.            FIRE AND SAFETY.  THE FACILITY ON THE PROPERTY SHALL BE
CONSTRUCTED AND MAINTAINED IN COMPLIANCE WITH ALL FIRE AND SAFETY STATUTES,
ORDINANCES AND REGULATIONS WHICH WOULD BE APPLICABLE IF THE FACILITY WAS LOCATED
OUTSIDE OF THE EXTERIOR BOUNDARIES OF THE TERRITORY OF THE TRIBE, ALTHOUGH THOSE
REQUIREMENTS WOULD NOT OTHERWISE APPLY ON THAT TERRITORY; PROVIDED, THAT NOTHING
IN THIS SUBSECTION SHALL GRANT ANY JURISDICTION TO THE STATE OF OKLAHOMA OR ANY
POLITICAL SUBDIVISION THEREOF OVER THE PROPERTY.  LAW ENFORCEMENT SHALL BE
PROVIDED BY TRIBE.

 

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FIRE PROTECTION AND EMERGENCY MEDICAL SERVICES SHALL BE PROVIDED BY TRIBE,
EITHER DIRECTLY OR PURSUANT TO AN INTERGOVERNMENTAL AGREEMENT SECURED BY THE
TRIBE.  THE REASONABLE COST OF SUCH SERVICES SHALL BE BORNE BY THE GAMING
OPERATION.

 

D.            EQUIPMENT, FURNITURE AND FURNISHINGS ACQUISITION AND COST. 
MANAGER SHALL PROVIDE NECESSARY BINGO AND OTHER GAMING EQUIPMENT, FURNITURE AND
FURNISHINGS, WITH THE APPROVAL OF THE TRIBE, AND MANAGER AGREES TO LOAN TO THE
TRIBE THE FUNDS THEREFOR ON THE TERMS SET FORTH HEREIN FOR THE PURCHASE OF SUCH
EQUIPMENT FOR THE PROJECT, PROVIDED THAT THE MANAGER MAY EXPRESSLY AGREE THAT
SOME OR ALL OF SUCH EQUIPMENT MAY BE LEASED OR FINANCED WITH FINANCING SECURED
BY MANAGER FOR THE TRIBE.  IN SUCH EVENT, THE COSTS OF SUCH LEASE(S) (WHETHER A
FINANCING OR CAPITAL LEASE) OR SUCH FINANCING SHALL BE AN OPERATING EXPENSE OF
THE GAMING OPERATION.

 

E.             WORKING CAPITAL.  UPON COMPLETION OF CONSTRUCTION, MANAGER AGREES
TO PROVIDE TO THE TRIBE A SUM NOT TO EXCEED ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00) FOR THE EVENTUAL USE AS WORKING CAPITAL IN THE OPERATION
OF THE GAMING OPERATION (THE “WORKING CAPITAL”); PROVIDED HOWEVER, WHEN SUCH SUM
IS NOT NEEDED, IN THE JUDGMENT OF THE TRIBAL REPRESENTATIVE, IT SHALL BE
RETURNED TO MANAGER AND CREDITED TO THE PRINCIPAL DUE UNDER THE NOTE.  ANY
AMOUNTS PROVIDED BY MANAGER TO THE TRIBE FOR WORKING CAPITAL UNDER THIS SECTION
SHALL BE PAYABLE AND SHALL ACCRUE INTEREST AT THE RATE SET FORTH IN THE NOTE,
SUBJECT TO THE LIMITATIONS CONTAINED IN THE NOTE.

 

F.             DAMAGE OR IMPOSSIBILITY OF THE GAMING OPERATION.  IF, DURING THE
TERM OF THIS AGREEMENT, THE FACILITY IS DAMAGED OR DESTROYED BY FIRE, WAR, OR
OTHER CASUALTY, OR BY AN ACT OF GOD, AND SUCH DAMAGE WAS NOT THE RESULT OF AN
INTENTIONAL ACT OF THE MANAGER (ANY SUCH OCCURRENCE BEING REFERRED TO HEREIN AS
A “CASUALTY”), OR IF GAMING ON THE PROPERTY IS PROHIBITED AS A RESULT OF A
DECISION OF A COURT OF COMPETENT JURISDICTION, OR BY OPERATION OF ANY APPLICABLE

 

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LEGISLATION (ANY SUCH PROHIBITION BEING REFERRED TO HEREIN AS A “LEGAL
PROHIBITION”), MANAGER SHALL HAVE THE FOLLOWING OPTIONS:

 

1.             MAINTENANCE OF THE FACILITY.  IN THE EVENT OF A LEGAL
PROHIBITION, MANAGER SHALL HAVE THE OPTION TO CONTINUE ITS INTEREST IN THIS
AGREEMENT AND TO COMMENCE OR RECOMMENCE THE OPERATION OF GAMING AT THE FACILITY
AT ANY TIME PRIOR TO THE DATE EIGHTEEN (18) MONTHS AFTER THE EFFECTIVE DATE OF
THE LEGAL PROHIBITION IF AT SOME POINT DURING SUCH EIGHTEEN (18) MONTH PERIOD
SUCH COMMENCEMENT OR RECOMMENCEMENT SHALL BE LEGALLY AND COMMERCIALLY FEASIBLE
IN THE SOLE JUDGMENT OF MANAGER.

 

2.             REPAIR OR REPLACEMENT OPTION.  IN THE EVENT OF A CASUALTY,
MANAGER MAY, IN ITS SOLE DISCRETION, WITHIN ONE HUNDRED EIGHTY (180) DAYS AFTER
THE DATE OF THE CASUALTY, UNDERTAKE TO RECONSTRUCT THE FACILITY TO A CONDITION
WHERE GAMING CAN ONCE AGAIN BE CONDUCTED AT THE FACILITY.  IF MANAGER UNDERTAKES
TO RECONSTRUCT THE FACILITY AND IF THE INSURANCE PROCEEDS ARE INSUFFICIENT TO
RECONSTRUCT THE FACILITY TO A CONDITION WHERE GAMING CAN ONCE AGAIN BE CONDUCTED
AT THE FACILITY, MANAGER SHALL SUPPLY SUCH FUNDS NECESSARY TO RECONSTRUCT THE
FACILITY TO SUCH CONDITION AND SHALL HAVE THE SOLE RIGHT TO ADJUST AND SETTLE
ANY AND ALL CLAIMS FOR SUCH INSURANCE PROCEEDS.  SHOULD MANAGER USE ANY FUNDS OF
MANAGER BEYOND THOSE PROVIDED BY INSURANCE PROCEEDS, SUCH FUNDS SHALL BE
CONSIDERED A LOAN TO THE TRIBE AND, CONSEQUENTLY, SHALL BECOME PART OF THE
REPAYMENT OBLIGATION OF THE TRIBE TO MANAGER; PROVIDED, HOWEVER, THAT TRIBE MUST
CONSENT IN WRITING TO ANY ADDITIONAL JOAN AND IN NO EVENT SHALL THE TOTAL AMOUNT
LOANED TO THE BUSINESS CORPORATION EXCEED 55.8 MILLION WITHOUT THE WRITTEN
CONSENT OF THE TRIBE.  IF THE INSURANCE PROCEEDS ARE NOT USED TO REPAIR THE
FACILITY, THE BUSINESS COMMITTEE, ON BEHALF OF THE TRIBE, SHALL HAVE THE SOLE
RIGHT TO ADJUST AND SETTLE ANY AND ALL CLAIMS FOR SUCH

 

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INSURANCE PROCEEDS, AND SUCH PROCEEDS SHALL BE APPLIED (I) TO THE AMOUNTS DUE
UNDER THE NOTE (INCLUDING PRINCIPAL AND INTEREST); (II) TO PAY ANY UNDISTRIBUTED
NET REVENUES PURSUANT TO THIS AGREEMENT; AND (III) ANY SURPLUS SHALL BE
DISTRIBUTED TO THE TRIBE.  IN EITHER EVENT, MANAGER MAY ELECT TO TERMINATE THIS
AGREEMENT

 

3.             RECOMMENCEMENT OF GAMING.  AFTER THE MANAGEMENT AGREEMENT HAS
COMMENCED, IF AFTER A PERIOD OF CESSATION OF GAMING ON THE PROPERTY THE
RECOMMENCEMENT OF GAMING IS POSSIBLE, AND IF MANAGER OR TRIBE HAS NOT TERMINATED
THE MANAGEMENT AGREEMENT UNDER THE PROVISIONS OF THIS AGREEMENT, AND THE
PROVISIONS OF THE MANAGEMENT AGREEMENT SHALL ALSO RECOMMENCE AND THE PERIOD OF
SUCH CESSATION SHALL NOT BE DEEMED TO HAVE BEEN PART OF THE TERM OF THE
MANAGEMENT AGREEMENT AND THE DATE OF EXPIRATION OF THE TERM OF THE MANAGEMENT
AGREEMENT SHALL BE EXTENDED BY THE NUMBER OF DAYS OF SUCH CESSATION PERIOD.  ANY
REASONABLE PAYMENTS MADE TO ANY THIRD PARTY TO ELIMINATE RIGHTS ACQUIRED IN THE
PROPERTY, FACILITY OR GAMING OPERATION DURING THE PERIOD OF CESSATION SHALL BE
DEEMED AN OPERATING EXPENSE OF THE GAMING OPERATION.

 

4.             ALCOHOLIC BEVERAGES AND TOBACCO SALES.  DURING THE TERM OF THIS
AGREEMENT, NO ALCOHOLIC BEVERAGES SHALL BE SERVED ON THE PROPERTY, UNLESS THE
BUSINESS COMMITTEE, ON BEHALF OF THE TRIBE, AND MANAGER MUTUALLY AGREE TO THE
SERVING OF SUCH BEVERAGES, AND UNLESS THE SERVING OF SUCH BEVERAGE IS OTHERWISE
IN ACCORDANCE WITH APPLICABLE LAW.  TOBACCO MAY BE SOLD AT THE GAMING OPERATION
BY THE TRIBE IF SUCH SALE IS IN ACCORDANCE WITH THE PROVISIONS OF APPLICABLE LAW
AND WITH ANY AGREEMENTS BETWEEN THE TRIBE AND ANY AGENCY THEREOF AND ANY OTHER
GOVERNMENTAL ENTITY.  THE REVENUES OF ANY SUCH TOBACCO SALES SHALL BE REVENUES
OF THE TRIBE, EXCLUSIVELY.  THE OPERATION AND ALL

 

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EMPLOYEES SHALL BE UNDER THE DIRECTION OF THE TRIBE; HOWEVER, SUCH EMPLOYEES
SHALL MEET THE STANDARDS IMPOSED BY MANAGER ON OTHER EMPLOYEES OF THE GAMING
OPERATION.

 

G.            SECURITY FORCE.  MANAGER SHALL BE RESPONSIBLE FOR PROVIDING A
SECURITY FORCE SUFFICIENT TO REASONABLY ASSURE THE SAFETY OF THE CUSTOMERS,
PERSONNEL, MONIES, AND PROPERTY OF THE GAMING OPERATION.  SUCH SECURITY FORCE
SHALL BE COMPRISED OF SECURITY OFFICERS EMPLOYED DIRECTLY BY THE TRIBE, OR
PROVIDED UNDER A CONTRACT WITH A THIRD PARTY AND THE TRIBE, WHO SHALL REPORT
DIRECTLY TO THE MANAGER, AND EACH SECURITY OFFICER SHALL BE BONDED IN SUFFICIENT
AMOUNTS COMMENSURATE WITH THEIR ENFORCEMENT DUTIES AND OBLIGATIONS.  THE COST OF
SUCH SECURITY FORCE SHALL BE INCLUDED IN THE OPERATING EXPENSES OF THE GAMING
OPERATION.

 

H.            TRANSPORTATION.  MANAGER SHALL PROVIDE TRANSPORTATION TO CONCHO,
OKLAHOMA FROM THE WESTERN REGIONS OF THE TRIBE TO WESTERN TRIBAL MEMBERS SO THAT
SUCH MEMBERS WHO DO NOT HAVE ACCESSIBLE DAILY TRANSPORTATION MAY BE EMPLOYED AT
THE FACILITY DURING BOTH CONSTRUCTION OF THE PROJECT AND AFTER OPENING THE
FACILITY.  SUCH TRANSPORTATION SHALL CONSIST OF TWO STEP-VAN TYPE VEHICLES,
ACCOMMODATING AT LEAST NINE PASSENGERS EACH.  THE COST OF LEASING AND OPERATING
THE VEHICLES SHALL BE AN EXPENSE OF THE GAMING OPERATION.  PRIOR TO COMMENCEMENT
OF OPERATIONS, THE COST OF LEASING AND OPERATING THE VEHICLES SHALL BE A
START-UP EXPENSE AND SHALL BE LOANED TO THE TRIBES BY MANAGER.

