Lottery Gaming Facility Management Contract between the State of Kansas and Butler National Service Corporation, approved by the Kansas Racing and Gaming Commission on December 8, 2008

 

THIS ENVIRONMENTAL COMPLIANCE AND INDEMNIFICATION AGREEMENT (the “Environmental Compliance Agreement, dated as of [insert date], is given by Butler National Service Corporation, a Kansas corporation (“Manager”) having offices at 19920 W. 161st Street, Olathe, KS 66062, to the Kansas Lottery, an agency of the State of Kansas having its principal office at 128 N. Kansas Avenue, Topeka, KS ###-###-####.

 

 

WHEREAS, the Manager is the owner of, or is acquiring title to or other interest in, certain real property located _________________________, State of Kansas and described more fully in Schedule “A” attached and made a part hereof (the “Premises”); and

 

WHEREAS, the Manager is contracting with the Kansas Lottery to be a Lottery Gaming Facility Manager, as that term is defined in the Kansas Expanded Lottery Act, K.S.A. 2007 Supp. 74-8733 through 74-8773, which will consist of a Lottery Gaming Facility and certain Ancillary Lottery Gaming Facility Operations, as referenced in a Lottery Gaming Facility Management Contract of even date, to which this Environmental Compliance Agreement is attached (collectively referred to as the “Project”); and

 

WHEREAS, the Lottery Gaming Facility Management Contract contemplates that Manager will construct and maintain the Project in which a certain portion will be used to house a Lottery Gaming Facility, the business of which will be owned and operated by the Kansas Lottery; and

 

WHEREAS, the Kansas Lottery is unwilling to consummate the Lottery Gaming Facility Management Contract unless the Manager executes and delivers this Environmental Compliance Agreement to the Kansas Lottery.

 

NOW, THEREFORE, in consideration of the foregoing and to induce the Kansas Lottery to consummate the Lottery Gaming Facility Management Contract, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Manager covenants and agrees with the Kansas Lottery as follows:

 

1.             DEFINITIONS. All capitalized terms used in this Environmental Compliance Agreement and not defined will have the meanings set forth below.

 

(a)           Environment means any water, groundwater, water vapor, land (including land surface or subsurface), soil vapor, air, fish, wildlife, biota, and all other natural resources.

 

 

(b)           Environmental Laws mean all federal, state and local environmental, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the Environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances (as defined below) and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

 

(c)           Environmental Permits mean all permits, licenses, approvals, authorizations, consents or registrations required by any applicable Environmental Law in connection with the ownership, use and/or operation of the Premises for the storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances or the sale, transfer or conveyance of the Premises.

 

(d)           Hazardous Substance means any substance, which are not naturally occurring, (i) the presence of which requires investigation or remediation under any Environmental Law; or (ii) which is or becomes defined as a “hazardous waste”, “hazardous substance”, “toxic substance”, “solid waste”, pollutant and/or or contaminant under the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. section 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.), as amended, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801 et seq.), the Clean Air Act (42 U.S.C. Sections 7401, et seq., the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), the Clean Water Act, as amended (33 U.S.C. Sections 1251 et seq.) the Occupational Safety and Health Act, as amended (29 U.S.C.A. 651 et seq.) , and/or any other applicable Environmental Law or any regulations promulgated under any of the foregoing; or (iii) which is toxic (including, but not limited to, toxic mold), explosive, corrosive, flammable, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the State of Kansas or any political subdivision thereof; or (iv) which contains gasoline, diesel fuel or other petroleum hydrocarbons; or (v) which contains polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde foam insulation.

 

(e)           Improvements mean any buildings, structures and other improvements (if any) presently or hereafter located on the Premises.

 

(f)           Indemnitee means the Kansas Lottery, the Kansas Lottery Commission, and the State of Kansas, and their successors and assigns, and their respective officers, directors, employees, agents, representatives, contractors and subcontractors.

 

 

(g)           Release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the Environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Substance).

 

2.             REPRESENTATIONS AND WARRANTIES: The Manager represents and warrants to the Kansas Lottery that to the best of the Manager’s knowledge, information and belief:

 

(a)           Neither the Premises nor any property adjacent to the Premises is being or has been used for the storage, treatment, generation, transportation, processing, handling, production, disposal or release of any Hazardous Substance or as a landfill or other solid waste disposal site or for military, manufacturing or industrial purposes or for the storage of petroleum or petroleum based products.

