Exhibit 10.10
AMENDED AND RESTATED
GAMING FACILITY
MANAGEMENT AGREEMENT
between
THE TWENTY-NINE PALMS BAND OF LUISENO MISSION INDIANS OF CALIFORNIA
(the "Tribe"),
TWENTY-NINE PALMS ENTERPRISES CORPORATION
(the "Enterprise")
and
THCR MANAGEMENT SERVICES, LLC
("Manager")
March 28, 2002
Pursuant to the Terms of a Subordination Agreement
dated October 17, 2001, Manager has subordinated the
Management Fees Payable under this Agreement to
certain Lenders to the Enterprise.
Exhibit 10.10
TABLE OF CONTENTS
RECITALS.................................................................................................... 1
SECTION 1
AMENDED AND RESTATED AGREEMENT;
DEFINITIONS............................................................................................ 2
1.1 Amended and Restated Agreement................................................................ 2
1.2 Definitions................................................................................... 2
SECTION 2
COVENANTS.............................................................................................. 11
2.1 Engagement of Manager......................................................................... 11
2.2 Term.......................................................................................... 11
2.3 Status of Property............................................................................ 11
2.4 Manager Compliance with Law; Licenses......................................................... 12
2.5 Amendments to Tribal Gaming Code.............................................................. 12
2.6 Compliance with Compact....................................................................... 12
2.7 Fire and Safety............................................................................... 12
2.8 Compliance with the National Environmental Policy Act......................................... 12
2.9 Satisfaction of Effective Date Requirements................................................... 12
2.10 Commencement Date............................................................................. 13
2.11 Restrictions on Collateral Operations......................................................... 13
SECTION 3
BUSINESS AFFAIRS....................................................................................... 13
3.1 Manager's Authority and Responsibility........................................................ 13
3.2 Duties of Manager............................................................................. 13
3.2.1 Physical Duties...................................................................... 13
3.2.2 Compliance........................................................................... 13
3.2.3 Required Filings..................................................................... 14
3.2.4 Contracts in the Name of the Enterprise and at Arm's Length.......................... 14
3.2.5 Facility Operating Standards......................................................... 14
3.3 Security...................................................................................... 14
3.4 Damage, Condemnation or Impossibility of the Facility......................................... 14
3.4.1 Recommencement of Operations......................................................... 14
3.4.2 Repair or Replacement................................................................ 15
3.4.3 Other Business Purposes.............................................................. 15
3.4.4 Termination of Gaming................................................................ 15
3.4.5 Tolling of the Agreement............................................................. 15
3.5 Alcoholic Beverages and Tobacco Sales......................................................... 15
3.6 Employees..................................................................................... 16
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Exhibit 10.10
3.6.1 Manager's Responsibility............................................................. 16
3.6.2 Enterprise Employee Policies......................................................... 16
3.6.3 Employees............................................................................ 16
3.6.4 Off-Site Employees................................................................... 16
3.6.5 No Manager Wages or Salaries......................................................... 16
3.6.6 Employee Background Checks........................................................... 17
3.6.7 Indian Preference, Recruiting and Training........................................... 17
3.6.8 Goals and Remedies................................................................... 18
3.6.9 Removal of Employees................................................................. 18
3.7 Marketing..................................................................................... 18
3.7.1 Nature of Marketing Services......................................................... 18
3.7.2 Marketing Services................................................................... 18
3.8 Pre-Opening................................................................................... 18
3.9 Operating Budget and Annual Plan.............................................................. 19
3.9.1 Adjustments to Operating Budget and Annual Plan...................................... 20
3.10 Capital Budgets; Permitted Hotel Debt......................................................... 21
3.11 Capital Replacements.......................................................................... 21
3.12 Capital Replacement Reserve................................................................... 22
3.13 Periodic Contributions to Capital Replacement Reserve......................................... 22
3.14 Use and Allocation of Capital Replacement Reserve............................................. 22
3.15 Contracting................................................................................... 23
3.16 Internal Control Systems...................................................................... 23
3.17 Banking and Bank Accounts..................................................................... 23
3.17.1 Enterprise Bank Accounts............................................................. 23
3.17.2 Daily Deposits to Depository Account................................................. 24
3.17.3 Disbursement Account................................................................. 24
3.17.4 Transfers Between Accounts........................................................... 24
3.18 Insurance..................................................................................... 24
3.19 Accounting and Books of Account............................................................... 25
3.19.1 Statements........................................................................... 25
3.19.2 Books of Account..................................................................... 25
3.19.3 Accounting Standards................................................................. 25
3.19.4 Annual Audit......................................................................... 26
3.20 Retail Shops and Concessions.................................................................. 26
SECTION 4
LIENS.................................................................................................. 26
4.1 Liens......................................................................................... 26
4.2 Exceptions.................................................................................... 26
SECTION 5
MANAGEMENT FEE, REIMBURSEMENTS AND DISBURSEMENTS BY MANAGER............................................ 27
5.1 Management Fee................................................................................ 27
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Exhibit 10.10
5.2 Disbursements for Operating Expenses.......................................................... 27
5.3 Disbursements for Debt Service................................................................ 27
5.4 Payment of Fees and Tribal Disbursement....................................................... 27
5.5 Minimum Guaranteed Monthly Payment............................................................ 28
5.6 Distribution of Excess Funds.................................................................. 29
5.7 Manager Guaranty.............................................................................. 29
5.8 Development and Construction Costs............................................................ 29
SECTION 6
TRADE NAMES, TRADE MARKS AND SERVICE MARKS............................................................. 29
6.1 Facility Name................................................................................. 29
6.2 Signs......................................................................................... 30
SECTION 7
TAXES.................................................................................................. 30
7.1 State and Local Taxes......................................................................... 30
7.2 Tribal Taxes.................................................................................. 30
7.3 Compliance with Internal Revenue Code......................................................... 30
SECTION 8
GENERAL PROVISIONS..................................................................................... 30
8.1 Situs of the Contracts........................................................................ 30
8.2 Notice........................................................................................ 31
8.3 Authority to Execute and Perform Agreement.................................................... 32
8.4 Relationship.................................................................................. 32
8.5 Manager's Contractual Authority............................................................... 32
8.6 Further Actions............................................................................... 32
8.7 Defense....................................................................................... 32
8.8 Waivers....................................................................................... 32
8.9 Captions...................................................................................... 33
8.10 Severability.................................................................................. 33
8.11 Interest...................................................................................... 33
8.12 Travel and Out-of-Pocket Expenses............................................................. 33
8.13 Third Party Beneficiary....................................................................... 33
8.14 Brokerage..................................................................................... 33
8.15 Survival of Covenants......................................................................... 33
8.16 Estoppel Certificate.......................................................................... 33
8.17 Periods of Time............................................................................... 34
8.18 Exhibits...................................................................................... 34
8.19 Successors, Assigns, and Subcontracting....................................................... 34
8.20 Permitted Assignment.......................................................................... 34
8.21 Time is of the Essence........................................................................ 34
8.22 Confidential Information...................................................................... 34
8.23 Patron Dispute Resolution..................................................................... 35
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Exhibit 10.10
8.24 Modification.................................................................................. 35
SECTION 9
WARRANTIES............................................................................................. 35
9.1 Noninterference in Tribal Affairs............................................................. 35
9.2 Prohibition of Payments to Members of Tribal Government....................................... 35
9.3 Prohibition of Hiring Members of Tribal Government............................................ 36
9.4 Prohibition of Financial Interest in Enterprise............................................... 36
9.5 Definitions................................................................................... 36
SECTION 10
TERMINATION............................................................................................ 36
10.1 Voluntary Termination and Termination for Cause............................................... 36
10.2 Voluntary Termination......................................................................... 36
10.3 Termination for Cause......................................................................... 36
10.4 Involuntary Termination Due to Changes in Legal Requirements.................................. 37
10.5 Manager's Right to Terminate Agreement........................................................ 37
10.6 Tribe's and Enterprise's Right to Terminate Agreement......................................... 38
10.7 Consequences of Manager's Breach.............................................................. 38
10.8 Consequences of Tribe's Breach................................................................ 39
10.9 Suspension of Manager for Cause; Notice and Opportunity to Cure............................... 39
10.10 Enterprise's Buy-Out Option................................................................... 40
SECTION 11
CONCLUSION OF THE MANAGEMENT TERM...................................................................... 40
11.1 Conclusion of the Management Term............................................................. 40
11.2 Transition.................................................................................... 40
11.3 Undistributed Net Revenues.................................................................... 40
SECTION 12
CONSENTS AND APPROVALS................................................................................. 41
12.1 Tribal........................................................................................ 41
12.2 Manager....................................................................................... 41
SECTION 13
DISCLOSURES............................................................................................ 41
13.1 Shareholders and Directors.................................................................... 41
13.2 Warranties.................................................................................... 41
13.3 Criminal and Credit Investigation............................................................. 41
13.4 Disclosure Amendments......................................................................... 42
13.5 Breach of Manager's Warranties and Agreements................................................. 42
SECTION 14
RECORDATION............................................................................................ 43
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Exhibit 10.10
SECTION 15
NO LIEN, LEASE OR JOINT VENTURE........................................................................ 43
SECTION 16
DISPUTE RESOLUTION..................................................................................... 43
16.1 General....................................................................................... 43
16.2 Initiation of Arbitration and Selection of Arbitrators........................................ 44
16.3 Limited Waiver of Sovereign Immunity.......................................................... 44
(a) Time Period.......................................................................... 45
(b) Recipient of Waiver.................................................................. 45
(c) Limitations of Actions............................................................... 45
SECTION 17
NEGOTIATE NEW AGREEMENT................................................................................ 46
17.1 Intent to Negotiate New Agreement............................................................. 46
17.2 Transition Plan............................................................................... 46
SECTION 18
ENTIRE AGREEMENT....................................................................................... 46
SECTION 19
REQUIRED AMENDMENT..................................................................................... 46
SECTION 20
PREPARATION OF AGREEMENT............................................................................... 46
SECTION 21
STANDARD OF REASONABLENESS............................................................................. 47
SECTION 22
EXECUTION.............................................................................................. 47
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Exhibit 10.10
EXHIBITS
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EXHIBIT A Legal Description of the Property
EXHIBIT B Dispute Resolution Between Manager and Enterprise Employees
EXHIBIT C Enterprise Investment Policy Resolution
EXHIBIT D Statement of Investment Policy for the Twenty-Nine Palms Band of Luiseno
Mission Indians of California Gaming Enterprise
EXHIBIT E Twenty-Nine Palms Band of Luiseno Mission Indians of California
Irrevocable Banking Instructions
EXHIBIT F Tribal Insurance Requirements
EXHIBIT G Manager's Affiliates, Members and Officers
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Exhibit 10.10
AMENDED AND RESTATED
GAMING FACILITY
MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED GAMING FACILITY MANAGEMENT AGREEMENT (this
"Agreement") is made as of the _____ day of March 2002, by and between the
TWENTY-NINE PALMS BAND OF LUISENO MISSION INDIANS OF CALIFORNIA, a sovereign
Native American nation, with offices at 46-200 Harrison Place, Coachella,
California 92236 (the "Tribe"), the TWENTY-NINE PALMS ENTERPRISES CORPORATION, a
Federal corporation chartered by the Tribe pursuant to 25 U.S.C. Section 477,
with offices at 46-200 Harrison Place, Coachella, California 92236 ("the
Enterprise") and THCR MANAGEMENT SERVICES, LLC, a Delaware limited liability
company with offices at 1000 Boardwalk, Atlantic City, New Jersey 08401.
RECITALS:
A. The Tribe is a federally-recognized Indian Tribe which possesses
sovereign governmental powers pursuant to the Tribe's recognized powers of self
government.
B. The Tribe occupies certain property located in Coachella,
Riverside County, California, more specifically described on Exhibit A attached
hereto, as "Indian lands" pursuant to 25 U.S.C. Section 2703(4) (the
"Property"). The Tribe currently operates a Class II gaming facility on the
Property.
C. The Tribe desires to further develop the Property to promote
increased tribal economic development, self-sufficiency and strong tribal
government.
D. In order to obtain the benefit of Manager's management,
marketing and technical experience and expertise, the Tribe and Manager entered
into a Gaming Facility Management Agreement dated as of April 27, 2000.
E. The Tribe chartered the Enterprise to conduct Class II and Class
III Gaming pursuant to the Indian Gaming Regulatory Act and the Compact at the
Facility, and transferred all of its right, title and interest in and to the
Facility to the Enterprise pursuant to an Assignment and Bill of Sale dated July
5, 2001.
F. With the assistance of Trump Hotels & Casino Resorts Development
Company, LLC, the Enterprise intends to design, finance, construct, furnish and
equip a permanent Class III gaming resort on the Property, which shall include a
new casino facility, a hotel and other amenities and the renovation of the
Tribe's existing Class II gaming facility.
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Exhibit 10.10
G. The Tribe, the Enterprise and Manager desire to amend and
restate in its entirety the April 27, 2000 Gaming Facility Management Agreement
in order to conform such agreement to comments received from the NIGC.
H. This Agreement is entered into pursuant to the Indian Gaming
Regulatory Act of 1988, PL 100-497, 25 U.S.C. Section 2701 et seq. (the "IGRA")
as that statute may be amended. All gaming conducted at the Facility will at all
times comply with the IGRA, applicable Tribal law and the Compact.
SECTION 1
AMENDED AND RESTATED AGREEMENT;
DEFINITIONS
1.1 Amended and Restated Agreement. This Agreement amends and
restates in its entirety the Gaming Facility Management Agreement entered into
by the Tribe and Manager as of April 27, 2000.
1.2 Definitions. As they are used in this Agreement, the terms
listed below shall have the meaning assigned to them in this Section:
"Affiliate" means as to Manager, the Enterprise or the Tribe, any
corporation, partnership, limited liability company, joint venture, trust,
department or agency or individual controlled by or controlling, directly or
indirectly, Manager, the Enterprise or the Tribe.
"Articles of Association" shall mean the Articles of Association of The
Twenty-Nine Palms Band of Luiseno Mission Indians of California as adopted by
the Tribe on March 1, 1972 and approved by the Secretary of the Interior.
"BIA" shall mean the Bureau of Indian Affairs of the Department of the
Interior of the United States of America.
"Capital Budget" shall mean the capital budget described in Section
3.10.
"Capital Replacement(s)" shall mean any alteration or rebuilding or
renovation of the Facility, and any replacement of Furnishings and Equipment,
the cost of which is capitalized and depreciated, rather than being expensed,
applying generally accepted accounting principles, as described in Section 3.10.
"Capital Replacement Reserve" shall mean the reserve described in
Section 3.12, into which periodic contributions are paid pursuant to Section
3.13.
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Exhibit 10.10
"Charter" shall mean the Federal Charter of Incorporation of the
Enterprise approved by the U.S. Department of the Interior on February 16, 2001
and ratified by the Tribe on March 28, 2001 pursuant to 25 U.S.C. Section 477.
"Class II Gaming" shall mean Class II Gaming as defined in the IGRA.
"Class III Gaming" shall mean Class III Gaming as defined in the IGRA.
"Commencement Date" shall mean the first date that the approximately
50,000 square foot planned casino addition to the Facility is complete and open
to the public for Gaming, which shall be the date upon which management services
begin under this Agreement.
"Compact" shall mean the Tribal-State Compact between the Tribe and the
State of California regarding Class III Gaming, executed by the Tribe on October
1, 1999 and signed by the Secretary of the Interior on May 5, 2000 and published
in the Federal Register as provided in 25 U.S.C. Section 2710(d)(8)(D) on May
16, 2000; as the same may, from time to time, be amended, or such other Compact
that may be substituted therefor.
"Compensation" shall mean the direct salaries and wages paid to, or
accrued for the benefit of, any employee, including incentive compensation,
together with all fringe benefits payable to or accrued for the benefit of such
executive or other employee, including employer's contribution under FICA,
unemployment compensation or other employment taxes, pension fund contributions,
workers' compensation, group life, accident and health insurance premiums and
costs, and profit sharing, severance, retirement, disability, relocation,
housing and other similar benefits.
"Confidential Information" shall mean the information described in
Section 8.22.
"Depository Account" shall mean the bank account described in Section
3.17.2.
"Disbursement Account" shall mean the bank account described in Section
3.17.3.
"Early Termination Fee" shall mean one and one-half (1 1/2) times the
aggregate Management Fee payable to Manager for the twelve month period
preceding the notice of early termination provided by the Tribe pursuant to
Section10.10(i).
"Effective Date" shall mean the date five (5) days following the date on
which all of the following listed conditions are satisfied:
(i) written approval of this Agreement is granted by the
Chairman of the NIGC;
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Exhibit 10.10
(ii) written approval of a Tribal Gaming Code is granted by
the Chairman of the NIGC;
(iii) written confirmation that the Tribe and the State (to
the extent required by the Compact) have approved background investigations of
Manager;
(iv) Manager has received a certified copy of the Tribal
Resolutions adopted by the Tribe in accordance with the Tribe's governing
documents and the Corporate Resolutions adopted by the Enterprise in accordance
with the Charter authorizing the execution of this Agreement;
(v) execution of the Compact by the Secretary of the
Interior and publication in the Federal Register as provided in 25 U.S.C.
Section 2710(d)(8)(D);
(vi) receipt by Manager of all applicable licenses for or
related to management of the Facility; and
(vii) Manager has satisfied itself that the Tribal Gaming Code
and any other code adopted by the Tribe relative to any of the documents
referenced in this Agreement do not have a material adverse effect on Manager's
ability to operate the Facility under this Agreement.
"Emergency Condition" shall have the meaning set forth in Section 3.11.