 

2.3           RESPONSIBILITIES OF THE TRIBE.  TRIBE AGREES TO ASSIST MANAGER
(I) BY GAINING TIMELY PROJECT APPROVAL OF THIS CONTRACT BY NIGC; (II) BY USING
ITS BEST EFFORTS TO SECURE A BIA JOAN OR LOAN GUARANTY IN THE MAXIMUM AMOUNT
OBTAINABLE; (III) BY TIMELY OBTAINING A CLASS III GAMING COMPACT WITH THE STATE
OF OKLAHOMA OR SUCH OTHER APPROPRIATE GOVERNMENTAL BODIES BY WHICH TRIBE CAN
LEGALLY OPERATE A FULL AND SATISFACTORY RANGE OF GAMES IN” ORDER TO ENHANCE THE
FINANCIAL BENEFITS OF THE FACILITIES TO TRIBE AND MANAGER AND TO INSURE THE
FINANCIAL FEASIBILITY OF THE

 

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PROPOSED PROJECTS; (IV) BY USING ITS BEST EFFORTS TO CAUSE SEWER, WATER AND
ELECTRICITY, ADEQUATE FOR THE PROJECT TO BE EXTENDED TO THE SITE AT NO COST TO
MANAGER OR GAMING OPERATION; AND (V) BY TIMELY PROMULGATING APPROPRIATE TRIBAL
GAMING LAWS AND REGULATIONS BY WHICH MANAGER CAN BE GUIDED AND BY WHICH TRIBE
WILL EXERCISE THE REQUIRED TRIBAL CONTROL AND REGULATORY AUTHORITY OVER ITS
GAMING INDUSTRY.  OTHER THAN THE EXISTING SALES TAX ON CERTAIN GIFT SHOP ITEMS
AND THE ENTERTAINMENT TAX OF 51.00 ( CONTAINED IN CHAPTER 5 OF THE TRIBE’S
GENERAL REVENUE AND TAXATION ACT OF 1988, AS AMENDED ON OCTOBER 5, 1991), TRIBE
AGREES TO REFRAIN FROM THE PROMULGATING OR ENFORCING OF LAWS OR THE ASSESSING OR
COLLECTING OF TAXES ON THE OPERATION OF THE GAMING FACILITY OR MANAGER,
INCLUDING ALL PROFIT CENTERS AND ACTIVITIES THEREIN WHICH, IN THE JUDGMENT OF
MANAGER, MIGHT SERVE TO REDUCE THE BENEFITS OF THIS AGREEMENT TO MANAGER DURING
THE TERM OF THIS AGREEMENT, AND IN THE EVENT ANY SUCH LAW OR ASSESSMENT EXISTS
OR IS DULY PROMULGATED, TRIBE, BY THIS AGREEMENT, EXEMPTS THE GAMING AND RELATED
BUSINESS ACTIVITIES OF THIS FACILITY THEREFROM FOR THE TERM OF THIS AGREEMENT
AND WAIVES PAYMENT AND ENFORCEMENT OF SAME.  ANY SUCH CHANGE OF LAW OR
REGULATION WILL BE APPLICABLE TO THE SUBJECT FACILITY DURING THE TERM OF THIS
AGREEMENT ONLY WITH THE WRITTEN CONSENT OF MANAGER.  IN THE EVENT THE TRIBE
IMPOSES A TAX, FEE OR OTHER CHARGE IN CONTRAVENTION OF THIS SECTION, THE TRIBE
SHALL BE OBLIGATED TO REIMBURSE MANAGER WITHIN SEVENTY-TWO (72) HOURS.  IF THE
TRIBE FAILS TO REIMBURSE MANAGER WITHIN SEVENTY-TWO (72) HOURS, MANAGER SHALL BE
ENTITLED TO DEDUCT THE AMOUNT OF THE REQUIRED REIMBURSEMENT FROM THE TRIBE’S
SHARE OF NET REVENUES OTHERWISE DISTRIBUTABLE UNDER SECTION 6.1 OF THIS
AGREEMENT.

 

2.4           TERM OF AGREEMENT.  THIS AGREEMENT SHALL BE FOR A TERM OF SEVEN
(7) YEARS FROM THE DATE OF THE FIRST DAY SAID FACILITY IS OPENED FOR BUSINESS. 
IN THE EVENT A COMPACT PERMITTING CLASS III GAMING IS PROPERLY SECURED, IT IS
THE INTENTION OF THE PARTIES HERETO TO NEGOTIATE IN GOOD

 

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FAITH TO CAUSE THE TERM OF THIS AGREEMENT TO BE EXTENDED AND EXPANDED TO PERMIT
THE DEVELOPMENT OF CLASS III FACILITIES.  TRIBE AGREES THAT IT WILL USE ITS BEST
EFFORTS TO SEEK APPROPRIATE APPROVALS FROM NIGC FOR SUCH EXTENSIONS AND
EXPANSION.  IN THE EVENT SUCH APPROVAL IS NOT OBTAINED, MANAGER SHALL HAVE NO
OBLIGATION TO PROCEED WITH THE EXPANSION OF THE FACILITIES.

 

ARTICLE III
EMPLOYEES AND OPERATIONS

 

3.1           PERSONNEL.  ALL EMPLOYEES OF THE GAMING FACILITY (OTHER THAN THE
GENERAL MANAGER) SHALL BE CONSIDERED EMPLOYEES OF THE GAMING ENTERPRISE ASSIGNED
TO SAID TRIBAL GAMING FACILITY UNDER THE AUTHORITY AND SUPERVISION OF MANAGER. 
SUBJECT TO THE PROVISIONS OF SECTION 3.1 (D), ALL RESPONSIBILITY FOR EMPLOYMENT
DECISIONS, INCLUDING, BUT NOT LIMITED TO, THE HIRING, FIRING, PROMOTION,
TRANSFER, COMPENSATION AND DISCIPLINE OF SAID EMPLOYEES SHALL, HOWEVER, BE THE
SOLE RESPONSIBILITY OF MANAGER, WHO SHALL MAKE SUCH DECISIONS IN ACCORDANCE WITH
THE RULES, REGULATIONS, POLICIES AND PROCEDURES AND PRUDENT EMPLOYMENT PRACTICES
ESTABLISHED BY MANAGER AND REASONABLY APPROVED BY TRIBE FOR USE IN THE OPERATION
OF THE GAMING FACILITY.  TRIBE AGREES NOT TO ATTEMPT TO INFLUENCE EMPLOYMENT
DECISIONS BASED ON POLITICAL OR FAMILY RELATIONSHIPS.

 

A.            TRIBAL HIRING PREFERENCE.  THE PARTIES TO THIS AGREEMENT HAVE
AGREED THAT PREFERENCE WILL BE GIVEN TO QUALIFIED TRIBAL MEMBERS FOR ALL
AVAILABLE AND VACANT POSITIONS OF EMPLOYMENT WITH THE GAMING FACILITY.  NEXT
PREFERENCE WILL BE GIVEN TO NATIVE AMERICAN PERSONS WHO ARE NOT TRIBAL MEMBERS. 
FINAL DETERMINATION OF THE QUALIFICATIONS OF TRIBAL MEMBERS AND ALL OTHER
EMPLOYEES FOR EMPLOYMENT SHALL BE MADE BY MANAGER.

 

B.            HIRING PROCESS.  TRIBE SHALL MAINTAIN A FILE OF CURRENT
APPLICATIONS OF TRIBAL MEMBERS WHO DESIRE TO BE CONSIDERED FOR EMPLOYMENT WITH
THE GAMING FACILITY.  AT SUCH TIME AS A VACANCY OR OPENING OCCURS OR IS
ANTICIPATED TO OCCUR BY MANAGER, MANAGER WILL REQUEST

 

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SUCH APPLICATIONS BE DELIVERED BY TRIBE FOR CONSIDERATION.  IF NO QUALIFIED
APPLICANTS ARE AVAILABLE, AND MANAGER DOES NOT HAVE SUFFICIENT TIME TO TRAIN
BEFORE PLACING THE NEW HIRE IN THE POSITION, THEN MANAGER MAY AT MANAGER’S
DISCRETION CHOOSE TO HIRE A NON-TRIBAL MEMBER OF MANAGER’S CHOICE.  THE PARTIES
AGREE THAT ADEQUATE EDUCATION AND EXPERIENCE ARE AN ABSOLUTE REQUIREMENT FOR
PLACEMENT IN MANY MANAGEMENT AND SUPERVISORY POSITIONS THAT WILL BE REQUIRED FOR
THE OPERATION OF THIS GAMING FACILITY.  IN ADDITION, SPECIFIC TRAINING AND
EXPERIENCE WILL BE REQUIRED FOR PERSONS SELECTED TO FILL OTHER NON-MANAGEMENT
POSITIONS.  EVERY REASONABLE EFFORT WILL BE MADE TO PLACE CHEYENNE AND ARAPAHO
TRIBAL MEMBERS IN MIDDLE LEVEL .AND TOP LEVEL MANAGERIAL POSITIONS.  THE
MANAGEMENT SHALL BE PREPARED TO GIVE CLEAR EXPLANATIONS UPON REQUEST OF TRIBE AS
TO THE FINDING THAT TRIBAL MEMBERS WHO OTHERWISE MEET THE MINIMUM STANDARDS FOR
EMPLOYMENT ARE NOT HIRED.  MANAGER WILL ESTABLISH SUCH TRAINING ACTIVITIES AS
MAY BE NECESSARY TO MAINTAIN AN ADEQUATELY SKILLED WORK FORCE FOR THE FACILITY
ONCE OPERATION HAS BEGUN.  HOWEVER, DUE TO THE LARGE NUMBER OF EMPLOYEES THAT
WILL BE REQUIRED TO BEGIN OPERATION OF THE FACILITY, AND THE LIMITED TIME THAT
WILL BE AVAILABLE FOR TRAINING OF THE WORK FORCE, THE PREFERENCE IN EMPLOYMENT
WILL BE WAIVED FOR STAFFING DURING THE INITIAL STAGES OF THE COMMENCEMENT OF
OPERATIONS.  IT IS EXPECTED THAT MANY OF THESE POSITIONS WILL BE FILLED BY
PERSONS RECRUITED FROM PRESENT OR RECENT EMPLOYMENT WITH OTHER GAMING
FACILITIES, BOTH INDIAN AND NON-INDIAN.

 

C.            EMERGENCY HIRING.  MANAGER MAY, AT ITS DISCRETION, DECLARE ANY KEY
POSITION THAT BECOMES VACANT TO BE AN EMERGENCY VACANCY FOR IMMEDIATE EMPLOYMENT
OF ANY PERSON WHO MANAGER DEEMS TO BE COMPETENT IN EDUCATION, TRAINING AND/OR
SKILLS REQUIRED TO SATISFACTORILY PERFORM IN THE SUBJECT POSITION.  ANY SUCH
POSITION MUST BE ONE WHICH IN MANAGER’S OPINION OR JUDGMENT AN EXTENDED VACANCY
WOULD CAUSE SUBSTANTIAL LOSS OF REVENUE,

 

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QUALITY OF SERVICE, OR OTHERWISE JEOPARDIZE THE LEVEL OF PERFORMANCE AND THUS
THE REPUTATION OF THE FACILITY.

 

D.            SECURITY CLEARANCE AND BACKGROUND REVIEWS.  TRIBE SHALL CONDUCT
SUCH ADEQUATE BACKGROUND REVIEW AS IS NECESSARY AND APPROPRIATE TO THE POSITION
TO BE FILLED AND THE RESPONSIBILITIES OF SUCH POSITION WITHIN THE FACILITY.  ANY
SUCH REVIEW SHALL BE SUFFICIENT TO MEET THE REQUIREMENTS OF THE ACT AND
REGULATIONS PROMULGATED THEREUNDER, WHERE APPLICABLE, THE TRIBAL COMPACT, IF
ANY, AND SUCH REASONABLE REGULATIONS AS MAY BE PROMULGATED BY THE TRIBE.  THE
BACKGROUND INVESTIGATION PROCEDURES EMPLOYED BY THE TRIBE SHALL BE FORMULATED IN
CONSULTATION WITH MANAGER AND SHALL SATISFY ALL REGULATORY REQUIREMENTS.  THE
COST OF SUCH REVIEWS, AND REGULATION OF THE GAMING ENTERPRISE SHALL BE PAID BY
TRIBE OUT OF THE ENTERTAINMENT TAX REFERRED TO IN SECTION 2.3 HEREOF, AND
MANAGER SHALL COOPERATE AND ASSIST TRIBE WHERE NECESSARY IN OBTAINING SUCH
INFORMATION AS IS NECESSARY TO ADEQUATELY CARRY OUT THIS TASK.  IN THE EVENT
THAT TRIBE DOES NOT APPROVE THE HIRING OF ANY PERSON, THAT PERSON SHALL NOT BE
EMPLOYED BY MANAGER AT THE GAMING OPERATION.

 

3.2           MANAGER’S REPRESENTATIVE.  MANAGER SHALL APPOINT AND HIRE AS ITS
REPRESENTATIVE ON SITE THE GENERAL MANAGER WHO SHALL SERVE IN THE CAPACITY
GENERALLY DESCRIBED BELOW:

 

A.            GENERAL MANAGER OF THE FACILITY WITH PRIMARY AUTHORITY OVER ALL
OTHER EMPLOYEES, AND WHO WILL MAKE, OR DELEGATE TO AN APPROPRIATE STAFF-MEMBER
RESPONSIBILITY AND AUTHORITY FOR THE MAKING OF ALL DAY-TO-DAY BUSINESS DECISIONS
REQUIRED AT THE FACILITY.  THE GENERAL MANAGER SHALL HAVE ULTIMATE AUTHORITY
OVER SUCH DELEGATED TASKS AND SHALL ADEQUATELY SUPERVISE AND MONITOR SAME TO
SECURE THE SUCCESSFUL EXERCISE OF SUCH AUTHORITY BY HIS STAFF.

 

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B.            TRIBAL COORDINATOR.  TRIBE, THROUGH AND BY ITS BUSINESS COMMITTEE
SHALL SELECT AND EMPLOY A PERSON TO SERVE AS TRIBAL COORDINATOR WHO SHALL SERVE
AT THE PLEASURE OF THE TRIBE TRIBAL COORDINATOR SHALL BE PAID BY THE GAMING
OPERATION AT A SALARY OF $30,000 PER YEAR.

 

C.            COMPENSATION OF GENERAL MANAGER AND TRIBAL COORDINATOR.  THE
POSITIONS AS DESCRIBED IN PARAGRAPHS 3.2 A. AND 3.2 B. HEREOF, AS WITH ALL OTHER
EMPLOYMENT POSITIONS WITHIN THE GAMING FACILITY, SHALL PROVIDE COMPENSATION BY
SALARY, PAY SCALE AND OTHER APPROPRIATE AND DESIRABLE COMPENSATION AND BENEFITS
AS ARE APPROPRIATE TO THE RESPONSIBILITIES OF SUCH POSITION, AND THAT IS
COMPETITIVE IN THE GAMING AND RECREATION INDUSTRY.  IN THE EVENT THAT THE
ORIGINALLY APPOINTED PERSONS SHALL NOT BE ABLE, OR SHALL HEREAFTER CHOOSE NOT TO
SERVE IN THESE CAPACITIES, THEN IN SUCH EVENT, MANAGER AND TRIBE SHALL HAVE THE
SOLE AUTHORITY FOR THE SELECTION OF ANY REPLACEMENT OF THEIR APPOINTEE WITH A
QUALIFIED PERSON OR PERSONS OF THEIR CHOICE.