 

(b)           Underground storage tanks are not and have not been located on the Premises, except as set forth in Schedule “B” hereto.

 

(c)           The soil, subsoil, bedrock, soil vapor, surface water and groundwater of the Premises are free of any Hazardous Substances in excess of Kansas Department of Health and Environment limits for commercial use.

 

(d)           There has been no Release nor is there the threat of a Release of any Hazardous Substance on, at or from the Premises, or any property adjacent to or within the immediate vicinity of the Premises which through soil, subsoil, soil vapor, bedrock, surface water or groundwater migration could come to be located on the Premises, and the Manager has not received any form of written notice or inquiry from any federal, state or local governmental agency or authority, any operator, tenant, subtenant, licensee or occupant of the Premises or any property adjacent to or within the immediate vicinity of the Premises or any other person with regard to a Release or the threat of a Release of any Hazardous Substance on, at or from the Premises or any property adjacent to or within the immediate vicinity of the Premises.

 

(e)           All Environmental Permits necessary for the acquisition, construction, equipping, use or operation of the Premises will be obtained and will be in full force and effect.

 

(f)           No event has occurred with respect to the Premises which, with the passage of time or the giving of notice, or both, would constitute a violation of any applicable Environmental Law or non-compliance with any Environmental Permit.

 

 

(g)           There are no agreements, consent orders, decrees, judgments, notices of violations, demand letters, license or permit conditions or other orders or directives of any federal, state or local court, governmental agency or authority relating to the past, present or future ownership, use, operation, sale, transfer or conveyance of the Premises which require any change in the present condition of the Premises or any work, repairs, construction, containment, clean-up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Premises.

 

(h)           There are no actions, suits, claims or proceedings, pending or threatened, which could cause the incurrence of expenses or costs of any name or description or which seek money damages, injunctive relief, investigations, remedial action or any other remedy that arise out of, relate to or result from (i) a violation or alleged violation of any applicable Environmental Law or non-compliance or alleged non-compliance with any Environmental Permit, (ii) the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Premises or any property adjacent to or within the immediate vicinity of the Premises or (iii) human exposure to any Hazardous Substance of whatever kind to the extent the same arise from the condition of the Premises or the ownership, use, operation, sale, transfer or conveyance thereof.

 

3.             COVENANTS OF MANAGER: The Manager covenants and agrees with the Kansas Lottery as follows:

 

(a)           Except in accordance with Environmental Laws, Manager shall keep, and shall cause all operators, tenants, subtenants, licensees, invitees and occupants of the Premises to keep, the Premises free of all Hazardous Substances and shall not cause or permit the Premises or any part thereof to be used for the storage, treatment, generation, transportation, processing, handling, production, disposal or release of any Hazardous Substances.

 

(b)           The Manager shall comply with, and shall cause all operators, tenants, subtenants, licensees, invitees and occupants of the Premises to comply with, all applicable material Environmental Laws, and shall obtain and comply with, and shall cause all operators, tenants, subtenants, licensees, invitees and occupants of the Premises to obtain and comply with, all Environmental Permits.

 

 

(c)           Except in accordance with Environmental laws, Manager shall not cause or permit any change to be made in the present or intended use of the Premises which would (i) involve the storage, treatment, generation, transportation, processing, handling, production, disposal or release of any Hazardous Substance or the use of the Premises as a landfill or other solid waste disposal site or for military, manufacturing or industrial purposes, (ii) violate any applicable Environmental Law, (iii) constitute non-compliance with any Environmental Permit or (iv) increase the risk of a Release of any Hazardous Substance.

 

(d)           The Manager shall promptly provide the Kansas Lottery with a copy of all written notifications which the Manager gives or receives with respect to any past or present Release or the threat of a Release of any Hazardous Substance on, at or from the Premises or any property adjacent to or within the immediate vicinity of the Premises.

 

(e)           To the extent required by applicable Environmental Laws, Manager shall undertake and complete all investigations, studies, sampling and testing and all removal and other remedial actions necessary to contain, remove and clean up all Hazardous Substances that are determined to be present at the Premises in accordance with all applicable Environmental Laws and all Environmental Permits.

