SETTLEMENT, USE AND MANAGEMENT AGREEMENT AND DNR PERMIT
THIS SETTLEMENT, USE AND MANAGEMENT AGREEMENT AND DNR
PERMIT (this "Agreement") is made as of May 15, 1995, by and
between Xxxx FUELS, INC., a Delaware corporation having its
principal place of business at 0000 X. 00xx Xxxxxx Xxxxx,
Xxxxxxx, XX 00000, doing business as a private corporation in
Iowa (hereinafter called "Xxxx") and the STATE OF IOWA
(hereinafter called the "State"), acting by and through the IOWA
DEPARTMENT OF NATURAL RESOURCES (hereinafter called the "DNR").
RECITALS
WHEREAS, Xxxx was provided a Special Warranty Deed dated June 2,
1987, whereby it purportedly received fee title to parcels of
land in Pottawattamie County, Iowa, identified as "Parcel "A",
Parcel "B" and Parcel "C" in Exhibit "A" hereto (hereinafter
referred to as the "Real Estate");
WHEREAS, the Real Estate is riparian land with one of its
contiguous borders being the Missouri River;
WHEREAS, the State has claimed ownership to portions of the Real
Estate under the laws of the State, as applied by the courts of
the State and interpreted by the DNR, based on a claim that such
portions of the Real Estate formed by accretion to the bed of a
navigable river within the State;
WHEREAS, Xxxx disputes the State's claim;
WHEREAS, portions of the Real Estate were substantially developed
for industrial purposes before Xxxx purchased the Real Estate and
before the State made any claim of ownership as to the Real
Estate;
WHEREAS, a good faith dispute exists between the DNR and Xxxx as
to the boundaries between the portion of the Real Estate owned by
Xxxx and the portion of the Real Estate owned by the State;
WHEREAS, Xxxx has filed an action in the Iowa District Court for
Pottawattamie County at Council Bluffs (hereinafter referred to
as the "District Court"), [insert Case Number], to quiet title to
the Real Estate in Xxxx (hereinafter referred to as the "Quiet
Title Action");
WHEREAS, the Real Estate is neither a park, a forest, a fish and
wildlife area, nor a public recreation area;
WHEREAS, the Iowa Racing & Gaming Commission, an agency of the
State, has determined that the people of the State will benefit
if portions of the Real Estate are developed as a commercial
recreational complex featuring a casino gambling boat and related
appurtenances and facilities including, but not limited to, the
following: one or more hotels, one or more shopping areas,
docking and terminal facilities, parking areas, driveways and
walkways;
WHEREAS, members of the public have made little, if any, use of
the Real Estate for access to the Missouri River for recreational
purposes;
WHEREAS, Xxxx has proposed to pay a one-time payment of Five
Hundred Fifty-Six Thousand Five Hundred Fifty-Five Dollars
($556,555) (hereinafter referred to as the "Monetary
Consideration") to an escrow agent, such Monetary Consideration
to be paid by the escrow agent as directed by the DNR, but only
to sellers of privately-owned real estate pursuant to agreements
with the DNR, for State acquisition of privately-owned real
estate which abuts the Missouri River, or adjoins State-owned
real estate which abuts the Missouri River, or to a third party
whose land is acquired to qualify such purchase agreement as an
agreement for exchange of like-kind real estate, such acquired
real estate to be held by the State in trust and maintained and
managed by the DNR or another public agency for conservation
purposes and for the benefit of the public;
WHEREAS, the Monetary Consideration will enable the DNR to
acquire other real estate substantially expanding public
recreational access to the Missouri River;
WHEREAS, Xxxx or its assignee propose to make certain
improvements to the portion of the Real Estate identified as
"Parcel "3"" on the diagram attached hereto as Exhibit "B"
(hereinafter referred to as the "Premises") that will facilitate
public access to and along the existing bank of the Missouri
River;
WHEREAS, after the expiration of the term of years set forth
herein for control by Xxxx or its assignee of the Premises (and
any renewals which hereafter may be negotiated) said riparian
parcel will be available for public recreational access to the
Missouri River free of any impediments which would otherwise