"Enterprise" shall mean the "Twenty-Nine Palms Enterprises Corporation"
chartered under 25 U.S.C. Section 477 by the Tribe to engage in Class II and
Class III Gaming at the Facility and any other lawful commercial activity
allowed in the Facility including, but not limited to the sale of alcohol,
tobacco, gifts and souvenirs; or any ancillary non-Gaming activity within the
Facility generally related to Class II or Class III Gaming.
"Enterprise Bank Accounts" shall mean those accounts described in
Section 3.17.1.
"Enterprise Employee" shall mean all Employees who are assigned to work
at the Facility.
"Enterprise Employee Policies" shall mean those employee policies
described in Section 3.6.2.
"Excess Funds" shall have the meaning described in Section 5.4.1 so long
as the Transfer and Deposit Agreement may be in effect, and thereafter "Excess
Funds" shall have the meaning described in Section 5.4.2.
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Exhibit 10.10
"Facility" shall mean all buildings, structures and improvements located
on the Property used in connection with gaming or used for the operation of the
Enterprise, and all fixtures, Furnishings and Equipment attached to, forming a
part of, or necessary for the operation of such buildings, structures and
improvements.
"Financing Agreements" shall mean all loan agreements, indentures,
notes, security agreements and other documents to be entered into between the
Tribe and/or the Enterprise and one or more Lenders pursuant to which the
financing is issued including, without limitation, the Loan Agreement.
"Fiscal Year" shall mean the period commencing on January 1 of each year
and ending on December 31 of such year, except that for purposes of calculating
the Management Fee, the first Fiscal Year shall be deemed to commence upon the
Commencement Date and end on December 31 of such year.
"Furnishings and Equipment" shall mean all furniture, furnishings and
equipment required for the operation of the Facility, including, without
limitation:
(i) cashier, money sorting and money counting equipment,
surveillance and communication equipment and security equipment;
(ii) electronic lottery terminals, video games of chance,
table games, bingo blowers and equipment, electronic displays, Class II pull-tab
dispensers, table games, pari-mutuel betting equipment and other Class II and
Class III gaming equipment permitted pursuant to the Compact and the IGRA;
(iii) office furnishings and equipment;
(iv) specialized equipment necessary for the operation of any
portion of the Facility for accessory purposes, including equipment for
entertainment facilities, hospitality facilities, kitchens, laundries, dry
cleaning, cocktail lounges, restaurants, public rooms, commercial and parking
spaces and recreational facilities;
(v) all decor, special effects and artwork; and
(vi) all other furnishings and equipment hereafter located
and installed in or about the Facility which are used in the operation of the
Facility in accordance with the standards set forth in this Agreement.
"Gaming" shall mean any and all activities defined as Class II and Class
III Gaming.
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Exhibit 10.10
"General Manager" shall mean the person supplied by Manager and employed
by the Enterprise to direct the operation of the Facility.
"Generally Accepted Accounting Principles or GAAP" shall mean those
principles defined by the Financial Accounting Standards Board.
"Gross Gaming Revenue (Win)" shall mean the net win from gaming
activities which is the difference between gaming wins and losses before
deducting costs and expenses.
"Gross Revenues" shall mean all revenues of any nature derived directly
or indirectly from the Facility including, without limitation, Gross Gaming
Revenue (Win), food and beverage sales, and other rental or other receipts from
lessees, sublessees, licensees and concessionaires (but not the gross receipts
of such lessees, sublessees, licensees or concessionaires, provided that such
lessees, sublessees, and licensees and concessionaires are not subsidiaries or
affiliates of Manager), and revenue recorded for Promotional Allowances, but
excluding any taxes the Tribe is allowed to assess pursuant to Section 7.
"House Bank" shall mean the amount of cash, chips, tokens and plaques
that Manager from time to time determines necessary to have at the Facility
daily to meet its cash needs.
"IGRA" shall mean the Indian Gaming Regulatory Act of 1988, PL 100-497,
25 U.S.C. Section 2701 et seq., as same may, from time to time, be amended.
"Internal Control Systems" shall mean the systems described in Section
3.16.
"Legal Requirements" shall mean any and all present and future judicial,
administrative, and tribal rulings or decisions, and any and all present and
future federal, state, local, and tribal laws, codes, rules, regulations,
permits, licenses and certificates, in any way applicable to the Tribe, Manager,
the Property, the Facility, and the Enterprise, including without limitation,
the IGRA, the Compact, and the Tribal Gaming Code.
"Lender" shall mean First National Bank, as Administrative Agent,
together with the "Lenders" identified in the Financing Agreement(s).
"Loan Agreement" shall mean the Loan Agreement dated October 17, 2001,
by and among The Twenty-Nine Palms Enterprises Corporation, The Twenty-Nine
Palms Band of Luiseno Mission Indians of California, the Lenders referred to
therein, and First National Bank, together with all documents that constitute
"Loan Documents" as defined therein.
"Management Agreement" shall mean this Agreement and may be referred to
herein as the "Agreement."
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Exhibit 10.10
"Management Fee" shall mean the management fee described in Section 5.1.
"Manager" shall mean THCR Management Services, LLC, its successors and
assigns.
"Manager Advance" shall mean any funds advanced by Manager or its
Affiliates to the Enterprise, including on account of the Minimum Guaranteed
Monthly Payment or the Manager Guaranty.
"Manager Guaranty" shall mean the Payment Guaranty Agreement between
Manager, as guarantor, and First National Bank, as administrative agent, dated
as of October 17, 2001.
"Manager Proprietary Information" shall mean the information described
in Section 8.22.
"Material Breach" shall mean such material breach as described in
Section 10.3.
"Member of The Tribal Government" shall have the meaning described in
Section 9.5.
"Minimum Balance" shall mean the amount described in Section 3.17.1.
"Minimum Guaranteed Monthly Payment" shall mean that payment due the
Tribe each month commencing in the month after the Commencement Date occurs in
accordance with 25 U.S.C. Section 2711(b)(3) and Section 5.5 hereof.
"National Indian Gaming Commission" or "NIGC" shall mean the commission
established pursuant to 25 U.S.C. Section 2704.
"Net Revenues" shall mean the sum of "Net Revenues (Gaming)" and "Net
Revenues (Other)."
"Net Revenues (Gaming)" shall mean Gross Gaming Revenue (Win), of the
Enterprise from Class II or Class III gaming less all gaming related Operating
Expenses, excluding the Management Fee, and less the retail value of any
Promotional Allowances, and less the following revenues actually received by the
Enterprise and included in Gross Revenues:
(i) any gratuities or service charges added to a customer's
bill;
(ii) any credits or refunds made to customers, guests or
patrons;
(iii) any sums and credits received by the Enterprise for lost
or damaged merchandise;
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Exhibit 10.10
(iv) any sales taxes, excise taxes, gross receipt taxes,
admission taxes, entertainment taxes, tourist taxes or charges received from
patrons and passed on to a governmental or quasi governmental entity;
(v) any proceeds from the sale or other disposition of
furnishings and equipment or other capital assets;
(vi) any fire and extended coverage insurance proceeds other
than for business interruption;
(vii) any condemnation awards other than for temporary
condemnation;
(viii) any proceeds of financing or refinancing; and
(ix) any interest on bank account(s).
It is intended that this provision be consistent with 25 U.S.C. Section 2703(9).
"Net Revenues (Other)" shall mean all Gross Revenues of the Enterprise
from all other sources in support of Class II or Class III gaming not included
in "Net Revenues (Gaming)," such as food and beverage, entertainment, and
retail, less all non-gaming related Operating Expenses, excluding the Management
Fee and less the retail value of Promotional Allowances, if any, and less the
following revenues actually received by the Enterprise and included in Gross
Revenues:
(i) any gratuities or service charges added to a customer's
bill;
(ii) any credits or refunds made to customers, guests or
patrons;
(iii) any sums and credits received by the Enterprise for lost
or damaged merchandise;
(iv) any sales taxes, excise taxes, gross receipt taxes,
admission taxes, entertainment taxes, tourist taxes or charges received from
patrons and passed on to a governmental or quasi governmental entity;
(v) any proceeds from the sale or other disposition of
furnishings and equipment or other capital assets;
(vi) any fire and extended coverage insurance proceeds other
than for business interruption;
(vii) any condemnation awards other than for temporary
condemnation;
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Exhibit 10.10
(viii) any proceeds of financing or refinancing; and
(ix) any interest on bank account(s).
It is intended that this provision be consistent with 25 U.S.C. Section 2703(9).
"Note" shall mean the promissory note or notes to be executed by the
Enterprise and/or the Tribe pursuant to the Financing Agreements.
"Operating Budget and Annual Plan" shall mean the operating budget and
plan described in Section 3.9.
"Operating Expenses" shall mean all expenses of the operation of the
Enterprise, pursuant to GAAP, including but not limited to the following:
(i) the payment of salaries, wages, and benefit programs for
Enterprise Employees;
(ii) Operating Supplies for the Enterprise;
(iii) utilities;
(iv) repairs and maintenance of the Facility (excluding
Capital Replacements);
(v) interest on the Note;
(vi) interest on installment contract purchases or other
interest charges on debt approved by the Tribal Council;
(vii) insurance and bonding;
(viii) advertising and marketing, including busing and
transportation of patrons to the Facility;
(ix) accounting, legal and other professional fees;
(x) security costs;
(xi) reasonable travel expenses for officers and employees of
the Enterprise;
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Exhibit 10.10
(xii) lease payments for Furnishings and Equipment to the
extent approved by the Tribe;
(xiii) costs of goods sold;
(xiv) other expenses designated as Operating Expenses in
accordance with the accounting standards as referred to in Section 3.19.3;
(xv) expenses specifically designated as Operating Expenses
in this Agreement;
(xvi) depreciation and amortization of the Facility based on
an assumed thirty (30) year life, and depreciation and amortization of all other
assets in accordance with GAAP;
(xvii) recruiting and training expenses;
(xviii) fees due to the NIGC under the IGRA;
(xix) any required payments to the State or local governments
made by or on behalf of the Enterprise or the Tribe pursuant to the Compact;
(xx) license fees reflecting reasonable regulatory costs
incurred by the Tribal Gaming Agency; and
(xxi) any budgeted charitable contributions by the Enterprise
which are approved by the Tribe.
"Operating Supplies" shall mean food and beverages (alcoholic and
nonalcoholic) and other consumable items used in the operation of the Facility,
such as playing cards, tokens, chips, pull-tabs, bingo paper, plaques, fuel,
soap, cleaning materials, matches, paper goods, stationery and all other similar
items.
"Option Date" shall have the meaning described in Section 10.10.
"Pre-Opening Budget" shall have the meaning described in Section 3.8.
"Pre-Opening Expenses" shall have the meaning described in Section 3.8.
"Promotional Allowances" shall mean the retail value of complimentary
food, beverages, merchandise, and tokens for gaming, provided to patrons as
promotional items.
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Exhibit 10.10
"Property" shall mean the Tribe's "Indian lands" consisting of
approximately of 240 acres of land located at 46-200 Harrison Place, Coachella,
Riverside County CA 92236, pursuant to a declaration of trust by the United
States of America dated May 18, 1978, recorded June 27, 1978 in the Official
Records of Riverside County, California in Book 1978, Page 131619, more
specifically described on Exhibit A attached hereto.
"Relative" shall have the meaning described in Section 9.5.
"Shortfall Amount" shall mean any amount necessary to pay Manager all or
any portion of the Management Fee due but not paid to Manager as a result of a
shortage of available funds.
"State" shall refer to the State of California.
"Term" shall mean the term of this Agreement as described in Section
2.2.
"Transfer and Deposit Agreement" shall mean that certain Transfer and
Deposit Agreement dated as of October 17, 2001 between the Enterprise and First
National Bank, as Depository.
"Tribal Council" shall mean the duly elected Tribal Council of the Tribe
described in the Tribe's Articles of Association.
"Tribal Gaming Authority" shall mean the Tribal body created pursuant to
the Tribal Gaming Code to regulate the Class II and Class III Gaming of the
Tribe in accordance with the Compact, the IGRA and the Tribal Gaming Code.
"Tribal Gaming Code" shall mean the Gaming Ordinance adopted by the
Tribe and approved by the Chairman of the NIGC regulating the conduct of gaming
on tribal lands, as amended following the passage of Proposition 1A to permit
Class III Gaming at the Facility in accordance with the Compact, together with
the Tribal Gaming Commission Rules and Regulations.
"Tribal Priority Distribution" shall mean (i) for the months of October
through May, $650,000, and (ii) for the months of June through September,
$200,000; provided, however, in no event shall the Tribal Priority Distribution
be in excess of the amount of Excess Funds.
"Tribal Resolution" shall have the meaning described in Section 2.9.
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Exhibit 10.10
SECTION 2
COVENANTS
In consideration of the mutual covenants contained in this Agreement,
the parties agree and covenant as follows:
2.1 Engagement of Manager. The Enterprise hereby retains and
engages Manager as the exclusive manager of the Enterprise pursuant to the terms
and conditions of this Agreement, and Manager hereby accepts such retention and
engagement, subject to receipt of all necessary regulatory approvals.
2.2 Term. The management services to be provided under this
Agreement shall commence on the Commencement Date, and will terminate on the
date which is the fifth anniversary of the Commencement Date. Upon the agreement
of the Enterprise and Trump Hotels & Casino Resorts Development Company, LLC to
commence development of a second wing to the hotel and related amenities, such
as a spa, recreational vehicle park and/or truck facility, Manager shall be
granted an additional two (2) year term of this Agreement; provided, however
that the NIGC shall first have approved such extension of the term of this
Agreement.
2.3 Status of Property. The Tribe represents and covenants that it
will maintain the Property throughout the Term as Indian Lands, eligible as a
location upon which Class II and Class III Gaming can occur. The Tribe
covenants, during the term hereof, that Manager shall and may peaceably have
complete access to and presence in the Facility in accordance with the terms of
this Agreement, free from molestation, eviction and disturbance by the Tribe or
by any other person or entity; provided, however, that such right of access to
and presence in the Facility shall cease (i) in the event the Tribal Gaming
Authority revokes any license issued by it to Manager which license is necessary
for the lawful operation of the Facility by Manager, or (ii) upon the
termination of this Agreement pursuant to its terms.
2.4 Manager Compliance with Law; Licenses. Manager covenants that
it will at all times comply with all Legal Requirements, including the Tribal
Gaming Code, the IGRA, the Compact, California statutes, to the extent
applicable, and any licenses issued under any of the foregoing. The Tribe shall
not unreasonably withhold, delay, withdraw, qualify or condition such licenses
as the Tribe is authorized to grant.
2.5 Amendments to Tribal Gaming Code. The Tribe covenants that any
amendments made to the Tribal Gaming Code will be a legitimate effort to ensure
that gaming is conducted in a manner that adequately protects the environment,
the public health and safety, and the integrity of the Enterprise. The adoption
of any amendments to the Tribal Gaming Code or any other codes or resolutions
that would materially and adversely affect Manager's rights under this Agreement
shall be a Material Breach of this Agreement.
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Exhibit 10.10
2.6 Compliance with Compact. The parties shall at all times comply
with the provisions of the Compact.
2.7 Fire and Safety. Manager shall ensure that the Facility shall
be constructed and maintained in compliance with all fire and safety statutes,
codes, and regulations which would be applicable if the Facility were located
outside of the jurisdiction of the Tribe although those requirements would not
otherwise apply within that jurisdiction. Nothing in this Section shall grant
any jurisdiction to the State of California or any political subdivision thereof
over the Property or the Facility. The Tribe shall be responsible for arranging
fire protection and police services for the Facility.
2.8 Compliance with the National Environmental Policy Act. With the
assistance of Manager, the Tribe shall supply the NIGC with all information
necessary for the NIGC to comply with any regulations of the NIGC issued
pursuant to the National Environmental Policy Act (NEPA).
2.9 Satisfaction of Effective Date Requirements. Manager, the
Enterprise and the Tribe each agree to cooperate and to use their best efforts
to satisfy all of the conditions of the Effective Date at the earliest possible
date. The Tribe shall adopt a resolution (the "Tribal Resolution") reciting that
it is the governing law of the Tribe that the Management Agreement, the
Financing Agreements and the exhibited documents attached thereto are the legal
and binding obligations of the Tribe, valid and enforceable in accordance with
their terms. Manager agrees to memorialize the satisfaction of each of the
following requirements as well as the Effective Date in writings signed by
Manager and delivered to the Tribe and to the Chairman of the NIGC: (i) Manager
has satisfied itself as to the proper ownership and control of the Property, and
that all of the Legal Requirements and other requirements for lawful conduct and
operation of the Facility in accordance with this Agreement have been met and
satisfied; and (ii) the satisfactory completion of all necessary and applicable
feasibility studies required for the operation of the Facility.
2.10 Commencement Date. Manager shall memorialize the Commencement
Date in a writing signed by Manager and delivered to the Tribe and to the
Chairman of the NIGC.
2.11 Restrictions on Collateral Operations. During the term of this
Agreement, Manager agrees that neither Manager nor a Manager Affiliate shall
manage any gaming facilities located in San Bernardino, Ventura, Los Angeles,
Orange, San Diego, Riverside, Santa Barbara or Imperial county, California
without the written consent of the Tribe. During the term of this Agreement, the
Tribe agrees that it shall not develop or operate any gaming facilities other
than the Facility without the written consent of Manager.
SECTION 3
BUSINESS AFFAIRS
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Exhibit 10.10
3.1 Manager's Authority and Responsibility. Manager shall conduct
and direct all business and affairs in connection with the day-to-day operation,
management and maintenance of the Facility and the operation of the Enterprise,
including the establishment of operating days and hours. It is the parties'
intention that the Facility be open twenty-four (24) hours daily, seven (7) days
a week. Upon the Commencement Date, Manager shall be deemed to have the
necessary power and authority with respect to the Facility to fulfill all of its
responsibilities under this Agreement. Nothing herein grants or is intended to
grant Manager a titled interest to the Facility or to the Enterprise. Manager
hereby accepts such retention and engagement.