 

3.3           SECURITY.  MANAGER SHALL SELECT AND EMPLOY, ON BEHALF OF THE
ENTERPRISE, PERSONNEL TO REASONABLY INSURE THE SAFETY AND SECURITY OF THE
FACILITY (INCLUDING ANY PARKING LOTS OR GARAGES) AND GUESTS, EMPLOYEES ARID THE
HANDLING OF MONIES RELATED TO THE GAMING OPERATIONS OR ANY OTHER REVENUE CENTER
WITHIN OR CONNECTED TO THE GAMING FACILITY, INCLUDING A DIRECTOR OF SECURITY,
WHO SHALL REPORT TO GENERAL MANAGER ON SITE AND SHALL PROVIDE A COPY OF ANY
WRITTEN REPORT DIRECTLY TO MANAGER.  MANAGER SHALL WORK TOWARD ESTABLISHING A
SECURITY FORCE OF A HIGH LEVEL OF TRAINING AND EXPERTISE.  ALL REPORTS AND
INFORMATION FROM THE DIRECTOR OF SECURITY SHALL BE MADE IMMEDIATELY AVAILABLE TO
THE TRIBAL GAMING BOARD AS ESTABLISHED UNDER THE TRIBAL GAMING ORDINANCE.  ALL
EXPENSES OF SUCH SECURITY ACTIVITIES SHALL BE AN OPERATING EXPENSE OF THE
OPERATION OF THE FACILITY, INCLUDING PROFESSIONAL TRAINING, UNIFORMS,
TRANSPORTATION AND ANY ARMS OR OTHER EQUIPMENT REASONABLY NECESSARY, IN THE
JUDGMENT OF MANAGER, TO THE PROPER FULFILLMENT OF THE RESPONSIBILITIES OF THE
SECURITY FORCE.

 

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3.4           LIMITED APPOINTMENT OF MANAGER AS INDEPENDENT CONTRACTOR TO
TRIBE.  THIS AGREEMENT DOES NOT TRANSFER ANY INTEREST IN THE PROPERTY TO
MANAGER.  MANAGER, HOWEVER, IS HEREBY APPOINTED, DELEGATED, EMPLOYED AND
AUTHORIZED TO ACT ON BEHALF OF TRIBE AS TRIBE’S INDEPENDENT CONTRACTOR IN
CARRYING OUT A VARIETY OF DUTIES NECESSARY TO THE PROPER AND EFFICIENT
MANAGEMENT AND OPERATION OF THE GAMING FACILITY ON BEHALF OF TRIBE AS FOLLOWS:

 

A.            OPERATION OF GENERAL BUSINESS AND BUSINESS AFFAIRS.  MANAGER SHALL
MANAGE THE DAY-TO-DAY OPERATION OF THE GAMING FACILITY, INCLUDING, BUT NOT
LIMITED TO, THE GENERAL BUSINESS AND BUSINESS AFFAIRS IN CONNECTION WITH
FINANCING, CONSTRUCTION, IMPROVEMENT, DEVELOPMENT, OPERATION, MANAGEMENT AND
MAINTENANCE OF THE FACILITY, REAL ESTATE AND ALL IMPROVEMENTS TO THE PROPERTY
SET ASIDE FOR THE USE OF MANAGER AND FOR THE OPERATION OF THE GAMING FACILITY. 
IN CARRYING OUT THESE DUTIES AND RESPONSIBILITIES, MANAGER PROMISES AND AGREES
TO COMPLY WITH THE LETTER AND SPIRIT OF THIS AGREEMENT, ITS TERMS AND
CONDITIONS.  MANAGER IS NOT AUTHORIZED OR EMPOWERED TO OBLIGATE TRIBE OR TO
PLEDGE TRIBAL ASSETS TO SECURE ANY DEBT OR OBLIGATION OF THE GAMING FACILITY.

 

B.            MANAGEMENT AND CONTROL.  MANAGER SHALL HAVE THE EXCLUSIVE
AUTHORITY OVER, AND RIGHT TO CONTROL OF, THE DAY-TO-DAY MANAGEMENT AND CONTROL
OF THE GAMING OPERATION AND ALL NON GAMING ACTIVITIES OTHER THAN THE SMOKE SHOP,
ITS EMPLOYEES, CUSTOMERS, REVENUES AND ANY AND ALL PROPERTY AND ASSETS ASSIGNED,
LOCATED OR OTHERWISE USED AT OR FOR THE GAMING FACILITY.  SUCH AUTHORITY SHALL
INCLUDE ALL DECISIONS REGARDING GAMES PLAYED AND THE RULES OF PLAY FOR SUCH
GAMES, THE ODDS OR PAYOUTS OF SUCH GAMES, AND THE PROFIT MARGINS TO BE USED IN
THE SALE OF ANY GOODS OR SERVICES TO BE SOLD ON THE PREMISES, ALL IN COMPLIANCE
WITH THE COMPACT, THE TRIBAL GAMING ORDINANCE, AND/OR INDUSTRY STANDARDS.  THE
CONTROL EXERCISED BY TRIBE OVER THE GAMING FACILITY AND THE GAMING OPERATION
SHALL BE EXERCISED THROUGH THE COMPREHENSIVE TRIBAL GAMING

 

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ORDINANCE AND REGULATIONS APPROPRIATELY PROMULGATED THEREUNDER, THE TERMS OF ANY
APPROVED CLASS III COMPACT, AND THE TERMS OF THIS AGREEMENT.

 

C.            COLLECTION, DEPOSIT AND DISBURSEMENT OF REVENUES.  AS TRIBE’S
INDEPENDENT CONTRACTOR, MANAGER SHALL COLLECT, RECEIVE AND ACCOUNT FOR, ON
BEHALF OF TRIBE, ALL REVENUES GENERATED AND RESULTING FROM THE OPERATION OF THE
GAMING FACILITY.  SUCH REVENUES SHALL BE DEPOSITED INTO AN ACCOUNT OR ACCOUNTS
OF THE GAMING OPERATION WITH SUCH BANK OR BANKS AS MANAGER MAY CHOOSE, WITH THE
APPROVAL OF TRIBE, WITH THE SOLE SIGNATORIES TO BE MANAGER OR MANAGER’S DULY
AUTHORIZED REPRESENTATIVES DESIGNATED FOR THOSE PURPOSES.  MANAGER IS HEREBY
AUTHORIZED TO MAKE ALL SUCH DISBURSEMENTS AND EXPENDITURES AS ARE NECESSARY FROM
SAID ACCOUNT IN ORDER TO FUND ALL GAMING OPERATIONS AND OTHER EXPENSES RELATED
TO THE GAMING FACILITY, INCLUDING, BUT NOT LIMITED TO, OPERATING EXPENSES AND
NON-GAMING OPERATING EXPENSES; AND THE DISBURSEMENT OF NET REVENUES AND NON
GAMING NET REVENUES DUE TRIBE AND MANAGER.  ALL SUCH EXPENDITURES AND
DISBURSEMENTS SHALL BE CLEARLY REPRESENTED WITHIN AND ON THE REGULAR MONTHLY
FINANCIAL STATEMENT OR REPORT PROVIDED BY MANAGER TO TRIBE AS MORE SPECIFICALLY
SET FORTH HEREIN BELOW.

 

ARTICLE IV
ACCOUNTING AND FINANCIAL REPORTING

 

4.1           ACCOUNTING.  MANAGER SHALL PROVIDE FOR THE ESTABLISHMENT AND
MAINTENANCE OF SATISFACTORY ACCOUNTING SYSTEMS AND PROCEDURES THAT SHALL, AT A
MINIMUM: (A) INCLUDE AN ADEQUATE SYSTEM OF INTERNAL ACCOUNTING CONTROLS; (B)
PERMIT THE PREPARATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES; (C) BE SUSCEPTIBLE TO AUDIT; (D) ALLOW THE CLASS
II GAMING OPERATION, THE TRIBE, AND THE COMMISSION TO CALCULATE THE ANNUAL FEE
UNDER THE ACT; (E) PERMIT THE CALCULATION AND PAYMENT OF THE MANAGER’S FEE; AND
(F) PROVIDE FOR THE ALLOCATION OF OPERATING EXPENSES OR OVERHEAD EXPENSES AMONG
THE TRIBE, THE TRIBAL GAMING

 

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ENTERPRISE, THE MANAGER, AND ANY OTHER USER OF SHARED FACILITIES AND SERVICES. 
ANY SUCH ALLOCATION SHALL BE REASONABLE, AND SHALL BE ACCEPTABLE TO BOTH TRIBE
AND MANAGER.

 

4.2           FINANCIAL RECORDS AND STATEMENTS.  MANAGER SHALL MAINTAIN FULL AND
ACCURATE BOOKS OF ACCOUNT UPON THE PREMISES AND PROVIDE ACCESS TO TRIBE OR
TRIBE’S DELEGATED REPRESENTATIVE FOR THE INSPECTION OF SUCH BOOKS OF ACCOUNT AT
ANY TIME.  SUCH BOOKS SHALL BE KEPT IN COMPLIANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, AND PURSUANT TO THE REQUIREMENTS OF THE ACT AND THE TERMS
OF ANY APPROVED COMPACT FOR CLASS III GAMING.  MANAGER SHALL PREPARE AND PROVIDE
TO THE TRIBE COMPARATIVE FINANCIAL STATEMENTS MONTHLY, QUARTERLY AND ANNUALLY OF
ALL SALES, REVENUES AND ALL OTHER AMOUNTS COLLECTED AND RECEIVED, AND ALL
DEDUCTIONS AND DISBURSEMENTS MADE THEREFROM IN CONNECTION WITH THE GAMING
OPERATION AND IN CONFORMANCE WITH THE BUDGET.  AN INDEPENDENT, QUALIFIED
CERTIFIED PUBLIC ACCOUNTANT SELECTED BY THE TRIBAL REPRESENTATIVE AFTER
DISCUSSIONS WITH THE MANAGER SHALL PERFORM AN ANNUAL AUDIT OF THE GAMING
OPERATION AND OF ALL CONTRACTS FOR SUPPLIES, SERVICES OR CONCESSIONS FOR A
CONTRACT AMOUNT IN EXCESS OF $25,000.00 ANNUALLY (EXCEPT CONTRACTS FOR
PROFESSIONAL LEGAL OR ACCOUNTING SERVICES) REFLECTING OPERATING EXPENSES AS
DEFINED HEREIN.  THE COSTS INCURRED FOR SUCH AUDITS SHALL BE AN OPERATING
EXPENSE OF THE GAMING OPERATION.  SUCH AUDITS SHALL BE PROVIDED BY THE BUSINESS
COMMITTEE, ON BEHALF OF THE TRIBE, TO ALL APPROPRIATE GOVERNMENTAL AGENCIES, AS
REQUIRED BY LAW, AND MAY BE USED BY MANAGER FOR REPORTING PURPOSES UNDER FEDERAL
AND STATE SECURITIES LAWS, IF REQUIRED.

 

A.            CERTIFIED PUBLIC ACCOUNTANT.  MANAGER SHALL EMPLOY, AS AN
OPERATING EXPENSE, A BOOKKEEPER, CERTIFIED PUBLIC ACCOUNTANT OR ACCOUNTING FIRM
TO OVERSEE THE PERFORMANCE OF SUCH ACCOUNTING TASKS AS ARE REQUIRED TO MEET THE
REQUIREMENTS OF THIS AGREEMENT, AND IN ORDER TO ASSIST MANAGER WITH THE
FINANCIAL INFORMATION NEEDED TO FULLY AND PROPERLY CARRY

 

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OUT THE GENERAL DUTIES AND RESPONSIBILITIES OF MANAGER HEREUNDER.  MANAGER SHALL
DESIGN AND INSTALL SYSTEMS FOR INSURING THE SECURITY OF ALL FUNDS AND MAINTAIN
AND POLICE SUCH SYSTEMS AS MANAGER SEES FIT.  THE PERSON OR FIRM SO RETAINED BY
MANAGER SHALL BE INDEPENDENT FROM THE CPA DEFINED IN PARAGRAPH 1.2 HEREOF.

 

B.            DAILY REPORTS.  MANAGER SHALL ENSURE THE CAPACITY TO DETERMINE THE
DAILY REVENUES, INCLUDING THE GROSS HANDLE AND HOLD OF THE GAMING FACILITY, AND
SHALL COMMUNICATE DAILY RESULTS TO THE TRIBE.

 

C.            FINANCIAL REPORTING.  MANAGER SHALL PROVIDE SEPARATE
ACCOUNTABILITY AND FINANCIAL REPORTING FOR ALL NON-GAMING PROFIT CENTERS AS
EXIST WITHIN THE FACILITY OR AS MAY BE OTHERWISE RELATED TO THE GAMING FACILITY,
SUCH AS RESTAURANTS, GIFT SHOPS, HOTELS OR OTHERWISE.

 

D.            DEPOSIT OF PROCEEDS.  PROCEEDS FROM ALL SUCH PROFIT CENTERS SHALL
BE DEPOSITED AND SECURED BY MANAGER FOR DEPOSIT AT SUCH BANK OR BANKS AS MAY BE
SELECTED BY MANAGER AND TRIBE.

 

E.             CASH MANAGEMENT SYSTEM.  MANAGER SHALL ESTABLISH A CASH
MANAGEMENT SYSTEM WHICH IS ADEQUATE TO SAFEGUARD THE FUNDS OF THE GAMING
OPERATION.  THE TRIBE SHALL HAVE THE RIGHT TO OVERSEE THE CASH MANAGEMENT
SYSTEM, INCLUDING VIDEO SURVEILLANCE.

 

F.             TAX WITHHOLDINGS ON WINNINGS.  MANAGER SHALL BE RESPONSIBLE FOR
REPORTING AND WITHHOLDING TAXES WITH RESPECT TO THE WINNINGS FROM GAMING OR
WAGERING OPERATIONS AS MAY BE REQUIRED BY THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.

