shinnecock nation gaming authority - nov 2011 - updated info/voting packet

GAMING UPDATENOVEMBER 2011

SPECIAL EDITION

ContentsTrustee Board Voting Schedule Gaming Authority Tribal Council Q&A SNGA Draft Charter Charter Resolution Non-Interference Enabling Agreement Timeline 2 2 3 5 7 19 21 40 47

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SNGA Gaming Update November, 2011

Board of Trustees Hakame! Greetings!Dear Tribal Community, The Shinnecock Indian Nation Board of Trustees would like to report to the Tribal Community that it is committed to entering into government to government discussions with the State of New York for the purposes of obtaining a gaming compact between the Tribe and the State. These discussions will be crucial to ensuring that the Nation has a seat at the table and maintains its federal right to engage in gaming governed exclusively by the Nation within its current and future boundaries. These discussions, which we anticipate to begin soon, will be reported back to the Tribe as credible development progresses. As has been stated in the past, Nation business has been purposely leaked to the media and other outlets for the sole purpose of stalling and derailing Nation efforts. We ask for your assistance in keeping Nation business confidential. As a result the Board of Trustees has taken steps to deal with this as they help to move the Nation forward. On Monday and Tuesday, December 5th and 6th, 2011 beginning promptly at 7 pm, the Board of Trustees will convene Tribe Meetings to discuss the Gaming Authority Charter, the term sheet and the proposed Enabling-Non-interference agreement. We would like the Nation to vote on these issues on Wednesday Dec 7th. The Nation will also be called upon to vote on a gaming resolution that limits all gaming conducted within the Nations territory to facilities that are owned and licensed by the Nation in accordance with a duly adopted Nation Gaming Ordinance. The purpose of this resolution is to assure that no one individual can derive benefits from any form of gaming or games of chance on our territory that is not a benefit to the entire Shinnecock Tribal Nation. This resolution is also needed to protect the Nation from risk of litigation challenging our rights to govern our land, and to ensure that the NationSNGA Gaming Update November, 2011

has recourse to protect its sovereignty if individual members of the Nation violate federal law by attempting to operate illegal gaming operations on Shinnecock Territory. All class II and class III gaming must be regulated by the Nation through a gaming ordinance approved by the National Indian Gaming Commission (NIGC). Class II gaming includes bingo (including electronic facsimiles), tip jars, pulltabs, and non-banked card games. Class III gaming includes all banked table games, lotteries, and slot machines. NIGC made a determination in 2003 that phone card sweepstakes machines are considered class III gaming under IGRA and therefore any attempt to open such a facility puts the Nation at risk of litigation over land status and rights to regulate within our Territory. The Nation should not have to bear the costs of such litigation nor risk a challenge to its land status while individuals derive unlawful benefits at the expense of all tribal members. These forms of gaming are illegal under federal law and we as the Nations elected leadership need to bring this matter before the Nation now to ensure that that the Nation is regulating and enforcing the law on Shinnecock Territory in a manner that protects our land and all our people. We are hereby announcing that a vote will be taken via the use of closed ballots on the following day, Wednesday, December 7th, 2011. Voting will take place in the tribal community center 7 am to 7pm where each voting tribal member will be given the opportunity to place their ballot in a box that will be counted to determine if the charter can go forward. Thank you Board of Trustees Randy King, Chairman Gerrod T. Smith Frederick C. Bess

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Belmont Plan

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Shinnecock Nation Gaming AuthorityPO Box 2057 Shinnecock Indian Reservation, NY 11969(631) 204-9306 fax (631) 204-1139

Donna Collins-Smith, Chairman Joan Williams, Vice Chair Barre Hamp, Vice Chair Karen Hunter, Treasurer Phil Brown V, Secretary November 13, 2011 Dear Tribal Citizens Yes! The competition has opened its doors, with customers to spare. For the Shinnecock to move forward with our fabulous gaming facility, we must complete the following: 1. Adopt the Corporate Charter reaffirming the Shinnecock Nation Gaming Authority 2. Adopt the Non-Interference Enabling Agreement between the Nation and Gateway 3. Finalize Development and Management Agreements 4. Establish a Gaming Compact between the Shinnecock Nation and the State of New York 5. Adopt the Final Gaming Ordinance 6. Acquire Federal Approval of Gaming Sites Please vote YES to activate the proposed charter provisions and YES to allow the Trustees to sign the Non-Interference Enabling Agreement. The Charter directs the governance of and reaffirms the Shinnecock Nation Gaming Authority. The question was raised as to whether or not our authority to enter into binding agreements could be challenged if the challenge was presented to the National Indian Gaming Commission (NIGC). To ensure that we provide the strongest, most defensible position possible, the Nation must affirm its commitment to move forward with the gaming project by adopting the proposed charter. The draft charter has been reviewed by many within our community and over a significant number of years. We hereby present it again so that you may have another opportunity to read it in its final drafted form.


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Let us put this matter to rest so that the Shinnecock Nation Gaming Authority may move forward with the charge it has been given by the Nation. We are pleased to announce the conclusion of documenting the agreements between Gateway and the Gaming Authority. The Gaming Authority, the Board of Trustees and Gateway have had a series of negotiation meetings, and have agreed to a set of basic terms that have been presented at two community meetings. Since then, the final details of the new contracts have been argued, agreed upon and put into documents. We will report on these final agreements at the Monday tribe meeting. For us to sign these contracts, the Nation has to do two (2) things, one (1) is to adopt the charter by a tribal vote and two, (2) authorize the Board of Trustees to sign the proposed Non-Interference and Enabling Agreement. This document is included in this packet for your review. Also attached, is the original agreement that the Nation enacted for Ivy Ong (for you to compare and refer to). The Board of Trustees has agreed to chair two back to back Tribe meetings and provide an opportunity for all tribal members to vote their opinion. Originally slated for Nov 14th, 15th & 16th, they have assured us that these meetings will reconvene the first week of December. We cannot continue to put this matter off. The Nation should be preparing to sit down with the State of New York with our local governmental supporters and work out a Compact agreement and possibly a global settlement. Once the compact is agreed to it will go before the New York Legislature for approval and the Shinnecock Nation Gaming Commission will present to the Nation for adoption, the final gaming ordinance. The gaming ordinance will include provisions that the Nation and the State of New York have negotiated through the compact process as to the regulation of class III gaming. The New York State Legislature convenes in January 2012. The next step is to go to Congress with the support of the State of New York for federal approval of gaming sites and acquisition of future non-gaming land in the state of NY for the Shinnecock Nation. Congress convenes in January as well. We thank you for your help in expediting these matters.

Shinnecock Nation Gaming Authority

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Tribal Council Q&A1. When will the Gaming Authority begin itsnew term for re-elections? See Pg. 3 [1(c)(vi) The current members of the Authority (Board) shall retain their positions and begin their terms as provided in this Charter from the date of its adoption and approval by the Nation. Therefore the current Board of Directors shall continue to serve as the Board with terms beginning on the date the Charter is adopted, with 3 Directors serving 7 year terms, and 2 Directors serving an initial term of 4 years. See Pg. 2-4 [1(c)] for qualifications, duties and obligations of Authority members.

October 17, 2011flict of Interest Code within 90 days of the Nation adopting the Charter. See pg. 7 [Assets of Authority]- The Authority shall have only those assets of the Nation that are officially assigned or leased to it by the Tribal Trustees or by the Nation. See pg. 6 [Sovereign Immunity (b)] Any waiver of sovereign immunity shall be specific and limited as to (i)-(vi). This provision provides for very specific conditions that must occur prior to any limited waiver of sovereign immunity. All waivers of sovereign immunity issued by the Authority shall expressly state that the waiver does not extend to the Nation or any entity of the Nation other than the Authority. See pg. 9 [Powers of the Authority (b)]. The Authority is to prepare a comprehensive business plan and annual budget that will be submitted to the Nation for its review and approval. This budget represents the Authoritys annual budget must be administered in accordance with the Authoritys by-laws. See pg. 9[Powers and Authority (e)]. Bylaws are to be presented at to Authority meetings open to the Nations membership and allow comment from the Nations membership on the by-laws prior to approval by the Authority. The presentation and comment period are to occur within 90 days of the adoption of the Charter as the Board of Directors is required to submit the by-laws to the Nation within 90 days of the adoption of the Charter. See pg. 10 [ Powers and Authority (g)]. Any holding, purchasing, conveying of real property or hold, mortgage, sublease of the same is subject to approval of the6

2. Will there be an inclusion of at least one Tribal Council member and one Trustee to ensure accountability to the Nation? No- the Charter maintains the current 5 member Board of Directors. The Charter does not include Trustee or Tribal Council member Board of Director.