The Tribe shall have the sole proprietary interest in and ultimate
responsibility for the conduct of all Gaming conducted by the Enterprise,
subject to the rights and responsibilities of Manager under this Agreement.
3.2 Duties of Manager. In managing, operating, maintaining and
repairing the Facility, Manager's duties shall include, without limitation, the
following:
3.2.1 Physical Duties. Manager shall use reasonable measures
for the orderly physical administration, management, and operation of the
Facility, including without limitation capital improvements, cleaning, painting,
decorating, plumbing, carpeting, grounds care and such other maintenance and
repair work as is reasonably necessary.
3.2.2 Compliance. Manager shall comply with all duly enacted
statutes, regulations and codes of the State, the federal government, the Tribe
and the Tribal Gaming Authority.
3.2.3 Required Filings. Manager shall comply with all
applicable provisions of the Internal Revenue Code including, but not limited
to, the prompt filing of any cash transaction reports and W-2G reports that may
be required by the Internal Revenue Service of the United States or under the
Compact. Manager shall also comply with all applicable reporting and filing
provisions of all other federal, State, and Tribal regulatory agencies.
3.2.4 Contracts in the Name of the Enterprise and at Arm's
Length. Contracts for the operations of the Facility shall be entered into in
the name of the Enterprise, and signed by the General Manager. Any contract
requiring an expenditure in any year in excess of Two Hundred Fifty Thousand
($250,000) Dollars shall be approved by the Enterprise, provided this provision
shall be subject to the restrictions contained in Section 3.9.1 regarding the
Operating Budget and Annual Plan. No contracts, of any amount, for the supply of
goods or services to the Facility shall be entered into with an Affiliate of
Manager unless that affiliation is disclosed to and approved by the Enterprise,
and the contract terms are no less favorable for the Enterprise than could be
obtained from a non-affiliated contractor. Notwithstanding anything to the
contrary contained herein, contracts for the supply of any goods or services
paid for entirely
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Exhibit 10.10
by Manager may be provided by an Affiliate of Manager, provided that payments on
such contracts shall not constitute Operating Expenses and shall be the sole
responsibility of Manager and the Enterprise shall be notified of any such
contracts. Nothing contained in this Section 3.2.4 shall be deemed to be or
constitute a waiver of the Tribe's sovereign immunity.
3.2.5 Facility Operating Standards. Manager shall operate the
Facility in a proper, efficient and competitive manner in compliance with all
applicable provisions of the Compact and the standards promulgated by the NIGC
at 25 C.F.R. Section 542.1 et seq., as in effect at any time.
3.3 Security. Manager shall provide for appropriate security for
the operation of the Facility. All aspects of the Facility security shall be the
responsibility of Manager. All security officers shall be bonded and insured in
an amount commensurate with his or her enforcement duties and obligations. The
cost of any charge for security and increased public safety services will be an
Operating Expense.
3.4 Damage, Condemnation or Impossibility of the Facility. 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, or is taken by condemnation or sold
under the threat of condemnation, 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 legislation, Manager shall have the following options:
3.4.1 Recommencement of Operations. If Gaming on the Property
is prohibited by Legal Requirements, Manager shall have the option to continue
its interest in this Agreement and, with the approval of the Tribe, to commence
or recommence the operation of Gaming at the Facility if, at some point during
the Term of this Agreement, such commencement or recommencement shall be legally
and commercially feasible.
3.4.2 Repair or Replacement. If the Facility is damaged,
destroyed or condemned so that Gaming can no longer be conducted at the
Facility, the Facility shall be reconstructed if the insurance or condemnation
proceeds are sufficient to restore or replace the Facility to a condition at
least comparable to that before the casualty occurred. If Manager elects to
reconstruct the Facility and if the insurance proceeds or condemnation awards
are insufficient to reconstruct the Facility to such condition, Manager may, in
its sole discretion, supply such additional funds as are necessary to
reconstruct the Facility to such condition and such funds shall, with the prior
consent of the Tribe and the BIA or NIGC, as appropriate, constitute a loan to
the Enterprise, secured by the revenues from the Facility and repayable upon
such terms as may be agreed upon by the Enterprise and Manager. If the insurance
proceeds are not sufficient and are not used to repair the Facility, the
Enterprise and Manager shall jointly adjust and settle any and all claims for
such insurance proceeds or condemnation awards, and such proceeds or award shall
be applied first, to the amounts due under the Note (including principal and
interest); second, any other loans; third, any undistributed Net Revenues
pursuant to Section 5 of this Agreement; and fourth, any surplus shall be
distributed to the Tribe.
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Exhibit 10.10
3.4.3 Other Business Purposes. Manager shall have the option
to use the Facility for other purposes reasonably incidental to Class II and
Class III Gaming, provided the Enterprise has approved such purposes (which
approval shall not be unreasonably withheld). For any purpose other than Gaming,
Manager shall obtain all approvals necessary under applicable law.
3.4.4 Termination of Gaming. Manager shall have the option at
any time within a sixty (60) day period following the cessation of Gaming on the
Property to notify the Enterprise in writing that it is terminating operations
under this Agreement, in which case Manager shall retain any rights Manager may
have to undistributed Net Revenues pursuant to Section 5 of this Agreement and
rights to repayments of amounts owed to it. If Manager does not elect to
terminate this Agreement, it may take whatever action may be necessary to reduce
expenses during such termination of Gaming.
3.4.5 Tolling of the Agreement. If, after a period of
cessation of Gaming on the Property, the recommencement of Gaming is possible,
and if Manager has not terminated this Agreement under the provisions of Section
3.4.4, the period of such cessation shall not be deemed to have been part of the
term of this Agreement and the date of expiration of the term of this Agreement
shall be extended by the number of days of such cessation period.
3.5 Alcoholic Beverages and Tobacco Sales. No Tribal legislation
prohibiting the sale of tobacco and/or alcoholic beverages is now in force, and
no such legislation will be enacted during the term of this Agreement. The Tribe
agrees to enact any Tribal legislation necessary to allow sale of alcoholic
beverages or tobacco products in the facility. The Enterprise and Manager
mutually agree to include sale of tobacco and alcoholic beverages within the
Facility to the fullest extent allowed by the Compact.
3.6 Employees.
3.6.1 Manager's Responsibility. Manager shall have, subject
to the terms of this Agreement, the exclusive responsibility and authority to
direct the selection, control and discharge of all employees performing regular
services for the Enterprise in connection with the maintenance, operation, and
management of the Facility and any activity upon the Property; and the sole
responsibility for determining whether a prospective employee is qualified and
the appropriate level of compensation to be paid; provided, however, the Tribal
Gaming Authority shall have sole and exclusive control over the licensing of
employees or prospective employees of the Enterprise, and the compliance by such
employees with the conditions of their license.
3.6.2 Enterprise Employee Policies. Manager shall prepare a
draft of personnel policies and procedures (the "Enterprise Employee Policies"),
including a job classification system with salary levels and scales, which
policies and procedures shall be subject to approval by the Enterprise. The
Enterprise Employee Policies shall include a grievance procedure in order to
establish fair and uniform standards for the employees of the
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Exhibit 10.10
Enterprise, which will include procedures for the resolution of disputes between
Manager and Enterprise Employees. Any revisions to the Enterprise Employee
Policies shall not be effective unless they are approved in the same manner as
the original Enterprise Employee Policies. All such actions shall comply with
applicable Tribal law.
3.6.3 Employees. The selection by the Manager of the General
Manager, Chief Financial Officer, Director of Human Resources and Public Safety
Director of the Enterprise shall be subject to the approval of the Enterprise,
which approval shall not be unreasonably withheld. Manager shall provide the
Tribal Council with sufficient information to adequately evaluate all
recommendations for employment in the positions of General Manager, Chief
Financial Officer, or Security Director. The terms of employment of the
Enterprise Employees shall be structured as though all labor, employment, and
unemployment insurance laws applicable in California employees would also apply
to Enterprise Employees. The Enterprise agrees to take no action to impede,
supersede or impair such treatment.
3.6.4 Off-Site Employees. Subject to approval of the
Enterprise, Manager shall also have the right to use employees of Manager and
Manager's Affiliates not located at the Facility to provide services to the
Enterprise ("Off-Site Employees"). All expenses, costs (including, but not
limited to, salaries and benefits, but excluding pension, retirement, severance
or similar benefits), which are related to such Off-Site Employees shall be paid
by Manager.
3.6.5 No Manager Wages or Salaries. Neither Manager nor
Manager's Affiliates nor any of their officers, directors, shareholders, or
employees shall be compensated by wages from or contract payments by the
Enterprise for their efforts or for any work which they perform under this
Agreement, other than repayments of advances and the Management Fee to be paid
to Manager under Section 5.1. Nothing in this subsection shall restrict the
ability of an employee of the Enterprise to purchase or hold stock in Manager,
or Manager's Affiliates where (i) such stock is publicly held, and (ii) such
employee acquires, on a cumulative basis, less than five (5%) percent of the
outstanding stock in the corporation.
3.6.6 Employee Background Checks. A background investigation
shall be conducted by the Tribal Gaming Authority in compliance with all Legal
Requirements, to the extent applicable, on each applicant for employment as soon
as reasonably practicable, and in all events within the time necessary to enable
the Tribal Gaming Authority to forward a report on such applicant for employment
pursuant to 25 C.F.R. Section 556.5(b) within the 60 day time period provided in
25 C.F.R. Section 558.3(b). No individual whose prior activities, criminal
record, if any, or reputation, habits and associations are known to pose a
threat to the public interest, the effective regulation of Gaming, or to the
gaming licenses of Manager or any of its Affiliates, or to create or enhance the
dangers of unsuitable, unfair or illegal practices and methods and activities in
the conduct of Gaming, shall knowingly be employed by Manager, the Enterprise,
or the Tribe.
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Exhibit 10.10
The background investigation procedures employed by the Tribal Gaming
Authority shall be formulated in consultation with Manager and shall satisfy all
regulatory requirements independently applicable to Manager and its Affiliates.
Any cost associated with obtaining background investigations of the Manager, the
Enterprise, or the Tribe for the Tribal Gaming Authority shall constitute an
Operating Expense; costs associated with obtaining background investigations of
Manager for the NIGC shall be paid by Manager.
3.6.7 Indian Preference, Recruiting and Training. Manager
shall offer employment in the Enterprise to all employees in good standing of
the Class II gaming facility operated by the Tribe prior to the Commencement
Date. For additional employment needs, Manager shall, during the term of this
Agreement, to the extent permitted by applicable law, including but not limited
to the Indian Civil Rights Act, 25 U.S.C. Section 1301 et seq., and the Compact,
give preference in recruiting, training and employment to qualified members of a
Native American Tribe recognized by the Federal government or the State of
California, their spouses and children in all job categories of the Enterprise.
Manager shall:
(i) conduct job fairs and skills assessment meetings
for Native Americans;
(ii) abide by any duly enacted Tribal preference
laws;
(iii) in consultation with and subject to the approval
of the Tribe, develop a management training program for Native Americans. This
program shall be structured to provide appropriate training for those
participating to assume full managerial control at the conclusion of the Term of
this Agreement;
(iv) train and hire, to the maximum extent permitted
by law, members of the local communities where the Facility is located. Whenever
possible, Enterprise jobs shall be filled by Native Americans and persons living
within Riverside County. Final determination of the qualifications of Native
Americans and all other persons for employment shall be made by Manager, subject
to any licensing requirements of the Tribe Gaming Authority.
3.6.8 Goals and Remedies. All hiring for the Enterprise shall
be done by Manager, based on the hiring policies established by the Enterprise
in consultation with Manager.
3.6.9 Removal of Employees. Manager will act in accordance
with the Enterprise Employee Policies with respect to the discharge, demotion or
discipline of any Enterprise Employee.
3.7 Marketing.
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Exhibit 10.10
3.7.1 Nature of Marketing Services. The services described in
this Section 3.7 ("Marketing Services") shall be provided by Manager.
3.7.2 Marketing Services. Manager shall provide the following
Marketing Services:
(i) provide a Marketing Director and adequate staff
to implement the Marketing Plan; said Marketing Director and staff to be
employees of the Enterprise;
(ii) upon the later of (a) ninety (90) days prior to
the scheduled opening date of the Facility and (b) fifteen (15) days following
the Effective Date, Manager shall have prepared a Marketing Plan for the
Facility;
(iii) the Marketing Plan shall include provisions for
the Facility opening, public relations, community relations, electronic and
print media advertising, industry advertising and relations, employee marketing
programs, promotional programs, entertainment and hospitality marketing and
advertising, group sales, special events, tour sales, and any and all other
related or required components of a complete marketing program sufficient to
maximize the Facility's position in the local market; and
(iv) Manager shall be responsible for the placement
of advertising for the Facility consistent with the Marketing Plan.
3.8 Pre-Opening. Upon the later of (a) six (6) months prior to the
scheduled Commencement Date and (b) fifteen (15) days following the Effective
Date, Manager shall commence implementation of a pre-opening program which shall
include all activities necessary to financially and operationally prepare the
Facility for opening. To implement the pre-opening program, Manager shall
prepare a comprehensive pre-opening budget which shall be submitted to the
Enterprise for its approval upon the later of (x) seven (7) months prior to the
scheduled Commencement Date and (y) fifteen (15) days following the Effective
Date ("Pre-Opening Budget"). The Pre-Opening Budget sets forth expenses which
Manager anticipates to be necessary or desirable in order to prepare the
Facility for the Commencement Date, including without limitation, cash for
disbursements, Furnishings and Equipment and Operating Supplies, hiring,
training, relocation and temporary lodging of employees, advertising and
promotion, office overhead and office space (whether on or off the Property),
and travel and business entertainment (including opening celebrations and
ceremonies) ("Pre-Opening Expenses"). The Enterprise recognizes that the
Pre-Opening Budget has been prepared well in advance of the Commencement Date
and is intended only to be a reasonable estimate, subject to variation due to a
number of factors, some of which will be outside of Manager's control (e.g., the
time of completion, inflationary factors and varying conditions for the goods
and services required). The Enterprise agrees that the Pre-Opening Budget may be
modified from time to time, subject
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Exhibit 10.10
to approval of the Enterprise in accordance with the procedure established by
Article 3.9 of this Agreement for adjustments to the Operating Budget and Annual
Plan.
3.9 Operating Budget and Annual Plan. Manager shall, prior to the
scheduled Commencement Date, submit to the Enterprise, for its approval, a
proposed Operating Budget and Annual Plan for the remainder of the current
Fiscal Year. Thereafter, Manager shall, not less than sixty (60) days prior to
the commencement of each full or partial Fiscal Year, submit to the Enterprise,
for its approval, a proposed Operating Budget and Annual Plan for the ensuing
full or partial Fiscal Year, as the case may be. The Operating Budget and Annual
Plan shall include a projected income statement, balance sheet, and projection
of cash flow for the Enterprise, with detailed justifications explaining the
assumptions used therein. Included with the Operating Budget and Annual Plan
shall be a schedule of repairs and maintenance (other than Capital
Replacements), a business and marketing plan for the Fiscal Year, and the
Minimum Balance which must remain in the Enterprise Bank Accounts and the House
Bank as of the end of each month during the Fiscal Year to assure sufficient
monies for working capital purposes, the House Bank and other expenditures
authorized under the Operating Budget and Annual Plan.
The Operating Budget and Annual Plan for the Facility will be comprised of the
following:
(i) a statement of the estimated income and expenses for the
coming Fiscal Year, including estimates as to Gross Revenues and Operating
Expenses for such Fiscal Year, such operating budget to reflect the estimated
results of the operation during each month of the subject Fiscal Year;
(ii) either as part of the statement of the estimated income
and expenses referred to in the preceding clause (i), or separately, budgets
(and timetables and requirements of Manager) for:
(a) repairs and maintenance;
(b) Capital Replacements;
(c) Furnishings and Equipment;
(d) advertising and business promotion programs for
the Facility;
(e) the estimated cost of Promotional Allowances;
and
(iii) a business and marketing plan for the subject Fiscal
Year.
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Exhibit 10.10
The Enterprise's approval of the Operating Budget and Annual Plan shall
not be unreasonably withheld or delayed. Manager shall meet with the Enterprise
to discuss the proposed Operating Budget and Annual Plan and the Enterprise's
approval shall be deemed given unless a specific written objection thereto is
delivered by the Enterprise to Manager within thirty (30) days after Manager and
the Enterprise have met to discuss the proposed Operating Budget and Annual
Plan. If the Enterprise for any reason shall fail to meet with Manager to
discuss a proposed Operating Budget and Annual Plan, the Enterprise shall be
deemed to have consented unless a specific written objection is delivered to
Manager within fifteen (15) days after the date the proposed Operating Budget
and Annual Plan is submitted to the Enterprise. The Enterprise shall review the
Operating Budget and Annual Plan on a line-by-line basis. To be effective, any
notice which disapproves a proposed Operating Budget and Annual Plan must
contain specific objections in reasonable detail to individual line items.
If the initial proposed Operating Budget and Annual Plan contains any
disputed budget item(s), the Enterprise and Manager agree to cooperate with each
other in good faith to resolve the disputed or objectionable proposed item(s).
