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EXHIBIT 10.74
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (the "Agreement"), dated as of this 29th day
of July, 1999, is by and between LAKES SHINGLE SPRINGS, INC., a Minnesota
corporation ("Manager"), and LAKES KAR-shingle Springs, L.L.C., a Delaware
limited liability company (the "Company").
X. Xxxx Argovitz Resorts-Shingle Springs, L.L.C. ("KARSS") entered into
a Management Agreement with the Shingle Springs Band of Miwok Indians (the
"Tribe") dated June 11, 1999 (the "Tribe Management Agreement"), pursuant to
which KARSS was to manage a casino and certain related facilities to be owned by
the Tribe. Lakes Gaming, Inc. and KARSS entered into a Letter Agreement (the
"Letter Agreement") under which they agreed to form the Company to assume the
rights and obligations of KARSS in connection with the Tribe Management
Agreement. KARSS has assigned its rights and obligations under the Tribe
Management Agreement to the Company pursuant to the terms of an Assignment and
Assumption Agreement.
B. The Tribe has consented to the assignment of the Tribe Management
Agreement to the Company by KARSS and to the Company's assumption of KARSS's
rights and responsibilities under the Tribe Management Agreement.
C. The Company desires to have Manager assume certain of its
responsibilities and authority under the Tribe Management Agreement relating to
the management and operation of the foregoing facility, all upon the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Company and Manager agree as follows:
1. DEFINITIONS AND REFERENCES. Except for the terms defined in this
Agreement, the capitalized terms used herein shall have the meanings assigned to
them in the Tribe Management Agreement.
2. SCOPE OF AGREEMENT, RESPONSIBILITIES.
2.1 Authority of The Company. The Company shall determine the general
policy with respect to the management of the Enterprise and the Facility.
2.2 Authority of Manager. Subject to the foregoing general authority of
the Company, and subject to the terms of this Agreement, Manager shall have the
authority granted to the Company under Article 4 of the Tribe Management
Agreement. The Company agrees that it will cooperate with Manager in every
reasonable and proper way to permit and assist Manager to carry out its duties
hereunder and comply with any conditions or restrictions under Article 4 of the
Tribe Management Agreement or imposed by the Tribe or any gaming authority. The
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Manager shall have the authority granted to the Company under Article 4 of the
Tribe Management Agreement.
2.3 Duties and Obligations of Manager. The Manager shall perform the
duties of the Company under Article 4 of the Tribe Management Agreement with
respect to the management and operation of the Enterprise and the Facility.
2.4 Performance of Duties. Manager shall devote to its responsibilities
such time as may be reasonably necessary for the proper performance of all
duties hereunder in the manner prescribed by the Tribe Management Agreement.
2.5 Consultation with the Company. Manager shall at all times keep the
Company reasonably apprised and aware of all operating policies. Manager agrees
to consult with the Company as frequently as the Company shall reasonably
request to review operating policies and other matters referred to herein. The
Company shall, at all times, have the right to enter the Facility for the
purpose of inspecting same and reviewing the operations. The Company agrees that
it and its representatives will, at no time, act in a manner which is
inconsistent with the authority granted to Manager.
3. TERM. Unless earlier terminated as provided herein, the term of this
Agreement shall be the same as the Term of the Tribe Management Agreement.
4. OPERATION OF THE BUSINESS.
4.1 Licenses and Permits. Manager and the Company shall timely apply
for, obtain and maintain all licenses and permits required to operate the
business (other than gaming authority permits, licenses and approvals required
to be obtained by parties other than the Company or Manager), at the
Enterprise's expense.
4.2 Personnel.
4.2.1 General. Subject to the Tribe Management Agreement,
Manager shall hire, supervise, direct, discharge and determine terms of
employment of all personnel working for the Enterprise.
4.2.2 Key Employees. Key employees and the Off-Site Employees
may, at the option of Manager be employees of Manager. Except as Manager and the
Company may otherwise agree, all other personnel shall be in the sole employ of
the Enterprise or the Tribe.