3. In order to avoid autonomous corruption, will there be a way to ensure that all major contracts (i.e. business/financial plans, capital structure, etc.) are subject to approval by the Tribal Council, Trustees and the Nation? Yes- the Charter contains numerous provisions that provide oversight and protection for the Nation from autonomous corruption. See pg 4 [1(c)(viii) Compensation for the Board of Directors shall be submitted to the Nation as part of the comprehensive business plan referenced in section 7(b) below Compensation shall be set forth in the Boards by-laws that will be submitted to the Nation for approval with a Con-


Tribal Council Q&ATrustees. The Authority has no power to grant or permit any rights, liens, leases, encumbrances, or interests on any real property of the Nation unless the real property is defined under IGRA as gaming lands and used for the purposes of gaming - any such actions as to gaming lands must be approved by the Tribal Trustees. See pg. 11 [Board Meetings (a)]. The Board of Directors is required to hold quarterly noticed meetings before the Nation for the purposes of providing business updates and financial reports. See pg. 12 [Conflict of Interests]. The Board is to adopt a conflict of interest policy consistent with the Nations Ethics Ordinance. The conflict of interest policy shall be submitted to the Nation within 90 days of the Charter being adopted. See pg. 12-13 [Reports to the Nation]. The Board is required to make a number of reports to the Nation both quarterly and annually. These reports include a summary of annual or quarterly years activities, complete financial condition of the Authority and each Gaming Facility, any significant problems and accomplishments, plans for the next year/quarter, and other information as the Board, Trustees or Tribal Council deem important. See pg. 13-14 [Finances and Accounting] The Board is required to set up an accounting system and numerous internal control standards . The accounts and records of the Authority shall be audited in accordance with IGRA and the Nations Gaming Ordinance in conformity with Generally Accepted Principles of Accounting. The Authority will have to operate its business in accordance with the IGRA, NIGC regulations, the Nation-State Compact, and the Tribal Gaming Ordinance and regulations adopted by the Nations Gaming Commission. This will be a highly regulated business with a number of federal, tribal, and state agencies having oversight and enforcement powers as to compliance with the requirements for operating the facility in accordance with the law. 4. Can there be a way to make sure that the distribution of all cash comes through the Nations government and not just through the Gaming Authority? The Authority is the business arm of the Nation delegated to run the gaming operations. The distribution of cash will first flow through the Authority. However, there will be a number of mechanisms such as internal controls, auditing, and oversight by the Gaming Commission and Nation that will ensure the proper handling, distribution, and pass through of money from the Authority to the Nation. See list of oversight mechanisms in place above.

5. Please explain assets acquired by other means in accordance with this Charter. (Pg. 7)? This refers to property acquired by the Authority as part of the business in accordance with the Charter. This could be furniture, fixtures, materials for the construction of the buildings, parking lots, ect. This could also include rented space, and other ancillary facilities related to the gaming. The Authority would still need to be accountable to the Nation in its annual and quarterly reports as well as audits as to any acquired assets.

6. Will the historical/authorizing resolutions & documents become a part of the final charter? The prior resolutions creating the Shinnecock Gaming Authority will be suSNGA Gaming Update November, 2011

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Tribal Council Q&A

perseded by the Charter, but not repealed. Therefore anything from prior resolutions that is in conflict with the Charter will no longer be in effect; and anything that is consistent is incorporated. Other nonAuthority specific resolutions such as the creation of the Commission and the Economic Development Policy are not affected by the adoption of the Charter. 7. Please explain assets acquired by other means in accordance with this Charter. (Pg. 7) See response to 5 above

commissions which has caused confusion regarding the Gaming Authorities role. The Shinnecock Gaming Authority serves as the Nations gaming business entity or corporation. The Shinnecock Gaming Commission services as the Nations regulatory agency to oversee gaming operations as required by IGRA.

8. Were the Gaming Authority members originally hired to assist the General Manager and Assistant General Manger? No- Authority Board of Directors appointed to run the gaming operation. They are above the General Manager and Assistant General Manager and are the Nations representatives as owners of the facility.

9. What is the difference between the Gaming Commission and the Gaming Authority? The Gaming Commission regulates the Gaming Operation which includes the Gaming Authority. The Authority is the business arm of the Nation and the Commission is the regulatory arm. The powers set out in the Charter reflect the powers needed to operate the business. The Commissions powers and duties are set forth in the Nations Gaming Ordinance that is in draft form and has not yet been adopted. Many Indian tribes have entities similar to the Gaming Authority that use different terms such as economic development authority, business council, economic development council or other gaming corporation. Other New York tribes use the term Authority to refer to their gaming8


PROPOSED GAMING CHARTER

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CHARTER OF THE SHINNECOCK NATION GAMING AUTHORITYWHEREAS, since time immemorial and continuously to the present the Shinnecock Indian Nation (the Nation) has been and is a sovereign Indian Nation; and WHEREAS, the Nation exercises its sovereign power through the Nation; and WHEREAS, it is declared the policy of the Nation to promote the welfare and prosperity of its members and to actively promote, attract, encourage and develop economically sound commerce and industry through governmental action for the purpose of preventing unemployment and economic stagnation; and WHEREAS, the Gaming Enterprise is vitally important to the economy of the Nation and the general welfare of its members; and WHEREAS, the ability of the Nation to finance, plan, design, develop, construct, operate, and maintain the Gaming Enterprise will be enhanced by the creation of a separate entity for such purposes, and the entity created by this Charter will be able to perform these functions, and, accordingly, will be of benefit to the Nation and its members. NOW, THEREFORE, the Nation does hereby grant this Charter to re-affirm, re-appoint and specifically define the SHINNECOCK INDIAN NATION GAMING AUTHORITY. 1. Affirmance of Shinnecock Indian Nation Gaming Authority (a) By this Charter, the Nation affirms and sets forth the purpose and responsibilities of the Shinnecock Indian Nation Gaming Authority (the Authority). The Authority shall have its principal place of business at 1 Church Street, Shinnecock Nation Territory, Southampton, New York, 11969, or at such other location as determined by the Board of Directors of the Authority. (b) The Authority shall be considered a body corporate and shall constitute a governmental instrumentality of the Nation, having autonomous existence separate and distinct from the Nation governed by this Charter as approved by the Nation and the duly adopted by-laws approved in accordance with this Charter. There is hereby established a Board of Directors of the Authority (the Board), the purpose of which is to carry out the duties and powers of the Authority as set forth in this Charter. (i) There shall be five (5) Directors serving on the Board, all of whom shall be Shinnecock Indian Nation members. Directors shall be appointed by the Nation upon recommendation of the Tribal Trustees and Tribal Council. Directors may be re-appointed upon notification to the Tribal Council and Board of Trustees at least 60 days prior to the end of the Directors current term that such Director seeks a subsequent term. Re-appointments may be made in the same manner as initial appointments. The Authority shall not exercise any regulatory or legislative power.

(c)

(ii)


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(iii) The officers and employees of the Authority shall be entitled to all of the privileges and immunities enjoyed by the Nation, including but not limited to, immunities from suit. (iv) The Tribal Trustees and Tribal Council shall recommend five (5) at large Directors, who shall be approved by the Nation. Vacancies shall also be filled by Tribal Trustees and Tribal Council recommendation upon Nation approval. An approval of an at large Director shall take effect from the date and time at which the Nation authorizes such approval. Any Director candidate who is at least twenty-one years old, possessing a college degree or equivalent and/or seven to ten years of relevant work experience, and who shall not have been convicted of a felony, is eligible to serve as a member of the Board, and be able to meet all licensing requirements set forth by the Nation Gaming Ordinance.