In the event the Enterprise and Manager are not able to reach mutual agreement
concerning any disputed or objectionable item(s) prior to the commencement of
the applicable fiscal year, the undisputed portions of the proposed Operating
Budget and Annual Plan shall be deemed to be adopted and approved and the
corresponding line item(s) contained in the Operating Budget and Annual Plan for
the preceding fiscal year shall be adjusted as set forth herein and shall be
substituted in lieu of the disputed item(s) in the proposed Operating Budget and
Annual Plan. Those line items which are in dispute shall be determined by
increasing the preceding fiscal year's actual expense for the corresponding line
items by an amount determined by Manager which does not exceed the Consumer
Price Index for All Urban Consumers published by the Bureau of Labor Statistics
of the United States Department of Labor, Los Angeles-Riverside-Orange County
Average, all items (1982-1984 = 100) for the Fiscal Year prior to the Fiscal
Year with respect to which the adjustment to the line item(s) is being
calculated or any successor or replacement index thereto. The resulting
Operating Budget and Annual Plan obtained in accordance with the preceding
sentence shall be deemed to be the Operating Budget and Annual Plan in effect
until such time as Manager and the Enterprise have resolved the items objected
to by the Enterprise.
3.9.1 Adjustments to Operating Budget and Annual Plan.
Manager may, after notice to and approval by the Enterprise, revise the
Operating Budget and Annual Plan from time to time, as necessary, to reflect any
unpredicted significant changes, variables or events or to include additional,
unanticipated items of expense. Manager may, after notice to the Enterprise,
reallocate part or all of the amount budgeted with respect to any line item to
another line item and to make such other modifications to the Operating Budget
and Annual Plan as Manager deems necessary, provided that the total adjustments
to the Operating Budget and Annual Plan shall not exceed one hundred ten percent
(110%) of the aggregate approved Operating Budget and Annual Plan without
approval of the Enterprise. Manager shall submit a revision of the Operating
Budget and Annual Plan to the Tribe for review on a quarterly basis. In
addition, in the event actual Gross Revenues for any period are greater than
those provided for
-21-
Exhibit 10.10
in the Operating Budget and Annual Plan, the amounts approved in the Operating
Budget and Annual Plan for guest services, food and beverage, telephone,
utilities, marketing and the repair and maintenance of the Facility for any
month shall be automatically deemed to be increased to an amount that bears the
same relationship (ratio) to the amounts budgeted for such items as actual Gross
Revenue for such month bears to the projected Gross Revenue for such month. The
Enterprise acknowledges that the Operating Budget and Annual Plan is intended
only to be a reasonable estimate of the Facility's revenues and expenses for the
ensuing Fiscal Year. Manager shall not be deemed to have made any guarantee
concerning projected results contained in the Operating Budget and Annual Plan.
3.10 Capital Budgets; Permitted Hotel Debt. Manager shall, prior to
the Commencement Date and thereafter, not less than sixty (60) days prior to the
commencement of each fiscal year, or partial fiscal year after the Commencement
Date, submit to the Enterprise a recommended capital budget (the "Capital
Budget") describing the present value, estimated useful life and estimated
replacement costs for the ensuing full or partial year, as the case may be, for
the physical plant, furnishings, equipment, and ordinary capital replacement
items, all of which are defined to be any items, the cost of which is
capitalized and depreciated, rather than expensed, using GAAP ("Capital
Replacements") as shall be required to operate the Facility in accordance with
sound business practices. Capital Replacements in the Capital Budget in an
aggregate sum equal to or less than the sum of the Capital Replacement Reserve
for the Fiscal Year shall be approved by the Enterprise; and any amounts in
excess of the Capital Replacement Reserve for the Fiscal Year shall be subject
to approval of the Enterprise in its sole discretion. The Enterprise and Manager
shall meet to discuss the proposed Capital Budget and the Enterprise shall be
required to make specific written objections to a proposed Capital Budget in the
same manner and within the same time periods specified in Section 3.9 with
respect to an Operating Budget and Annual Plan. The Enterprise shall not
unreasonably withhold or delay its consent. Unless the Enterprise and Manager
otherwise agree, Manager shall be responsible for the design and installation of
Capital Replacements, subject to the Enterprise's approval. The Enterprise shall
not incur any indebtedness to finance or refinance the development of a hotel in
connection with the operation of the Enterprise unless the payment obligations
of the Enterprise with respect to such indebtedness is contractually
subordinated to the payment of the Management Fee upon terms and conditions
satisfactory to Manager.
3.11 Capital Replacements. The Enterprise shall effect and expend
such amounts for any Capital Replacements as shall be required, in the course of
the operation of the Facility, to maintain, at a minimum, the Facility in
compliance with any Legal Requirements and to comply with Manager's recommended
programs for renovation, modernization and improvement intended to keep the
Facility competitive in its market, to maintain industry standards; or to
correct any condition of an emergency nature, including without limitation,
maintenance, replacements or repairs which are required to be effected by the
Enterprise, which in Manager's sole discretion requires immediate action to
preserve and protect the Facility, assure its continued operation, and/or
protect the comfort, health, safety and/or welfare of the Facility's guests or
employees (an "Emergency Condition"); provided, however, that the
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Exhibit 10.10
Enterprise shall be under no obligation to fund Capital Replacements in
aggregate amount greater than its periodic required contributions to the Capital
Replacement Reserve described in Section 3.12. Manager is authorized to take all
steps and to make all expenditures from the Working Capital Account, described
at Section 3.17.1 (in the case of non-capitalized repairs and maintenance), or
Capital Replacement Reserve Account, described at Section 3.12, (in the case of
expenditures for Capital Replacements) as it deems necessary to repair and
correct any Emergency Condition, regardless whether such provisions have been
made in the Capital Budget or the Operating Budget and Annual Plan for any such
expenditures; or the cost thereof may be advanced by Manager and reimbursed from
future revenues. Design and installation of Capital Replacements shall be
effected in a time period and subject to such conditions as the Enterprise may
establish to minimize interference with or disruption of ongoing operations.
3.12 Capital Replacement Reserve. Manager shall establish a Capital
Replacement Reserve on the books of account of the Facility, and an account (the
"Capital Replacement Reserve Account") in the Enterprise's name at a bank
designated by the Enterprise in accordance with Section 3.17.1 of this
Agreement. All amounts in the Capital Replacement Reserve Account shall be
invested in interest bearing investments in accordance with the Enterprise
Investment Policy approved by the Enterprise, attached hereto as Exhibit C to
the extent that availability of funds, when required, is not thereby impaired.
Interest earned on amounts deposited in the Capital Replacement Reserve Account
shall be credited to the Capital Replacement Reserve and shall be available for
payment of expenditures for Capital Replacements to the Facility. Manager shall
draw on the Capital Replacement Reserve Account for Capital Replacements to
purchase those items included in the Capital Budget approved by the Enterprise
or such emergency additions, repairs or replacements as shall be required to
correct an Emergency Condition or to comply with operating standards.
3.13 Periodic Contributions to Capital Replacement Reserve. In
accordance with Section 5.4 of this Agreement, Manager shall make monthly
deposits into the Capital Replacement Reserve Account in amounts equivalent to
an annual rate of two percent (2%) of Net Revenues during the first two (2)
years of the Term of this Agreement after the Commencement Date and equivalent
to an annual rate of three percent (3%) of Net Revenues during the remainder of
the Term. If any adjustment of Net Revenues is made as a result of an audit or
for other accounting reasons, a corresponding adjustment in the Capital
Replacement Reserve Account deposit shall be made. In addition, all proceeds
from the sale of capital items no longer needed for the operation of the
Facility, and the proceeds of any insurance received in reimbursement for any
items previously paid for from the Capital Replacement Reserve, shall be
deposited into the Capital Replacement Reserve Account upon receipt.
3.14 Use and Allocation of Capital Replacement Reserve. Any
expenditures for Capital Replacements which have been budgeted and previously
approved may be paid from the Capital Replacement Reserve Account without
further approval from the Enterprise. Any amounts remaining in the Capital
Replacement Reserve Account at the close of any year shall be carried forward
and retained in the Capital Replacement Reserve Account until fully used. If
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Exhibit 10.10
amounts in the Capital Replacement Reserve Account at the end of any year plus
the anticipated contributions to the Capital Replacement Reserve Account for the
next ensuing year are not sufficient to pay for Capital Replacements authorized
by the Capital Budget for such ensuing year, then funds in the amount of the
projected deficiency may be advanced by Manager to be repaid to Manager pursuant
to Section 5.4 of this Agreement as a Manager Advance.
3.15 Contracting. In entering contracts for the supply of goods and
services for the Facility, Manager shall give preference to qualified members of
the Tribe, their spouses and children, and qualified business entities certified
by the Tribe to be controlled by members of the Tribe.
"Qualified" shall mean a member of the Tribe, a member's spouse or
children, or a business entity certified by the Tribe to be controlled by
members of the Tribe, who or which is able to provide services at competitive
prices, has demonstrated skills and abilities to perform the tasks to be
undertaken in an acceptable manner, in Manager's opinion, and can meet the
reasonable bonding and/or financial requirements of Manager.
3.16 Internal Control Systems. Manager shall install systems for
monitoring of all funds (the "Internal Control Systems"), which systems shall
comply with all Legal Requirements, and shall be submitted to the Enterprise and
the Tribal Gaming Authority for approval in advance of implementation, which
approval shall not be unreasonably withheld. The Enterprise shall have the right
to retain an auditor to review the adequacy of the Internal Control Systems
prior to the Commencement Date. If the Enterprise elects to exercise this right,
the cost of such review shall be a Pre-Opening Expense. Any significant changes
in such systems after the Commencement Date also shall be subject to review and
approval by the Tribal Gaming Authority in advance of implementation. The Tribal
Gaming Authority and Manager shall have the right and duty to maintain and
police the Internal Control Systems in order to prevent any loss of proceeds
from the Facility. The Tribal Gaming Authority shall have the right to inspect
and oversee the Internal Control System at all times. Manager shall install a
closed circuit television system to be used for monitoring all cash handling
activities of the Facility sufficient to meet all Legal Requirements.
3.17 Banking and Bank Accounts.
3.17.1 Enterprise Bank Accounts. The Enterprise shall select a
bank or banks for the deposit and maintenance of funds and shall establish in
such bank or banks accounts as Manager deems appropriate and necessary in the
course of business and as consistent with this Agreement, including, but not
limited to, a Depository Account, Disbursement Account, a Working Capital
Account and a Capital Replacement Reserve Account ("Enterprise Bank Accounts").
Establishment of any Enterprise Bank Account shall be subject to the approval of
the Enterprise. The sum of money agreed upon by the Manager and the Enterprise
to be maintained in the Working Capital Account to serve as working capital for
Facility operations, shall include all sums needed for the House Bank, all sums
needed to accrue
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Exhibit 10.10
for payment of expenses not paid on a monthly basis, and all sums needed to be
reserved taking into account anticipated cash flow and Operating Expenses of the
Facility based upon, among other things, seasonality (the "Minimum Balance").
The Manager may increase the Minimum Balance, in Manager's sole discretion, at
any time during the first year following the Commencement Date to reflect
unanticipated working capital needs revealed by actual Facility operations, and
during the first and subsequent years to account for the seasonality of business
operations. Attached hereto as Exhibit E is the form of Irrevocable Banking
Instructions to be executed by the Enterprise with regard to each Enterprise
Bank Account and to be in effect during the Term of this Agreement, other than
with respect to the accounts maintained by the Enterprise with the "Collection
Bank" and the "Depository Bank" pursuant to the Transfer and Deposit Agreement.
Prior to the Commencement Date, the Enterprise shall transfer to the Working
Capital Account an amount equal to the initial Minimum Balance. In the event the
revenue of the Facility is insufficient at any time to maintain the Minimum
Balance after the payment of Operating Expenses, the Enterprise shall transfer
to the Working Capital Account funds in an amount equal to the difference
between the Minimum Balance and the cash balance of the Working Capital Account
prior to such transfer. The parties agree that so long as the Transfer and
Deposit Agreement shall be in effect, the "Accounts" specified therein shall
constitute the Disbursement Account of the Enterprise.
3.17.2 Daily Deposits to Depository Account. Manager shall
collect all gross revenues and other proceeds connected with or arising from the
operation of the Facility, the sale of all products, food and beverage, and all
other activities of the Facility and deposit the related cash, other than
reasonably required cage cash and petty cash, daily into the Depository Account
at least once during each twenty-four (24) hour period. All money received by
the Facility on each day that it is open must be counted at the close of
operations for that day or at least once during each twenty-four (24) hour
period. Manager agrees to obtain a bonded transportation service to effect the
safe transportation of the daily deposit to the bank, which expense shall
constitute an Operating Expense.
3.17.3 Disbursement Account. Manager shall, consistent with
and pursuant to the approved annual Operating Budget and Annual Plan, have
responsibility and authority for making or otherwise authorizing all payments
for Operating Expenses, debt service, Management Fees, and disbursements to the
Tribe from the Disbursement Account in accordance with the provisions of Section
5.
3.17.4 Transfers Between Accounts. Manager has the authority
to transfer funds from and between the Enterprise Bank Accounts to the
Disbursement Account in order to pay Operating Expenses and to pay debt service
pursuant to the Financing Agreements and Note, to invest funds in accordance
with the Enterprise Investment Policy and to pay the fees payable to Manager and
distributions to the Tribe pursuant to this Agreement.
3.18 Insurance. Manager, on behalf of the Tribe and the Enterprise,
shall arrange for, obtain and maintain, or cause its agents to maintain, with
responsible insurance
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Exhibit 10.10
carriers licensed to do business in the State of California, insurance
satisfactory to Manager and the Enterprise covering the Facility and the
operations of the Enterprise, naming the Tribe, the Enterprise, Manager, and
Manager's Affiliates as insured parties, in at least the amounts which are set
forth in Exhibit F.
3.19 Accounting and Books of Account.
3.19.1 Statements. Manager shall prepare and provide operating
statements to the Enterprise on a monthly, quarterly, and annual basis. The
operating statements shall comply with all Legal Requirements and shall include
an income statement, statement of cash flows, and balance sheet for the
Enterprise. Such statements shall include the Operating Budget and Annual Plan
and Capital Budget projections as comparative statements, and which, after the
first full year of operation, will include comparative statements from the
comparable period for the prior year of all revenues, and all other amounts
collected and received, and all deductions and disbursements made therefrom in
connection with the Facility.
3.19.2 Books of Account. Manager shall maintain full and
accurate books of account at an office in the Facility. The Enterprise and the
Tribe shall have the right to immediate access to the daily operations of the
Facility and shall have the unlimited right to inspect, examine, and copy all
such books and supporting business records. Any such copies are to be considered
confidential and proprietary and shall not be divulged to any third parties
without the express written permission of the Enterprise. Such rights may be
exercised through the Tribal Gaming Agency or through an agent, employee,
attorney, or independent accountant acting on behalf of the Tribe or the
Enterprise.
3.19.3 Accounting Standards. Manager shall maintain the books
and records reflecting the operations of the Facility in accordance with the
accounting practices of Manager in conformity with Generally Accepted Accounting
Principles consistently applied and shall adopt and follow the fiscal accounting
periods utilized by Manager in its normal course of business (i.e., a month,
quarter and year prepared in accordance with the Enterprise Fiscal Year). The
accounting systems and procedures shall comply with Legal Requirements and, at a
minimum:
(i) include an adequate system of internal
accounting controls;
(ii) permit the preparation of financial statements
in accordance with generally accepted accounting principles;
(iii) be susceptible to audit;
(iv) permit the calculation and payment of the
Management Fee described in Section 5;
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Exhibit 10.10
(v) provide for the allocation of operating expenses
or overhead expenses among the Tribe, the Enterprise, and any other user of
shared facilities and services; and
(vi) allow the Enterprise, the Tribe and the NIGC to
calculate the annual fees required under 25 C.F.R. Section 514.1.
3.19.4 Annual Audit. An independent certified public
accounting firm of national recognition engaged by the Enterprise or the Tribe
shall perform an annual audit of the books and records of the Enterprise and of
all contracts for supplies, services or concessions reflecting Operating
Expenses. The BIA and the NIGC shall also have the right to perform special
audits of the Enterprise on any aspect of the Enterprise at any time without
restriction. The costs incurred for such audits shall constitute an Operating
Expense. Such audits shall be provided by the Tribe or the Enterprise, as the
case may be, to all applicable federal and state agencies, as required by law,
and may be used by Manager for reporting purposes under federal and state
securities laws, if required.
3.20 Retail Shops and Concessions. With respect to the operation of
the shops and concessions located within the Facility, the Enterprise shall
approve in advance in writing the specific type or types of shops or concessions
proposed by Manager to be authorized for inclusion in the Facility.
SECTION 4
LIENS
4.1 Liens Subject to the exceptions hereinafter stated in Section
5.1, the Tribe and the Enterprise specifically warrant and represent to Manager
that during the term of this Agreement neither the Tribe nor the Enterprise
shall act in any way whatsoever, either directly or indirectly, to cause any
person or entity to become an encumbrancer or lienholder of the Property or the
Facility, other than the Lender, or to allow any person or entity to obtain any
interest in this Agreement without the prior written consent of Manager, and,
where applicable, consent from the United States. Manager specifically warrants
and represents to the Tribe and the Enterprise that during the term of this
Agreement Manager shall not act in any way, directly or indirectly, to cause any
person or entity to become an encumbrancer or lienholder of the Property or the
Facility, or to obtain any interest in this Agreement without the prior written
consent of the Tribe or the Enterprise, and, where applicable, the United
States. The Tribe, the Enterprise and Manager shall keep the Facility and
Property free and clear of all enforceable mechanics' and other enforceable
liens resulting from the construction of the Facility and all other enforceable
liens which may attach to the Facility or the Property, which shall at all times
remain the property of the United States in trust for the Tribe. If any such
lien is claimed or filed, it shall be the duty of Manager, utilizing funds of
the Enterprise, to discharge the lien within thirty (30) days after having been
given written notice of such claim, either by payment to the claimant, by the
posting of a bond and the payment into the court of the amount necessary to
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Exhibit 10.10
relieve and discharge the Property from such claim, or in any other manner which
will result in the discharge or stay of such claim.