 

(f)           The Manager shall at all times, upon reasonable notice, allow the Kansas Lottery and its officers, employees, agents, representatives, contractors and subcontractors reasonable access to the Premises for the purposes of ascertaining site conditions, including, but not limited to, subsurface conditions. In exercising such right, the Kansas Lottery will use good faith efforts to not unreasonably disturb or disrupt the Premises. In exercising such right, the Kansas Lottery will use good faith efforts to not unreasonably disturb or disrupt the Premises. In the event the Kansas Lottery negligently damages the Premises in the exercise of its rights under this subparagraph (f), the Kansas Lottery will return the Premises to the same condition as existed prior to the Kansas Lottery’s entering the Premises pursuant to this subparagraph (f).

 

 

(g)           Except as provided in the Lottery Gaming Facility Management Contract, if at any time the Manager obtains credible evidence or information which suggests that potential violation of Environmental Laws or Environmental Permits may exist at the Premises, the Kansas Lottery may require that a full or supplemental environmental investigation and environmental assessment report (including a Phase II environmental investigation) with respect to the Premises of a scope and level of detail satisfactory to the Kansas Lottery to be prepared by an environmental engineer or other qualified person acceptable to the Kansas Lottery, at the Manager’s expense. Said investigation may include a physical inspection of the Premises, a visual inspection of any property adjacent to or within the immediate vicinity of the Premises, personnel interviews and a review of all Environmental Permits. If the Kansas Lottery requires, such inspection shall also include a records search and/or subsurface testing for the presence of Hazardous Substances in the soil, subsoil, soil vapor, bedrock, surface water and/or groundwater. If the investigations indicate the presence of any Hazardous Substance or a Release or the threat of a Release of any Hazardous Substance on, at or from the Premises, the Manager shall promptly undertake and diligently pursue to completion all necessary, appropriate and legally authorized investigative, containment, removal, and other remedial actions, using methods recommended by the engineer or other person who conducted the investigations and acceptable to the appropriate federal, state and local agencies or authorities.

 

(h)           Attached hereto as Schedule “C” is a complete list of all Environmental Permits presently required for the ownership, use or operation of the Premises and the businesses located thereon. The Manager agrees to notify the Kansas Lottery of any additions, deletions, or modifications of any Environmental Permits and the list thereof. Upon written request of the Kansas Lottery, the Manager shall furnish true and complete copies of all Environmental Permits.

 

 

4.             INDEMNIFICATION PROVISIONS: Except for claims or liabilities arising from the actions or failure to act by any Indemnitee or Indemnitees or their agents (excluding Manager to the extent an agency relationship would be found as a matter of law between Manager and any Indemnitee), Manager covenants and agrees, at its sole cost and expense, to indemnify, protect, defend, and save harmless each and every Indemnitee from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, actions, proceedings, costs, disbursements and/or expenses (including, without limitation, attorneys’ and experts’ fees for attorneys and experts selected by the Indemnitee, expenses and disbursements) of any kind or nature whatsoever which may at any time be imposed upon, incurred by or asserted or awarded against any Indemnitee relating to, resulting from or arising out of (a) the use of the Premises, during the term of the Lottery Gaming Facility Management Contract, for the storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance, except in accordance with Environmental Laws or Environmental Permits, or as a landfill or other waste disposal site or for military, manufacturing or. industrial purposes, (b) the presence or claimed presence of any Hazardous Substance, except in accordance with Environmental Laws or Environmental Permits, or a Release or the threat of a Release of any Hazardous Substance on, at or from the Premises, or of any property adjacent to or within the immediate vicinity of the Premises during the term of the Lottery Gaming Facility Management Contract, (c) the failure during the term of the Lottery Gaming Facility Management Contract to promptly undertake and diligently pursue to completion all necessary, appropriate and legally authorized investigative, containment, removal, clean-up and other remedial actions with respect to a Release or the threat of a Release of any Hazardous Substance on, at or from the Premises, (d) human exposure during the term of this Lottery Gaming Facility Management Contract to any Hazardous Substance, except in accordance with Environmental Laws or Environmental Permits, to the extent the same arise from the condition of the Premises or the ownership, use, operation, sale, transfer or conveyance thereof, (e) a violation of any applicable Environmental Law during the term of the Lottery Gaming Facility Management Contract, (f) non-compliance with any Environmental Permit during the term of the Lottery Gaming Facility Management Contract, (g) a material misrepresentation or inaccuracy in any representation or warranty or a material breach of or failure to perform any covenant made by the Manager in this Environmental Compliance Agreement, and (h) the designation by any state or governmental entity, the United States Environmental Protection Agency or any other governmental authority of an Indemnitee as a party responsible or potentially responsible for the remediation of any condition on the Premises (collectively, the “Indemnified Matters”).