(v)

(vi) Directors shall serve for a term of seven (7) years, provided, however, that three (3) of the initial Directors shall serve a term of seven (7) years and two (2) members shall serve an initial term of four (4) years from the date this Charter is adopted and approved by the Nation. The current members of the Authority shall retain their positions and begin their terms as provided in this Charter from the date of its adoption and approval by the Nation. The initial terms of office shall be determined by casting lots. The Board shall inform the Tribal Trustees and Tribal Council of each Directors initial term of office. Thereafter the terms for each Director shall be staggered seven (7) year terms in accordance with the provisions of the Charter. (vii) A Director may be removed for cause upon a majority vote of the Tribal Trustees and the Tribal Council. Cause shall be defined as a Directors breach of fiduciary duty to the Authority, willful neglect of duties, willful conversion of Authority funds, or a conviction of a felony or misdemeanor involving moral turpitude. (viii) The Directors shall receive compensation for their services as provided in the bylaws and approved by the Board. The compensation amount shall be submitted to the Nation as part of the comprehensive business plan referenced in section 7(b) below, and shall be reimbursed for actual expenses incurred in the discharge of their duties, including necessary travel expenses. In no event shall compensation be based on the profitability of the Gaming Enterprise. 2. Purpose The Authority is created by the Nation for the purpose of: (a) (b) (c) (d)11

Furthering the economic prosperity of the Nation in accordance with the Shinnecock Indian Nation Economic Development Policy; Developing, owning and managing the assets of the Nations Gaming Enterprise, and all other assets of the Authority; Identifying and acquiring land(s) for the purpose of gaming, such lands shall be acquired with the mutual consent of both the Authority and the Tribal Trustees; and Exercising all the rights and privileges of the Nation in relation to the Gaming EnterSNGA Gaming Update November, 2011

prise consistent with this Charter. 3. Definitions For purposes of this Charter, when capitalized, the following terms shall have the meanings respectively specified--a.Act shall mean the Indian Gaming Regulatory Act, 25 U.S.C. 2701, et seq. b. Authority shall mean the Shinnecock Indian Nation Gaming Authority, a body corporate and shall constitute a governmental instrumentality of the Nation political created by Resolution dated May 9, 2003 and reaffirmed upon approval of this Charter by Resolution dated Board shall mean the 5 member Board of Directors that are responsible to carry out the duties and powers of the Authority as set forth in this Charter and as described in section 1 above. Class II Gaming shall have the same meaning found in 25 U.S.C. 2703(7). Class III Gaming shall have the same meaning found in 25 U.S.C. 2703(8). Compact shall mean the Nation-State Gaming Compact between the

c.

d. e. f.

Shinnecock Indian Nation and the State of New York. g. Consulting Agreement shall mean any contract, subcontract, or collateral agreement between the Authority and a contractor or between a contractor and a subcontractor if such contract or agreement provides for consultation or advise as to the development or management of the Gaming Enterprise. Contractual Agreements or Contract shall mean, but not be limited to, any Development Agreement, Management Agreement, or Consulting Agreement. Development Agreement shall mean any contract, subcontract, or collateral agreement between the Authority and a contractor or between a contractor and a subcontractor if such contract or agreement provides for the development of all or part of the Gaming Enterprise. Elected Officials shall mean the Shinnecock Indian Nation Tribal Council and the Shinnecock Indian Nation Board of Trustees. Gaming Enterprise means all Class II and Class III Gaming Operations, and all related businesses within Nation Territory or otherwise operated under the auspices of the Nation. Gaming Operation shall mean each economic entity that is licensed by the Nation, operates games, receives the revenues, issues the prizes, and pays the expenses. A gaming operation may be operated by the Authority directly or by a management contractor consistent with a valid Management Contract approved by the NIGC. m. Management Contract shall mean any contract, subcontract or collateral agreement between the Authority and a contractor or a contractor and a subcontractor if such contract or agreement provides for the management of all or a part of a Gaming Operation or the Gaming Enterprise.12

h. i.

j. k.

l.


n. o.

Nation shall mean the Shinnecock Indian Nation, a federally recognized tribe, a sovereign nation. Nation Territory shall mean 1) all lands within the limits of the Shinnecock Indian Nation existing reservation, including the piece of property known as Westwoods; and 2) any lands title to which is either held now or in the future in trust by the United States for the benefit of the Nation or lands held now or in the future by the Nation or the State of New York for the benefit of the Nation subject to restriction against alienation and over which the Nation exercises governmental power. NIGC shall mean the National Indian Gaming Commission. Tribal Council shall mean the Shinnecock Indian Nation Tribal Council. Tribal Trustees shall mean the Shinnecock Indian Nation Board of Trustees. The Authority shall have only those assets of the Nation that are officially assigned or leased to it by the Tribal Trustees or by the Nation, together with any assets acquired by

p. q. r. 4.

Assets of Authority

other means in accordance with this Charter. No activity of the Authority, nor any indebtedness incurred by it shall encumber or implicate any assets of the Nation not officially assigned or leased to the Authority. 5. 6. (a) Perpetual Succession The Authority shall have perpetual succession in its name. Sovereign Immunity The Authority is entitled to and possesses all privileges and immunities of the Nation, including the immunity from suit. Nothing contained herein shall be deemed or construed to waive the sovereign immunity of the Authority. The sovereign immunity of the Authority may only be waived in strict compliance with the provisions of this Charter. The Authority may waive its sovereign immunity when necessary, in the best business judgment of the Board, to secure a substantial advantage or benefit for the Authority or the Nation. Any waiver of sovereign immunity shall be specific and limited as to (i) duration, (ii) the grantee, (iii) the scope of the waiver, (iv) nature and description of the property or funds, if any, of the Authority, available to satisfy any order or judgment, (v) a particular court or courts, or other proceedings having jurisdiction over the Authority, and (vi) the law that shall be applicable thereto. Any express waiver of sovereign immunity by the Authority must be by written resolution passed by a majority of the members of the Board. All waivers of immunity issued by the Authority shall expressly state that the waiver does not extend to the Nation or any entity of the Nation other than the Authority. 7. Powers of Authority The Authority, acting through its Board, shall have the following powers, delegated by the Nation, not inconsistent with this Charter or Nation law: a. b.13

(b)

To take such action, as it deems necessary and appropriate to promote the economic development and general welfare of the Nation and its members; To take any actions reasonable and necessary to finance, plan, design, develop, conSNGA Gaming Update November, 2011

struct, maintain, and operate the Gaming Enterprise, and to enter into contracts for the same, including any Development and or Management Contracts; c. To own and operate the Gaming Enterprise on behalf of the Nation, all class III gaming shall be operated consistent with the Nation State Compact as negotiated by the Tribal Trustees and approved by the Secretary of Interior; To adopt by-laws, resolutions, procedures, and policies governing Authoritys conduct consistent with this Charter and enforce the same, such by-laws, resolutions, procedures and policies shall be presented in at least two (2) open Authority meetings to allow comment from members of the Nation prior to approval, the first meeting shall be to inform the Nation of the proposal, the Authority may vote on the action at the second meeting. The Authority shall develop and adopt procedures for presenting actions and conducting meetings; To hold, purchase and convey personal property; To hold, purchase and convey real property, and to hold, mortgage, manage or sublease the same subject to approval by the Tribal Trustees; provided that nothing herein shall be construed to include, and the Authority shall not have the power to grant or permit any right, lien, lease, encumbrance or interest in or on any real property constituting Nation Territory, with the exception of Nation Territory defined as Indian lands under IGRA to be used for gaming related purposes and such action must be approved by the Tribal Trustees pursuant to a lease to the Authority authorizing such lien, encumbrance, or interest of the Nations real property that constitute Nation Territory; When necessary to the transaction of business, to borrow money, to issue promissory notes and other evidences of indebtedness and to secure the same by pledging only the assets of the Authority; To purchase, hold, sell, exchange, lease, assign, pledge, transfer or deal in bonds, notes, shares, securities, obligations or other investments consistent with the purposes of this Charter and Nation law; To manage the assets, revenues, accounts, property and other interests of the Authority; To create and use the seal of the Authority or use the seal of the Nation. To employ or contract for the services of advisors, experts, professionals, and laborers, and to enter into any relationship with another person in connection with any lawful activities of the Authority and the Gaming Enterprise; To obtain or provide for the obtaining of adequate fidelity bond coverage of its officers, agents, or employees handling cash or authorized to sign checks or certify vouchers;; In connection with any contractual obligation of the Authority, to waive the Authoritys sovereign immunity from suit, to consent to the jurisdiction of any court or proceeding, or to consent to the levy of any judgment, lien attachment upon any property or revenue of the Gaming Enterprise, subject to the provisions of this Charter; To charter subordinate organizations consistent with the purposes set forth above; and To take any action reasonable and necessary for the accomplishment of the purposes of this Charter consistent with Nation law.14

d.

e. f.

g.

h.

i. j. k.

l.

m.

n. o.


8.