4.2 Exceptions. The Enterprise shall have the right to grant
security interests in Facility revenues, as well as first priority security
interests in any Facility assets other than personal property purchased with the
proceeds of the Loan, but only if such security interests are granted to secure
loans made to and for the benefit of the Enterprise.
SECTION 5
MANAGEMENT FEE, REIMBURSEMENTS AND DISBURSEMENTS BY MANAGER
5.1 Management Fee. In consideration of the services rendered by
Manager pursuant to this Agreement, Manager shall be entitled to an annual
Management Fee equal to thirty (30%) percent of Net Revenues per each Fiscal
Year. The Management Fee shall be payable monthly in an amount equal to the
accrued Management Fee for the preceding month plus any Shortfall Amount.
Notwithstanding anything contained in this Agreement to the contrary, Manager
shall not be entitled to any compensation for providing management services
pursuant to this Agreement other than the annual Management Fee.
5.2 Disbursements for Operating Expenses. Each month, Manager
shall, for and on behalf of the Enterprise, cause funds to be disbursed from the
Disbursement Account, to the extent available, to pay Operating Expenses due and
payable. So long as the Transfer and Deposit Agreement shall be in effect, such
disbursements shall be from the "Operating Account" specified therein.
5.3 Disbursements for Debt Service. After the disbursements
pursuant to Section 5.2, Manager shall, for and on behalf of the Enterprise,
disburse funds from the Disbursement Account, to the extent available, to pay
debt service due and payable in accordance with the Loan Agreement. Thereafter,
Manager shall, for and on behalf of the Enterprise, cause funds to be disbursed
from the Disbursement Account, to the extent available, to pay debt service due
and payable in accordance with Financing Agreements other than the Loan
Agreement in accordance with the payment priorities specified in the Loan
Agreement and the Financing Agreements. So long as the Transfer and Deposit
Agreement shall be in effect, such disbursements shall be from the "Debt Service
Account," "Permitted Equipment Debt Account," and "Permitted Other Debt Account"
specified therein, respectively.
5.4 Payment of Fees and Tribal Disbursement. Within twenty-one (21)
days after the end of each calendar month of operations, Manager shall calculate
Gross Revenues, Operating Expenses, and Net Revenues of the Facility for the
previous month's operations and the year's operations to date.
5.4.1 Disbursements Pursuant to Transfer and Deposit
Agreement. After the disbursements pursuant to Sections 5.2 and 5.3, so long as
the Transfer and Deposit
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Exhibit 10.10
Agreement shall be in effect, Manager shall cause funds to be disbursed from the
Enterprise Bank Account(s) in accordance with the provisions of Section 3.6, 3.7
and 3.8 thereof. Funds released to the Enterprise pursuant to Section 3.8(d) of
the Transfer and Deposit Agreement ("Excess Funds") shall be applied in the
following order:
(i) an amount necessary to maintain the Minimum
Balance shall be deposited in the Working Capital Account;
(ii) amounts specified to fund the Capital
Replacement Reserve pursuant to Section 3.13 shall be deposited in the Capital
Replacement Reserve Account;
(iii) an amount equal to any Manager Advance shall be
disbursed to the Manager; and
(iv) the balance of Excess Funds shall be disbursed
to the Enterprise.
5.4.2 Disbursements Other Than Pursuant to Transfer and
Deposit Agreement. In the event the Transfer and Deposit Agreement shall no
longer be in effect, after the disbursements pursuant to Sections 5.2 and 5.3,
Manager shall cause the funds remaining in the Enterprise Bank Account(s)
("Excess Funds") to be applied in the following order:
(i) the Minimum Guaranteed Monthly Payment described
in Section 5.5 shall be disbursed to the Tribe;
(ii) an amount necessary to maintain the Minimum
Balance shall be deposited in the Working Capital Account;
(iii) Capital Replacement Reserve contributions as
described in Section 3.13 shall be deposited in the Capital Replacement Reserve
Account;
(iv) Such amount as is necessary to reimburse Manager
for any outstanding Manager Advance shall be disbursed to the Manager;
(v) the Tribal Priority Distribution shall be
disbursed to the Tribe;
(vi) the Management Fee shall be disbursed to the
Manager, together with any outstanding Shortfall Amount;
(vii) after disbursement of the Management Fee and any
Shortfall Amount, all remaining Excess Funds shall be distributed to the
Enterprise.
5.4.3 Shortfall Amounts and Manager Advances. Shortfall
Amounts due Manager and Manager Advances shall be paid at such time as
sufficient Excess Funds exist
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Exhibit 10.10
to pay such Shortfall Amounts or Manager Advances in accordance with Section
5.4, notwithstanding that such Shortfall Amount may have been incurred or
Manager Advance may have been made in a prior fiscal year; provided, however,
that the Enterprise shall be under no obligation to pay any Shortfall Amount
that may be outstanding upon the expiration of the Term of this Agreement.
5.5 Minimum Guaranteed Monthly Payment. Manager shall pay the Tribe
from Net Revenues Fifty Thousand ($50,000) Dollars per month (the "Minimum
Guaranteed Monthly Payment"), beginning on the Commencement Date and continuing
for the remainder of the Term in accordance with Section 5.4. The Minimum
Guaranteed Monthly Payment shall have preference over the retirement of
development and construction costs of the Facility. The Minimum Guaranteed
Monthly Payment shall be payable to the Tribe in arrears on the twenty-first
(21st) day of each calendar month following the month in which the Commencement
Date occurs, which payment shall have priority over the Management Fee. If the
Commencement Date is a date other than the first day of a calendar month, the
first payment will be prorated from the Commencement Date to the end of the
month. Minimum Guaranteed Monthly Payments shall be charged against the Tribe's
distribution of Net Revenues for each month provided, however, where the Net
Revenues in a given month are less than Fifty Thousand ($50,000) Dollars,
Manager shall advance the funds necessary to compensate for the deficiency from
its own funds. In the event Class II and/or Class III gaming is suspended for
any portion of a month, the Guaranteed Monthly Payment shall be prorated and
payable for the portion of the month during which gaming was conducted at the
Facility. No Minimum Guaranteed Monthly Payment shall be owed for a month in the
event Class II and/or Class III gaming is suspended or terminated at the
Facility pursuant to Section 3.4 for the entire month. The obligation of Manager
to make Minimum Guaranteed Monthly Payments shall cease upon termination of this
Agreement. Except as provided in the preceding sentence of this Section 5.5,
Manager's obligation to pay the Tribe the Minimum Guaranteed Monthly Payment is
unconditional, and shall not be affected by the actual level of funds generated
by the Facility.
5.6 Distribution of Excess Funds. The distributions of Excess Funds
to the Enterprise pursuant to this Section 5 shall be deposited in the
Enterprise's bank account specified by the Enterprise in a notice to Manager
pursuant to Section 8.2.
5.7 Manager Guaranty. Manager shall guarantee the obligations of
the Enterprise under the Financing Agreements in an amount up to the amount of
the Development Fee paid to Trump Hotels & Casino Resorts Development Company,
LLC pursuant to the Development and Construction Agreement dated as of April 27,
2000 between Trump Hotels & Casino Resorts Development Company and the Tribe, as
the same may be amended (the "Manager Guaranty"). Any payments made by Manager
in respect of the Manager Guaranty shall be reimbursed to Manger as provided in
Section 5.4 herein.
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Exhibit 10.10
5.8 Development and Construction Costs. Manager and the Tribe agree
that $68 million shall be the maximum amount paid by the Enterprise for the
recoupment of development and construction costs.
SECTION 6
TRADE NAMES, TRADE MARKS AND SERVICE MARKS
6.1 Facility Name. The Facility shall be operated under the name
"Trump Spotlight 29 Casino Hotel" or such other name as the parties may agree
upon (the "Facility Name") during the Term of this Agreement, subject to and in
accordance with the terms and conditions of the Trademark License Agreement
dated May 31, 2000, between Trump Hotels & Casino Resorts Holdings, L.P. and the
Tribe, as amended by the First Amendment to Trademark License Agreement dated as
of March ___, 2002.
6.2 Signs. Prior to the Commencement Date and from time to time
during the Term hereof, Manager agrees to erect and install, in accordance with
local codes and regulations, all signs Manager deems necessary in, on or about
the Facility, including, but not limited to, signs bearing the Facility Name.
SECTION 7
TAXES
7.1 State and Local Taxes. If the State of California or any local
government attempts to impose any tax including any possessory interest tax upon
any party to this Agreement or upon the Enterprise, the Facility or the
Property, the Tribal Council, in the name of the appropriate party or parties in
interest, may resist such attempt through legal action. The costs of such action
and the compensation of legal counsel shall be an Operating Expense of the
Facility. Any such tax shall constitute an Operating Expense of the Facility.
This Section shall in no manner be construed to imply that any party to this
Agreement or the Enterprise is liable for any such tax.
7.2 Tribal Taxes. The Tribe agrees that neither it nor any agent,
agency, affiliate or representative of the Tribe will impose any taxes, fees,
assessments, or other charges of any nature whatsoever on payments of any debt
service to Manager or any of its Affiliates or to any lender furnishing
financing for the Facility or for the Enterprise, or on the Enterprise, the
Facility, the revenues therefrom or on the Management Fee as described in
Section 5.1 of this Agreement; provided, however, the Tribe may assess license
fees reflecting reasonable regulatory costs incurred by the Tribal Gaming Agency
to the extent not paid as Operating Expenses; the Tribe further agrees that
neither it nor any agent, agency, affiliate or representative will impose any
taxes, fees, assessments or other charges of any nature whatsoever on the
salaries or benefits, or dividends paid to, any of Manager's stockholders,
officers, directors, or employees, any of the employees of the Enterprise; or
any provider of goods, materials, or services to the Facility, other than with
respect to any such provider of goods, materials, or
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Exhibit 10.10
services to the Facility, license fees reflecting reasonable regulatory costs
incurred by the Tribal Gaming Authority.
Nothing in this Section 7.2 shall be construed to prohibit the Tribe
from taxing the sale of goods at the Facility in amounts equivalent to any state
taxes that would otherwise be applicable but for the Tribe's status as an Indian
tribe; provided that no such tax shall be applied to any goods supplied as
Promotional Allowances.
7.3 Compliance with Internal Revenue Code. Manager shall comply
with all applicable provisions of the Internal Revenue Code.
SECTION 8
GENERAL PROVISIONS
8.1 Situs of the Contracts. This Agreement, as well as all
contracts entered into between the Tribe, the Enterprise and any person or any
entity providing services to the Facility, shall be deemed entered into in
California, and shall be subject to all Legal Requirements of the Tribe and
federal law as well as approval by the Secretary of the Interior where required
by 25 U.S.C. Section 81 or by the Chairman of the NIGC where required by the
IGRA.
8.2 Notice. Any notice required to be given pursuant to this
Agreement shall be delivered to the appropriate party by Federal Express or by
Certified Mail Return Receipt Requested, addressed as follows:
If to the Tribe or the Enterprise, to:
Dean Mike, Chairman
Twenty-Nine Palms Band of Luiseno Mission Indians
of California
46-200 Harrison Place
Coachella CA 92236
with a copy to: Gene R. Gambale, Esq.
Vice President-General Counsel
Spotlight 29 Enterprises
46-200 Harrison Place
Coachella CA 92236
If to Manager, to: Robert M. Pickus
Executive Vice President and General Counsel
Trump Hotels & Casino Resorts, Inc.
Huron Avenue & Brigantine Boulevard
Atlantic City NJ 08401
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Exhibit 10.10
with copies to: John M. Peebles, Esq.
Monteau, Peebles & Marks, L.L.P.
12100 West Center Road, Suite 202
Bel Air Plaza
Omaha NE 68144-3960
and: Peter Michael Laughlin, Esq.
Graham, Curtin & Sheridan, PA
4 Headquarters Plaza
Morristown NJ 07962-1991
or to such other different address(s) as Manager, the Enterprise or the Tribe
may specify in writing using the notice procedure called for in this Section
8.2. Any such notice shall be deemed given two (2) days following deposit in the
United States mail or upon actual delivery, whichever first occurs.
8.3 Authority to Execute and Perform Agreement. The Tribe, the
Enterprise and Manager represent and warrant to each other that they each have
full power and authority to execute this Agreement and to be bound by and
perform the terms hereof. On request, each party shall furnish the other
evidence of such authority.
8.4 Relationship. Manager, the Enterprise and the Tribe shall not
be construed as joint venturers or partners of each other by reason of this
Agreement and neither shall have the power to bind or obligate the other except
as set forth in this Agreement.
8.5 Manager's Contractual Authority. Manager is authorized to make,
enter into and perform in the name of and for the account of the Enterprise,
such contracts deemed necessary by Manager to perform its obligations under this
Agreement, provided such contracts comply with the terms and conditions of this
Agreement, including, but not limited to, Section 3.2.4, and provided such
contracts do not obligate the Enterprise to pay sums not approved in the
Operating Budget and Annual Plan or the Capital Budget.
8.6 Further Actions. The Tribe, the Enterprise and Manager agree to
execute all contracts, agreements and documents and to take all actions
necessary to comply with the provisions of this Agreement and the intent hereof.
8.7 Defense. Except for disputes between the Tribe, the Enterprise
and Manager, and claims relating to the Tribe's status as a Tribe or the trust
status of the Property, Manager shall bring and/or defend and/or settle any
claim or legal action brought against Manager, the Enterprise or the Tribe,
individually, jointly or severally, or any Enterprise Employee, in connection
with the operation of the Facility. Subject to the Tribe's approval of legal
counsel, Manager shall retain and supervise legal counsel, accountants and such
other professionals, consultants and specialists as Manager deems appropriate to
defend any such
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Exhibit 10.10
claim or cause of action. All liabilities, costs and expenses, including
reasonable attorneys' fees and disbursements incurred in defending and/or
settling any such claim or legal action which are not covered by insurance,
shall be an Operating Expense. Nothing contained herein is a grant to Manager of
the right to waive the Tribe's or the Enterprise's sovereign immunity. That
right is strictly reserved to the Tribe and the Enterprise. Any settlement of a
third party claim or cause of action shall require approval of the Enterprise.
8.8 Waivers. No failure or delay by Manager, the Enterprise or the
Tribe to insist upon the strict performance of any covenant, agreement, term or
condition of this Agreement, or to exercise any right or remedy consequent upon
the breach thereof, shall constitute a waiver of any such breach or any
subsequent breach of such covenant, agreement, term or condition. No covenant,
agreement, term, or condition of this Agreement and no breach thereof shall be
waived, altered or modified except by written instrument. No waiver of any
breach shall affect or alter this Agreement, but each and every covenant,
agreement, term and condition of this Agreement shall continue in full force and
effect with respect to any other then existing or subsequent breach thereof.
8.9 Captions. The captions for each Section and Subsection are
intended for convenience only.
8.10 Severability. If any of the terms and provisions hereof shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any of the other terms or provisions hereof. If, however, any material
part of a party's rights under this Agreement shall be declared invalid or
unenforceable, (specifically including Manager's right to receive its Management
Fees) the party whose rights have been declared invalid or unenforceable shall
have the option to terminate this Agreement upon thirty (30) days written notice
to the other party, without liability on the part of the terminating party.
8.11 Interest. Any amounts advanced by Manager related to the
operation of the Facility shall accrue interest at the rate specified in the
Note; provided, however, no interest shall accrue or be payable in respect of
the Minimum Guaranteed Monthly Payment funded by Manager.
8.12 Travel and Out-of-Pocket Expenses. Subject to the Operating
Budget and Annual Plan, all travel and out-of-pocket expenses of Enterprise
Employees reasonably incurred in the performance of their duties shall be an
Operating Expense.
8.13 Third Party Beneficiary. This Agreement is exclusively for the
benefit of the parties hereto and it may not be enforced by any party other than
the parties to this Agreement and shall not give rise to liability to any third
party other than the authorized successors and assigns of the parties hereto as
such are authorized by this Agreement.
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Exhibit 10.10
8.14 Brokerage. Manager, the Enterprise and the Tribe represent and
warrant to each other that none of them has sought the services of a broker,
finder or agent in this transaction, and none of them has employed, nor
authorized, any other person to act in such capacity. Manager, the Enterprise
and the Tribe each hereby agrees to indemnify and hold the other harmless from
and against any and all claims, loss, liability, damage or expenses (including
reasonable attorneys' fees) suffered or incurred by the other party as a result
of a claim brought by a person or entity engaged or claiming to be engaged as a
finder, broker or agent by the indemnifying party.
8.15 Survival of Covenants. Any covenant, term or provision of this
Agreement which, in order to be effective, must survive the termination of this
Agreement, shall survive any such termination.
8.16 Estoppel Certificate. Manager, the Enterprise and the Tribe
agree to furnish to any other party, from time to time upon request, an estoppel
certificate in such reasonable form as the requesting party may request stating
whether there have been any defaults under this Agreement known to the party
furnishing the estoppel certificate and such other information relating to the
Facility as may be reasonably requested.
8.17 Periods of Time. Whenever any determination is to be made or
action is to be taken on a date specified in this Agreement, if such date shall
fall on a Saturday, Sunday or legal holiday under the laws of the Tribe, federal
government, or the State of California, then in such event said date shall be
extended to the next day which is not a Saturday, Sunday or legal holiday.
8.18 Exhibits. All exhibits attached hereto are incorporated herein
by reference and made a part hereof as if fully rewritten or reproduced herein.