5. TITLE, OTHER MATTERS.
5.1 Proprietary Information. All specifically identifiable information
developed by Manager for the Company shall be the property of both Manager and
the Company. All existing information of Manager previously developed by Manager
at Manager's expense, including,
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without limitation, all customer lists, gaming and marketing strategies and
other similar information, shall be the property of Manager and not the Company
or the Tribe and neither the Company, the Tribe nor any of their respective
affiliates or successors may use such proprietary information without the
consent of Manager, which consent shall not be unreasonably withheld. The
parties agree that Proprietary Information does not include information which is
clearly available in the public domain.
5.2 Outside Activities of Parties. Subject to Section 21 of the Letter
Agreement, this Agreement shall be limited to the purposes set forth herein and
nothing in this Agreement, whether by implication or otherwise, shall be
construed to extend the relationship of the parties beyond such purposes. Each
party acknowledges that the other party and their respective affiliates are or
may hereafter become interested, directly or indirectly, by ownership, contract,
agency or otherwise, in business opportunities which are not within the purpose
of this Agreement and which may compete with or otherwise affect all or some
aspects of the Enterprise or the Facility.
6. COMPENSATION OF MANAGER. In consideration for the services to be
performed by Manager, Manager shall be entitled to an annual management fee
equal to two percent (2%) of the Enterprises' gross Revenue, not to exceed Two
Million Dollars ($2,000,000) per annum. The fee shall become due and payable ten
(10) days after the end of each month based upon the gross revenue for the
previous month.
7. INSURANCE. Manager shall be a named insured on all insurance policies
required to be maintained under the Tribe Management Agreement.
8. DEFAULT AND TERMINATION.
8.1 Events of Default. It shall be an event of default hereunder (an
"Event of Default") if Manager or the Company (the "Defaulting Party") as
hereinafter defined fails to keep, perform or observe any material covenant,
obligation or agreement required to be kept, performed or observed by such party
under the terms of this Agreement, followed by written notice of such breach,
default or non-compliance from the other party (the "Non-Defaulting Party" as
hereinafter defined) to the Defaulting Party and the Defaulting Party fails to
remedy or correct such breach, default or non-compliance within thirty (30) days
after receipt of such notice. If the breach, default or non-compliance is other
than payment of money and is of a nature such that it cannot reasonably be cured
within such thirty (30) day period, the period for curing the default shall be
extended so long as the Defaulting Party commences immediately and expediently
as possible to cure the breach, default or non-compliance within such thirty
(30) day period.
8.2 Termination.
8.2.1 General. If an Event of Default occurs and has not been
cured, this Agreement shall terminate at the election of the Non-Defaulting
Party. Notice of termination
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pursuant to this Section 8.2.1 may be given by the Non-Defaulting Party to the
Defaulting Party at any time prior to the curing of such Event of Default, and
such termination shall be effective as of the date specified in such notice of
termination, which date shall be not less than sixty (60) nor more than one
hundred twenty (120) days after the date of such notice. Notwithstanding the
foregoing, if the Event of Default pertains to the payments of money, Manager
may cease the discharge of its responsibilities hereunder effective upon the
expiration of the thirty (30)-day notice referenced in Section 8.1 hereof.
Manager shall receive all funds due to it at the time of Termination.
8.2.2 Termination. In addition to the foregoing, this
Agreement shall terminate upon any of the following events:
(a) The mutual agreement of the parties;
(b) The termination of the Tribe Management Agreement or the
Letter Agreement (pursuant to paragraph 3 thereof);
(c) The inability of either party to receive or maintain the
licenses to perform their obligations hereunder; or
(d) Manager shall
(i) apply for or consent to the appointment of, or
taking possession by, a receiver, custodian, trustee,
liquidator or other similar official of all of its
assets;
(ii) make a general assignment for the benefit of
creditors;
(iii) be adjudicated as bankrupt or insolvent or have
any order for relief entered with respect thereto; or
(iv) file a voluntary petition, commence a voluntary
case under the federal bankruptcy laws as now or
hereafter constituted or file a petition or an answer
seeking reorganization or any arrangement with
creditors or take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debts,
dissolution or liquidation law or statute.