Board Meetings a. The Board shall hold meetings and special meetings at such times and places as it may deem convenient, but at least one regular meeting shall be held monthly. A majority of the Board members shall constitute a quorum for purposes of meetings of the Board. Special meetings may be called by the Chairperson, and shall be called by the Chairperson at the written request of at least two Directors of the Board. The Board shall hold noticed quarterly meetings before the Nation to provide business updates and financial reports. The Board may hold executive or closed meetings for any of the following purposes: i. ii. Consulting with experts and principals from the Nation or the Gaming Enterprise concerning matters of special and unique necessity; ii. iii. Discussing business strategies, marketing and pricing strategies of the Enterprise and its activities; Negotiating the terms of any financing arrangement for the benefit of the Authority and the Nation. Discussing personnel issues or other matters that a reasonable individual of average sensibilities would deem a private matter; Discussing and consulting on matters of importance with attorneys and accountants; and Discussing any matter that the Board deems confidential and or proprietary in nature.

b.

iv. v. 9. Conflict of Interest

The Board shall adopt a Conflict of Interest Policy that is consistent with the Nations Ethics Ordinance to be incorporated into the Authoritys by-laws upon adoption of the Ethics Ordinance. This policy shall be submitted for comment to the Nation with the proposed bylaws within 90 days of the adoption of this Charter. 10. a. Reports and submissions to the Nation The Board shall cause and prepare a report to be submitted to the Nation , signed by the Chairperson, showing: (i) (ii) (ii) (iii) (v) a summary of the quarters activities; the financial condition of the Authority and of each Gaming Facility; any significant problems and accomplishments; plans for the following quarter; and such other information as the Board, Tribal Trustees or the Tribal Council deems pertinent.

b. The Board shall prepare and submit to the Nation within ninety (90) days after the close of each fiscal year an annual report, signed by the Chairperson, showing:15 SNGA Gaming Update November, 2011

(i) (ii)

a summary of the fiscal years activities; the complete financial condition of the Authority and of the Gaming Enterprise, and each Gaming Operation including a detailed report outlining the operations of the Authority and the Gaming Enterprise and each Gaming Operation, including audited financials; any significant problems and accomplishments; plans for the following fiscal year, including budget and financial projections; and

(iii) (iv)

(v) such other information as the Board, Tribal Trustees or the Tribal Council deems pertinent. C. The Board shall submit its annual budget and any plans for expansion of existing facilities or development of new facilities to the Tribal Trustees and Tribal Council for review and approval by a majority of the members of each body in accordance with the procedures set forth in the Authority by -laws adopted in accordance with this Charter. The Authority shall submit its comprehensive business plan and annual budget to the Tribal Trustees and Tribal Council at least 30 days before the end of the Nations fiscal year. The Tribal Trustees and Tribal Council shall either approve or disapprove the proposed budget within 20 days from the date of receipt from the Authority. Any disapproval shall include a written statement as to the basis for disapproval. As to any disapproval; undisputed items shall be deemed approved and disputed items in the budget shall continue to be funded at the level of the previous years budget. If the Tribal Trustees and Tribal Council neither approve nor disapprove the budget within 20 days from the date received from the Authority, the comprehensive business plan and annual budget shall be deemed approved. The Authority by-laws shall set forth provisions that ensure the continued, uninterrupted operation of gaming business pending the approval of the annual budget. Such budget shall include a minimum retention of five percent (5%) net revenue for purposes of reinvestment; 11. Finances and Accounting a. b. The fiscal year of the Authority shall be the fiscal year of the Nation The Board shall establish and install an accounting system (i) in conformity with accounting principles generally accepted in the Gaming industry, and (ii) necessary and advisable, in the reasonable discretion of the Board, in order to manage the assets of the Authority and the Gaming assets of the Nation. Such accounting system shall insure the availability of information as may be necessary to comply with the Compact, and with applicable Nation and federal regulatory requirements. The accounts and records of the Authority shall be audited at the close of each fiscal year in accordance with the provisions of the Act, the regulations of the NIGC and, to the extent applicable, the Compact in conformity with the Generally Accepted Principles of Accounting. Copies of such audit reports shall be furnished to authorized representatives of the Nation. The Authority shall establish a System of Internal Controls for the Gaming Enterprise consistent with the IGRA, the Compact, and the Nations duly adopted Gaming Ordinance as approved by NIGC.

c.

d.

e. The books, records and property of the Authority shall be deemed confidential and may not be disclosed by the Authority to any person or entity except authorized representaSNGA Gaming Update November, 2011 16

tives of the Nation or as otherwise deemed advisable by the Authority. 12. Indemnification a. The Authority shall (i) indemnify, save and hold harmless the Nation and the agents and employees from any and all claims arising out of activities of the Authority, (ii) defend at the Authoritys own cost and expense any action or proceeding commenced for the purpose of asserting any claim arising out of its activities, and (iii) reimburse any expense which may be incurred by the Nation to defend any such claim until the Authority assumes such defense; provided, however, that the Nation shall have the right, but not the obligation, to participate, at the Authoritys expense, in any settlement, compromise or litigation thereof through counsel of its own choice and shall have the right to provide co-direction and co-control over the negotiations, settlement and litigation if the same shall have a direct effect upon the Nation. b. The Authority shall indemnify, save and hold harmless the Directors of the Board and officers of the Authority, or any person acting at their official direction, if any one of them is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a Board member or officer, or person acting at their official direction, against expenses (including attorneys fees), judgments, fines and amounts paid in connection with such action, suit or proceeding, if such person had no reasonable cause to believe that his or her conduct was unlawful or otherwise improper; provided, however, that no indemnification shall be made for which such person shall have been adjudged to be liable for willful misconduct or a violation of the criminal law in the performance of such persons duty to the Authority. 13. Judgment Proof Property All property including funds acquired or held by the Authority pursuant to this Charter shall be exempt from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against the same nor shall any judgment against the Authority be a charge or lien upon such property. However, the provisions of this section shall not apply to or limit the right of lenders or Obligees to pursue any remedies for the enforcement of any pledge or lien given by the Authority on its fees or revenues, nor to any explicit waiver of immunity specifically subjecting Authority property to levy, execution or judicial process which is contained in a contract and approved by resolution of the Board as provided in this Charter. 14. a. Dissolution or Liquidation In the event of the dissolution or final liquidation of the Authority, none of the property of the Authority nor any proceeds thereof shall be distributed to or divided among any of the Directors or officers of the Authority or inure to the benefit of any individual. After all liabilities and obligations of the Authority have been paid, satisfied and discharged, or adequate provision made thereof, all remaining property and assets of the Authority shall be distributed to the Nation or, at the Nations direction, to one or more organizations designated pursuant to a plan of distribution approved by the Nation

b.

15.

Amendment This Charter may be amended by a majority vote of the Authority upon approval of either 1) the Tribal Trustees and Tribal Council, or 2) the Nation. A resolution approved by the Nation at two (2) duly noticed tribal meetings shall be required to rescind this Charter. Duly noticed tribal meeting means a tribal meeting called specifically for the purpose of rescinding

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the Charter with at least 5 days notice of the proposed action to the membership of the Nation. 16. Severability If any provision of this Charter is held invalid, the remainder of the provisions of this Charter shall not be affected. 17. Effective Date This Charter shall be effective on the date of its passage.


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Proposed Resolution to Enable and Reaffirm the Shinnecock Nation Gaming Authority.

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The Shinnecock Indian Nation Resolution #-----2011Adoption of the Charter of the Shinnecock Nation Gaming Authority and Reaffirmation of the Shinnecock Nation Gaming AuthorityTITLE:

WHEREAS, we, the members of the Shinnecock Indian Nation, a federally-recognized Indian tribe, invoking the divine blessing of the Creator upon our efforts and purposes, in order to preserve for ourselves and our descendants the inherent sovereign rights of our Indian nation and all other rights and benefits to which we are entitled under the laws and Constitution of the United States, to preserve Indian cultural values, and otherwise promote the health, safety and welfare of our Shinnecock Tribal members, do hereby establish and submit the following resolution; and WHEREAS, since time immemorial and continuously to the present the Shinnecock Indian Nation (Nation) has been and is a sovereign Indian Nation; and WHEREAS, the Shinnecock Nation exercises its sovereign power through the Nation; and WHEREAS, the Nation enacts policy and law and has enacted an economic development policy; and WHEREAS, the Nation finds that it is in the best interests of the Nation to issue charters to tribally controlled subordinate economic entities in order to promote governmental purposes such as economic development, and for such entities to function as instrumentalities of the Nation government; and WHEREAS, the Nation established a subordinate economic entity, known as the Shinnecock Nation Casino at Westwoods Authority to engage in the development, promotion and operation of the Nations gaming endeavors through a Nation adopted resolution on May 19, 2003; and

WHEREAS, the Nation pursuant to Resolution dated January 31, 2004 authorized and approved the name of the Shinnecock Nation Casino at Westwoods to be changed to the Shinnecock Nation Gaming Authority (SNGA or Authority) and expanded its powers; and WHEREAS, such Board of Directors have been duly appointed and are currently serving in that capacity by exercising management control over the Authority; and WHEREAS, the Nation finds it is in the best interests of the Nation to reaffirm the creation of the Authority, and the powers of the Authority to conduct all business necessary to finance, plan, design, develop, construct, operate maintain the gaming enterprises of the Nation and enter into binding contracts, including any proposed development and management contracts , for purposes of the aforesaid; and WHEREAS, the Nation finds that it is in the best interest of the Nation to issue a Charter to set forth the powers and duties of the Authority to be referred to as the Charter of the Shinnecock Nation Gaming Authority (Charter); and


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NOW THEREFORE BE IT RESOLVED, the Nation hereby adopts and approves the Charter of the Shinnecock Nation Gaming Authority, incorporated by reference and attached hereto as Exhibit A; and BE IT FURTHER RESOLVED, that the action to approve the Charter authorizes the Authority to issue limited waivers of sovereign immunity for the sole purposes of meeting its responsibilities as set forth in the Charter; and BE IT FURTHER RESOLVED, this resolution shall be the policy of The Shinnecock Indian Nation until it is withdrawn or modified by subsequent resolution of the Nation adopted by a majority of the eligible Nation voters in attendance at a meeting called for this purpose with due notice of at least 5-7 days prior to the meeting; and BE IT FURTHER RESOLVED, that all previous resolutions defining the powers and duties of the Authority are hereby superseded by this Resolution and Exhibit A, the attached Charter. The Shinnecock Indian Nation does hereby certify that a meeting duly called, noticed and convened on the ____day of ________, 2011, where tribal members gathered for such purpose, do hereby certify that the foregoing resolution was adopted by the Nation by a vote of ____ for, ____against, ____abstain.