8.19 Successors, Assigns, and Subcontracting. The benefits and
obligations of this Agreement shall inure to and be binding upon the parties
hereto and their respective successors and assigns. Manager shall have the right
to assign its rights under this Agreement to one or more directly or indirectly
wholly-owned subsidiaries of Trump Hotels & Casino Resorts, Inc., or its
successor. The Enterprise's consent shall be required for the assignment or
subcontracting by Manager of its rights, interests or obligations as Manager
hereunder to any person or entity other than an Affiliate of Manager, or any
successor corporation to Manager, provided that any such assignee or
subcontractor agrees to be bound by the terms and conditions of this Agreement,
and the Enterprise shall consent to any such assignee or subcontractor provided
that such assignee or subcontractor has, in the discretion of the Enterprise,
the competency and financial capability to perform as required by this
Agreement. The acquisition of Manager or its parent company by a party other
than an Affiliate of Manager, or its successor corporation, shall not constitute
an assignment of this Agreement by Manager and this Agreement shall remain in
full force and effect between the Tribe, the Enterprise and Manager, subject
only to Legal Requirements. In all respects, any assignment or subcontracting
permitted
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Exhibit 10.10
pursuant to this Section 8.19 shall be subject to the notification requirements
provided in Section 13.4 of this Agreement and any required approval by the
NIGC.
8.20 Permitted Assignment. Any assignment of this Agreement
permitted under the Agreement, to the extent mandated by the IGRA, shall be
subject to approval by the Chairman of the NIGC or his authorized representative
after a complete background investigation of the proposed assignee. The Tribe or
Enterprise shall, without the consent of Manager but subject to approval by the
Secretary of the Interior or the Chairman of the NIGC or his authorized
representative, have the right to assign this Agreement and the assets of the
Facility to an instrumentality of the Tribe or to a corporation wholly-owned by
the Tribe organized to conduct the business of the Enterprise for the Tribe that
assumes all obligations herein. Any assignment by the Tribe shall not prejudice
the rights of Manager under this Agreement. No assignment authorized hereunder
shall be effective until all necessary government approvals have been obtained.
8.21 Time is of the Essence. Time is of the essence in the
performance of this Agreement.
8.22 Confidential Information. The parties agree that any
information received concerning any other party during the performance of this
Agreement, regarding the parties' organization, financial matters, marketing
plans, or other information of a proprietary nature (the "Confidential
Information"), will be treated by both parties in full confidence and except as
required to allow Manager, the Enterprise and the Tribe to perform their
respective covenants and obligations hereunder, or in response to legal process
or appropriate and necessary inquiry, and will not be revealed to any other
persons, firms or organizations. This provision shall survive the termination of
this Agreement for a period of two (2) years.
The obligations not to use or disclose the Confidential Information
shall not apply to Confidential Information which (i) has been made previously
available to the public by the Tribe, the Enterprise or Manager or becomes
generally available to the public, unless the Confidential Information being
made available to the public results in a breach of this Agreement; (ii) prior
to disclosure to the Tribe, the Enterprise or Manager, was already rightfully in
any such person's possession; or (iii) is obtained by the Tribe, the Enterprise
or Manager from a third party who is lawfully in possession of such Confidential
Information, and not in violation of any contractual, legal or fiduciary
obligation to the Tribe, the Enterprise or Manager, with respect to such
Confidential Information and who does not require the Tribe, the Enterprise or
Manager to refrain from disclosing such Confidential Information to others.
8.23 Patron Dispute Resolution. Manager shall submit all patron
disputes concerning play to the Tribal Gaming Authority pursuant to the Tribal
Gaming Code, and the regulations promulgated thereunder.
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Exhibit 10.10
8.24 Modification. Any change to or modification of this Agreement
must be in writing signed by all parties hereto and shall be effective only upon
approval by the Chairman of the NIGC, the date of signature of the parties
notwithstanding.
SECTION 9
WARRANTIES
9.1 Noninterference in Tribal Affairs. Manager agrees not to
interfere in or attempt to wrongfully influence the internal affairs or
government decisions of the Tribal Council or the Enterprise by offering cash
incentives, by making written or oral threats to the personal or financial
status of any person, or by any other action, except for actions in the normal
course of business of Manager that relate to the Facility. As of the date of
this Agreement, the Tribe and the Enterprise acknowledge that Manager has not
interfered or wrongfully interfered in the internal affairs of the Tribe and the
Enterprise. For the purposes of this Section 9.1, if any such undue interference
in Tribal affairs is alleged by the federally recognized Tribal government in
writing and the NIGC finds that Manager has unduly interfered with the internal
affairs of the Tribe government and has not taken sufficient action to cure and
prevent such interference, that finding of interference shall be grounds for
termination of the Agreement. Manager shall be entitled to immediate written
notice and a complete copy of any such complaint to the NIGC.
9.2 Prohibition of Payments to Members of Tribal Government.
Manager represents and warrants that no payments have been or will be made by
Manager or Manager's Affiliates, to any Member of the Tribal Government, any
Tribal official, any relative of a Member of Tribal Government or Tribal
official, or any Tribal government employee for the purpose of obtaining any
special privilege, gain, advantage or consideration.
9.3 Prohibition of Hiring Members of Tribal Government. No Member
of the Tribal Government, Tribal official, or employee of the Tribal government
may be employed at the Facility or Manager or its Affiliates without a written
waiver of this Section 9.3 by the Tribe. For this purpose, the Tribe will
identify all such persons to Manager in a writing and take reasonable steps to
keep the list current; Manager shall not be held responsible if any person not
on such written list is employed.
9.4 Prohibition of Financial Interest in Enterprise. No Member of
the Tribal Government or relative of a Member of the Tribal Government shall
have a direct or indirect financial interest in the Enterprise greater than the
interest of any other member of the Tribe. No Member of the Tribal Government or
relative of a Member of the Tribal Government shall have a direct or indirect
financial interest in Manager or Manager's Affiliates.
9.5 Definitions. As used in this Section 9, "Member of the Tribal
Government" means any member of the Tribal Council, the Tribal Gaming Authority
or any independent board or body created to oversee any aspect of Gaming and any
Tribal court
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Exhibit 10.10
official; "Relative" means an individual residing in the same household who is
related as a spouse, father, mother, son or daughter.
SECTION 10
TERMINATION
10.1 Voluntary Termination and Termination for Cause. This Agreement
may be terminated pursuant to the provisions of Sections 3.4.4, 10.2, 10.3,
10.4, 10.5 and 10.6 and 10.10.
10.2 Voluntary Termination. This Agreement may be terminated upon
the mutual written consent and approval of the parties.
10.3 Termination for Cause. Either the Tribe or the Enterprise may
terminate this Agreement if Manager commits or allows to be committed any
Material Breach of this Agreement, and Manager may terminate this Agreement if
either the Tribe or the Enterprise commits or allows to be committed any
Material Breach of this Agreement,. A Material Breach of this Agreement means a
failure of any party to perform any material duty or obligation on its part for
any thirty (30) consecutive days after notice, and shall include, but not be
limited to, those events identified as a Material Breach in Section 13.5 of this
Agreement. Any action taken or the adoption of any statute or code that taxes,
materially prejudices or materially adversely affects or imposes additional
costs or burdens on Manager's rights or duties under this Agreement shall be a
Material Breach of this Agreement by the Tribe. No party may terminate this
Agreement on grounds of Material Breach unless it has provided written notice to
the other parties 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. During the period specified in the notice to terminate, any party may
submit the matter to arbitration under the dispute resolution provisions of this
Agreement at Section 16. The discontinuance or correction of a Material Breach
shall constitute a cure thereof.
In the event of any termination for cause, regardless of fault, the
parties shall retain all money previously paid to them pursuant to Section 5 of
this Agreement; and the Enterprise shall retain title to all Facility and
Facility fixtures, improvements, supplies, equipment, funds and accounts,
provided that the Manager shall be paid any accrued and unpaid Management Fee,
including any Shortfall Amount, and other sums due under Section 5 of this
Agreement up to and including the date of termination of this Agreement.
An election to pursue damages or to pursue specific performance of this
Agreement or other equitable remedies while this Agreement remains in effect
pursuant to the provisions of Sections 10.7 or 10.8 shall not preclude the
injured party from providing notice of termination pursuant to this Section
10.3. Neither shall termination preclude a suit for damages.
-38-
Exhibit 10.10
10.4 Involuntary Termination Due to Changes in Legal Requirements.
It is the understanding and intention of the parties that the establishment and
operation of the Facility shall conform to and comply with all Legal
Requirements. If during the term of this Agreement, the Facility or any material
aspect of Gaming is determined by the Congress of the United States, the
Department of the Interior of the United States of America, the NIGC, or the
final judgment of a court of competent jurisdiction to be unlawful under federal
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 described in Section 3.4
of this Agreement;
(ii) Manager, the Tribe and the Enterprise shall retain all
money previously paid to them pursuant to Section 5 of this Agreement;
(iii) funds of the Enterprise in any Enterprise account shall
be paid and distributed as provided in Section 5 of this Agreement;
(iv) The Enterprise shall retain its interest in the title
(and any lease) to all Facility assets, including all fixtures, supplies and
equipment, subject to any requirements of financing arrangements.
10.5 Manager's Right to Terminate Agreement. Manager may terminate
this Agreement by written notice effective upon receipt if:
(i) Any Tribal, State or Federal authority where approval is
required fails to approve this Agreement or otherwise objects to the performance
by Manager of any obligation imposed on it under this Agreement.
(ii) Manager has been notified by any Federal regulatory
agency that the performance by it of any obligation imposed by this Agreement
will jeopardize the retention of any license, or approvals granted thereunder,
held by Manager or any of its Affiliates in other jurisdiction, and the Tribe or
the Enterprise refuses to allow Manager to immediately rectify any such
complaint.
(iii) Manager has reason to believe that the performance by
it, by the Enterprise or by the Tribe of any obligation imposed under this
Agreement may reasonably be expected to result in the breach of any Legal
Requirement and the parties have been unable to agree upon waiver of such
performance within ten (10) days written notice by Manager.
(iv) Through its own actions, the Tribe or the Enterprise
fails to make any payment to Manager when due within the time specified in this
Agreement and a grace period of thirty (30) days.
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Exhibit 10.10
10.6 Tribe's and Enterprise's Right to Terminate Agreement. In
addition to the suspension of Manager pursuant to Section 10.9 herein, the Tribe
or the Enterprise may terminate this Agreement by written notice effective upon
receipt if:
(i) Any Federal or State authority, where approval is
required, fails to approve this Agreement or otherwise objects to the
performance by Manager of any obligation imposed on it under this Agreement and
Manager has not cured the circumstance giving rise to the failure to approve or
the objection to performance within thirty (30) days.
(ii) The Tribe has reason to believe that the performance by
it, the Enterprise or Manager of any obligation imposed under this Agreement may
reasonably be expected to result in the breach of any Legal Requirement (other
than a Legal Requirement imposed or created by the Tribe or any agency thereof)
and the parties have been unable to agree upon waiver of such performance within
ten (10) days of written notice given by the Tribe.
(iii) Manager fails to make any payment to the Tribe or the
Enterprise when due, including but not limited to any Minimum Guaranteed Monthly
Payment to the Tribe within the time specified in this Agreement and a grace
period of thirty (30) days.
(iv) Manager has had its license withdrawn because Manager,
or a director or officer of Manager, has been convicted of a criminal felony or
misdemeanor offense in the performance of Manager duties hereunder, or where
Manager has failed to disclose any such conviction to the Tribal Gaming
Authority promptly upon Manager receiving notice thereof; provided, however, the
Tribe or the Enterprise may not terminate this Agreement based on a director or
officer's conviction where Manager terminates such individual within ten (10)
days after receiving notice of the conviction.
10.7 Consequences of Manager's Breach. In the event of the
termination of this Agreement by the Tribe or the Enterprise for cause under
Section 10.3, Manager shall not, prospectively from the date of termination,
except as provided in Section 10.3, have the right to its Management Fee from
the Facility, but such termination shall not affect Manager's rights relating to
recoupment and reimbursement of monies owed to Manager and/or guaranteed by
Manager and/or Manager's Affiliates (to the extent Manager or Manager's
Affiliate has paid under such guarantee) under this Agreement, the Financing
Agreements, the Note, the Manager Guaranty or any other agreements entered
pursuant hereto, including a Shortfall Amount, and such right of recoupment and
reimbursement shall survive any termination of this Agreement. Any Net Revenues
accruing through the date of termination shall be distributed in accordance with
Section 5 of this Agreement. Manager, the Tribe and the Enterprise acknowledge
and agree that termination of this Agreement may not be a sufficient or
appropriate remedy for breach by Manager, and further agree that pursuant to the
other provisions of this Agreement, including, but not limited to, Section 16,
the Tribe or the Enterprise shall, upon breach of this Agreement by Manager,
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
specifically
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Exhibit 10.10
acknowledges and agrees that there may be irreparable harm to the Tribe or the
Enterprise and that damages will be difficult to determine if Manager commits a
Material Breach, and Manager therefore further acknowledges that an injunction
and/or other equitable relief may be an appropriate remedy for any such breach.
In any event, the Tribe shall have the right to all payments due to the Tribe
accruing until the date of termination.
10.8 Consequences of Tribe's Breach. In the event of termination of
this Agreement by Manager for cause under Section 10.3, Manager shall not be
required to perform any further services under this Agreement and the Enterprise
shall indemnify and hold Manager harmless against all liabilities of any nature
whatsoever relating to the Facility, but only insofar as these liabilities
result from acts within the control of the Tribe or the Enterprise or their
respective agents or created by the termination of this Agreement. Manager, the
Tribe and the Enterprise acknowledge and agree that termination of this
Agreement may not be a sufficient or appropriate remedy for breach by the Tribe
or the Enterprise, and further agree that pursuant to the other provisions of
this Agreement, including but not necessarily limited to, Section 16, Manager
shall, upon breach of this Agreement by the Tribe or the Enterprise, 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, including, without
limitation, specifically actions to require payment of the Management Fee
pursuant to Section 5 for a term equal to the then remaining term of this
Agreement at the percentage of Net Revenues specified in Section 5. The Tribe
and the Enterprise specifically acknowledge and agree that there may be
irreparable harm to Manager and that damages will be difficult to determine if
the Tribe or the Enterprise commits a material breach, and the Tribe and the
Enterprise therefore further acknowledge that an injunction and/or other
equitable relief may be an appropriate remedy for any such breach. In any event,
Manager shall have the right to its Management Fee accruing until the date of
termination as provided in Section 5 of this Agreement, and to the repayment of
unpaid principal and interest and other amounts due under the Note and any other
note guaranteed by Manager or its Affiliates, the Financing Agreements, and any
other loans to the Tribe or the Enterprise, including any Shortfall Amount.
10.9 Suspension of Manager for Cause; Notice and Opportunity to Cure.
In the event of any breach of this Agreement by Manager involving a violation
by Manager of any Legal Requirements, the Enterprise may immediately suspend the
right and authority of Manager to manage the Facility unless and until such
breach is remedied or cured by Manager. The Enterprise will give Manager notice
of any alleged violation of the Tribal Gaming Code by Manager and twenty (20)
days opportunity to cure before the Tribal Gaming Authority may take any action
other than suspension of the Manager based on such alleged violation.
10.10 Enterprise's Buy-Out Option. The Enterprise shall have the
right to purchase all of the rights of the Manager pursuant to this Agreement on
the terms and conditions provided in this Section 10.10. This right may only be
exercised on or after the last day of the 36th month following the first full
month after the Commencement Date (the "Option Date"). In order to effectively
exercise this option, the Enterprise shall:
-41-
Exhibit 10.10
(i) give notice of its intent to exercise this option 90
days prior to the Option Date;
(ii) pay to Manager the Early Termination Fee;
(iii) pay all amounts due to Manager pursuant to this
Agreement, including the amount of any advances made by Manager to the Tribe,
Management Fee and Shortfall Amounts, through and including the Option Date;
(iv) tender to the Manager a full release, in form and
substance reasonably satisfactory to Manager, of all of Manager's obligations
pursuant to this Agreement, and all claims, whether asserted or unasserted,
liquidated or contingent, which the Tribe or any of its members, governmental
agencies of affiliates may have or be entitled to assert against manager or any
of its officers, agents, employees, members or affiliates arising out of events
occurring on or before the Option Date.
If the Enterprise fails to satisfy any of the above conditions on or before the
dates specified above, then this option and any attempted exercise thereof shall
be null and void and of no further force or effect, and this Agreement shall
continue in full force and effect according to its terms.
SECTION 11
CONCLUSION OF THE MANAGEMENT TERM
11.1 Conclusion of the Management Term. Upon the conclusion or the
termination of this Agreement, Manager shall have the following rights and
obligations:
11.2 Transition. Manager shall take reasonable steps for the orderly
transition of management of the Facility to the Tribe, the Enterprise or its
designee pursuant to a transition plan as described in Section 17 of this
Agreement.
11.3 Undistributed Net Revenues. If the Facility has accrued Net
Revenues which have not been distributed under Section 5 of this Agreement,
Manager shall receive that Management Fee equal to that Management Fee it would
have received had the distribution occurred during the term of the Management
Agreement (including any Shortfall Amount, but upon termination at the
conclusion of the Term, only to the extent of Excess Funds).
SECTION 12
CONSENTS AND APPROVALS
12.1 Tribal. Where approval or consent or other action of the Tribe
is required, such approval shall mean the written approval of the Tribal Council
evidenced by a resolution thereof, certified by a Tribal official as having been
duly adopted, or such other
-42-
Exhibit 10.10
person or entity designated by resolution of the Tribal Council. Any such
approval, consent or action shall not be unreasonably withheld or delayed;
provided that the foregoing does not apply where a specific provision of this
Agreement allows the Tribe an absolute right to deny approval or consent or
withhold action.
12.2 Manager. Where approval or consent or other action of Manager
is required, such approval shall mean the written approval of an officer of
Manager. Any such approval, consent or other action shall not be unreasonably
withheld or delayed.