 

G.            INTERNAL REVENUE CODE.  MANAGER SHALL BE RESPONSIBLE FOR
COMPLIANCE WITH ALL OTHER LAWFUL REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE
CODE.

 

4.3           DEPOSITORIES AND ACCOUNTS.  MANAGER SHALL, AS AGENT FOR TRIBE,
ESTABLISH SUFFICIENT BANK ACCOUNTS AS ARE DEEMED NECESSARY AND APPROPRIATE TO
THE PROPER MANAGEMENT AND CONTROL OF

 

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ALL REVENUES GENERATED UPON THE FACILITY MANAGER AND TRIBE SHALL MUTUALLY
DETERMINE THOSE DEPOSITORIES TO BE USED FOR THESE PURPOSES.

 

A.            TAX IDENTIFICATION NUMBER.  MANAGER WILL NOT USE THE TRIBAL TAX
IDENTIFICATION NUMBER FOR ANY OR ALL SUCH ACCOUNTS.  MANAGER SHALL SECURE A
SEPARATE TAX IDENTIFICATION NUMBER FOR THE GAMING ENTERPRISE AS A MEANS OF
INSURING AGAINST ANY AND ALL CLAIMS OF THIRD PARTIES, INCLUDING CREDITORS OR
STATE AND FEDERAL AUTHORITIES WHO MAKE ANY CLAIM AGAINST MANAGER.  THE USE OF
SUCH TAX NUMBER SHALL NOT CHANGE OR REDUCE THE AUTHORITY OF MANAGER OVER THE USE
OR DISBURSEMENT OF SUCH MONIES AS IS OTHERWISE AUTHORIZED BY THIS AGREEMENT.

 

B.            CHANGE OF DEPOSITORY.  WITH THE CONSENT OF THE TRIBAL
REPRESENTATIVE, MANAGER MAY FROM TIME TO TIME CHANGE THE DEPOSITORIES USED FOR
THE FACILITY, BUT SHALL BE REQUIRED TO GIVE TRIBE NOTICE OF MANAGER’S INTENT SO
TO DO NO LESS THAN TWENTY (20) DAYS PREVIOUS TO ANY SUCH CHANGE IN
DEPOSITORIES.  FAILURE OF THE TRIBE TO OBJECT WITHIN SUCH TWENTY (20) DAY NOTICE
SHALL BE DEEMED TO BE APPROVAL OF THE CHANGE IN DEPOSITORIES.  SUCH NOTICE SHALL
CONTAIN A FULL AND COMPLETE STATEMENT OF THE REASON FOR SUCH CHANGE AND THE
BASIS UPON WHICH SUCH SELECTION OF THE NEW DEPOSITORY WAS MADE.

 

ARTICLE V
REVENUES, PROFITS AND TAXES

 

5.1           DETERMINATION OF NET REVENUES AND NON-GAMING NET REVENUES.  FOR
THE PURPOSES OF DETERMINING NET REVENUES IN ORDER TO CALCULATE THE PROPER
DISTRIBUTION OF PROFITS BETWEEN TRIBE AND MANAGER, NET REVENUES ARE DEFINED IN
PARAGRAPH 1.10 HEREOF AND NON-GAMING NET REVENUES ARE DEFINED IN PARAGRAPH 1.11
HEREOF.

 

5.2           DISTRIBUTION OF PROFITS.  THE DISTRIBUTION OF PROFITS SHALL BE
MADE WITHIN TWENTY (20) DAYS OF THE CLOSE OF EACH CALENDAR MONTH, FOLLOWING
CALCULATION OF NET REVENUES AND NON-

 

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GAMING NET REVENUES BY MANAGER AND AFTER REPORT OF SAID CALCULATIONS AND THE
RESULTING DISTRIBUTION PLAN IS DELIVERED TO TRIBE.  ALL PAYMENTS TO THE TRIBE OF
ITS SHARE OF NET REVENUES AND NON-GAMING NET REVENUES OR ITS GUARANTEED PAYMENT
SHALL BE DEPOSITED AS INSTRUCTED, IN WRITING, FROM TIME TO TIME.  TRIBE AND
MANAGER SHALL BEAR THE BURDEN OF ANY LOSS FOR NON-GAMING OPERATIONS IN THE
FOLLOWING RATIO: 65% TRIBE AND 35% MANAGER.  ANY SUCH LOSS SHALL BE DEDUCTED
FROM NET REVENUES BEFORE PAYMENT OF MANAGEMENT FEES OR DISBURSEMENT OF NET
REVENUES TO TRIBE.

 

A.            OBJECTIONS TO CALCULATIONS.  ANY OBJECTION OR DIFFERENCE OF
OPINION THAT TRIBE MIGHT HAVE WITH THE MANNER OF CALCULATION SHALL BE THE
SUBJECT OF GOOD FAITH NEGOTIATION BETWEEN THE PARTIES.

 

B.            WAIVER OF OBJECTIONS.  TRIBE SHALL ENDEAVOR TO REVIEW THE REPORTS
REFERRED TO IN PARAGRAPH 5.2 ABOVE PROMPTLY.  FAILURE OF TRIBE TO RAISE ANY SUCH
OBJECTION WITHIN SIXTY (60) DAYS OF SUCH DISTRIBUTION REPORT SHALL RESULT IN THE
WAIVER BY TRIBE OF SUCH OBJECTIONS, UNLESS MANAGER HAS FAILED TO ADEQUATELY
REPORT INCOME AND EXPENSE OR HAS FAILED TO PROPERLY CALCULATE THE DISTRIBUTIONS,
AND IN THE ABSENCE OF FRAUD, TRIBE SHALL BE ESTOPPED FROM MAKING SUCH OBJECTIONS
THEREAFTER.

 

C.            MISCALCULATION.  IN THE EVENT THAT IT IS DETERMINED AS A RESULT OF
TIMELY OBJECTION OF TRIBE THAT MANAGER IS INDEBTED TO TRIBE FOR MISCALCULATION
OR OTHERWISE, TRIBE SHALL BE ENTITLED TO REPAYMENT OF SUCH AMOUNTS AS ARE
DETERMINED TO BE OWED, WITH INTEREST AT THE CURRENT TREASURY BOND RATE AT THE
TIME SUCH DETERMINATION IS MADE AND ENTERED.  LIKEWISE, ANY SUCH DEBT OR
JUDGMENT AWARDED MANAGER AGAINST TRIBE SHALL EARN INTEREST AT THE SAME RATE, AND
IN EITHER CASE SUCH AWARD MAY BE PAID IMMEDIATELY OR OUT OF FUTURE NET REVENUES
AND NON-GAMING

 

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NET REVENUES.  TERMS OF REPAYMENT SHALL BE NEGOTIATED IN GOOD FAITH BY THE
PARTIES HERETO.  UPON FAILURE OF THE PARTIES TO AGREE, SUCH TERMS SHALL BE
ESTABLISHED BY THE TRIBAL GAMING BOARD.

 

5.3           FIDUCIARY RELATIONSHIP OF MANAGER TO TRIBE.  IN THE CARRYING OUT
OF MANAGER’S DUTIES AND RESPONSIBILITIES UNDER THIS AGREEMENT, MANAGER ACTS AS
THE FIDUCIARY OF TRIBE AND SHALL BE HELD TO THE TRADITIONAL STANDARDS OF A
FIDUCIARY THEREIN.

 

ARTICLE VI
COMPENSATION AND REIMBURSEMENT

 

6.1           MANAGEMENT FEE.  IN CONSIDERATION OF THE PERFORMANCE OF THE DUTIES
AND OBLIGATIONS ASSUMED BY MANAGER HEREUNDER, TRIBE AGREES THAT MANAGER SHALL
RECEIVE COMPENSATION EQUAL TO THE SUM OF (I) THE LESSER OF (A) THIRTY PERCENT
(30%) OF NET REVENUES, OR (B) THIRTY-FIVE PERCENT (35%) OF ADJUSTED NET REVENUES
PLUS (II) 30% OF NON-GAMING NET REVENUES.  ADJUSTED NET REVENUES SHALL MEAN NET
REVENUES PLUS DEPRECIATION AND AMORTIZATION DETERMINED IN ACCORDANCE WITH GAAP,
LESS ALL AMOUNTS PAID TO RETIRE THE PRINCIPAL BALANCE OF ANY LOANS.  AFTER
PAYMENT OF THE MANAGEMENT FEE TO MANAGER, REMAINING NET REVENUE AND NON-GAMING
NET REVENUES SHALL BE PAID TO TRIBE.  MANAGEMENT FEES SHALL BE CALCULATED
MONTHLY AND ADJUSTED ANNUALLY.  THE ANNUAL ADJUSTMENT SHALL BE REVIEWED AND
CONFIRMED BY THE CPA.

 

Tribe agrees that it shall pay all principal payments required to be made on any
loans provided to the Gaming Operation out of Tribe’s share of Net Revenues and
Non-Gaming Net Revenues.  Manager is hereby empowered to make such payments
directly to the holder of any such loan out of Net Revenues and Non-Gaming Net
Revenues from the Gaming Facility before any distribution to the Tribe.

 

6.2           JUSTIFICATION FOR MANAGER’S COMPENSATION.  THE AGREEMENT BETWEEN
TRIBE AND MANAGER IS BASED ON THE SUBSTANTIAL INVESTMENTS, OBLIGATIONS AND
LIABILITIES TO BE MADE OR INCURRED BY MANAGER OF IN EXCESS OF APPROXIMATELY FIVE
MILLION DOLLARS AND NO/100 DOLLARS

 

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($5,000,000.00) REQUIRED OF MANAGER IN ORDER TO BUILD THE FACILITY AND TO
PURCHASE, LEASE OR OTHERWISE OBTAIN ALL UTILITIES, START-UP COSTS, GAMING
EQUIPMENT, MACHINERY, DEVICES AND FURNISHINGS NECESSARY TO TRIBE’S GAMING
FACILITY AS PLANNED.  AS FURTHER CONSIDERATION FOR THE EXPENDITURE AND
INVESTMENT REQUIRED OF MANAGER, TRIBE EXTENDS THE TERM OF THIS AGREEMENT FROM
FIVE (5) YEARS TO SEVEN (7) YEARS IN ORDER TO ALLOW MANAGER SUFFICIENT TIME TO
RECOUP THE INITIAL INVESTMENT MADE AND TO GAIN WHAT THE PARTIES BELIEVE TO BE
ADEQUATE EARNINGS ON SAID INVESTMENT.  TRIBE WILL URGE THE APPROVAL OF THESE
TERMS BY THE NATIONAL INDIAN GAMING COMMISSION, OR SUCH OTHER APPROPRIATE
FEDERAL AGENCY AS REQUIRED.

 

6.3           GUARANTEED PAYMENT TO TRIBE.  MANAGER AGREES THAT THE TRIBE SHALL
RECEIVE A MINIMUM MONTHLY DISTRIBUTION OF NET REVENUE PURSUANT TO SECTION 5.2
HEREOF IN THE AMOUNT OF FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00) (“MONTHLY
GUARANTEED PAYMENT”), THE FIRST PAYMENT DUE ON OR BEFORE THE TWENTIETH (20TH)
DAY OF THE SECOND FULL MONTH OF OPERATION OF THE FACILITY AND DUE ON OR BEFORE
THE SAME DATE OF EACH MONTH THEREAFTER THROUGHOUT THE TERM OF THIS AGREEMENT,
WITHOUT REGARD TO THE PROFITABILITY OF SAID GAMING FACILITY.  IN ADDITION,
MANAGER AGREES TO MAKE AN ADDITIONAL MONTHLY PAYMENT TO TRIBE OF TEN THOUSAND
AND NO/100 DOLLARS ($10,000.00) PER MONTH (“ADDITIONAL PAYMENT”) AFTER PAYMENT
OF ALL OPERATING EXPENSES AND JOAN AMORTIZATION, BUT BEFORE ANY PAYMENT TO
MANAGER OF NET REVENUES.  (THE FIRST YEAR OF OPERATION SHALL BE PRORATED).  AT
SUCH TIME AS TRIBE SHALL HAVE RECEIVED ONE HUNDRED TWENTY THOUSAND AND NO/100
DOLLARS ($120,000.00) IN TOTAL DISTRIBUTIONS OF THE AGGREGATE OF ADDITIONAL
PAYMENTS AND NET REVENUES IN ANY CALENDAR YEAR, NO FURTHER ADDITIONAL PAYMENTS
SHALL BE PAID TO TRIBE DURING THAT CALENDAR YEAR; HOWEVER, THE MONTHLY
GUARANTEED PAYMENT SHALL CONTINUE.