Shinnecock Nation Board of Trustees ___________________________________ Chairman ___________________________________

___________________________________

Tribal Council ___________________________________ Chairperson ____________________________________

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Non-Interference and Enabling AgreementThe non-interference and enabling agreement is similar to the prior enabling agreement that the Nation approved and was entered into between the Gateway and the Tribal Trustees on behalf of the Nation in 2003 and amended in 2004. This agreement is a promise by the Nation that it will not interfere with Gateways or the Gaming Authoritys ability to perform their obligations under the business agreements. The agreement allows for a limited waiver of sovereign immunity only as to matters concerning or related to the business agreements and only for damages. It does not allow for punitive or consequential damages, and limits any award to assets of Authority. Agreements similar to this are standard within Indian Country, and again is similar to the agreement the Nation entered into as to Gateway in 2003/2004.

NON-INTERFERENCE AND ENABLING AGREEMENT

Between the

SHINNECOCK INDIAN NATION,

a federally recognized tribe

and

GATEWAY CASINO RESORTS, LLC

A Michigan limited liability company

Dated as of [

], 2011


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TABLE OF CONTENTS

RECITALS .....................................................................................................1 ARTICLE 1 DEFINITIONS ............................................................................2 ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE TRIBE.6 2.1 Authorization; No Contravention..........................................................6 2.2 Transaction Documents .........................................................................6 2.3 Binding Effect........................................................................................6 2.4 Litigation. .............................................................................................7 2.5 No Default.. ...........................................................................................7 ARTICLE 3 AFFIRMATIVE COVENANT OF THE TRIBE........................7 ARTICLE 4 NEGATIVE COVENANTS OF THE TRIBE ............................8 ARTICLE 5 DEFAULT; REMEDIES AGAINST THE TRIBE UPON BREACH OF AGREEMENT ..........................................................................10 5.1 Default. ................................................................................................10 5.2 Remedies. . ..........................................................................................10 ARTICLE 6 WAIVERS; RELATIONSHIP OF TRIBE TO AUTHORITY .11 6.1 Continuing Nature of Agreement and Obligations..............................11 6.2 Waivers.. ..............................................................................................11 ARTICLE 7 Dispute Resolution; Sovereign Immunity; Jurisdiction............11 7.1 Dispute Resolution ..............................................................................11 7.2 Obligation to Meet and Confer............................................................11 7.3 Forum Selection...................................................................................11 7.4 Limited Waiver of Sovereign Immunity..............................................11 7.5 Service of Process................................................................................15 7.6 No Exhaustion of Tribal Remedies .....................................................16 7.7 Full Faith and Credit of Judgments .....................................................16 ARTICLE 8 MISCELLANEOUS .................................................................16 8.1 Severability of Provisions. ..................................................................16 8.2 Headings. .............................................................................................16 8.3 Assignment of Gateway's Rights.........................................................16 8.4 Notices. ................................................................................................16 8.5 Counterparts. .......................................................................................17 8.6 Rights and Remedies ...........................................................................17

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NON-INTERFERENCE AND ENABLING AGREEMENTThis NON-INTERFERENCE AND ENABLING AGREEMENT (the Agreement) is made and entered into as of [ ], 2011 (the Effective Date), between the SHINNECOCK INDIAN NATION, a federally recognized Indian tribe and GATEWAY CASINO RESORTS, LLC, a Michigan limited liability company (together with its permitted successors and assignees, Gateway). RECITALS Capitalized terms used in these recitals are defined in Article 1 of this Agreement. The Nation is a federally recognized Indian tribe, possessing and exercising powers of selfgovernment, including the power to conduct gaming pursuant to the IGRA. The Nation intends to construct Casino Facilities, which are to be owned and operated by the Authority. The Authority is the duly recognized economic development body formed to conduct the Nations gaming operations. As a wholly owned instrumentality of the Nation, the Authority is vested with the sovereign immunity of the Nation. In connection with the anticipated development and construction of the Casino Facilities, the Authority has or is entering into the Transaction Documents with Gateway. A condition of Gateways willingness to enter into the Transaction Documents and to undertake the obligations thereof is that this Agreement be executed and delivered by the Nation. The Nation is the owner of the Authority and expects to derive benefits from the Transaction Documents and the activities of the Authority and finds it advantageous, desirable, and in the Nations and its members best interests to execute and deliver this Agreement. NOW THEREFORE, in consideration of the benefits to be extended to the Nation and the Authority pursuant to the Transaction Documents, and for other good and valuable consideration, the receipt and sufficiency of which are expressly acknowledged, the Nation and Gateway hereby covenant and agree as follows: ARTICLE 1 DEFINITIONS Affiliate means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person; provided that persons acting only in their individual capacities as a general tribal member shall not be considered an Affiliate of the Authority or the Nation. The Nations affiliates include, but are not limited to, the Authority and the Gaming Commission. For the purpose of this definition, control means the ability to direct or cause the direction of the policies or management of the specified Person whether directly or indirectly, by voting securities, partnership or member interSNGA Gaming Update November, 2011 24

ests, contract or otherwise. Authority means the Shinnecock Nation Gaming Authority, a wholly owned instrumentality of the Nation. Applicable Courts has the meaning set forth in Section 7.3 of this Agreement. Authority Board means the governing body of the Authority. BIA means the Bureau of Indian Affairs, established within the United States Department of Interior. Business Day means each day other than a Saturday, a Sunday, or other day on which commercial banks in the State of New York are not open for business. Casino Facilities means, unless otherwise agreed by the Parties, all areas within any building on the Site in which Class III Gaming is conducted, as well as any Hotel as defined herein. Notwithstanding the foregoing, no area exclusively used for the conduct of Class I or Class II Gaming shall be considered part of the Casino Facilities. The Casino Facilities shall be deemed to consist of public areas, non-public areas, restricted areas, gaming floor, and Hotel. Claim means any dispute or claim between the Nation, the Authority or an Affiliate thereof and Developer, the Manager, or an Affiliate of Developer or Manager, arising out of or relating to this Agreement or any rule, action or decision of the Nation. Class II Gaming has the meaning set forth in 25 U.S.C. 2703(7)(A) and 25 CFR 502.3, as the same may be supplemented, amended, restated or replaced from time to time. Class III Gaming has the meaning set forth in 25 U.S.C. 2703(8) and 25 CFR 502.3, as the same may be supplemented, amended, restated or replaced from time to time. Developer has the meaning set forth in the Development Agreement. Distribution has the meaning set forth in the Developer Credit Agreement. GAAP means, as of any date of determination, accounting principles set forth as generally accepted in the United States of America in currently effective opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and in statements of the Financial Accounting Standards Board, together with interpretive rulings and bulletins issued in connection therewith. The term consistently applied, as used in connection therewith, means that the accounting principles applied are consistent in all material respects to those applied at prior dates or for prior periods. Gaming shall mean any and all activities defined as Class II and Class III Gaming under IGRA or any other form of gaming authorized under state or federal law, conducted by the Nation or an instrumentality thereof. Gaming does not include activities defined as Class I gaming under IGRA or Class II gaming conducted at Westwoods or on the Nations Reservation. Gaming Assets means, collectively: (a) all Property, now or hereafter constituting a part of or to be incorporated into or used in the construction or equipping of Casino Facilities; (b) all Property of any Tribal Party or Affiliate of a Tribal Party that is (i) used in or is reasonably related and beneficial to, a Gaming Business, or is derived from a Gaming Business, or (ii) permitted under GAAP to be reflect25 SNGA Gaming Update November, 2011