 

The liability of the Manager to the Kansas Lottery and each Indemnitee shall be perpetual and shall survive for a period of three (3) years following the termination or expiration of the Lottery Gaming Facility Management Contract, and shall in no way be limited, abridged, impaired or otherwise affected, by (i) any amendment or modification of any of the Lottery Gaming Facility Management Contract, (ii) the invalidity or unenforceability of any of the terms or provisions of the Lottery Gaming Facility Management Contract, (iii) any applicable statute of limitations, (iv) any investigation or inquiry conducted by or on the behalf of the Kansas Lottery or any other Indemnitee or any information which the Kansas Lottery or any other Indemnitee may have or obtain with respect to the environmental or ecological condition of the Premises, (v) the sale, transfer or conveyance of all or part of the Premises, (vi) the dissolution or liquidation of the Manager, (vii) the release or discharge, in whole or in part, of the Manager in any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or similar proceeding, (viii) any other circumstances which might otherwise constitute a legal or equitable release or discharge, in whole or in part, of the Manager under this Environmental Compliance Agreement, (ix) the expiration or termination of the Lottery Gaming Facility Management Contract or (x) the reconveyance of title to the Premises by the Manager or any other person, whether in accordance with the terms of a lease, by foreclosure or deed in lieu of foreclosure, sale or otherwise.

 

 

The indemnification agreement contained herein is wholly independent of and in addition to any indemnification agreement given to the Kansas Lottery or any other Indemnitee, as part of the application of the Kansas Expanded Lottery Act or any other applicable statute or regulation.

 

5.             GOVERNING LAW: This Environmental Compliance Agreement shall be governed by, construed in accordance with and enforceable under the laws of the State of Kansas.

 

6.             COUNTERPARTS: This Environmental Compliance Agreement may be executed in one or more counterparts, each of which shall be deemed an original. Said counterparts shall constitute but one and the same instrument and shall be binding upon each of the undersigned as fully and completely as if all had signed the same instrument.

 

7.             SUCCESSORS AND ASSIGNS: This Environmental Compliance Agreement shall be binding upon the Manager, its successors and assigns, all subsequent owners of the Premises, and their respective successors, assigns, executors, administrators, legal representatives, distributees and fiduciaries and shall inure to the benefit of each Indemnitee.

 

IN WITNESS WHEREOF, the Manager has caused this Environmental Compliance Agreement to be duly executed as of the day and year first above written.

 

 

 

 

On the __ day of _____________ in the year 2008, before me, the undersigned, personally appeared _________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signatures on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	Notary Public

 

 

State of _________ )
County of                  ) )	ss.:

 

On the __ day of __________________ in the year 2007 before me, the undersigned, personally appeared _____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signatures on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	Notary Public]

 

 

(Premises)

 

Lot 1, MARIAH CENTER a subdivision in part of Section 21 and part of Section 28, Dodge City, Ford County, Kansas

 

 

 

(Underground Storage Tanks)

 

None

 

SCHEDULE “C”

 

(Environmental Permits)

 

TO BE SUPPLEMENTED

 

ENDORSEMENT BY LOCAL GOVERNMENT·

 

 

WHEREAS, the City of Dodge City (“City”) and Ford County have undertaken an aggressive economic development program described as the Why Not Dodge development project, the purpose and intent of which is to attract tourists, visitors, conventions and meetings to the City and the Ford County area involving the construction of various entertainment and recreational facilities including facilities and programs, the primary purpose of which would be to enhance, improve and foster the nationally recognized western heritage of the area, thereby broadening, diversifying and enhancing the economic base of Ford County and the City economy; and

 