 

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ARTICLE VII
REIMBURSEMENT OF DEVELOPMENT COSTS - LOAN

 

7.1           REPAYMENT OF LOAN.  CERTAIN EXPENDITURES HAVE BEEN, AND/OR WILL
BE, MADE, SECURED OR ARRANGED BY MANAGER, TOWARD THE DEVELOPMENT, INCLUDING
CONSTRUCTION AND REMODELING OF THIS GAMING FACILITY.  SUCH EXPENDITURES INCLUDE
BUT ARE NOT LIMITED TO THE PURCHASE OF EQUIPMENT, MACHINERY, FURNITURE AND
FIXTURES, AS WELL AS ATTORNEY FEES AND RELATED TRANSACTIONAL EXPENSES.  ALL SUCH
EXPENSES WILL BE EVIDENCED BY A NOTE OR NOTES OR A LOAN AGREEMENT OR LOAN
AGREEMENTS TO BE NEGOTIATED IN GOOD FAITH.  ALL INTEREST CHARGED ON ANY SUCH
LOANS SHALL BE EQUAL TO MANAGER’S INTEREST COST AND SHALL OTHERWISE BE
COMPETITIVE AND COMMERCIALLY REASONABLE RATES, AFTER TAKING INTO CONSIDERATION
THE NATURE AND TERM OF THE LOAN AND THE SECURITY AVAILABLE .FOR REPAYMENT
THEREOF.  THE INITIAL LOAN, IN THE APPROXIMATE AMOUNT OF FIVE MILLION EIGHT
HUNDRED THOUSAND AND NO/100) DOLLARS ($5,800,000.00), SHALL BEAR INTEREST AT THE
RATE OF 9.25% PER ANNUM AND SHALL BE AMORTIZED OVER SEVEN (7) YEARS.  SUCH LOANS
ARE HEREBY SECURED BY THE BUSINESS CORPORATION’S PLEDGE OF REMOVABLE EQUIPMENT,
FURNITURE AND TRADE FIXTURES PURCHASED WITH FUNDS LOANED TO THE BUSINESS
CORPORATION, AND BY THE FUTURE GAMING REVENUES FROM THE GAMING OPERATION OR THE
GAMING FACILITY.  THE FURNITURE, TRADE FIXTURES AND EQUIPMENT AND GAMING
REVENUES SHALL BE THE SOLE SOURCE OF REPAYMENT AND COLLATERAL AND NEITHER THE
TRIBE NOR THE BUSINESS CORPORATION SHALL HAVE ANY OTHER RESPONSIBILITY FOR
RETIREMENT OF THE DEBT.  THE REAL PROPERTY, INCLUDING THE BUILDING AND ALL
PERMANENT EQUIPMENT AND FIXTURES WHICH BECOME REALTY UNDER OKLAHOMA LAW, SHALL
NOT BE COLLATERAL FOR THE LOAN.  DURING THE TERM OF THIS AGREEMENT AS LONG AS
MANAGER IS MANAGING THE GAMING.  ENTERPRISE, IN THE EVENT THAT CASH FLOW FROM
OPERATIONS IS INADEQUATE TO PAY PRINCIPAL OR INTEREST ON THE LOAN, ANY SHORTAGE
SHALL BE SUSPENDED UNTIL CASH FLOW IS ADEQUATE TO CURE SUCH DELINQUENCY AND ANY
SUCH SUSPENSION SHALL NOT CAUSE AN DEFAULT IN THE LOAN DOCUMENTS.

 

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7.2           LIMITATIONS ON LOAN.  TRIBE AND MANAGER AGREE THAT MANAGER’S
INITIAL DEVELOPMENT COSTS FOR THE PROJECT SHALL NOT EXCEED FIVE MILLION EIGHT
HUNDRED THOUSAND AND NO/100 DOLLARS ($5,800,000.00) IN COSTS, CREDIT OR OTHER
FORMS OF FINANCIAL CONTRIBUTION BY PURCHASE OF GAMING EQUIPMENT AND OTHER
NECESSARY EQUIPMENT, MACHINERY AND FURNISHINGS, INCLUDING OVERHEAD, FINANCING
COSTS AND FOR FUNDING OF THE HOUSE BANK AND INITIAL PAYROLL AND PRE-OPENING
COSTS, AND THAT THE LOAN FROM MANAGER TO THE BUSINESS CORPORATION SHALL NOT
EXCEED FIVE MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($5,800,000.00).

 

7.3           THIS SECTION INTENTIONALLY LEFT BLANK.

 

7.4           FINAL DISTRIBUTION.  UPON TERMINATION OR EXPIRATION OF THIS
AGREEMENT, MANAGER SHALL BE ENTITLED TO RECEIVE FROM THE TRIBE, CASH EQUAL TO
THIRTY PERCENT (30%) OF THE GAMING OPERATION UNDISTRIBUTED NET REVENUES AND
NON-GAMING NET REVENUES.

 

ARTICLE VIII
NOTICE

 

8.1           NOTICES.  ANY NOTICE REQUIRED TO BE GIVEN PURSUANT TO THIS
AGREEMENT SHALL BE DELIVERED BY CERTIFIED MAIL ADDRESSED TO TRIBE AT:

 

CHEYENNE AND ARAPAHO TRIBES OF Oklahoma

P.O. Box 38

Concho, Oklahoma  73022

 

and to the Manager at:

 

Southwest Casino and Hotel Corp.

c/o James B. Druck, President

2001 Killebrew Drive, Suite 345

Minneapolis, Minnesota  55425

 

and to NIGC at:

 

National Indian Gaming Commission

1850 M Street N.W., Suite 250

Washington, D.C.  20036

 

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ARTICLE IX
WARRANTIES AND REPRESENTATIONS

 

9.1           WARRANTIES AND REPRESENTATIONS.  THE PARTIES TO THIS AGREEMENT
WARRANT AND REPRESENT TO EACH OTHER THAT THEY WILL EACH ACT RESPONSIBLY TO
PROMPTLY REQUEST THE APPROVAL OF THIS AGREEMENT BY THE PROPER FEDERAL AGENCY OR
COMMISSION; THAT THEY WILL TAKE NO ACTION, NOR FAIL TO TAKE APPROPRIATE ACTION
TO SECURE THE APPROVAL OF THIS AGREEMENT.  NEITHER PARTY SHALL ATTEMPT TO ALTER
THE TERMS OF THIS AGREEMENT WITHOUT THE WRITTEN CONSENT OF THE OTHER, NOR WILL
THEY ATTEMPT TO MAKE ASSIGNMENT OR TRANSFER OF THEIR RIGHTS IN WHOLE OR IN PART
HEREUNDER TO ANY THIRD PARTY.  TRIBE WARRANTS TO MANAGER THAT TRIBE HEREBY
EXEMPTS THIS FACILITY FROM ANY ORDINANCE OR REGULATION WHICH WILL, BY VIRTUE OF
THE ENFORCEMENT OF SUCH ORDINANCE OR REGULATION, EFFECTIVELY AMEND OR MODIFY THE
TERMS OF THIS AGREEMENT, OR IN ANY WAY REDUCE THE BENEFITS TO MANAGER FROM THIS
AGREEMENT WHETHER PRESENTLY EXISTING OR HEREAFTER PROMULGATED FOR THE TERM OF
THIS AGREEMENT.

 

ARTICLE X
GROUNDS FOR TERMINATION

 

10.1         BREACH BY MANAGER.  THIS AGREEMENT MAY BE TERMINATED UPON THE
WRITTEN CONSENT AND APPROVAL OF BOTH PARTIES, OR BY THE TRIBE IN THE EVENT THAT
ANY PRINCIPAL, EMPLOYEE OR AGENT OF MANAGER IS FOUND GUILTY OF THEFT OR
EMBEZZLEMENT OF MONIES OR ASSETS OF THE TRIBAL GAMING OPERATION.  FOR PURPOSES
OF THIS SECTION, A PRINCIPAL OF MANAGER SHALL BE DEFINED AS JAMES B. DRUCK,
JEFFREY S. HALPERN OR ROBERT C. HARVEY.  HOWEVER, IN THE EVENT OF SUCH FINAL
DETERMINATION OF GUILT, MANAGER MAY TERMINATE SUCH PRINCIPAL, EMPLOYEE OR AGENT
OF MANAGER AND MAKE RESTITUTION FOR THE AMOUNT LOST AND THEREBY PRECLUDE TRIBE’S
RIGHT TO TERMINATE.  THIS AGREEMENT MAY ALSO BE TERMINATED BY A FINAL JUDGMENT
OF A COURT OF COMPETENT JURISDICTION AS A RESULT OF A FINDING OF A MATERIAL
BREACH OF SAME.  SUBJECT TO MANAGER’S ABILITY TO CURE ANY SHORTFALL BY
RESTITUTION AS PROVIDED ABOVE, IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT
THIS AGREEMENT MAY BE TERMINATED BY THE TRIBE IN THE EVENT THAT MANAGER FAILS TO
MAKE ANY PAYMENT

 

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TO THE TRIBE WHEN DUE WITHOUT GOOD CAUSE OR REASONABLE EXPLANATION THEREFOR (IT
BEING UNDERSTOOD THAT MISTAKE, INADVERTENCE OR OTHER NEGLIGENT ERROR SHALL
CONSTITUTE “REASONABLE EXPLANATION” HEREUNDER), WHICH SHALL BE CONSIDERED A
MATERIAL BREACH OF THIS AGREEMENT.  A MATERIAL BREACH OF THIS AGREEMENT SHALL
INCLUDE, BUT NOT BE LIMITED TO, A FAILURE OF EITHER PARTY TO PERFORM ANY
MATERIAL DUTY OR OBLIGATION ON ITS PART FOR ANY TWENTY (20) CONSECUTIVE DAYS. 
HOWEVER, NEITHER PARTY MAY TERMINATE THIS AGREEMENT ON GROUNDS OF MATERIAL
BREACH UNLESS IT HAS PROVIDED WRITTEN NOTICE TO THE OTHER PARTY OF ITS INTENTION
TO DECLARE A DEFAULT AND TO TERMINATE THIS AGREEMENT, AND THE DEFAULTING PARTY
THEREAFTER FAILS TO CURE OR TAKE STEPS TO SUBSTANTIALLY CURE THE DEFAULT WITHIN
SIXTY (60) DAYS FOLLOWING RECEIPT OF SUCH NOTICE.  THE DISCONTINUANCE OR
CORRECTION OF THE MATERIAL BREACH SHALL CONSTITUTE A CURE THEREOF.  IN THE EVENT
OF ANY TERMINATION FOR CAUSE, REGARDLESS OF FAULT, THE PARTIES SHALL RETAIN ALL
MONIES PREVIOUSLY PAID TO THEM PURSUANT TO ARTICLE 6 (COMPENSATION AND
REIMBURSEMENT) OF THIS AGREEMENT; AND THE TRIBE SHALL RETAIN TITLE TO ALL GAMING
OPERATION FACILITIES, FIXTURES, IMPROVEMENTS, SUPPLIES, EQUIPMENT, FUNDS AND
ACCOUNTS (COLLECTIVELY, THE “GAMING OPERATION ASSETS”), SUBJECT TO THE RIGHTS OF
MANAGER OR ANY THIRD PARTY LENDER UNDER: ANY LOAN AGREEMENTS RELATING TO THE
ACQUISITION OR FINANCING OF ALL OR ANY PORTION OF THE GAMING OPERATION ASSETS,
INCLUDING BUT NOT LIMITED TO THE ADJUSTABLE RATE PROMISSORY NOTE, SECURITY
AGREEMENT AND LOAN AGREEMENT BETWEEN THE TRIBE AND MANAGER.  NOTWITHSTANDING THE
FOREGOING, TO THE EXTENT MANAGER HAS, AT THE TIME OF THE TERMINATION, NET
REVENUES DUE UNDER ARTICLE 6 OF THIS AGREEMENT, SUCH NET REVENUES SHALL BE PAID
TO MANAGER PROMPTLY UPON TERMINATION.  IN ADDITION, MANAGER SHALL CONTINUE TO
HAVE THE RIGHT TO REPAYMENT OF UNPAID PRINCIPAL AND INTEREST UNDER THE NOTE IN
ACCORDANCE WITH THE TERMS THEREOF.

 

10.2         TRIBAL BREACH.  IN THE EVENT OF TERMINATION WHERE THE TRIBE HAS
BREACHED THIS AGREEMENT, MANAGER SHALL NOT BE REQUIRED TO PERFORM ANY FURTHER
SERVICES UNDER THIS AGREEMENT

 

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AND THE BUSINESS COMMITTEE AND THE TRIBE SHALL INDEMNIFY AND HOLD MANAGER
HARMLESS AGAINST ALL LIABILITIES OF ANY NATURE WHATSOEVER RELATING TO THE GAMING
OPERATION OR CREATED BY THE TERMINATION OF THIS AGREEMENT.  ANY NET REVENUES ON
HAND- AT THE TIME OF TERMINATION WILL BE DISTRIBUTED IN ACCORDANCE WITH ARTICLE
6 OF THIS AGREEMENT.  MANAGER AND THE TRIBE ACKNOWLEDGE AND AGREE THAT
TERMINATION OF THIS AGREEMENT MAY NOT BE A SUFFICIENT OR APPROPRIATE REMEDY FOR
BREACH, AND FURTHER AGREE THAT PURSUANT TO THE OTHER PROVISIONS OF THIS
AGREEMENT, INCLUDING BUT NOT NECESSARILY LIMITED TO, SECTIONS 18 AND 19, MANAGER
SHALL HAVE THE RIGHT TO PURSUE SUCH REMEDIES- (IN ADDITION TO TERMINATION AT LAW
OR EQUITY) AS IT DETERMINES ARE BEST ABLE TO COMPENSATE IT FOR SUCH BREACH. 
MANAGER SHALL SPECIFICALLY BE ENTITLED TO RECOVER ITS SHARE OF NET REVENUES FOR
THE PERIOD COMMENCING ON THE DATE OF ANY BREACH BY THE TRIBE AND CONTINUING
THROUGH THE REMAINING TERM OF THIS AGREEMENT.  IN ADDITION, THE TRIBE
SPECIFICALLY ACKNOWLEDGES AND AGREES THAT THERE WILL BE IRREPARABLE HARM AND
THAT FULL DAMAGES WILL BE DIFFICULT TO DETERMINE IF THE TRIBE COMMITS ANY
BREACH.  THE TRIBE FURTHER ACKNOWLEDGES AND AGREES THAT AN INJUNCTION AND/OR
OTHER EQUITABLE RELIEF IS AN APPROPRIATE REMEDY FOR A TRIBAL BREACH OF THIS
AGREEMENT.  AN EJECTION TO PURSUE DAMAGES OR TO PURSUE SPECIFIC PERFORMANCE OF
THIS AGREEMENT OR OTHER EQUITABLE REMEDIES WHILE THIS AGREEMENT REMAINS IN
EFFECT SHALL NOT PRECLUDE THE INJURED PARTY FROM PROVIDING NOTICE OF TERMINATION
PURSUANT TO THE PROVISIONS OF THIS SECTION 10.  REGARDLESS OF THE REMEDY
SELECTED, MANAGER SHALL RETAIN THE RIGHT TO REPAYMENT OF UNPAID PRINCIPAL AND
INTEREST AND OTHER AMOUNTS DUE UNDER THIS AGREEMENT, THE NOTE AND LOAN
AGREEMENT, AND ITS CONTINUED INTEREST IN THE SECURITY AGREEMENT.