ed on the balance sheet of the Authority as it relates to a Gaming Business, (c) all books and records relating to a Gaming Business and the foregoing assets, (d) Gaming Revenues, and (e) proceeds of the foregoing; provided, however, that as of any time, Gaming Assets shall not include amounts that have already been the subject of a Distribution to the Nation that did not at the time of its occurrence violate any terms of the Transaction Documents or documentation evidencing or securing the Permanent Financing, or assets used primarily in connection with the Nation providing essential governmental services to its members or residents of its reservation, it being expressly understood, however, that to the extent lawful any Gaming Assets that are the subject of a Distribution in violation of any Transaction Document shall continue to constitute Gaming Assets regardless of any transfer in location, possession or title. Gaming Business means (i) a Gaming Operation, (ii) all commercial activities undertaken by or on behalf of any Tribal Party or Affiliate of a Tribal Party at a Casino Facility, and (iii) all of the following (unless the Authority and Gateway shall otherwise agree in writing) undertaken by or on behalf of the Authority: (a) all other commercial entertainment, lodging, retail, restaurant, hospitality, transportation or recreational activities, and any other trade, business or commercial activities that market, support, develop, or enhance a Gaming Operation; and (b) all other activities incidental, related, complementary or similar to the foregoing. Gaming Commission means the Shinnecock Nation Gaming Commission. Gaming Operation means the conduct of Class III Gaming by or on behalf of the Authority at the Casino Facilities. Gaming Revenue means all gross revenues, receipts, income and gain of any nature arising from operations at Casino Facilities conducted by or on behalf of the Authority, the conduct of gaming at Casino Facilities, or the use or ownership of Gaming Assets by or on behalf of the Authority, whether the same consists of money, instruments, accounts or otherwise. Governmental Authority means each of the United States, the BIA, the State, the NIGC, and any court, agency, department, commission, board, bureau or instrumentality of competent jurisdiction, but only to the extent it has authority over Class II Gaming, Class III Gaming, the Casino Facilities, the Gaming Business, the Manager, the Authority, or any dispute between them with respect to any rights or obligations of such Persons under this Agreement. Hotel shall mean that portion of the Casino Facilities providing lodging to the public, or a separate building physically connected to the Casino Facilities in a manner deemed appropriate by the Shinnecock Nation Gaming Commission and the Authority and which is operated as part of a single integrated facility. IGRA means the Indian Gaming Regulatory Act of 1988, 25 U.S.C. 2701 et. seq., as it may be amended from time to time. Investment means, (i) any direct or indirect purchase or other acquisition by a Person, of a beneficial interest in, any other Person, including any partnership or joint venture interests, or (ii) any direct or indirect loan, advance or capital contribution by a Person to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.SNGA Gaming Update November, 2011 26

Manager has the meaning set forth in the Management Agreement. Material Adverse Change means any material adverse change in the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Authority or the Nation or the ability of the Nation or the Authority to perform its obligations under this Agreement or the Transaction Documents, or the legality, validity, binding effect or enforceability against the Nation of this Agreement or against the Authority of the Transaction Documents. Nation means the Shinnecock Indian Nation, a federally recognized Indian tribe, whose present mailing address is P.O. Box 5006, Southampton, New York, 11969-5006. Nation Forum means any court or other tribunal or forum of the Nation. NIGC means the National Indian Gaming Commission, established under 25 U.S.C. 2704, and any successor federal agency. Non-Gaming Assets means any Property that does not constitute Gaming Assets. Obligations means all amounts due and owing to Gateway pursuant to the Transaction Documents, regardless of the characterization of such payments. Opening Date means the first date that the Casino Facilities are complete, issued all applicable licenses, open to the public, and that Gaming Operations are conducted in the Casino Facilities and managed by the Manager. Party means either Gateway or the Nation. Person means any entity, whether an individual, trustee, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, joint stock company, trust, estate, unincorporated organization, business association, Indian tribe, commission, instrumentality, firm, joint venture, Governmental Authority, or otherwise. Project Documents means the Development Agreement, Developer Credit Agreement, the Developer Note, the Developer Security Agreement, the Land Acquisition Agreement, and this Agreement and any additional development agreements, developer credit agreements, developer notes and developer security agreements as may be executed by the Parties pursuant to Section 2.2 of the Development Agreement. Property means any interest (legal, beneficial or otherwise) in any kind of property or assets, whether real, personal or mixed, or tangible or intangible. Recourse Assets means (i) the revenues from the Gaming Business, (ii) the furniture, fixtures and equipment related to the Gaming Business, (iii) the accounts receivable of the Gaming Business, and (iv) any insurance award or payment made to compensate the Authority for the loss of gaming revenues (net of any legal fees and expenses associated with the obtaining of such award or payment); provided, however, that recourse to these items shall be limited to the extent required by the Permanent Financing and shall be further limited to the amount owed by the Authority to the Developer. Recourse Assets does not include and in no event shall the Developer have recourse with respect to: (A) distributions of revenue made to the Nation, (B) assets of the Nation whether or not purchased with distributions of revenue from the Gaming Business, and (C) other sources of revenue not related to the Gaming Business.27 SNGA Gaming Update November, 2011

Transaction Documents means the Project Documents and the Management Agreement (upon approval of such Management Agreement by the NIGC Chair), and any agreement between the Parties related to any of the foregoing, including any management agreement with respect to the management of additional Casino Facilities. Tribal Trustees means the three trustees elected by the Nation to represent the Nation on governmental, business and other matters. Tribal Member means a Person who has membership in the Nation. Nation - State Compact means such Nation - State Compact between the State and the Nation concerning Class III Gaming as may hereafter be entered into, as the same may be amended, supplemented, restated or replaced. ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE NATION 2.1 Authorization; No Contravention. The Tribal Trustees serve as the executive arm of the Nation for purposes of interacting with entities outside the Nation including governmental entities and private business entities. The execution, delivery and performance by the Authority and/or the Tribal Trustees of the Transaction Documents has been duly authorized by all necessary actions of the Nation, the Tribal Trustees, and the Authority Board, and does not and will not: require any consent or approval not heretofore obtained, of another unit of the Nations government, the Authority Board, any enrolled member of the Nation, any security holder or creditor; or conflict with any law, agreement or obligation by which the Nation or Authority is bound. 2.2 Transaction Documents. The Nation: (A) authorizes and approves the execution of the Transaction Documents and any amendments thereto that the Authority or the Trustees deem appropriate; (B) authorizes and directs the Authority and all of the Nations Affiliates to take all actions necessary and appropriate to execute and implement the Transaction Documents; and (C) warrants that neither the Authority, the Nation, the Tribal Trustees, nor any Affiliate thereof will take any action inconsistent with the Transaction Documents. 2.3 Binding Effect. This Agreement has been duly executed and, once voted on by the Nation and executed by the Authority and the Tribal Trustees and upon delivery of an executed copy hereof by the Nation to Gateway, will have been duly delivered by the Nation. Once so voted upon and delivered, this Agreement will constitute a legal, valid and binding obligation of the Nation, enforceable against it in accordance with its terms. The Nation has approved the Authority's and the Tribal Trustees execution and delivery of the Transaction Documents by the Authority and the Tribal Trustees. Accordingly, the Nation represents and warrants that the Transaction Documents to which the Authority is party constitute a legal, valid and binding obligation of the Authority enforceable against it in accordance with its terms. 2.4 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Nation after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any governmental authority, by or against the Nation or against anySNGA Gaming Update November, 2011 28

of its properties or revenues that (a) purport to affect or pertain to this Agreement or the Transaction Documents, or any of the transactions contemplated hereby or thereby, or (b) either individually or in the aggregate, if determined adversely, could reasonably be expected to result in a Material Adverse Change, except as attached as Schedule 2.3 of this Agreement. 2.5 No Default. The Nation is not in default under or with respect to any obligation that could, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement. 2.6 Licensure. Any license of Gateway which is issuable by the Shinnecock Nation Gaming Commission and which is necessary to carry out Gateways duties set forth in the Transaction Documents shall not wrongfully or otherwise in bad faith be withheld, suspended or revoked. ARTICLE 3