8.2.3 Waiver. The waiver of any one Event of Default shall not
be construed as the waiver of any other Event of Default.
8.3 Remedies Cumulative. Except as herein provided to the contrary, the
termination of this Agreement by the Non-Defaulting Party upon an Event of
Default shall be without damages, injunctions, specific performance or other
legal or equitable remedies by reason of any breach, default or noncompliance by
the Defaulting Party with such Defaulting Party's covenants,
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obligations and agreements hereunder, except for compensatory (but not punitive)
damages based on the gross negligence or willful misconduct of the Defaulting
Party. Except as to any disputes for which injunctive relief would be an
appropriate remedy, in the event a dispute of any kind arises in connection with
this Agreement (including any dispute concerning its construction, performance
or breach), the parties to the dispute will attempt to resolve the dispute as
set forth in Section 8.4 before proceeding to arbitration as provided in Section
8.5. All documents, discovery and other information related to any such dispute,
and the attempts to resolve or arbitrate such dispute, will be kept confidential
to the fullest extent possible.
8.4 Negotiation. If a dispute arises, any party to the dispute will
give notice to each other party. After notice has been given, the parties in
good faith will attempt to negotiate or mediate a resolution of the dispute.
9. NOTICES.
9.1 Notices. Every notice, demand, consent, approval or other document
or instrument required or permitted to be served upon any of the parties hereto
shall be in writing and shall be deemed to have been duly served on the day of
mailing, and shall be sent by registered or certified United States Mail,
postage prepaid, return receipt requested, addressed to the respective parties
at the addresses stated below:
If to Manager: Lakes Shingle Springs, Inc., President
or his designee Manager
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
With copies thereof to the following:
Xxxx Xxxxx, Esq.
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxx & Xxxxx PLC
West 1450 First National Bank Building
000 Xxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to the Company: Lakes KAR-Shingle Springs, L.L.C.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx Xxxx
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With copies thereof to the following:
Xxxxx X. Xxxx
Kean Argovitz Resorts-Shingle Springs, L.L.C.
00000 Xxxx Xxxxxxx, Xxxxx 000
0
Xxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxx, Esq.
XxXxxxx, Xxxx & Xxxxxx, L.L.P.
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxx Xxxxx, Esq.
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxx & Xxxxx PLC
West 1450 First National Bank Building
000 Xxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
or to such other address as either Manager or the Company may have specified in
a notice duly given as required herein to the other.
10. RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS.
10.1 Relationship. Manager and the Company shall not be construed as
joint venturers or partners of each other by reason of this Agreement and
neither shall have the power to bind or obligate the other except as
specifically authorized and set forth in this Agreement. Nevertheless, Manager
is granted such authority and powers as may be reasonably necessary for it to
carry out the provisions of this Agreement. This Agreement, either alone or in
conjunction with any other documents, shall not be deemed to constitute or
create a lease of all or any portion of the Facility.
10.2 Contractual Authority. Subject to the limitations thereon set
forth in this Agreement and the Tribe Management Agreement, and in conformity
with the Operating Budget and Annual Plan, Manager is authorized to make, enter
into and perform in the name of, for the account of, on behalf of the Tribe any
contracts and agreements (including, but not limited to bank accounts) which are
reasonably necessary and appropriate to carry out and place in effect the terms
and conditions of this Agreement. Copies of all executed contracts shall be
immediately conformed and furnished to the Company or the Tribe as appropriate.
10.3 Further Actions. The Company and Manager agree to execute all
contracts, agreements and documents and to take all actions necessary to comply
with the provisions of this Agreement and the intent hereof.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. Any action shall be
commenced in California Superior Court. If any of the terms and provisions
hereof shall be held invalid or unenforceable for any reason, such validity or
unenforceability shall in no event affect any of the other terms or provisions
hereof, all such other terms and provisions to be held valid and enforceable to
the fullest extent permitted by law.
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12. MISCELLANEOUS.
12.1 Successors and Assigns. Manager shall not assign the whole or any
portion of this Agreement or any payments due Manager hereunder, without the
consent of the Company, which consent will not be unreasonably withheld. The
Company shall not assign the whole or any portion of this Agreement, without
Managers consent, except as collateral for any financing obtained in connection
with the development and/or operation of the Facility.
