Exhibit 10.12
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT ("Agreement"), dated as of
October 8, 2002, is made among Cascade Entertainment Group, LLC, a California
limited liability company ("Cascade"), The Chukchansi Economic Development
Authority, an instrumentality of the Picayune Rancheria of Chukchansi Indians
(the "Authority") and the Picayune Rancheria of Chukchansi Indians (the
"Tribe" and, together with the Authority, the "Chukchansi Parties").
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Manager Agreement (as defined below).
Recitals
WHEREAS, Cascade is party to that certain Manager Agreement
(the "Manager Agreement"), dated as of October 8, 2002 by and between Cascade
and U.S. Bank, N.A., as trustee under the Indenture governing the Authority's
14 1/2% Senior Notes due 2009 (the "Indenture");
WHEREAS, Cascade and the Authority (and, where applicable,
the Tribe) are parties to those certain other agreements in respect of the
transaction described in the Manager Agreement (all such agreements together
with the Manager Agreement are referred to herein as the "Transaction
Documents");
WHEREAS, pursuant to the Manager Agreement, Cascade has
undertaken to perform certain functions on behalf of the Chukchansi Parties
with respect to the Indenture; and
WHEREAS, the parties hereto desire to provide for
indemnification of certain liabilities in connection with Cascade's
obligations pursuant to the Manager Agreement.
NOW THEREFORE, for and in consideration of the mutual
promises and covenants contained herein, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
Agreement
1. Indemnification of the Chukchansi Parties. Cascade shall indemnify,
defend and hold harmless the Chukchansi Parties (including each of
their respective officers, directors, members, representatives and
agents), and each of them, from and against all losses, claims,
demands, actions, disputes, damages, expenses (including reasonable
attorneys' fees), judgments, penalties, fines, settlements, and all
other liabilities incurred or paid (each a "Loss" and, collectively,
"Losses") by the Chukchansi Parties, or either of them, in connection
with the investigation, defense, prosecution, settlement or appeal of
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and to
which any Chukchansi Party was or is a party or is threatened to be
made a party by reason or arising as a result of (i) any untrue
statement or alleged untrue statement of a material fact, or any
material or alleged material omission of a material fact(s),
contained in any report, document or financial statement provided by
Cascade to the Authority pursuant to Section 2.1 of the Manager
Agreement, or which Cascade otherwise files on behalf of either of
the Chukchansi Parties pursuant to the Transaction Documents, (ii)
any statement made in any certificate filed by Cascade on its own
behalf or on behalf of the Authority pursuant to Section 2.2 of the
Manager Agreement or the other Transaction Documents which Cascade
knows at the time of such filing is untrue, or (iii) Cascade's
failure to perform in all material respects all of its obligations as
Manager under Section 2.1 or 2.2 of the Manager Agreement.
Notwithstanding the foregoing, Cascade shall not be required to
indemnify the Chukchansi Parties to the extent that any such claim is
arising out of or is a result of any act which entitles Cascade to
indemnification from the Chukchansi Parties pursuant to Section 2
hereof. For all purposes of indemnification under this Section 1,
Cascade (including each of its respective officers, directors,
members, representatives and agents) shall be known as the
"indemnifying party" and the Chukchansi Parties (including each of
their respective officers, directors, members, representatives and
agents), collectively, shall be know as the "indemnified party."
2. Indemnification of Cascade. Each Chukchansi Party shall indemnify,
defend and hold harmless Cascade (including each of its officers,
directors, members, agents, representatives and agents), and each of
them, from and against all Losses in connection with the
investigation, defense, prosecution, settlement or appeal of any
threatened, pending or completed action, suite or proceeding, whether
civil, criminal, administrative or investigative, and to which
Cascade (including each of its officers, directors, members, agents,
representatives and agents) was or is a party or is threatened to be
made a party by reason or arising as a result of (i) any untrue
statement or alleged untrue statement of a material fact contained in
any report, document or financial statement (a) provided in writing
by any Chukchansi Party to Cascade specifically for inclusion in any
filing with the Securities and Exchange Commission, or (b) contained
in any document filed with the Securities and Exchange Commission by
any Chukchansi Party that either (x) was not given to Cascade for its
review and approval a reasonable time prior to filing, or (y) which
was filed with the Securities and Exchange Commission by any
Chukchansi Party over the objection of Cascade; or (ii) any statement
made in any certificate filed by the Chukchansi Parties with the
Trustee or the Disbursement Agent on their own behalf which such
party knows at the time of such filing is untrue. Notwithstanding the
foregoing, the Chukchansi Parties shall not be required to indemnify
Cascade to the extent that any such claim is arising out of or is a
result of any act which entitles the Chukchansi Parties to
indemnification from Cascade pursuant to Section 1 hereof. For all
purposes of indemnification under this Section 2, the Chukchansi
Parties (including each of their respective officers, directors,
members, representatives and agents) shall be known as the
"indemnifying party" and Cascade (including each of its officers,
directors, members, representatives and agents), shall be know as the
"indemnified party."