 

10.3         INVOLUNTARY TERMINATION DUE TO CHANGES IN APPLICABLE LAW.  IT IS
THE UNDERSTANDING AND INTENTION OF THE PARTIES THAT THE ESTABLISHMENT AND
OPERATION OF THE GAMING OPERATION CONTEMPLATED HEREIN CONFORMS TO AND COMPLIES
WITH ALL APPLICABLE LAWS.  IF THIS

 

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AGREEMENT, THE GAMING OPERATION, ANY MATERIAL ASPECT OF GAMING OR ANY MATERIAL
ASPECT OF ANY TRIBAL COMPACT IS DETERMINED BY THE CONGRESS OF THE UNITED STATES,
THE DEPARTMENT OF THE INTERIOR, THE NATIONAL INDIAN GAMING COMMISSION, OR THE
FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION TO BE UNLAWFUL UNDER FEDERAL
OR STATE LAW, THE OBLIGATIONS OF THE PARTIES HERETO SHALL CEASE AND THIS
AGREEMENT SHALL BE OF NO FURTHER FORCE AND EFFECT; PROVIDED THAT (I) MANAGER
SHALL HAVE THE RIGHTS IN ARTICLE 2.2 F. OF THIS AGREEMENT; (II) MANAGER AND THE
TRIBE SHALL RETAIN ALL MONIES PREVIOUSLY PAID TO THEM PURSUANT TO ARTICLE 6 OF
THIS AGREEMENT; (III) FUNDS OF THE GAMING OPERATION (EXCLUDING WORKING CAPITAL
IF IT HAS NOT BEEN REPAID TO MANAGER BY THE TRIBE) IN ANY ACCOUNT SHALL BE PAID
AND DISTRIBUTED AS PROVIDED IN ARTICLE 6 OF THIS AGREEMENT; (IV) ANY MONIES
LOANED OR SECURED OR ARRANGED BY MANAGER TO OR FOR THE TRIBE UNDER ANY NOTE AND
LOAN AGREEMENTS SHALL BE REPAID TO MANAGER IN ACCORDANCE WITH THE NOTE AND LOAN
AGREEMENT (SUBJECT TO ACCELERATION BY MANAGER IN ACCORDANCE WITH ARTICLE 10.1
HEREOF); AND (V) THE TRIBE SHALL RETAIN TITLE TO ALL GAMING OPERATION
FACILITIES, FIXTURES, IMPROVEMENTS, SUPPLIES AND EQUIPMENT, SUBJECT TO THE
RIGHTS OF MANAGER UNDER ANY SECURITY AGREEMENT AND SUBJECT TO ANY REQUIREMENTS
OF FINANCING ARRANGEMENTS.

 

10.4         MANAGER’S RIGHTS TO TERMINATE.  IN THE EVENT THAT CONDITIONS BEYOND
THE REASONABLE CONTROL OF MANAGER OCCUR, WHICH IN MANAGER’S SALE DISCRETION
CAUSE MANAGER TO BELIEVE THAT THIS AGREEMENT CANNOT BE REASONABLY PERFORMED BY
EITHER PARTY, MANAGER MAY TERMINATE THIS AGREEMENT WITHOUT PENALTY AT ANY TIME
PRIOR TO COMMENCEMENT OF CONSTRUCTION.  IN ADDITION, THE MANAGER SHALL HAVE THE
RIGHT TO TERMINATE THIS AGREEMENT ANY TIME WITHIN TWENTY-FOUR (24) MONTHS AFTER
THE DATE OF THIS AGREEMENT IF THE CONDITIONS IN SECTION 2.3 OF THIS AGREEMENT
ARE NOT SATISFIED BY THE TRIBE.  IN EITHER EVENT, MANAGER SHALL CONTINUE TO HAVE
THE

 

33

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RIGHT TO REPAYMENT OF UNPAID PRINCIPAL AND INTEREST, IF ANY, UNDER THE NOTE AND
LOAN AGREEMENT, WHICH AMOUNTS MAY BE ACCELERATED BY MANAGER AS SET FORTH IN
ARTICLE 10.1 HEREOF.

 

10.5         DISSOLUTION, INSOLVENCY OR BANKRUPTCY OF MANAGER.  IF THE MANAGER
IS DISSOLVED, EXECUTES ANY PETITION UNDER THE BANKRUPTCY CODE, FILES FOR OR IS
DECLARED BANKRUPT, BECOMES INSOLVENT, CEASES TO FUNCTION AS A BUSINESS ENTITY,
FAILS TO PERFORM OR OTHERWISE IS GUILTY OF A MATERIAL BREACH OF THIS AGREEMENT,
OR IF THE MANAGER’S CREDITORS CAUSE TO BE EXECUTED ANY VALID PETITION UNDER THE
BANKRUPTCY CODE THEN, UPON THE OCCURRENCE OF ANY SUCH EVENT, MANAGER’S RIGHTS
UNDER THIS AGREEMENT SHALL CEASE AND THE AGREEMENT SHALL TERMINATE.  AN
ACCOUNTING SHALL THEREAFTER BE MADE AND MANAGER OR ITS SUCCESSOR OR LEGAL
REPRESENTATIVE SHALL BE ENTITLED TO A PRO RATA SHARE OF THE PROFITS EARNED TO
THE DATE OF INSOLVENCY OR DEFAULT AND THE RIGHT TO REPAYMENT OF ANY LOANS, AND
SHALL LIKEWISE BE LIABLE FOR ANY LOSSES INCURRED TO THAT DATE.

 

ARTICLE XI
INSURANCE

 

11.1         PUBLIC LIABILITY INSURANCE.  THE MANAGER SHALL MAINTAIN PUBLIC
LIABILITY INSURANCE IN THE AMOUNT OF AT LEAST 51,000,000 PER PERSON AND
53,000,000 PER OCCURRENCE.  MANAGER SHALL ALSO KEEP THE BUILDINGS, IMPROVEMENTS
AND CONTENTS THEREON INSURED FOR THEIR FULL REPLACEMENT VALUE AGAINST JOSS OR
DAMAGE BY FIRE, WITH EXTENDED COVERAGE ENDORSEMENT AND VANDALISM COVERAGE.  THE
EXACT NATURE AND EXTENT OF SUCH COVERAGE SHALL BE AGREED UPON BY THE PARTIES,
AND IN THE EVENT OF DISAGREEMENT, AN EXPERIENCED AND LICENSED APPRAISER SHALL BE
HIRED TO DETERMINE SAME.  THE TRIBE WILL BE NAMED AS AN INSURED IN AL/ POLICIES
AND MANAGER WILL SUPPLY TO THE TRIBE WRITTEN EVIDENCE SATISFACTORY TO THE TRIBE
OF SUCH CONTINUING INSURANCE COVERAGE ANNUALLY THEREAFTER.  SUCH INSURANCE
PREMIUMS AND APPRAISAL SHALL BE AN EXPENSE OF OPERATION.  MANAGER SHALL SECURE
FIDELITY BONDS OR INSURANCE ACCEPTABLE TO TRIBE IN AN AMOUNT ADEQUATE TO PROTECT
THE

 

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ACCOUNTS OF THE ENTERPRISE ON ALL PERSONS WITH SIGNATURE AUTHORITY OVER ACCOUNTS
OF THE ENTERPRISE AND ALL PERSONS WITH MONEY ROOM ACCESS.

 

ARTICLE XII
SUCCESSORS AND ASSIGNMENTS

 

12.1         BINDING EFFECT.  THE BENEFITS AND OBLIGATIONS OF THIS AGREEMENT
SHALL INURE TO AND BE BINDING UPON THE PARTIES HERETO, THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS, PROVIDED THAT NEITHER PARTY MAY ASSIGN OR SUBLEASE THEIR
INTEREST IN THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF THE OTHER PARTY. 
ANY ASSIGNMENT OR SUBLEASE UNDER THIS AGREEMENT SHALL BE SUBJECT TO APPROVAL BY
NIGC, AND SHALL BE PRECEDED BY A COMPLETE BACKGROUND INVESTIGATION OF SUCH
ASSIGNEE OR SUB-LESSEE: TRIBE UNDERSTANDS THAT MANAGER IS ABOUT TO BECOME A
PUBLIC COMPANY AND WILL BE SUBJECT TO FINANCIAL AND OTHER REPORTING REQUIREMENTS
PURSUANT TO SECTION 12 (G) OF THE SECURITIES AND EXCHANGE ACT OF 1934.

 

ARTICLE XIII
RECORDATION

 

13.1         RECORDING OF AGREEMENT.  AT THE OPTION OF MANAGER, THIS AGREEMENT
MAY BE RECORDED IN ANY PUBLIC RECORDS.

 

ARTICLE XIV
NO PARTNERSHIP

 

14.1         NOTHING IN THIS AGREEMENT IS INTENDED TO CREATE OR CONSTITUTE THE
PARTIES AS PARTNERS TOGETHER, OR ONE TO THE OTHER, AND IT IS EXPRESSLY AGREED
THAT THIS BUSINESS RELATIONSHIP SHALL NOT BE A PARTNERSHIP.

 

ARTICLE XV
ENTIRE AGREEMENT

 

15.1         THIS AGREEMENT REPRESENTS THE ENTIRE MANAGEMENT AGREEMENT BETWEEN
THE TRIBE AND MANAGER, AND SUPERSEDES ALL OTHER PREVIOUS AGREEMENTS, WHETHER
WRITTEN OR ORAL, THAT MAY HAVE BEEN ENTERED INTO.

 

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ARTICLE XVI
NON-INTERFERENCE

 

16.1         AS A MATERIAL AND SUBSTANTIAL CONSIDERATION FOR THE TRIBE ENTERING
INTO THIS AGREEMENT, MANAGER AGREES THAT NEITHER MANAGER, ITS AGENTS AND
EMPLOYEES SHALL INTERFERE WITH OR ATTEMPT TO INFLUENCE INTERNAL AFFAIRS OR
GOVERNMENTAL DECISIONS OF THE TRIBE WITH THE EXCEPTION THAT MANAGER MAY CHOOSE
TO PUBLICLY OR PRIVATELY OPPOSE ANY PROPOSED ACT OR DECISION THAT IN MANAGER’S
OPINION WOULD BE DETRIMENTAL TO THE GAMING ACTIVITY AND PROFITS TO BE EARNED
THEREFROM.

 

ARTICLE XVII
EXECUTION IN MULTIPLE

 

17.1         THIS AGREEMENT IS BEING EXECUTED IN FIVE ORIGINALS, ONE COPY TO BE
RETAINED BY EACH PARTY AND THREE TO BE PRESENTED FOR REVIEW OF THE APPROPRIATE
FEDERAL AGENCY OR COMMISSION.  ALL ARE EQUALLY VALID.

 

ARTICLE XVIII
SOVEREIGN IMMUNITY AND JURISDICTION

 

18.1         COUNCIL’S LIMITED WAIVER OF SOVEREIGN IMMUNITY.  THE TRIBE DOES NOT
WAIVE, LIMIT, OR MODIFY ITS SOVEREIGN IMMUNITY FROM UNCONTESTED SUIT, EXCEPT AS
EXPRESSLY PROVIDED IN THIS SECTION 18.  THE TRIBE EXPRESSLY WAIVES ITS SOVEREIGN
IMMUNITY FROM SUIT AND CONSENTS TO (I) SUBMITTING TO THE JURISDICTION OF THE
ARBITRATION PROCESS PROVIDED FOR IN SECTION 18.3 HEREOF AND (II) BEING SUED IN
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OKLAHOMA FOR THE LIMITED
PURPOSE OF ENFORCING THE COVENANTS IN THIS AGREEMENT AS BETWEEN THE TRIBE AND
MANAGER (HEREINAFTER REFERRED TO AS “CLAIM”), INCLUDING THE ARBITRATION
PROVISIONS OF SECTION 18.3 HEREOF.  THE WAIVER OF SOVEREIGN IMMUNITY CONTAINED
IN THIS SECTION IS FURTHER LIMITED AS FOLLOWS:

 

18.1.1 Monetary Damages.  The Tribe waives its immunity in connection with any
arbitration award entered pursuant to section 18.3 hereof, and any court order

 

36

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to enforce such an award to the extent that such an award or order may be
enforced or executed against (i) removable furniture, trade fixtures and
equipment of the Gaming Enterprise; (ii) undistributed Net Revenues; (iii)
undistributed Non-Gaming Net Revenues; and (iv)future proceeds of any other
gaming operation conducted by the Tribe at the Gaming Facility or any other
business operated in the Gaming Facility, and any arbitration award or order to
enforce such an award may be enforced or executed against such proceeds.  The
real property, including the building and all permanent equipment and fixtures
which become realty under Oklahoma law, shall not be collateral for the loan. 
No other assets of the Tribe are, or shall be, subject to the Security Agreement
nor are, or shall, such assets be available to satisfy any such award or
judgment.

 

18.2         EQUITABLE RELIEF.  THE TRIBE WAIVES ITS IMMUNITY IN CONNECTION WITH
ANY ARBITRATION AWARD OR COURT ORDER TO PROVIDE A PROVISIONAL REMEDY IN
CONNECTION WITH ANY CLAIM PENDING UNDER THIS AGREEMENT AND FURTHER CONSENTS THAT
THE ARBITRATOR OR ANY COURT OF COMPETENT JURISDICTION MAY GRANT EQUITABLE RELIEF
AGAINST THE TRIBE, EITHER IN THE FORM OF MANDAMUS RELIEF/SPECIFIC PERFORMANCE OR
INJUNCTION WHICH COMPELS THE TRIBE TO PERFORM A DUTY ASCRIBED TO THE TRIBE UNDER
THE TERMS OF THIS AGREEMENT OR WHICH PROHIBITS THE TRIBE FROM ENGAGING IN
CONDUCT THAT IS CONTRARY TO THE TERMS OF THIS AGREEMENT.