12.2 Force Majeure. If at any time it becomes necessary in Manager's or
the Company's reasonable opinion to cease operation of all or part of the
Facility to protect the Facility or the health, safety or welfare of guests or
employees of the Enterprise for reasons of force majeure, such as, but not
limited to, weather, acts of war, insurrection, civil strife and commotion,
labor unrest, contagious illness, catastrophic events, or acts of God, then in
such event, as provided or permitted in the Tribe Management Agreement, Manager
may close and cease operations of all or part of the Facility, reopening and
commencing operation when Manager determines in good faith that such may be done
without jeopardy to the Enterprise or the Facility, its guests and employees.
Neither party shall be liable for failure to perform any obligation hereunder
(other than to pay money) when prevented by any force majeure cause not
reasonably within the control of such party, such as strike, lockout, breakdown,
accident, order or regulation of or by any governmental authority, failure of
supply or inability, by the exercise of reasonable diligence, to obtain
supplies, parts or employees necessary to perform such obligation to which such
force majeure applies and shall be extended for a period of time equivalent to
the delay from such cause.
12.3 Authorization. The Company and Manager represent to the other that
it has full power and authority to execute this Agreement and to be bound by and
perform the terms hereof. On request, each party shall furnish the other
evidence of such authority.
12.4 Entire Agreement; Amendments. This Agreement sets forth the entire
and only agreement or understanding between the Company and Manager relating to
the subject matter hereof and supersedes and cancels all previous agreements,
negotiations, commitments and representations in respect hereof among them. The
Company has not relied on any projection of earnings or statements as to the
possibility of future success or other similar matters which may have been
prepared by Manager, or any of its affiliates, and understands that no guaranty
is made or implied by Manager or its affiliates as to the cost or the future
financial success of the operations being managed hereunder. This Agreement may
not be amended in any respect except by an instrument in writing signed by the
Company and Manager.
12.5 Survival of Covenants. Any covenant, term or provision of this
Agreement which, in order to be effective, must survive the termination of this
Management, shall survive any such termination.
12.6 No Waiver. No waiver by either party of a breach by the other
party of any of the
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terms, covenants or conditions of this Agreement, shall be construed or held to
be a waiver of any succeeding or preceding breach of the same or any other term,
covenant or condition herein contained. No waiver of any default of either party
hereunder shall be implied from any omission by the other party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect default other than as specified in said waiver.
12.7 Compliance. In performing its obligations under this Agreement,
Manager shall comply with the applicable terms of the Tribe Management Agreement
and with all present and future laws, ordinances and all rules and regulations,
requirements and orders of all governmental authorities and shall obtain all
licenses and permits required to perform such obligations and shall file all
returns and reports lawfully required of Manager in connection with its duties
hereunder, including, but not limited to, income tax withholding returns,
Federal Insurance Contributions Act returns and reports, Federal Unemployment
Tax Act and worker's compensation returns and reports, sales and use tax returns
(and shall timely pay all contributions, taxes, costs and other amounts due
thereunder). All of the foregoing returns and reports shall be maintained as a
part of the books and records of Manager.
12.8 Benefit. The rights and obligations of the parties hereto shall
inure solely to the benefit of the parties and their successors and assigns,
without conferring on any other person or entity any right of enforcement or
other rights of any kind whatsoever.
12.9 Headings. The headings hereunder are used for convenience only and
shall not affect the construction or interpretation of any provision hereof.
12.10 Counterparts. For the convenience of the parties hereto, this
Management Agreement may be executed in several original counterparts, each of
which shall be deemed an original for all purposes and all such counterparts
shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Management Agreement as of the date and year first above written.
LAKES SHINGLE SPRINGS, INC. LAKES KAR-Shingle Springs, L.L.C.
a Minnesota corporation a Delaware limited liability company
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxx X. Xxxx
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Name: Xxxxxxx Xxxx Name: Xxxxx X. Xxxx
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Title: Executive Vice President Title: President
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