3. Contribution. If for any reason the foregoing indemnification is
unavailable to any indemnified party or is insufficient to hold any
indemnified party harmless, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as
a result of such Loss in such proportion as is appropriate to reflect
not only the relative benefits received by the indemnified party on
the one hand and the indemnifying party on the other hand, but also
the relative fault of the indemnifying party on the one hand, and the
indemifying party on the other hand, as well as any relevant
equitable considerations.
4. Procedures for Indemnification/Notice of Claims. The indemnified
party shall give written notice to the indemnifying party under this
Agreement within ten (10) calendar days of the receipt of any written
claim; provided, however, that any failure to give such notice will
not waive any rights of the indemnified party except to the extent
the rights of the indemnifying party have been materially prejudiced.
Such notice shall set forth in reasonable detail the nature and basis
of such third party claim and the amount thereof, to the extent
known, and shall be accompanied by copies of any written demand,
summons, complaint or other pleading which may have been served in
connection therewith. The indemnifying party shall notify the
indemnified party in writing within ten (10) calendar days after the
indemnified party has given notice of the matter that the
indemnifying party is assuming the defense thereof and acknowledge in
writing that the indemnifying party is fully responsible to
indemnify, defend and hold harmless the indemnified party from and
against all damages related to such claim, and further: (a) the
indemnifying party will defend the indemnified party against the
matter with counsel of indemnifying party's own choice (which counsel
shall be reasonably acceptable to the indemnified party) and shall
control the defense of any such action or matter; (b) the indemnified
party may retain separate co-counsel at its sole cost and expense
(except that the indemnifying party will be responsible for the
reasonable fees and expenses of separate counsel to the extent the
indemnified party reasonably concludes that the counsel the
indemnifying party has selected is also representing the indemnifying
party and has a conflict of interest or separate and different
defenses, in which case, if the indemnified party notifies the
indemnifying party in writing that such indemnified party elect to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such claim on behalf of the indemnified party); and (c) the
indemnifying party will not consent to the entry of judgment or enter
into any settlement with respect to any matter without the written
consent of the indemnified party and unless the terms thereof include
as an unconditional term thereof the giving by the claimant or
plaintiff to the indemnified party the written release from all
liability in respect of such claim or litigation, of the indemnified
party (which consent shall not be unreasonably withheld or delayed).
The parties shall cooperate as reasonably requested to ensure the
proper and adequate defense and settlement thereof.
5. Timing of Payments. All payments of Losses by any indemnifying party
to any indemnified party pursuant to this Agreement shall be made to
the fullest extent permitted by law as soon as practicable after
written demand by the indemnified party is presented to the
indemnifying party, but in no event later than thirty (30) calendar
days after such written demand by the indemnified party is presented
to the indemnifying party, accompanied by documentary support of such
Losses reasonably satisfactory to the indemnifying party.
6. Notices. Any notice or communication by any party hereto to any other
party hereto is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing
next day delivery, to the others' address:
If to Cascade to:
Cascade Entertainment Group, LLC
7915 Folsom Boulevard
Sacramento, California 95826-2611
Telecopier No.: (916) 387-6317
Attention: Chief Financial Officer
If to the Authority:
The Chukchansi Economic Development Authority
46575 Road 417
Coarsegold, California 93614
Attention: Chairman
Facsimile: (559) 642-4075
If to the Tribe:
The Picayune Rancheria of Chukchansi Indians
46575 Road 417
Coarsegold, California 93614
Attention: Tribal Chairman
Facsimile: (559) 642-4075
7. Entire Agreement. This Agreement constitutes the entire understanding
of the parties and supersedes all prior understanding, whether
written or oral, between the parties with respect to the subject
matter of this Agreement.
8. Severability of Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future
laws effective during the term of this Agreement, such provision
shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had
never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of this Agreement a provision
as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid, and enforceable.
9. Waiver of Sovereign Immunity, Arbitration and Non-Impairment.
a. Irrevocable Waiver of Sovereign Immunity. Each of the
Chukchansi Parties hereby unconditionally and irrevocably
waives its sovereign immunity and any and all defenses based
thereon with respect to any claim, demand, dispute, action or
cause of action arising under or in any way connected with or
related or incidental to this Agreement, as the same may be
amended or modified from time to time, whether now existing or
hereafter arising and whether sounding in tort, contract or
otherwise (collectively "Permitted Claims"). Such waiver shall
extend (a) to permit the interpretation, enforcement and the
seeking of legal or equitable relief and remedies (whether
through an award or granting of specific performance,
injunction, mandamus, damages or otherwise) by the parties
hereto (and their successors and assigns permitted hereunder)
through arbitration proceedings as herein provided, and (b) to
permit judicial actions to compel, enter judgment upon,
enforce, modify or vacate any award or interim injunctive
relief related to the arbitration proceedings in any of the
Applicable Courts described below.