 

18.3         ARBITRATION.  ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR THE BREACH THEREOF, SHALL BE SETTLED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, AND JUDGMENT UPON THE AWARD RENDERED BY THE
ARBITRATOR(S) MAY BE ENTERED IN A COURT SUBJECT TO THE PROVISIONS OF SECTION 18
OF THIS AGREEMENT.  EITHER PARTY MAY SPECIFY AND REQUIRE THAT ANY ARBITRATOR
SELECTED SHALL BE

 

37

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AN ATTORNEY LICENSED TO PRACTICE LAW IN THE STATE OF OKLAHOMA.  IF MORE THAN ONE
ARBITRATOR IS USED, THE TRIBE SHALL SELECT ONE, MANAGER SHALL SELECT ONE, AND
THE TWO SO SELECTED SHALL SELECT A THIRD ARBITRATOR.  THE AWARDS OF ANY
ARBITRATION SHALL BE GOVERNED BY TITLE 9 OF THE UNITED STATES CODE, EXCEPT AS
THE SAME MAY BE CHANGED OR LIMITED BY THE PROVISIONS OF THIS AGREEMENT.

 

18.4

 

A.            RESOLUTION OF DISPUTES BETWEEN MANAGER AND CUSTOMERS OF THE GAMING
OPERATION.  MANAGER SHALL PRESCRIBE RULES OF PLAY FOR EACH TYPE OF GAMING WHICH
HAS BEEN LICENSED BY THE TRIBAL GAMING BOARD.  SUCH RULES OF PLAY SHALL BE
POSTED IN PLAIN VIEW, ACCESSIBLE AND VISIBLE BY ALL CUSTOMERS OF THE GAMING
OPERATION.  ALL GAMES SHALL BE CONDUCTED FAIRLY AND HONESTLY BY BOTH MANAGER AND
CUSTOMERS.  IN THE EVENT OF A DISPUTE BETWEEN MANAGER AND ANY CUSTOMER, THE
WRITTEN RULES OF PLAY SHALL GOVERN.  HOWEVER, MANAGER SHALL STRIVE TO SATISFY
THE CUSTOMER IN THE RESOLUTION OF ANY DISPUTE.  THE GENERAL MANAGER SHALL BE
INITIALLY RESPONSIBLE TO ATTEMPT TO RESOLVE ALL SUCH DISPUTES.  IF A DISPUTE
CANNOT BE RESOLVED BY THE GENERAL MANAGER, THE GENERAL MANAGER SHALL IMMEDIATELY
SUBMIT A WRITTEN REPORT OF THE DISPUTE TO BOTH MANAGER AND TRIBAL COORDINATOR
WHO SHALL DISCUSS THE DISPUTE WITH EACH OTHER AND WITH THE CUSTOMER.  MANAGER
SHALL MAKE THE FINAL DETERMINATION OF THE ACTION TO BE TAKEN TO RESOLVE THE
DISPUTE, AFTER CONSULTING WITH TRIBAL COORDINATOR, AND MANAGER’S DECISION SHALL
BE FINAL.  ANY CUSTOMER WHO IS NOT SATISFIED WITH THE DECISION OF MANAGER MAY
APPEAL THE DECISION TO THE TRIBAL GAMING BOARD.

 

B.            RESOLUTION OF DISPUTES BETWEEN MANAGER AND EMPLOYEES OF THE GAMING
OPERATION.  MANAGER SHALL PREPARE AND SUBMIT TO TRIBAL COORDINATOR A PERSONNEL
MANUAL WHICH SHALL DESCRIBE ALL PERSONNEL POLICIES, PROCEDURES, JOB
CLASSIFICATIONS, SALARY LEVELS, DISCIPLINARY PROCEDURES AND FRINGE BENEFITS. 
THE PERSONNEL MANUAL SHALL BE AVAILABLE TO EACH EMPLOYEE.  THE

 

38

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MANUAL SHALL PROVIDE FOR ESTABLISHMENT OF A GRIEVANCE COMMITTEE.  THE GRIEVANCE
COMMITTEE SHALL CONSIST OF THE GENERAL MANAGER, THE TRIBAL COORDINATOR AND A
THIRD PERSON SELECTED BY MANAGER.  THE THIRD PERSON MAY BE THE DIRECTOR OF HUMAN
RESOURCES FOR EITHER THE TRIBE, THE MANAGER OR THE GAMING OPERATION, OR SUCH
OTHER THIRD PERSON AS MAY BE QUALIFIED IN SUCH MATTERS.  THE SELECTION OF THE
THIRD PERSON BY MANAGER SHALL BE FINAL.  THE DECISION OF THE GRIEVANCE COMMITTEE
SHALL BE FINAL WITH RESPECT TO ALL DISPUTES.

 

ARTICLE XIX
MISCELLANEOUS

 

19.1         PARTIES IN INTEREST.  MANAGER AGREES TO HAVE ATTACHED TO THIS
AGREEMENT AS EXHIBIT B, A LIST OF ALL PARTIES IN INTEREST TO THE CONTRACT,
INCLUDING ON BEHALF OF THE MANAGER, ALL CORPORATE DIRECTORS, ALL STOCKHOLDERS OF
THE CORPORATION HOLDING FIVE PERCENT (5%) OR MORE OF THE STOCK OF THE
CORPORATION, THE TOP TEN SHAREHOLDERS, AND ALL EMPLOYEES PRESENTLY HIRED WHO
WILL HAVE DAY-TO-DAY MANAGEMENT RESPONSIBILITY FOR THE GAMING OPERATIONS. 
MANAGER AGREES TO INFORM THE TRIBE, IN WRITING, OF ANY CHANGE OF PARTIES IN
INTEREST INCLUDING ALL CORPORATE DIRECTORS AND STOCKHOLDERS HOLDING FIVE PERCENT
(5%) OR MORE OF THE STOCK OF THE CORPORATION.

 

19.2         PARTIES’ PERSONAL HISTORY STATEMENTS.  THE LIST OF PARTIES IN
INTEREST SHALL INCLUDE BRIEF PERSONAL HISTORY STATEMENTS INCLUDING THEIR
RESIDENCE AND BUSINESS ADDRESSES, OCCUPATIONS, DATES OF BIRTH AND SOCIAL
SECURITY NUMBERS FOR ALL EMPLOYEES PRESENTLY HIRED WHO WILL HAVE DAY-TO-DAY
MANAGEMENT RESPONSIBILITY FOR THE GAMING OPERATIONS AND ALL STOCKHOLDERS OF THE
CORPORATION HOLDING FIVE PERCENT (5%) OR MORE OF THE STOCK OF THE CORPORATION.

 

19.3         CORPORATE DOCUMENTS AND AUTHORIZATION.  MANAGER HAS PREVIOUSLY
PROVIDED TO TRIBE ITS ARTICLES OF INCORPORATION AND THE CORPORATE RESOLUTION
AUTHORIZING THIS AGREEMENT.

 

19.4         CONFLICT OF INTEREST.  MANAGER AGREES THAT NO PERSON WHO HAS A
FINANCIAL INTEREST IN MANAGER SHALL BE ELECTED MEMBERS OF THE TRIBAL GOVERNMENT
OR A RELATIVE OF AN ELECTED MEMBER

 

39

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OF THE TRIBAL GOVERNMENT.  IN THE EVENT ANY PARTY IN INTEREST OR A RELATIVE
THEREOF IS ELECTED TO THE TRIBAL GOVERNMENT, SUCH PERSON SHALL BE REQUIRED TO
DIVEST HIMSELF OR HERSELF OF HIS OR HER INTEREST IN THE CONTRACT.

 

19.5         LIMITATION ON TRIBAL OFFICES.  MANAGER AGREES THAT NO ELECTED
MEMBER OF THE TRIBAL GOVERNMENT, OR RELATIVE RESIDING IN THE IMMEDIATE HOUSEHOLD
OF AN ELECTED MEMBER OF THE TRIBAL GOVERNMENT, MAY BE HIRED AS AN EMPLOYEE OF
THE MANAGER OR OF THE GAMING OPERATION.

 

19.6         RELATIVE.  “RELATIVE” FOR THESE PURPOSES MEANS AN INDIVIDUAL WHO IS
RELATED TO AN ELECTED MEMBER OF THE TRIBAL GOVERNMENT AS A FATHER, MOTHER, SON,
DAUGHTER, BROTHER, SISTER, UNCLE, AUNT, FIRST COUSIN, NEPHEW, NIECE, HUSBAND,
WIFE, FATHER-IN-LAW, MOTHER-IN-LAW, SON-IN-LAW, DAUGHTER-IN-LAW, BROTHER-IN-LAW,
SISTER-IN-LAW, STEPFATHER, STEPMOTHER, STEPSISTER, HALF BROTHER OR HALF SISTER.

 

19.7         NO PAYMENTS.  MANAGER AGREES THAT NO PAYMENTS HAVE BEEN AND NO
PAYMENTS WILL BE MADE TO ANY ELECTED MEMBER OF THE TRIBAL GOVERNMENT OR THE
RELATIVE OF ANY ELECTED MEMBER OF THE TRIBAL GOVERNMENT FOR THE PURPOSE OF
OBTAINING OR MAINTAINING THE CONTRACT OR ANY OTHER PRIVILEGE FOR THE MANAGER.

 

19.8         EFFECTIVE DATE.  THE EFFECTIVE DATE OF THIS AGREEMENT SHALL MEAN
THE DATE THAT THE WRITTEN APPROVAL OF THIS AGREEMENT IS GRANTED BY NIGC PURSUANT
TO THE ACT.  THE TRIBE AGREES TO USE ITS BEST EFFORTS TO SATISFY ALL OF THE
ABOVE CONDITIONS WITHIN TWELVE (12) MONTHS AFTER THE DATE OF THIS AGREEMENT. 
PENDING APPROVAL OF THIS AGREEMENT BY N.I.G.C. PARTIES ACKNOWLEDGE THAT SECOND
AMENDED AND RESTATED GAMING MANAGEMENT AGREEMENT DATED OCTOBER 8, 1993 SHALL
REMAIN IN FULL FORCE AND EFFECT.

 

19.9         CONTINGENCIES.  THIS AGREEMENT IS SUBJECT TO THE FOLLOWING MATTERS:

 

40

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(a)                                  availability of financing which will be
preliminarily secured prior to execution of this agreement; and

 

(b)                                 approval by the Tribe and Manager of the
exact site and all plans, specifications and design.

 

19.10       EXCLUSIVE.  AT SUCH TIME AS CLASS III GAMING IS AVAILABLE, MANAGER
AND TRIBE SHALL NEGOTIATE IN GOOD FAITH TO PERMIT MANAGER TO EXPAND THE
FACILITY, ACQUIRE ALL NECESSARY EQUIPMENT AND LOAN SUFFICIENT AND NECESSARY
FUNDS TO THE TRIBE FOR THE CONDUCTING OF CLASS III GAMING ACTIVITIES, AND TO
MANAGE SUCH CLASS III GAMING FACILITY IN ADDITION TO THE MANAGEMENT OF THE CLASS
II GAMING FACILITY LOCATED AT CONCHO, OKLAHOMA.  THE TERMS OF ANY SUCH AGREEMENT
INVOLVING CLASS III GAMING, SHALL BE NEGOTIATED IN GOOD FAITH AND SHALL INCLUDE
A LOAN TO THE TRIBE FOR THE COSTS OF CONSTRUCTION, EQUIPMENT AND ALL NECESSARY
FURNITURE AND FIXTURES AND SHALL BE SUBJECT TO THE APPROVAL OF NIGC.  IN
CONSIDERATION OF THE COVENANTS OF MANAGER CONTAINED HEREIN, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED BY TRIBE, OTHER THAN CONTINUING THE
EXISTING BINGO OPERATION AT WATONGA, OKLAHOMA, TRIBE AGREES THAT FOR A PERIOD OF
TIME COMMENCING AS OF THE DATE HEREOF AND CONTINUING THROUGH THE END OF THE TERM
OF THIS AGREEMENT, AS IT MAY BE EXTENDED, IT SHALL NOT PARTICIPATE, DIRECTLY OR
INDIRECTLY, IN ANY OTHER GAMING OPERATIONS WITHIN A RADIUS OF 55 MILES FROM
CONCHO, OKLAHOMA, WITHOUT THE PRIOR WRITTEN CONSENT OF MANAGER.  SINCE ANY
VIOLATION OF THE FOREGOING PROVISIONS OF THIS SECTION 19.10 BY THE TRIBE WOULD
RESULT IN IMMEDIATE AND IRREPARABLE INJURY TO THE MANAGER, THE TRIBE AGREES THAT
THE MANAGER WILL HAVE THE RIGHT TO OBTAIN EQUITABLE RELIEF INCLUDING AN
INJUNCTION TO SPECIFICALLY ENFORCE THE TERMS OF THIS SECTION 19.10, AND TO
OBTAIN ANY OTHER LEGAL OR EQUITABLE REMEDIES THAT MAY BE AVAILABLE.  IN THE
EVENT OF ANY VIOLATION BY THE TRIBE OF THIS SECTION 19.10, THE TRIBE AGREES TO
PAY THE REASONABLE COSTS AND LEGAL FEES TO THE MANAGER IN PURSUING ANY OF ITS
RIGHTS WITH

 

41

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RESPECT TO THIS SECTION 19.10, IN ADDITION TO THE DAMAGES SUSTAINED BY THE
MANAGER.  FOR PURPOSES OF ENFORCING ITS RIGHTS UNDER THIS SECTION 19.10, THE
TRIBE AGREES THAT ANY ACTION BROUGHT BY MANAGER TO ENFORCE ITS RIGHTS UNDER THIS
SECTION 19.10 MAY BE VENUED IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN
DISTRICT OF OKLAHOMA, AND THE TRIBE HEREBY SUBMITS TO THE JURISDICTION OF SUCH
COURT FOR THAT LIMITED PURPOSE.  MANAGER AGREES THAT DURING THE TERM OF THIS
AGREEMENT IT SHALL NOT PARTICIPATE IN ANY OTHER GAMING OPERATION WITHIN A RADIUS
OF 65 MILES FROM CONCHO, OKLAHOMA WITHOUT PRIOR WRITTEN CONSENT OF TRIBE.