WHEREAS, in addition to the efforts undertaken by the City and County, a volunteer group of local supporters formed Boothill Gaming Inc. (“Boothill Gaming”), for the purpose of exploring, pursuing and implementing the concept of a gaming facility in the City in order to attract area tourists, conventions, visitors and programs from across the state and nation,

and

WHEREAS, due in part at least to the efforts of Boothill Gaming, Senate Bill 66, the Kansas Expanded Lottery Act (the “Act”), was approved by the Kansas Legislature, signed by the Governor, and was published in the Kansas Register, Vol. 26, No, 16, Pg. 518 on April 19, 2007; and

 

WHEREAS, the Act provides for the development of one Lottery Gaming Facility in each of four Gaming Zones; and

WHEREAS, Dodge City is located in Ford County, which is designated in the Act as the Southwest Kansas Gaming Zone; and

WHEREAS, the Act provides that each county in each gaming zone must submit to the qualified voters a resolution to permit a Lottery Gaming Facility within the County; and

WHEREAS, Ford County called for an election on the question of whether to allow a Lottery Gaming Facility in Ford County; and

 

WHEREAS, the election was duly noticed, conducted and the votes counted and canvassed in the matter provided by Kansas law; and

WHEREAS, the qualified electors of Ford County voted in favor of a Lottery Gaming Facility in Ford County and the certified results were transmitted to the Lottery Commission; and

WHEREAS, Boothill Gaming has enlisted the services of Butler National Service Corporation (“Butler”) for the purpose of managing a Lottery Gaming Facility and the development of a Lottery Gaming Enterprise as defined in the Act, in Ford County and

WHEREAS, Butler has entered into a real estate purchase agreement to acquire approximately 400 acres of property in Ford County for the location of the Lottery Gaming Enterprise and has requested said property be annexed into the City, and

WHEREAS, the City has taken the required legal action to accomplish the annexation of said property into the City and has adopted the proper ordinance annexing the property, and

WHEREAS, the Act requites a resolution of endorsement by the City governing body of any prospective Lottery Gaming Facility Manager who submits an application for a Lottery Gaming Facility Management Contract to the Lottery Commission to manage a Lottery Gaming Facility within the City limit; and

WHEREAS, Butler and Boothill Gaming have presented to the City a proposal for the development, construction and management of a Lottery Gaming Enterprise to be located on the annexed property and has requested that the City issue its resolution of endorsement of such proposal, and

WHEREAS, Butler has presented to the City its statement of qualifications, financial resources, proposed site and development plans for the Lottery Gaming Facility and its ancillary development; and

 

WHEREAS, after duly considering all information and testimony provided by Butler, the City has determined that Butler possesses the necessary qualifications, financial resources and development plans to manage a Lottery Gaming Facility in the City; and

WHEREAS, the City has determined that the proposed location, together with Butler’s plan for development of a Lottery Gaming Facility and ancillary operations, is well suited to attract tourism and enhance the economic development of the City, Ford County and the surrounding counties and is consistent and compatible with the long range development plans of the City, and

WHEREAS, to facilitate the location of the Southwest Kansas Lottery Gaming Facility in Dodge City, Ford County, Kansas, the City has determined that based on the proposal and information presented by Butler, it is in the best interest of the City to issue a Resolution of Endorsement to Butler; and

WHEREAS, Butler and the City have discussed and have agreed in principle to an overall development plan that will enhance and attract tourism and economic development to the area.

NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DODGE CITY, FORD COUNTY, KANSAS:

Pursuant to the provisions of Senate Bill No. 66, the City Commission of the City of Dodge City, Kansas does hereby issue its endorsement of the application of Butler National Service Corporation to develop and manage a destination casino in Dodge City, Ford County, Kansas to be constructed and developed in accordance with the requirements of the Act and a development plan to be mutually agreed to by the City and Butler National Service Corporation in anticipation of Butler National Service Corporation being granted a Lottery Gaming Facility management contract pursuant to the Act.

 

Adopted this 21st day of September, 2007.

 

 

	City Commission of Dodge City, Kansas
	By: /s/ Rick Sowers
	Rick Sowers, Vice Mayor
Attest: /s/ Nannette Pogue
Nannette Pogue

Certificate

 

The undersigned being duly appointed Clerk of the City of Dodge City, Kansas does hereby certify that the above and forgoing Resolution was duly adopted by majority vote of the City Commission of the City of Dodge City, Kansas on this 21st day of September, 2007.

 

/s/ Nannette Pogue

Nannette Pogue, City Clerk

/Seal of City of Dodge City