SECTION 13
DISCLOSURES
13.1 Shareholders and Directors. Manager warrants that on the date
of this Agreement its Affiliates, shareholders, directors and officers are those
listed on Exhibit G.
13.2 Warranties. Manager further warrants and represents as follows:
(i) no person or entity has any beneficial ownership
interest in Manager other than as set forth herein;
(ii) no officer, director or owner of ten (10%) percent or
more of the stock of Manager has been arrested, indicted for, convicted of, or
pleaded nolo contendere to any felony or any gaming offense, or had any
association with individuals or entities known to be connected with organized
crime; and
(iii) no person or entity listed on Exhibit G to this
Agreement, including any officers and directors of Manager, has been arrested,
indicted for, convicted of, or pleaded nolo contendere to any felony or any
gaming offense, or had any association with individuals or entities known to be
connected with organized crime.
13.3 Criminal and Credit Investigation. Manager agrees that all of
its shareholders, directors and officers (whether or not involved in the
Facility), shall:
(i) consent to background investigations to be conducted by
the Tribe, the State of California, the Federal Bureau of Investigation (the
"FBI") or any other law enforcement authority to the extent required by the IGRA
and the Compact;
(ii) be subject to licensing requirements in accordance with
Tribal law and this Agreement;
(iii) consent to a background, criminal and credit
investigation to be conducted by or for the NIGC, if required;
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Exhibit 10.10
(iv) consent to a financial and credit investigation to be
conducted by a credit reporting or investigation agency at the request of the
Tribe;
(v) cooperate fully with such investigations; and
(vi) disclose any information requested by the Tribe which
would facilitate the background and financial investigation.
Any materially false or deceptive disclosures or failure to cooperate
fully with such investigations by an employee of Manager or an employee of the
Tribe shall result in the immediate dismissal of such employee. The results of
any such investigation may be disclosed by the Tribe to federal officials and to
such other regulatory authorities as required by law.
13.4 Disclosure Amendments. The Tribe and Enterprise acknowledge
that Manager is wholly-owned by a publicly traded company, and that Manager's
Affiliates, shareholders, directors and officers may change from time to time
without the prior approval of the Tribe or the Enterprise. Manager agrees that
whenever there is any material change in the information disclosed pursuant to
this Section 13 it shall notify the Tribe of such change not later than ten (10)
days following the change or within ten (10) days after it becomes aware of such
change, whichever is later. In the event the change relates to information
provided or required to be provided to the NIGC pursuant to 25 C.F.R Section
537.1, Manager shall notify the NIGC in sufficient time to permit the NIGC to
complete its background investigation by the time the individual is to assume
management responsibility for the gaming operation, and within ten (10) days of
any proposed change in financial interest. All of the warranties and agreements
contained in this Section 13 shall apply to any person or entity who would be
listed in this Section 13 as a result of such changes.
13.5 Breach of Manager's Warranties and Agreements. The material
breach of any warranty or agreement of Manager contained in this Section 13
shall be grounds for immediate termination of this Agreement; provided that (i)
if a breach of the warranty contained in clause (ii) of Section 13.2 is
discovered, and such breach was not disclosed by any background check conducted
by the FBI as part of the BIA or other federal approval of this Agreement, or
was discovered by the FBI investigation but all officers and directors of
Manager sign sworn affidavits that they had no knowledge of such breach, then
Manager shall have thirty (30) days after notice from the Tribe to terminate the
interest of the offending person or entity and, if such termination takes place,
this Agreement shall remain in full force and effect; and (ii) if a breach
relates to a failure to update changes in financial position or additional
gaming related activities, then Manager shall have ten (10) days after notice
from the Tribe to cure such default prior to termination.
-44-
Exhibit 10.10
SECTION 14
RECORDATION
At the option of the Lender, Manager, the Enterprise or the Tribe, any
security agreement related to the Financing Agreements may be recorded in any
public records. Where such recordation is desired in any relevant recording
office maintained by the Tribe, and/or in the public records of the BIA, the
Tribe or the Enterprise will accomplish such recordation upon the request of the
Lender or Manager, as the case may be. No such recordation shall be deemed to
waive the Tribe's or the Enterprise's sovereign immunity.
SECTION 15
NO LIEN, LEASE OR JOINT VENTURE
The parties agree and expressly warrant that neither the Management
Agreement nor any exhibit thereto is a mortgage or lease and, consequently, does
not convey any present interest whatsoever in the Facility or the Property, nor
any proprietary interest in the Facility itself. The parties further agree and
acknowledge that it is not their intent, and that this Agreement shall not be
construed, to create a joint venture between the Tribe or the Enterprise and
Manager; rather, Manager shall be deemed to be an independent contractor for all
purposes hereunder.
SECTION 16
DISPUTE RESOLUTION
16.1 General. The parties agree that binding arbitration shall be
the remedy for all disputes, controversies and claims arising out of this
Agreement, any documents referenced by any of this Agreement, any agreements
collateral thereto, or any notice of termination thereof, including without
limitation, any dispute, controversy or claim arising out of any of these
agreements; provided, however, that actions or decisions by the Tribe that
constitute the exercise of its sovereign governmental powers shall not be
subject to arbitration, including decisions or actions by the Tribal Gaming
Authority regarding the issuance or denial of licenses, and actions by the
Tribal Council regarding the approval of budgets or the enactment of ordinances
relating to Gaming. The Tribe acknowledges, however, that while the exercise of
its governmental powers in a manner contrary to a provision of this Agreement
may not be avoided through arbitration, Manager may compel arbitration pursuant
to this Section 16 to redress any injury suffered by Manager as a result of such
exercise. The parties intend that such arbitration shall provide final and
binding resolution of any dispute, controversy or claim, and that action in any
other forum shall be brought only if necessary to compel arbitration, or to
enforce an arbitration award or order. All initial arbitration or judicial
proceedings shall be instituted within twelve (12) months after the claim
accrues or shall be forever barred.
Each party agrees that it will use its best efforts to negotiate an
amicable resolution of any dispute between Manager and the Enterprise or the
Tribe arising from this
-45-
Exhibit 10.10
Agreement. If the Tribe or the Enterprise and Manager are unable to negotiate an
amicable resolution of a dispute within fourteen (14) days from the date of
notice of the dispute pursuant to the notice section of this Agreement, or such
other period as the parties mutually agree in writing, either party may refer
the matter to arbitration as provided herein.
16.2 Initiation of Arbitration and Selection of Arbitrators.
Arbitration shall be initiated by written notice by one party to the other
pursuant to the notice section of this Agreement, and the Commercial Arbitration
Rules of the American Arbitration Association shall thereafter apply. The
arbitrators shall have the power to grant equitable and injunctive relief and
specific performance as provided in this Agreement. If necessary, orders to
compel arbitration or enforce an arbitration award may be sought before the
United States District Court for the Central District of California and any
federal court having appellate jurisdiction over said court. If the United
States District Court for the Central District of California finds that it lacks
jurisdiction, the Tribe and the Enterprise consent to be sued in the California
State Court system. This consent to California State Court jurisdiction shall
only apply if Manager exercises reasonable efforts to argue for the jurisdiction
of the federal court over said matter. The arbitrator shall be a licensed
attorney, knowledgeable in federal Indian law and selected pursuant to the
Commercial Arbitration Rules of the American Arbitration Association.
Unless the parties agree upon the appointment of a single arbitrator, a
panel of arbitrators consisting of three (3) members shall be appointed. One (1)
member shall be appointed by the Tribe and one (1) member shall be appointed by
Manager within ten (10) working days' time following the giving of notice
submitting a dispute to arbitration. The third member shall be selected by
agreement of the other two (2) members. In the event the two (2) members cannot
agree upon the third arbitrator within fifteen (15) working days' time, then the
third arbitrator shall be chosen by the American Arbitration Association.
Alternatively, the parties may, prior to any dispute, agree in advance upon a
panel of arbitrators or a single arbitrator to which any dispute that may arise
shall be submitted for resolution pursuant to this Section 16.2.
(i) Choice of Law. In determining any matter the arbitrators
shall apply the terms of this Agreement, without adding to, modifying or
changing the terms in any respect, and shall apply federal and applicable State
law.
(ii) Place of Hearing. All arbitration hearings shall be held
at a place designated by the arbitrators in Los Angeles or Los Angeles County,
California.
(iii) Confidentiality. The parties and the arbitrators shall
maintain strict confidentiality with respect to arbitration.
16.3 Limited Waiver of Sovereign Immunity. The Tribe and the
Enterprise expressly and irrevocably waives its respective immunity from suit as
provided for and limited by this Section. This waiver is limited to the Tribe's
and the Enterprise's consent to all
-46-
Exhibit 10.10
arbitration proceedings, and actions to compel arbitration and to enforce any
awards or orders issuing from such arbitration proceedings which are sought
solely in United States District Court for the Central District of California
and any federal court having appellate jurisdiction over said court, provided
that if the United States District Court for the Central District of California
finds that it lacks jurisdiction, the Tribe and the Enterprise consent to such
actions in the California State Court system. This consent to California State
Court jurisdiction shall only apply if Manager exercises reasonable efforts to
argue for the jurisdiction of the federal court over said matter. The
arbitrators shall not have the power to award punitive damages.
(a) Time Period. The waiver granted herein shall commence
as of the Date of this Agreement and shall continue for one year following
expiration, termination or cancellation of this Agreement, but shall remain
effective for the duration of any arbitration, litigation or dispute resolution
proceedings then pending, all appeals therefrom, and except as limited by this
Section, to the full satisfaction of any awards or judgments which may issue
from such proceedings, provided that an action to collect such judgments has
been filed within one year of the date of the final judgment.
(b) Recipient of Waiver. This limited waiver is granted
only to Manager and not to any other individual or entity.
(c) Limitations of Actions. This limited waiver is
specifically limited to the following actions and judicial remedies:
(i) The enforcement of an arbitrator's award of
money damages provided that the waiver does not extend beyond the assets
specified in Subsection (iii) below. No arbitrator or court shall have any
authority or jurisdiction to order execution against any assets or revenues of
the Tribe or the Enterprise except as provided in this Section or to award any
punitive damages against the Tribe or the Enterprise.
(ii) An action to compel or enforce arbitration or
arbitration awards or orders.
(iii) Damages awarded against the Tribe or the
Enterprise shall be satisfied solely from the distributable share of Net
Revenues of the Tribe from the Facility, the tangible assets of the Facility and
the business of the Enterprise, provided, however, that this limited waiver of
sovereign immunity shall terminate with respect to the collection of any Net
Revenues transferred from the accounts of the Enterprise to the Tribe or the
Tribe's separate bank account in the normal course of business in accordance
with this Agreement. In no instance shall any enforcement of any kind whatsoever
be allowed against any assets of the Tribe other than those specified in this
subsection.
-47-
Exhibit 10.10
SECTION 17
NEGOTIATE NEW AGREEMENT
17.1 Intent to Negotiate New Agreement. On or before thirty (30)
days after the end of the fourth (4th) year of this Agreement, the Enterprise
shall give Manager notice of its intent regarding its willingness to enter into
negotiations for a new Management Agreement to be effective upon the conclusion
of this Agreement.
17.2 Transition Plan. If the Enterprise and Manager are unable to
agree to the terms of a new agreement or if the Enterprise decides not to enter
into negotiations for a new agreement, then the Enterprise and Manager shall
agree upon a transition plan within thirty (30) days notice from the Enterprise
of its intention not to negotiate a new Management Agreement, which plan shall
be sufficient to allow the Tribe and/or the Enterprise to operate the Facility
and provide for the orderly transition of the management of the Facility.
SECTION 18
ENTIRE AGREEMENT
This Agreement, including the Schedules and Exhibits referred to herein,
constitutes the entire understanding and agreement of the parties hereto and
supersedes all other prior agreements and understandings, written or oral,
between the parties. The parties acknowledge that the Tribe is entering into a
Gaming Facility Construction and Development Agreement and a Trademark License
Agreement with affiliates of Manager contemporaneously with this Agreement.
SECTION 19
REQUIRED AMENDMENT
Each of the parties agrees to execute, deliver and, if necessary, record
any and all additional instruments, certifications, amendments, modifications
and other documents as may be required by the United States Department of the
Interior, BIA, the NIGC, the office of the Field Solicitor, or any applicable
statute, rule or regulation in order to effectuate, complete, perfect, continue
or preserve the respective rights, obligations, liens and interests of the
parties hereto to the fullest extent permitted by law; provided, that any such
additional instrument, certification, amendment, modification or other document
shall not materially change the respective rights, remedies or obligations of
the Tribe, the Enterprise or Manager under this Agreement or any other agreement
or document related hereto.
SECTION 20
PREPARATION OF AGREEMENT
This Agreement was drafted and entered into after careful review and
upon the advice of competent counsel; it shall not be construed more strongly
for or against any party.
-48-
Exhibit 10.10
SECTION 21
STANDARD OF REASONABLENESS
Unless specifically provided otherwise, all provisions of this Agreement
and all collateral agreements shall be governed by a standard of reasonableness.
SECTION 22
EXECUTION
This Agreement may be executed in four counterparts, one to be retained
by each of the Tribe and the Enterprise, and two to be retained by Manager. Each
of the four originals is equally valid. This Agreement shall be deemed
"executed" and shall be binding upon both parties when properly executed and
approved by the Chairman of the NIGC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
THCR MANAGEMENT SERVICES, LLC
By: /s/ Donald J. Trump
-----------------------------------
Donald J. Trump, President
TWENTY-NINE PALMS BAND OF LUISENO
MISSION INDIANS OF CALIFORNIA
By: /s/ Dean Mike
-----------------------------------
Dean Mike, Chairperson
TWENTY-NINE PALMS
ENTERPRISES CORPORATION
By: /s/ Dean Mike
-----------------------------------
Dean Mike, President
By: /s/ Gene Gambale
-----------------------------------
Gene Gambale, Secretary
-49-
Exhibit 10.10
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Legal Description
APN # 603-020-008
That certain parcel of land situated in City of Coachella, County of Riverside,
State of California, being that portion of the northeast one-quarter of Section
30, Township 5 South, Range 8 East, San Bernadino Meridian, more particularly
described as follows:
COMMENCING at the northeast corner of said section as shown on California
Division of Highways Monumentation Map 11-RIV 10;
thence along the easterly line of said section South 00(degree)07'00" East 70.00
feet to a point on the southerly right-of-way line of Interstate Route 10 and
the TRUE POINT OF BEGINNING;
thence along said southerly right-of-way line through the following courses;
North 89(degree)59'38" West 164.49 feet;
thence South 87(degree)57'46" West 584.00 feet to the beginning of a tangent
curve concave northerly and having a radius of 3750.00 feet;
thence along said curve westerly 965.11 feet through a central angle of
14(degree)44'45" to the northerly line of said section;
thence leaving said southerly right-of-way line, along said northerly line and
non-tangent from said curve South 89(degree)55'38" West 550.58 feet to the
northeasterly right-of-way line of State Route 86;
thence along said northeasterly right-of-way line through the following courses:
South 42(degree)14'22" East 746.34 feet;
thence South 46(degree)12'43" East 1499.98 feet;
thence South 50(degree)05'25" East 884.79 feet to said easterly line of Section
30;
thence leaving said northeasterly right-of-way line, along said easterly line
North 00(degree)12'11" West 830.65 feet to an angle point therein;
thence continuing along said easterly line North 00(degree)07'00" West 1258.84
feet to the TRUE POINT OF BEGINNING;
CONTAINING: 56.10 Acres, more or less.
SUBJECT TO all Covenants, Rights, Rights-of-Way and Easements of Record.
Exhibit A - 1
Exhibit 10.10
EXHIBIT B
DISPUTE RESOLUTION BETWEEN MANAGER
AND ENTERPRISE EMPLOYEES
BOARD OF REVIEW
Once an employee has been employed at the Enterprise for ninety (90) calendar
days, the employee may request a Board of Review if the employee feels
job-related problems have not been resolved. The employee may request a Board of
Review to protest decisions, work history entries, performance evaluations, any
disciplinary action including termination, etc. Three impartial members of the
Board shall decide to either uphold, modify, or overturn the original decision
made in relation to the issue the employee is protesting. The Board of Review is
made up of five (5) impartial members as follows:
1. Two Tribal representatives;
2. A Manager representative having no jurisdiction over the employee's
department;
3. A Human Resources representative who has not been involved in the
employee's issue.
4. An employee representative.
A Board of Review request form must be filed with Human Resources within seven
(7) days of the incident or of the employee learning of the incident. A decision
is made on the basis of facts and evidence presented to the Board of Review. The
Board's decision is final and cannot be appealed or reversed by anyone in the
Enterprise.
On an annual basis, employees are asked to volunteer for one year terms as
employee representatives on the Board of Review.
Exhibit B - 1
Exhibit 10.10
EXHIBIT C
ENTERPRISE INVESTMENT POLICY
RESOLUTION NO.___________
TWENTY NINE PALMS BAND OF MISSION INDIANS COUNCIL
(Gaming Enterprise Cash Management and Investment Policy)
WHEREAS, the Twenty Nine Palms Band of Mission Indians (the "Tribe") has
determined that facilities owned by Tribe offering Class II and Class III gaming
activities, as defined in the Indian Gaming Regulatory Act of 1988, Pub. L.
100-497, 25 U.S.C. Sections 1701-2721 and 18 U.S.C. 1166-1168 ("IGRA"), will be
constructed and operated on its lands; and
WHEREAS, Tribe has entered into a Management Agreement with THCR
Management Services, LLC ("Manager") for the management of Tribe's Gaming
Enterprise, said resolution having been approved by the NIGC on
__________________; and
WHEREAS, Tribe deems it in its best interest to provide for Manager to
manage the gaming Enterprise's short-term cash position so as to maximize income
to Tribe;
NOW, THEREFORE, BE IT RESOLVED, that in order to maximize Tribe's income
and to manage its short term cash position, Manager is hereby authorized, during
the term of its Management Agreement with the Tribe, to invest cash of Tribe's
gaming Enterprise in accordance with the attached Investment Policy.