AFFIRMATIVE COVENANTS OF THE NATION So long as any of the Obligations remain outstanding, unless Gateway consents in writing otherwise, the Nation covenants and agrees with Gateway that the Nation shall: (a) preserve, renew and maintain in full force and effect its legal existence as a federally recognized Indian tribe; (b) take or cause to be taken all action required to maintain, both directly and/or indirectly all rights, privileges, permits, licenses and franchises reasonably necessary in the normal course of business of the Casino Facilities, except to the extent that failure to do so could not reasonably be expected to result in a Material Adverse Change; take or cause to be taken all action required to maintain all rights, privileges, permits, licenses and franchises reasonably necessary for the Authority to legally exist and conduct the operations for which it was formed which includes the ownership and operation of the Casino Facilities; and No later than six months prior to the Opening Date, validly adopt as law of the Nation: (i) a law or regulation providing for the adjudication of patron claims; (ii) a law or regulation providing clear standards for cash transaction reporting under the Federal Bank Secrecy Act; (iii) to the extent required by the Nation-State Compact or Applicable Law, a law or regulation regarding shipping and transportation of gaming devices; (iv) a law or regulation governing exclusion of patrons from Casino Facilities; and (v) such other laws or regulations as may be required by the Nation-State Compact. ARTICLE 4 NEGATIVE COVENANTS OF THE NATION So long as the Obligations remain outstanding and during the Term of any Transaction Document, unless Gateway consents in writing otherwise, the Nation covenants and agrees that the Nation shall not directly or indirectly do any of the following, and shall take all reasonable actions to prevent the Nations Affiliates, representatives, political subunits or councils, agencies, instrumentali29 SNGA Gaming Update November, 2011

ties, enterprises, or gaming regulatory agencies, from directly or indirectly, doing any of the following: (a) increase or impose any tax or other payment obligation on the Authority or on any patrons of, or any activity at, the Casino Facilities, other than: (i) payments that are not prohibited by the covenants in the Transaction Documents; (ii) sales, use, room occupancy, leisure and related excise taxes, including admissions and cabaret taxes and any other tax (other than income tax) that the Nation may from time to time impose at rates less than or equal to the prevailing aggregate state, county, and local tax rate assessed upon other similarly situated businesses in the Casino Facilitys geographic location; or (iii) reimbursement payments to the Nation for fees, costs and expenses imposed on or charged to the Nation by persons that are not Affiliates of the Nation (including, without limitation, the NIGC), that relate directly to the Casino Facilities; (b) impose any tax, fee, charge or other payment obligation on Gateway or with respect to the Transaction Documents, or any payments or deposits to be made thereunder; (c) restrict in a manner that would result in a Material Adverse Change or eliminate the right of the Authority to conduct gaming operations at the Casino Facilities unless, and then only to the extent, required by applicable laws of the United States or the State of New York or consistent with subsection (o) of this Article 4; (d) undertaking Gaming with a manager or developer other than Gateway or permitting the Nation or any Affiliate of the Nation other than the Authority to conduct Gaming, except as permitted under the Transaction Documents; enter into any agreement that would have a material adverse effect on the economic interests of Gateway or the Authority; except pursuant to this Agreement and the Transaction Documents, waive its sovereign immunity in any manner that would create recourse to the Casino Facilities, except that the Nation or the Authority may do so to the extent it is acting for the account and benefit of the Authority so long as such action would not be prohibited by the other provisions of this Agreement or the Transaction Documents if undertaken directly by the Authority and such action has been approved by the Authority Board; unless required by the Nation-State Compact or other applicable non-tribal law, enact any statute, law, ordinance or rule that would have a material adverse effect on the rights of Gateway under the Transaction Documents; permit or incur any consensual liability of the Nation (or any other instrumentality, enterprise or subunit of the Nation except the Authority) that is or will become a legal obligation of the Authority; appoint or consent to the appointment of a custodian of the Authority for all or substantially all the assets of the Casino Facilities pursuant to or within the meaning of any bankruptcy law; enact any bankruptcy law or similar law for the relief of debtors that would materially impair, limit, restrict, delay or otherwise materially adversely affect any of the rights and remedies of Gateway provided for herein or in the Transaction Documents;SNGA Gaming Update November, 2011 30

exercise any power of eminent domain over the assets of the Casino Facilities; purport to abrogate any of the provisions of this Agreement or the Transaction Documents; receive, accept or retain any payments from the Authority (other than payments distributed to the Nation in accordance with the Transaction Documents or any other agreement entered into in connection therewith, and/or the terms of the Permanent Financing) if the receipt, acceptance or retention would cause the Authority to default in its Obligations; or commingle the assets of the Casino Facilities or other Gaming Assets (other than assets distributed to the Nation in accordance with the Transaction Documents or any other agreement entered into in connection therewith, and/or the terms of the Permanent Financing) with any other assets of the Nation outside the Authority; adopt or enforce, or permit any Affiliate to adopt or enforce, any ordinance, law, or agreement that would abolish, consolidate, merge or otherwise change the organizational structure of the Authority unless the Authority (or, if the Authority is not the successor or surviving entity, the successor or surviving entity) has the capacity to and does, in fact, assume all obligations under this Agreement pursuant to an assumption agreement reasonably satisfactory to Gateway; adopt or enforce, or permit any Affiliate to adopt or enforce, any ordinance, law, or agreement that would abolish or change the power and right of the Authority to be the Nations sole entity to develop, manage, and operate the Nations Gaming Operations or to limit the Authoritys sovereign immunity waiver as set forth in the Transaction Documents; adopt or enforce, or permit any Affiliate to adopt or enforce any tribal zoning law against the Gaming Operation; wrongfully or otherwise in bad faith fail to issue or renew any license or wrongfully or otherwise in bad faith suspend or revoke any license of Gateway necessary to carry out the duties set forth in the Transaction Documents; or failing to within thirty (30) days of receipt approve or reject a business plan or budget related to the Gaming Operation, or rejecting all or a portion of a business plan or budget other than (1) in good faith and on commercially reasonable grounds, (2) because the business plan or budget submitted violates the Transaction Documents or (3) the rejected portion of the business plan or budget relates solely to the operations of the Authority itself. ARTICLE 5 DEFAULT; REMEDIES AGAINST THE NATION UPON BREACH OF AGREEMENT 5.1 Default. Any of the following shall constitute an Event of Default:

(a) Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Nation herein, or in any document in connection herewith shall be materially incorrect or misleading when made or deemed made; or

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(b) The Nation materially fails to perform or observe any covenant contained in Article 3 or Article 4. 5.2 Remedies. If a Default or Event of Default occurs hereunder, Gateway's only remedy hereunder shall be an action for specific performance, injunction, or declaratory judgment to enforce the Nation's performance of any of its covenants and obligations under this Agreement and/or to fully rectify any Default or Event of Default unless (a) the Nation opposes such remedies for reasons independent of whether a Default or Event of Default has occurred, (b) a court specified in Section 7.3 has found a Default or Event of Default by the Nation has occurred but fails to order any remedy, or (c) the Nation fails to comply with any order for specific performance, injunction or declaratory judgment obtained by Gateway as a result of a Default or Event of Default, and in each such event, Gateway may seek damages for such result.

ARTICLE 6 WAIVERS; RELATIONSHIP OF NATION TO AUTHORITY 6.1 Continuing Nature of Agreement and Obligations. This Agreement shall be continuing and shall not be discharged, impaired or affected by (a) the insolvency of the Authority, (b) lack of authority of the Authority to incur the Authority's Obligations, or (c) the invalidity of the Transaction Documents or any other agreement executed in connection therewith This Agreement shall terminate upon irrevocable payment and full satisfaction of the Obligations or upon the end of the Term of all Transaction Documents. 6.2 Waivers. The Nation hereby waives (a) all rights to revoke this Agreement at any time, (b) all rights to revoke or terminate any Obligations, and (d) all rights to revoke, terminate or withdraw the limited waivers of sovereign immunity and consent to jurisdiction granted hereunder and under the Transaction Documents. ARTICLE 7 DISPUTE RESOLUTION; SOVEREIGN IMMUNITY; JURISDICTION 7.1 Dispute Resolution. The Parties agree that any Claim will be governed by the dispute resolution procedures set forth in this Article 7. Nothing in this Agreement shall be deemed to be a waiver of the Nations sovereign immunity from suit or other legal or dispute resolution proceedings except as provided in this Article 7. 7.2 [Intentionally Omitted]

7.3 Forum Selection. With respect to any Claim, the Nation, for itself and the Authority, irrevocably and unconditionally submits, subject to the provisions of this Article 7 and Section 7.4 in particular, to the exclusive jurisdiction of: (i) the United States District Court for the Eastern District of New York (or if such court determines that it is unwilling or unable to hear the dispute, then any other federal court of competent jurisdiction in the State of New York), and any court having appellate jurisdiction thereof and (ii) if, and only if the federal courts determine that they lack jurisdiction over any claim arising hereunder, the Supreme Court in and for Suffolk County, New York (or if such court determines that it is unwilling or unable to hear the dispute, then any other state court in theSNGA Gaming Update November, 2011 32

State of New York), and any court having appellate jurisdiction thereof (collectively, the Applicable Courts). The Nation further expressly and unconditionally consents to the jurisdiction of any Nation Forum with respect to an action for provisional or interim relief expressly authorized by this Article 7. 7.4 Limited Waiver of Sovereign Immunity.