In connection with the foregoing waiver of sovereign immunity by any
Chukchansi Party:
i. Duration. The duration of such waiver shall commence on
the date hereof and continue with respect to each
Chukchansi Party until one year after all obligations of
such Chukchansi Party hereunder have been completely
performed and any amounts thereunder owing from a
Chukchansi Party have been indefeasibly paid in full;
ii. Grantees. The grantee(s) of the waiver are each party
hereto, together with their successors and assigns
hereunder;
iii. Scope. The scope of the waiver applies to all Permitted
Claims;
iv. Property and Funds. The only assets or rights against
which any award, judgment or other order for relief
arising from this waiver may be enforced are Authority
Assets as defined in the Chukchansi Authority Ordinance
whether held in the name of the Authority, the Tribe or
any branch, department, agency, instrumentality,
division, subsidiary, authority, enterprise,
corporation, business or other entity directly owned or
controlled in whole or in part by either the Authority
or the Tribe. Notwithstanding the foregoing, any
revenues or other property transferred by the Authority
to any other Tribal Party in compliance with the Notes
and the Collateral Documents shall upon such transfer no
longer constitute Authority Assets;
v. Jurisdictions. The courts with jurisdiction with respect
to the Permitted Claims are the Applicable Courts
(subject to the obligation of each Chukchansi Party to
submit to arbitration as provided herein); and
vi. Governing Law. The law applicable to the waiver and the
Permitted Claims shall be the internal laws of the State
of New York.
b. Designation of Applicable Courts and Jurisdictions. Each
Chukchansi Party hereby irrevocably consents to the following
courts, jurisdictions and venues for the judicial actions
described in Section 9.a. above (the "Applicable Courts"): (i)
the United States District Court for the Southern District of
New York, and all courts to which any appeal therefrom may be
available; (ii) any court of the State of New York, and all
courts to which any appeal therefrom may be available; (iii)
if none of the foregoing courts shall have or accept
jurisdiction, then any other federal or state court, and all
courts to which any appeal therefrom may be available, (iv) if
none of the foregoing courts shall have or accept
jurisdiction, the any court of the Tribe (in the case of any
Permitted Claim to which the Tribe or Authority is a party).
c. Additional Waivers as to Tribal Courts. Each of the Chukchansi
Parties hereby unconditionally and irrevocably waives the
jurisdiction of any tribal courts now or hereafter existing or
created with respect to any Permitted Claim, except as
provided in clause (iv) of 9.b. above. Each of the Chukchansi
Parties unconditionally and irrevocably waives the application
of any rule or doctrine relating to exhaustion of tribal
remedies or comity that might otherwise require a Permitted
Claim be heard in a tribal court.
d. Agreement not to Contest. In connection with any Permitted
Claim, each of the Chukchansi Parties agrees it will not
dispute before or in any court, arbitration panel or other
forum, the validity and binding effect of its waiver of
sovereign immunity, consent to arbitration proceedings,
consent to judicial proceedings, or waivers of the right to
assert application of any rules or doctrines of exhaustion of
tribal remedies or comity with respect to tribal court, all to
the extent contained herein.
e. Arbitration. All Permitted Claims must be resolved by binding
arbitration under the commercial arbitration rules of the
American Arbitration Association (the "AAA"), as modified by
this Section 9.e. Notwithstanding any other provision of this
Section 9, an arbitrator shall not have the power to compel,
negate, assume, usurp or in any manner affect any Governmental
Action unless any Governmental Action or failure to take
Governmental Action constitutes a breach of this Agreement by
the Tribe or the Authority. "Governmental Action" means any
resolution, ordinance, statute, regulation, order or decision
regardless of how constituted having the force of law or legal
authorization of the Tribe, the Authority or any
instrumentality or agency of the Tribe.
i. Commencement of Proceedings. An arbitration proceeding
may be commenced only by the Tribe, the Authority or
Cascade by the filing of a Statement of Claim (within
the meaning of the AAA rules) with the AAA and serving a
copy thereof on the other parties affected by the
Permitted Claim. A single arbitrator shall hear the
Permitted Claim, and shall be selected in accordance
with the rules of the AAA.
ii. Qualification of Arbitrators. No person shall be
eligible to serve as an arbitrator if the person is
related to, affiliated with or has represented in a
legal capacity any party to the arbitration proceeding
or any party to this Agreement. The arbitrator shall be
an attorney admitted to practice and in good standing
before the highest court of a state, who is experienced
in advising clients in connection with commercial
borrowings or the issuance of debt securities.
iii. Discovery. Any party shall be permitted to engage in any
discovery permitted under the rules of the AAA. However,
all discovery shall be completed within 90 days
following the initial filing of the Statement of Claim.
iv. Hearing. The hearing on the arbitration shall be held in
the City of Los Angeles, California, and commence and be
completed no more than 30 days after the close of
discovery, and the arbitrator shall render an award in
writing within 30 days of the completion of the hearing,
which shall contain findings of facts and conclusions of
law. The parties hereto further agree that any
arbitrator appointed hereunder may award interim
injunctive relief before the final arbitration award.