CERTIFICATION
Pursuant to (CITATIONS HERE) the Tribal Council of the Twenty Nine Palms
Band of Mission Indians, a quorum of members present at a Council meeting held
on ______________, 2000, by a vote of ___________ for, _______________ against,
_____________ not voting, and _____________ absent; the foregoing resolution was
adopted.
By:
-----------------------------------
Secretary
By:
-----------------------------------
Chairperson
Exhibit C - 1
Exhibit 10.10
EXHIBIT D
STATEMENT OF INVESTMENT POLICY FOR THE
TWENTY-NINE PALMS BAND OF LUISENO MISSION INDIANS
OF CALIFORNIA GAMING ENTERPRISE ("ENTERPRISE")
I. Investment Objectives
A. Primary - to ensure the value and safety of principal invested
in short-term money market securities.
B. Secondary - to ensure liquidity to meet projected and emergency
cash needs:
- to provide for prudent diversification of investments
- to maximize investment income consistent with other objectives
- to comply with the requirements of the Enterprise's debt
agreements
II. Investment Responsibility - It will be the responsibility of THCR
Management Services, LLC ("Manager") (1) to invest funds for which the
company has been designated as cash manager, and (2) to maintain
adequate records of all investments. All investments must conform to the
Investment Guidelines.
III. Investment Guidelines
A. Investment Types and Limitations - the Tribe, the Enterprise and
Manager agree that only the following investments shall be
deemed "Permitted Investments" for the Enterprise:
"Permitted Investments" shall mean (a) any evidence of
Indebtedness, maturing not more than one (1) year after the date
of acquisition, issued by the United States of America, or an
instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of
America; (b) any certificate of deposit, maturing not more than
one (1) year after the date of acquisition, issued by, or time
deposit of, a commercial banking institution that is a member of
the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $300.0 million
whose debt has a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Standard &
Poor's Investors Service, Inc. or any successor rating agency,
or "A-1" (or higher) according to Standard & Poor's Corporation
or any successor rating agency; (c) commercial paper, maturing
not more than one (1) year after the date of acquisition, issued
by a corporation (other than an Affiliate or subsidiary of Trump
Hotels & Casino Resorts, Inc.) organized and existing under the
laws of the United States of America with a rating, at the time
as of which any investment therein is made, of "P-1" (or higher)
according to
Exhibit D - 1
Exhibit 10.10
Moody's Investors Service, Inc. or any successor rating agency,
or "A-1" (or higher) according to Standard & Poor's Corporation
or any successor rating agency; and (d) any money market deposit
accounts issued or offered by a domestic commercial bank having
capital and surplus in excess of $300.0 million.
B. Investment Institutions - In order for a firm to be included on
the list of Investment Institutions that are approved for
dealing with the Enterprise, an authorized signer of the firm
must first execute a copy of this Statement of Investment
Policy. This will provide written verification of their being
familiar with the types of securities ("Permitted Investments")
that are acceptable under the Enterprise's Investment Policy.
[Director of Cash Management] will be responsible for obtaining
the executed document, distributing a list of approved
institutions to designated [Treasury] personnel and retaining
records of all investment contracts with those investment
institutions.
IV. Investment Review - An Investment Report is distributed on a daily basis
to the [CFO] and [Director of Cash Management] for review of adherence
to the Investment Guidelines. In addition, the accuracy of the report is
verified by [Director of Treasury Administration], who matches the
information on the report with the confirmations provided by the
brokers. Discrepancies are investigated as they are received. A revised
report, if necessary, is distributed by [Director of Treasury
Administration].
Exhibit D - 2
Exhibit 10.10
EXHIBIT E
TWENTY-NINE PALMS BAND OF LUISENO MISSION INDIANS
OF CALIFORNIA IRREVOCABLE BANKING INSTRUCTIONS
The undersigned does hereby certify that he is the duly authorized
Chairman of the Twenty-Nine Palms Band of Luiseno Mission Indians of California
(the "Tribe"), and that the following resolutions were duly adopted by the
Tribal Council and such resolutions regarding banking arrangement of Tribe's
gaming and related ventures (the "Enterprise") are now in full force and effect:
RESOLVED, that upon written instruction of THCR Management Services, LLC
as Manager for Tribe (the "Manager"), the Tribe may open bank accounts (the
"Enterprise Bank Accounts") with such banks (the "Bank(s)") as the Officers
determine would be a reasonable depository in any jurisdiction in which the
Enterprise does business;
RESOLVED, that funds deposited in any of the Enterprise Bank Accounts
may be withdrawn only upon a check, draft, or order when signed by any one of
the officers of Manager holding one of the following positions (hereinafter
referred to as "Officer") or their designees:
President
Executive Vice President
Assistant Vice President
Secretary
General Manager
Chief Financial Officer
Controller
said Officers, or their designee(s), whose signatures shall be duly certified to
the Bank (the "Certified Signers") by the Secretary of Manager, and not
otherwise;
RESOLVED, that any of the Certified Signers may authorize the use of
facsimile signatures on an Enterprise Bank Account, and the Banks hall be
authorized to honor check, drafts, or orders up to __________ ($__________)
Dollars, when bearing the facsimile signatures of any of the Certified Signers,
and shall be entitled to honor and charge for all such checks, drafts, or orders
if such facsimile signatures resemble the facsimile specimens duly certified by
the Secretary of Manager and filed with the Bank;
RESOLVED, that consistent with these resolutions Manager is hereby
authorized to use phone initiated or electronic clearing house facilities of the
Federal Reserve System for the purpose of transferring Enterprise funds to and
from various banks;
RESOLVED, that Manager is hereby authorized to arrange for the servicing
by a Bank of any automatic teller machines purchased or leased on behalf of the
Enterprise;
Exhibit E - 1
Exhibit 10.10
RESOLVED, that the appointment of the Certified Signers shall be an
appointment coupled with an interest, and shall be irrevocable by Tribe unless
revocation is consented to in writing by Manager or this appointment is
terminated by an arbitration award entered pursuant to the dispute resolution
provisions of the Management Agreement entered into by and between Tribe and
Manager dated __________, 2000 as the same any have heretofore been or hereafter
be amended (the "Management Agreement");
RESOLVED, that the Enterprise Bank Accounts established and administered
by Manager shall not be subject to attachment, or any rights of deduction, set
off or counterclaim by Manager in the event of any disagreements between Manager
and Tribe, it being the intent that the assets in the Enterprise Bank Accounts
will be used solely for purposes permitted and provided for in the Management
Agreement, and recourse to said Enterprise Bank Accounts as a remedy in the
event of dispute shall be permitted only in the event so ordered in an
arbitration award entered pursuant to the dispute resolution provisions of the
Management Agreement.
RESOLVED, that any of the Certified Signers are hereby authorized to
execute and deliver any documents including signature cards, authorizations,
powers of attorney or appointment, or other documents which they deem necessary
and appropriate to give effect to the foregoing resolutions;
RESOLVED, that the Bank is hereby authorized to rely upon certificates
signed by any of the Certified Signers as to all matters concerning the
identity, authority or signature of Certified Signers; and
RESOLVED, that each of the Officers, or their designees appointed in
writing be, and each of them hereby is, authorized to perform the obligations
under the agreements and contracts described in the aforesaid resolutions, and
to negotiate, execute and deliver on behalf of Tribe and to perform the
obligations under any and all other documents, agreements, contracts, and other
instruments that any one or more of the Officers deems necessary or desirable to
evidence and give effect to the transactions contemplated in the foregoing
resolutions, all upon such terms and conditions, not inconsistent with the
aforesaid resolutions, as any one or more of the Officers or their designees may
approve.
CERTIFICATION
Pursuant to (CITATIONS HERE) the Tribal Council of the Twenty-Nine Palms
Band of Luiseno Mission Indians of California, a quorum of members present at a
Council meeting held on ______________, 2000, by a vote of _________ for,
__________ against, ____________ not voting, and _________ absent; the foregoing
resolution was adopted.
By:
-----------------------------------
Secretary
By:
-----------------------------------
Chairperson
Exhibit E - 2
Exhibit 10.10
EXHIBIT F
TRIBAL INSURANCE REQUIREMENTS
1.01. Coverage.
1.01.1. Required Insurance. The following minimum insurance will be
obtained by Manager and maintained with respect to the Facility at all times
during the term of this Agreement:
a) All-risk property insurance, including flood and
earthquake insurance and building ordinance coverage, on
the Facility in an amount equal to the full replacement
value thereof (with no coinsurance clause);
b) All-risk business interruption insurance, including
extra expense and extended indemnity, and increased cost
of operation insurance for full recovery of the actual
loss sustained of Net Revenues of the Facility for a
period of one (1) year from the date of any casualty, or
cessation of Gaming;
c) Insurance against loss from accidental damage to and
from breakdown of air conditioning systems, including
building ordinance coverage, in an amount equal to the
full replacement value of the Property, in amounts
acceptable to Manager;
d) Business interruption insurance, including extended
indemnity, against loss from accidental damage to, and
from breakdown of air conditioning systems, for full
recovery of the actual loss sustained of Net Revenues
for the entire period of any such business interruption
but not less than one (1) year from the date of such
casualty, or such additional period as the Tribe may
elect;
e) Commercial general liability insurance naming the Tribe,
the Enterprise and Manager and/or Manager's Affiliates
as named insured(s), covering bodily injury, personal
injury, broad form property damage (including completed
operations), innkeeper's liability, liquor liability,
products liability, contractual liability, and
employment practices liability (including coverage for
third party discrimination claims), employee benefits
liability and garage and garage keeper's liability in an
amount equal to not less than $1,000,000 combined single
limit for bodily injury and property damage per
occurrence with a $2,000,000 general aggregate, which
insurance coverages shall be primary as respects any
other insurance coverages that may be available to
Manager;
f) automobile (including owned, non-owned and leased
automobiles) physical damage and liability insurance
naming the Tribe, the Enterprise and Manager and/or
Manager's Affiliates as named insured(s) in an amount
equal to not less than $1,000,000 combined single limit
for bodily injury and property
Exhibit F - 1
Exhibit 10.10
damage per occurrence with a $2,000,000 general
aggregate, which insurance coverages shall be primary as
respects any other insurance coverages that may be
available to Manager;
g) Comprehensive crime insurance, including employee
dishonesty, money and securities on and off premises,
depositors' forgery, computer fraud and funds transfer
and hotel safe deposit box legal liability, in an amount
equal to not less than $10,000,000;
h) Manager shall maintain statutory workers' compensation
and employers liability insurance for Manager's
Employees. The Enterprise shall maintain statutory
workers' compensation and employers liability insurance
for the Enterprise Employees. The employers liability
limits shall not be less than $1,000,000 each accident
for bodily injury by accident or $1,000,000 each
employee for bodily injury by disease.
Workers' compensation insurance equal to the statutory
requirements of California (which shall, in the case of
Manager Employees be carried by Manager and in the case
of all other Enterprise Employees be carried by the
Enterprise, and which shall, in either case, be paid for
by the Enterprise and treated as an Operating Expense);
and
i) An umbrella policy covering any excess of the
liabilities described in clauses (e) and (f) with a
combined limit of liability of not less than $50,000,000
per occurrence.
1.01.2. Responsibility to Maintain. The obligation to maintain the
insurance policies required by the Management Agreement, the cost of which shall
be an Operating Expense and subject to the budget process of the Management
Agreement, shall lie solely with Manager. During the budgeting process, Manager
shall recommend to the Tribe for its approval a schedule setting forth the kinds
and amounts of such insurance to be maintained by it during the ensuing policy
year.
1.01.3. Changes in Coverage. Manager shall have the right to raise the
minimum amount of insurance to be maintained with respect to the Facility under
Section 1.01.1 and/or to require the insurance of additional risks, not
specified herein, in order to make such insurance compatible with prudent
industry standards (including consideration of the incremental cost thereof) and
to reflect increases in liability exposures, taking into account the size and
location of the Facility.
1.01.4. Requirements. All policies of insurance shall, to the extent
such coverage is commercially available, be written on an "occurrence" basis. To
the extent that any insurance required hereby is or becomes available only on a
"claims made" basis, the Enterprise shall, as an Operating Expense, purchase
satisfactory extended reporting period endorsements to policies placed during
the term of the Management Agreement or, in the alternative, continue to insure
Manager as an additional insured party under policies of insurance placed after
termination of this Agreement until the expiration, without claim, of all
applicable statutes of limitation as may be necessary to assure that Manager has
the benefit of the required insurance for causes of action arising out of
Exhibit F - 2
Exhibit 10.10
events occurring with respect to the Enterprise during the term of the
Management Agreement,
Exhibit F - 3
Exhibit 10.10
whether or not any such claim is actually asserted prior to the expiration or
earlier termination thereof.
1.02. Policies and Endorsements.
1.02.1. Policies. All insurance coverage provided for under the
Management Agreement shall be effected by policies issued by insurance companies
authorized to do business in the state where the Enterprise is located that are
of good reputation and of sound and adequate financial responsibility, having an
A.M. Best's ("Best") Rating of A - VIII, or better, or a comparable rating if
Best ceases to publish its ratings or materially changes its rating standards or
procedures. Manager shall be entitled to object to an insurance company which
meets this standard, but only for reasonable cause based upon rates, claim
experience, and other similar pertinent considerations. The Tribe shall deliver
to Manager duplicate copies of the insurance policies or certificates of
insurance with respect to all of the policies of insurance so procured,
including existing, additional and renewal policies, and in the case of
insurance about to expire, shall deliver duplicate copies of the insurance
policies or certificates of insurance with respect to the renewal policies to
Manager not less than ten (10) business days prior to the respective dates of
expiration. Certificates or duplicate copies of insurance shall be sent to
Manager at the address of Manager provided in the MANAGEMENT Agreement for
notices.
1.02.2. Endorsements. All policies of insurance provided for under the
Management Agreement shall, to the extent obtainable, have attached thereto (a)
an endorsement that such policy shall not be canceled or materially changed
without at least sixty (60) days prior written notice to Manager, and (b) an
endorsement to the effect that no act or omission of the Tribe or Manager, other
than nonpayment, after written notice thereof, of the premiums for such policy,
shall affect the obligation of the insurer to pay the full amount of any loss
sustained (but not to exceed, in any event, the policy limits). All insurance
policies required under clauses (e), (f), (g), (h) and (i) of Subsection 1.01.1,
shall contain an endorsement to the effect that such insurance shall be primary,
not excess, and not contributory to any similar insurance carried by Manager.
1.02.3. Additional Insureds. All policies of insurance required under
Subsection 1.01.1, shall be carried in the name of the Enterprise and the Tribe,
and, if required, name the Tribe's mortgagees as additional insureds, or, as
appropriate, mortgagees having the benefit of the standard New York form of
mortgagee endorsement. Losses thereunder shall be payable to the parties as
their respective interests may appear. Notwithstanding the foregoing, if the
Tribe's Lender so requires, losses under any fire or casualty policy may be made
payable to such mortgagee, or to a bank or trust company qualified to do
business in the state where the Facility is located, in either instance as
trustee for the custody and disposition of the proceeds therefrom. All liability
policies, primary and excess, shall name Manager, and in each case any
Affiliates which Manager may specify, and their respective directors, officers,
agents, employees, and partners as additional insureds.
1.03. Waiver of Liability. Fire and Casualty Insurance. To the extent
any loss is covered by insurance proceeds actually paid or would be covered by
insurance required to be carried under this Agreement, but not otherwise,
Manager, the Enterprise and the Tribe each waive, release and discharge the
other from all claims or demands which each may have or acquire against the
other,
Exhibit F - 4
Exhibit 10.10
or against each other's directors, officers, agents, employees, or partners,
with respect to any claims for any losses, damages, liability or expenses
(including attorneys' fees) incurred or sustained by either of them on account
of damage to their respective property (but not as to personal injury or
property damage suffered by third parties) arising out of the ownership,
management, operation and maintenance of the Facility, regardless whether any
such claim or demand may arise because of the fault or negligence of the other
party or its officers, partners, agents, and employees. Each policy of fire and
property damage insurance shall contain a specific waiver of subrogation
reflecting the provisions of this Section 1.03, or a provision to the effect
that the existence of the preceding waiver shall not affect the validity of any
such policy or the obligation of the insurer to pay the full amount of any loss
sustained.
Exhibit F - 5
Exhibit 10.10
EXHIBIT G
MANAGER'S AFFILIATES,
MEMBERS
AND
OFFICERS
AFFILIATES:
Donald J. Trump
Trump Hotels & Casino Resorts, Inc.
Trump Hotels & Casino Resorts Holdings, L.P.
THCR Ventures, Inc.
Trump Hotels & Casino Resorts Development Company, LLC
THCR Management Holdings, LLC
MEMBERS:
THCR Management Services, LLC, is a Delaware limited liability company
wholly-owned by its one Member, THCR Management Holdings, LLC, a Delaware
limited liability company, which in turn is wholly-owned by Trump Hotels &
Casino Resorts Holdings, LP, a Delaware limited partnership.
OFFICERS:
Donald J. Trump, Chairman & President
Mark A. Brown, Chief Operating Officer
Robert M. Pickus, Executive Vice President & Secretary
Francis X. McCarthy, Executive Vice President & Chief Financial Officer
John P. Burke, Executive Vice President & Treasurer
Richard Santoro, Vice President, Corporate Security
Joseph A. Fusco, Executive Vice President, Government Relations &
Regulatory Affairs
Joseph Polisano, Vice President, Project Development
Exhibit G - 1