(a) Retention of Sovereign Immunity. By executing this Agreement, the Nation does not waive, limit or modify its sovereign immunity from unconsented suit or judicial litigation, except as provided for herein. (b) Scope of Waiver. The Nation hereby grants to Gateway an irrevocable limited waiver of sovereign immunity waiving the sovereign immunity of the Nation and the Authority from unconsented suit and all defenses based thereon, and consents to suit in accordance with this Non-Interference Agreement solely and exclusively to: interpret or enforce the terms of this Agreement and resolve any Claim, and with regard to the Authority, to interpret or enforce the terms of the Transaction Documents; enforce an award of damages pursuant to Section 5.2 of this Agreement or the Transaction Documents; enforce any judgment prohibiting the Nation from taking any action, or mandating or obligating the Nation to take any action; order amounts payable under the Transaction Documents to be paid in accordance with the terms thereof and enforce the award of damages owing as a consequence of a breach of any Transaction Document; exercise any other remedy available generally in the State of New York for judgment creditors, provided, however, that such remedies shall not extend to the appointment of a receiver with the power to manage Casino Facilities, as such term is construed by the NIGC; determine whether any consent or approval of the Authority or the Nation has been improperly granted or unreasonably withheld; enforce any judgment prohibiting the Authority or the Nation from taking any action, or mandating or obligating the Authority or the Nation to take any action; and adjudicate claims for damages for the wrongful failure to issue or renew any license or the wrongful suspension or revocation by the Shinnecock Nation Gaming Commission of any license of Manager necessary to carry out the duties set forth in any Transaction Document. (c) Procedural Requirements. The limited waiver by the Nation of its sovereign immunity as to unconsented suit is effective if, and only if, each and every one of the following conditions is met: (i) the Claim is made by Gateway (or the Developer or Manager designated under the Transaction Documents);

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(ii) the Claim relates to the obligations of the Nation or the Authority under this Agreement or the Transaction Documents; (iii) the Claim seeks: (a) payment of a specified sum, some specific action, or discontinuance of some action, by the Nation or the Authority to bring the Nation or the Authority into full compliance with the duties and obligations expressly assumed by the Nation or the Authority under the Transaction Documents; or (b) money damages pursuant to Section 5.2 of this Agreement; (iv) the Claim is made in a detailed written statement to the Nation stating the specific action or discontinuance of action by the Nation or the Authority that would cure the alleged breach or non-performance, or the sum of money claimed to be due and owing to Gateway pursuant to Section 5.2 of this Agreement, and, unless permanent irreparable injury would result, the Nation shall have seven (7) calendar days to cure or cause the cure of such breach or non-performance or to make such payment before judicial proceedings may be instituted, during which 7-day period the Parties shall in good faith seek to meet and confer to resolve the Claim without the need for judicial proceedings to be instituted; provided, however, that this cure period may be reasonably extended in the sole discretion of Gateway for non-monetary matters as long as the Nation is making good faith efforts to cure such breach or nonperformance; (v) with respect to any Claim authorized herein, initial suit, as authorized herein, shall be commenced within the later of three (3) years after the Claim accrues or is discovered upon the exercise of due diligence, or such Claim shall be forever barred. The waiver granted herein shall commence on the date hereof and shall continue for three (3) years following the date of the termination of this Agreement, except that the waiver shall remain effective for any proceedings then pending, all appeals there from, and the enforcement of any judgments with respect thereto; (vi) no claim for damages is made in any such suit against any individual member of the Nation, Tribal Trustees, Authority Board, Gaming Commission, or other director, officer, employee or agent of the Nation; (vii) no claim is made in such suit for punitive damages or for any claim under federal or state securities laws and no claim is made for consequential damages with respect to any Claim that is not a breach of contract Claim; and (viii) the Claim does not seek to subject any assets of the Nation other than Recourse Assets to use for satisfaction of any judgment that may be rendered against the Nation. (d) Recipient of Waiver. The recipient of the benefit of the irrevocable waiver of sovereign immunity is limited to Gateway (or the Developer or Manager designated under the Transaction Documents). (e) Governing Law. The Nation and Gateway hereby agree that any dispute arising under the provisions of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that state.


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(f) Enforcement. The Nation irrevocably waives the sovereign immunity of the Nation and the Authority from a judgment or order consistent with the terms and provisions of this limited waiver, which is final because either the time for appeal thereof has expired or the judgment or order is issued by a court having final appellate jurisdiction over the matter. The Nation consents to the jurisdiction of, to be sued in and accepts and agrees to be bound by any order or judgment of any of the Applicable Courts, consistent with the terms and provisions of this limited waiver and agreement. The Nation irrevocably waives its sovereign immunity as to an action by Gateway in any Applicable Court, seeking injunctive and/or declaratory relief against the Nation based upon any attempt to revoke its irrevocable waiver of its sovereign immunity under this Agreement, and as to enforcement in said Applicable Court of any such final judgment against the Nation. Without in any way limiting the generality of the foregoing, the Nation expressly authorizes any governmental authorities who have the right and duty under applicable law to take any action authorized or ordered by any court, to take such action to give effect to any judgment entered or order granted in accordance with the terms of this Agreement. (g) bly waives: Waivers. The Nation, for itself and the Authority, hereby expressly and irrevoca-

(i) its rights to have any dispute, controversy, suit, action or proceeding arising under this Agreement heard in any forum other than the Applicable Courts set forth in Section 7.3, whether or not such forum now exists or is hereafter created; (ii) any claim or right which it may possess to the exercise of jurisdiction by any Tribal court or other tribunal or forum, council or adjudicative body of the Nation (each a Nation Forum), including, without limitation, any determination that any Nation Forum has jurisdiction over any such dispute, controversy, suit, action or proceeding or jurisdiction to determine the scope of such Nation Forums jurisdiction; (iii) any requirement which may exist for exhaustion of any remedies available in any Nation Forum prior to the commencement of any dispute, controversy, suit, action or proceeding in any state or federal court even if any such Nation Forum would have concurrent jurisdiction over any such dispute, controversy, suit, action or proceeding but for such waiver and agrees that the Authority will not present any affirmative defense based on any alleged failure to exhaust such remedies. Without in any way limiting the generality of the foregoing, the Authority expressly authorizes, if ordered by a final non-appealable judgment by an Applicable Court or if the time for appeal has expired without the judgment being appealed, the repossession of any personal property and equipment subject to a security interest or otherwise giving effect to any judgment entered; (iv) its sovereign immunity as to the action of Gateway in any of the Applicable Courts, seeking injunctive and/or declaratory relief against the Nation based upon an attempt by it to revoke its irrevocable waiver of its sovereign immunity or other waivers granted hereunder; and (v) its sovereign immunity from a judgment or order (including any appellate judgment or other order) and post judgment proceedings supplemental thereto consistent with the terms and provisions hereof, which is final because either the time for appeal thereof has expired or the judgment or an order is issued by the court having final jurisdiction over the matter.35 SNGA Gaming Update November, 2011

(h) No Revocation of Sovereign Immunity Waiver. The Nation, for itself and the Authority, agrees not to revoke or limit, in whole or in part, the Nation or the Authoritys limited waiver of sovereign immunity contained in this limited waiver and agreement or in any way attempt to revoke or limit, in whole or in part, such limited waiver of sovereign immunity and will take all available steps to prevent the Nation from taking any action to revoke or limit, in whole or in part, the Authoritys limited waiver of sovereign immunity. In the event of any such revocation, limitation, attempted revocation, or attempted limitation, the parties hereto expressly recognize and agree that there remains no adequate remedy at law available to Gateway, it will be irreparably injured upon any revocation or limitation hereof, and the Nation, for itself and the Authority, hereby consents to the entry of appropriate injunctive relief, consistent with the terms and conditions of this Agreement. In the event of any attempted limitation or revocation of the limited waiver of sovereign immunity granted herein, Gateway may immediately seek judicial injunctive relief as provided in this limited waiver and agreement without first complying with any of the prerequisites contained herein to the limited waiver of sovereign immunity granted herein. Any action seeking injunctive relief hereunder shall be brought in one of the Applicable Courts, and the Nation, for itself and the Authority, expressly consents to the jurisdiction of, and agrees to be bound by, any order or judgment of such Applicable Courts. 7.5 Service of Process. In any legal action or other proceeding as to which the Nation has waived its sovereign immunity as provided in this Article 7, the Nation consents and agrees that process against the Nation and the Authority shall be effective if served pursuant to Section 8.4. 7.6 No Exhaustion of Tribal Remedies. The Nation, for itself and the Authority, hereby waives any requirement of exhaustion of tribal remedies, and agrees that they will not present any affirmative defense based on any alleged failure to ex

shinnecock nation gaming authority - nov 2011 - updated info/voting packet

Documents

nation gaming ordinance

gaming resolution

gaming compact

gaming updatenovember

form of gaming

forms of gaming

gaming authority charter

nationsnga gaming update