Any controversy concerning whether an issue is
arbitrable shall be determined by the arbitrator.
v. Enforcement. Proceedings to enter judgment upon,
enforce, modify or vacate any award or interim
injunctive relief may be commenced in any of the
Applicable Courts. Any such proceedings shall be
governed (i) by the Federal Arbitration Act, if the
matter will be heard in federal court, (ii) the trial
arbitration code adopted by Resolution No. 2001-34 of
the Tribal Council, as amedned by an amendment thereto
adopted on July 30, 2002 by Tribal Council Resolution
No. 2002-39, provided that the standards of reciew of
the award in all cases shall be consistent with the
Federal Arbitration Act, (iii) by the applicable state
arbitration code, if the matter will be heard in state
court, and (iv) by the applicable Tribal Arbitration
Code, if the matter will be heard in a tribal court,
provided that the standards of review of the award in
all cases shall be consistent with the Federal
Arbitration Act.
vi. Prohibition on Punitive Damages. Each party hereto
agrees that each party has equal bargaining power and
that each has freely entered into this Agreement after
such consultation with their attorneys as it has deemed
advisable, and that notwithstanding any other provision
herein, no arbitrator shall have the power to award
punitive damages and any such award shall be null and
void and of no effect.
vii. Validity of Arbitration Provisions. Each party hereto
agrees that these arbitration provisions are valid,
binding and enforceable, and, to the extent permitted by
law, waives any defense or claim to the contrary.
viii. Full Faith and Credit. The Chukchansi Parties and the
tribal courts of the Tribe now or hereafter existing
shall give full faith and credit to any award, order or
decree rendered in any arbitration or by any federal or
state court in accordance with this Section 9, and, to
the extent reasonably necessary, shall issue such orders
and exercise such legal powers as may reasonably be
necessary to effectuate the same. The Tribe shall cause
the police powers of the Tribe to be available to secure
and support any such enforcement efforts with respect to
the Tribe or the Authority, and all police or other law
enforcement officials of the Tribe to carry out any
orders that may be entered by the Tribe or its tribal
court pursuant to this Section 9. The Chukchansi Parties
agree that judgement enforcement remedies generally
available throughout the State of New York may be
applied on lands held by or in trust for or under the
control of the Tribe with respect to any matter that is
a proper subject for arbritration under this Section 9.
f. Non-Impairment. No Chukchansi Party or any of its Affiliates
will: (a) adopt, enact, promulgate or otherwise place into
effect any law or legal requirement that impairs or
interferes, or could impair or interfere, in any manner, with
any right or remedy of another party hereunder or their
successors and assigns (it being understood and agreed that
any such law or legal requirement that is adopted, enacted,
promulgated or otherwise placed into effect without the prior
written consent of any affected party, successor or assign
shall be void and of no effect); or (b) demand, impose or
receive any tax, charge, assessment, fee or other imposition
or impose any regulatory or licensing requirement against a
party, their successors or assigns, except in connection with
licensing required by the Compact entered into between the
Tribe and the State of California, as amended from time to
time.
10. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAWS.
11. Execution in Counterparts. This Agreement and any amendment may be
executed simultaneously or in counterparts, each of which together
shall constitute one and the same instrument.
12. Amendment. No amendment, modification or alteration of the terms of
this Agreement shall be binding unless in writing, dated subsequent
to the date of this Agreement, and executed by the parties hereto.
13. Nonexclusivity. The rights of indemnification and reimbursement
provided in this Agreement shall be in addition to any rights to
which the Indemnitee may otherwise be entitled by statute, agreement
or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the day and year first above
written.
The Chukchansi Economic Development
Authority
By: /s/ Dixie Jackson
--------------------------------------
Name: Dixie Jackson
Title: Chairperson
Picayune Rancheria of Chukchansi Indians
By: /s/ Dixie Jackson
--------------------------------------
Name: Dixie Jackson
Title: Chairperson
Cascade Entertainment Group, LLC
a California limited liability company
By: /s/ Russell S. Pratt
--------------------------------------
Name: Russell S. Pratt
Title: President/CEO