 

19.11       OLD FACILITY.  MANAGER SHALL CONSULT WITH TRIBE ABOUT THE EXISTING
BINGO OPERATION.

 

19.12       SEMI ANNUAL MEETING.  MANAGER SHALL BE AVAILABLE FOR A MEETING AT
THE GAMING OPERATION WITH ITS PRINCIPALS AND THE BUSINESS COMMITTEE, TRIBAL
REPRESENTATIVE AND TRIBAL GAMING BOARD AT LEAST EVERY SIX {5} MONTHS DURING THE
TERM HEREOF TO DISCUSS ALL MATTERS RELEVANT TO THE GAMING OPERATION.

 

ARTICLE XX
DUTY TO DEFEND, NOTICE OF CLAIMS, SELECTION OF COUNSEL

 

20.1         DEFENSE OF CLAIMS.  IT SHALL BE THE DUTY OF THE MANAGER TO DEFEND
ANY AND ALL CLAIMS AND ACTIONS BROUGHT AGAINST MANAGER, THE FACILITY OR TRIBAL
GAMING INTERESTS WITH ALL COSTS OF DEFENSE, INCLUDING BUT NOT LIMITED TO,
ATTORNEYS’ FEES, NECESSARY AND REASONABLE EXPENSES OF THE LITIGATION, AND EXPERT
WITNESS FEES TO BE CONSIDERED OPERATING EXPENSES OF THE GAMING OPERATIONS.  SUCH
CLAIMS AND ACTIONS SHALL NOT BE LIMITED BY THE NATURE OR THE AMOUNT OF SUCH
CLAIMS UNLESS OTHERWISE SPECIFICALLY STATED HEREIN, BUT SHALL INCLUDE ONLY SUCH
CLAIMS AND ACTIONS AS ARE BROUGHT RELATIVE TO THE DUTIES AND OBLIGATIONS OF
MANAGER UNDER THIS MANAGEMENT AGREEMENT AND ANY AND ALL ACTIVITIES OF MANAGER IN
THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.

 

20.2         NOTICE.  MANAGER SHALL BE RESPONSIBLE FOR GIVING PROMPT NOTICE TO
TRIBE OF ANY AND ALL CLAIMS OR ACTIONS BROUGHT AGAINST MANAGER, THE FACILITY,
TRIBAL GAMING INTERESTS OR ANY

 

42

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PERSONS ACTING ON BEHALF OF ANY OF THE ABOVE, WHERE SUCH CLAIM OR ACTION IS
RELATED TO THE GAMING OPERATION OR THE FACILITY.  CLAIMS AND ACTIONS, FOR
PURPOSES OF THIS AGREEMENT, SHALL INCLUDE ADMINISTRATIVE, CIVIL OR CRIMINAL
ACTIONS BROUGHT IN ANY FORUM OR JURISDICTION, INCLUDING CLAIMS OR ACTIONS
BROUGHT BEFORE THE NATIONAL INDIAN GAMING COMMISSION PURSUANT TO THE INDIAN
GAMING REGULATORY ACT OF 1988.

 

20.3         DUTY TO DEFEND.  MANAGER SHALL BE REQUIRED TO DEFEND ANY AND ALL
SUCH CLAIMS AND TO SECURE TRIBAL APPROVAL FOR HIRING COMPETENT COUNSEL IN THE
DEFENSE THEREOF AT THE EXPENSE OF THE GAMING OPERATION.  IN THE EVENT THAT
ISSUES OF SUCH A NATURE AND MAGNITUDE ARE ADDRESSED BY ANY SUCH ACTION OR CLAIM
AS TO DIRECTLY ENDANGER THE TRIBAL GOVERNMENTAL CAPACITY OF THE TRIBE, TRIBAL
ASSETS (OTHER THAN FUTURE EARNINGS FROM THE GAMING OPERATION) OR OTHER MORE
SUBSTANTIAL TRIBAL INTERESTS, THEN IN THAT EVENT TRIBE MAY ELECT TO SELECT AND
PROVIDE COUNSEL OF ITS CHOICE TO ADDRESS SUCH ISSUES IN ORDER TO INSURE AND
PROTECT ITS INTEREST THEREIN.  AT THE OPTION OF MANAGER, MANAGER MAY CHOOSE TO
PROVIDE CO-COUNSEL TO WORK IN CONJUNCTION WITH TRIBAL COUNSEL AT THE EXPENSE OF
THE GAMING OPERATION.  ANY AND ALL COSTS RELATIVE TO TRIBAL COUNSEL’S
PARTICIPATION OR ASSUMING OF RESPONSIBILITY OVER SUCH GREATER ISSUES OF SAID
CLAIMS OR ACTIONS, WHETHER ADMINISTRATIVE OR OTHERWISE, SHALL BE AN EXPENSE TO
BE SHARED EQUALLY BETWEEN TRIBE AND THE GAMING OPERATION WITH NO MORE THAN
ONE-HALF OF SAID COSTS TO BE PAID AS AN EXPENSE OF OPERATION OF THE FACILITY.

 

20.4         TRIBAL ATTORNEY.  MANAGER SHALL HAVE THE RIGHT TO CONTRACT
INDEPENDENTLY WITH TRIBE’S ATTORNEY TO RENDER ANY OR ALL OF SAID REPRESENTATION
HEREINABOVE DESCRIBED, OR MANAGER SHALL BE ENTITLED TO SELECT COUNSEL WITH
TRIBAL APPROVAL FOR ANY AND ALL REPRESENTATION, COUNSEL, ADVICE OR OTHER LEGAL
SERVICES REASONABLY RELATED TO THE FULFILLMENT OF THEIR DUTIES AND OBLIGATIONS
AND THE EXERCISE OF THEIR RIGHTS UNDER THIS AGREEMENT.

 

43

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20.5         LEGAL FEES.  MANAGER SHALL BE RESPONSIBLE FOR ANY AND ALL COSTS OF
LEGAL REPRESENTATION OBTAINED BY MANAGER FOR PURPOSES OTHER THAN CARRYING OUT
THEIR DUTIES AND RESPONSIBILITIES UNDER THIS AGREEMENT, AND NO SUCH OTHER
EXPENSES OR COSTS SHALL BE PAID AS AN EXPENSE OF THE OPERATION OF THE FACILITY.

 

20.6         INDEMNIFICATION.  MANAGER SHALL BE ENTITLED TO INDEMNIFICATION FROM
THE GAMING OPERATION FOR ALL LIABILITIES INCURRED AND CLAIMS MADE AS A RESULT OF
MANAGER’S GOOD FAITH PERFORMANCE OF DUTIES UNDER THIS AGREEMENT IF THE TRIBE,
MANAGER, ANY CONTRACTOR OR SUBCONTRACTOR OR ANY EMPLOYEES OF THE GAMING
OPERATION ARE SUED BY ANY PERSON BASED ON TRIBAL, STATE OR FEDERAL STATUTE OR
LAW, MANAGER SHALL HAVE THE RIGHT TO DEFEND SUCH ACTION OR ACTIONS ON BEHALF OF
ITSELF.  THE TRIBE AGREES TO DEFEND ITSELF AND TO FULLY COOPERATE IN THE
DEFENSE.  THE COST OF DEFENDING A LAWSUIT PURSUANT TO THIS SECTION, AS WELL AS
ANY LIABILITY INCURRED BY MANAGER, SHALL BE A START-UP EXPENSE WHERE INCURRED
PRIOR TO THE COMMENCEMENT DATE AND AN OPERATING EXPENSE WHERE INCURRED AFTER THE
COMMENCEMENT DATE.  NOTHING IN THIS SECTION 20.6 SHALL BE CONSTRUED TO WAIVE OR
LIMIT THE TRIBE’S SOVEREIGN IMMUNITY.

 

20.7         SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS RULED INVALID
BY ANY COURT OR AUTHORITY OF COMPETENT JURISDICTION, IT SHALL NOT AFFECT THE
VALIDITY OF ANY OTHER PROVISION AND IT IS THE INTENT OF THE PARTIES THAT THE
REMAINING PROVISIONS CONTINUE IN FULL FORCE AND EFFECT.

 

44

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ACKNOWLEDGEMENT

 

The CHEYENNE AND ARAPAHO TRIBES OF Oklahoma, acting by and through its delegated
representative, Charles Surveyor, Tribal Chairman, and SOUTHWEST CAS}NO AND
HOTEL CORP., (formerly Southwest Casino and Hotel Ventures, Inc.), by its
President, hereby agree to the foregoing Management Agreement by and between the
CHEYENNE AND ARAPAHO TRIBES OF Oklahoma, and SOUTHWEST CASINO AND HOTEL CORP.,
(formerly Southwest Casino and Hotel Ventures, Inc.), with an Effective Date
defined in Section 19.8 hereof.

 

IN WITNESS WHEREOF, we hereby set our hands this 16 day of June, 1995, at
Concho, Oklahoma.

 

 

CHEYENNE AND ARAPAHO TRIBES
OF OKLAHOMA

 

By and through its delegated
representative, Charles Surveyor, Chairman

 

 

 

s/ ??

 

 

ATTEST:

 

 

 

/s/ Archie Hoffman

 

 

Secretary

 

 

 

 

SOUTHWEST CASINO AND HOTEL
CORP., (formerly Southwest Casino and
Hotel Ventures, Inc.), a Minnesota
corporation

 

 

 

By

/s/ James B. Druck

 

 

James B. Druck, President

 

THE FOREGOING THIRD AMENDED AND RESTATED GAMING MANAGEMENT AGREEMENT is hereby
approved this        day of                , 1995.

 

 

NATIONAL INDIAN GAMING
COMMISSION

 

 

 

By

 

 

Its

 

 

45

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EXHIBIT A

 

Legal Description and Plat of Survey.

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

JEFFREY S. HALPERN

 

Officer, Director and Holder of a 5% or more interest in Southwest Casino and
Hotel Corp.

 

 

 

Residence:

 

6617 Pawnee Road
Edina, Minnesota 55435

 

 

 

Business Address:

 

2001 Killebrew Drive, Suite 345
Minneapolis, Minnesota 55425

 

 

 

Occupation:

 

Attorney at Law - 25 years;
Presently - Indian Gaming
Development/Management

 

 

 

Date of Birth:

 

October 14, 1942

 

 

 

Social Security No.

 

###-##-####

 

 

 

JAMES B. DRUCK

 

Officer, Director and Holder of a 5% or more interest in Southwest Casino and
Hotel Corp.

 

 

 

Residence:

 

5135 Lonsdale Boulevard
Webster, Minnesota 55088

 

 

 

Business Address:

 

2001 Killebrew Drive, Suite 345
Minneapolis, Minnesota 55425

 

 

 

Occupation:

 

Attorney at Law - 25 years;
Presently - Indian Gaming
Development/Management

 

 

 

Date of Birth:

 

September 9, 1941

 

 

 

Social Security No.

 

###-##-####

 

--------------------------------------------------------------------------------

 

ROBERT E. ARMSTRONG

 

Director of Southwest Casino and Hotel Corp.

 

 

 

Residence:

 

1750 Skyline Boulevard
Reno, NV 89509

 

 

 

Business Address:

 

241 Ridge Street, 4th Floor
P.O. Box 2670
Reno, NV 89505

 

 

 

Occupation:

 

Attorney

 

 

 

Date of Birth:

 

March 25, 1954

 

 

 

Social Security No.

 

###-##-####

 

--------------------------------------------------------------------------------

 

TEN TOP SHAREHOLDERS:

 

Jeffrey Sorger Halpern

 

Social Security No.:  ###-##-####

Birth Date:  10/14/42

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

James Burton Druck

 

Social Security No.:  ###-##-####

Birth Date:  9/9/41

Birth Place:  St. Paul, Minnesota

Citizenship:  U.S.

Gender:  Male

 

Robert Charles Harvey

 

Social Security No.:  ###-##-####

Birth Date:  4/5/51

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

Dr. Paul Mitchell Blum

 

Social Security No.:  ###-##-####

Birth Date:  6/23/42

Birth Place:  Brooklyn, New York

Citizenship: U.S.

Gender:  Male

 

Dr. James Marshall Gordon

 

Social Security No.:  ###-##-####

Birth Date:  8/18/40

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

--------------------------------------------------------------------------------

 

Michael Gary Hofkin

 

Social Security No.:  ###-##-####

Birth Date:  8/2/40

Birth Place:  Philadelphia, Pennsylvania

Citizenship:  U.S.

Gender:  Male

 

Sidney Kaplan

 

Social Security No.:  ###-##-####

Birth Date:  5/22/39

Birth Place:  Chicago, Illinois

Citizenship:  U.S.

Gender:  Male

 

Irving Jay Pinto

 

Social Security No.:  ###-##-####

Birth Date:  1/12/42

Birth Place:  Des Moines, Iowa

Citizenship:  U.S.

Gender.  Male

 

Primadonna Resorts, Inc.

 

Tax I.D. No. 88-0297563

Nevada Corporation

Incorporated April 13, 1993

 

Noel Paul Rahn

 

Social Security No.:  ###-##-####

Birth Date:  2/14/39

Birth Place:  Mountain Lake, Minnesota

Citizenship:  U.S.

Gender:  Male

 

William Harry Thomas (Director)

 

Social Security No.:  ###-##-####

Birth Date:  9/27/42

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

--------------------------------------------------------------------------------

 

STOCKHOLDERS HOLDING FIVE PERCENT OR MORE OF STOCK:

 

Jeffrey Sorger Halpern

 

Social Security No.:  ###-##-####

Birth Date:  10/14/42

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

James Burton Druck

 

Social Security No.:  ###-##-####

Birth Date:  9/9/41

Birth Place:  St. Paul, Minnesota

Citizenship:  U.S.

Gender:  Male

 

Primadonna Resorts, Inc.

 

Tax I.D. No. 88-0297563

Nevada Corporation

Incorporated April 13, 1993

 

Robert Charles Harvey

 

Social Security No.:  ###-##-####

Birth Date:  4/5/51

Birth Place:  Minneapolis, Minnesota

Citizenship:  U.S.

Gender:  Male

 

--------------------------------------------------------------------------------