exist by virtue of Xxxx'x claim to the Real Estate; and
WHEREAS, Xxxx and the State desire to settle the Quiet Title
Action and their dispute as to the ownership of the Real Estate
and to provide for the development of the Real Estate for
recreational purposes.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises of the
parties hereto and other valuable consideration, the receipt of
which is hereby acknowledged, in order to resolve the disputed
claims of the parties, and, pursuant to the authority granted to
the DNR under Chapter 28E, Section 461A.4 and Section 461A.24 of
the 1995 Code of Iowa, Xxxx and the DNR agree as follows:
1. State Real Estate. In settlement of the Quiet Title Action
and the disputed claims with respect to the Real Estate and
in consideration of the Right to Use (as hereinafter
defined), Xxxx hereby disclaims all of its interest in and
acknowledges the State's title to the Premises, and Xxxx or
its assignee shall execute and deliver to the DNR a
quitclaim deed conveying all of its right, title and
interest, if any, in and to the Premises to the State
(subject to the Right to Use described below) upon the later
of (i) approval of this Agreement by the District Court,
(ii) approval of the Survey (described below) by the DNR and
Xxxx, or (iii) payment of the Monetary Consideration into
the escrow created pursuant to the terms of an escrow
agreement in the form of Exhibit "C" attached hereto
(hereinafter referred to as the "Escrow Agreement").
2. Xxxx Real Estate. In settlement of the Quiet Title Action
and the disputed claims with respect to the Real Estate, and
pursuant to Section 461A.24 of the Iowa Code, the DNR, on
behalf of the State, hereby disclaims all of the State's
interest in and acknowledges Xxxx'x title to all those
portions of the Real Estate not identified as "Parcel "3""
on the diagram attached hereto as Exhibit "B" (hereinafter
referred to as "Xxxx'x Property") and, the DNR shall execute
and deliver to Xxxx a boundary line agreement in the form
attached hereto as Exhibit "D" and an Affidavit Explanatory
of Title and Disclaimer of Interest in Real Estate in the
form attached hereto as Exhibit "E," disclaiming all of its
right, title and interest, if any, in Xxxx'x Property to
Xxxx, upon the later of (i) approval of this Agreement by
the District Court (ii) approval of the Survey by the DNR
and Xxxx or (iii) payment of the Monetary Consideration into
escrow pursuant to the terms of the Escrow Agreement. The
State, through the appropriate State agency or authority
shall provide Xxxx such other quitclaim deeds, disclaimers,
affidavits, or other documentation as Xxxx shall reasonably
request to evidence that it has fee title, including
riparian rights, to Xxxx'x Property free from any
enforceable claims of the State with respect to title to or
ownership of Xxxx'x Property, specifically including, but
not limited to, claims resulting from accretions from the
bed of the Missouri River.
3. Right to Use Premises. Xxxx'x prospective assignee
anticipates developing the Premises with commercial or
recreational facilities (which may include one or more
shopping areas) that would be compatible with its adjoining
casino gambling facilities. In settlement of the Quiet
Title Action and the disputed claims with respect to the
Real Estate, the DNR, on behalf of the State, hereby grants
to Xxxx and its assignees, and their successors, assignees
and mortgagees, employees, designees, agents, customers,
licensees, and invitees the right to use (hereinafter
referred to as the "Right to Use") the Premises for a term
of fifty (50) years for commercial or recreational purposes
including the development, construction, operation,
management and use of retail facilities, hotel facilities,
recreational vehicle parks, parking areas, and other uses
compatible or complementary to the foregoing or to the
operation of a gaming facility on adjoining property, all in
accordance with applicable law. The Right to Use shall also
include the right of Xxxx or its successor or assignee to
grant to any other persons or entities, including any
political subdivision of the State, the right to use all or
any portion of the Premises for any or all of the uses
otherwise permitted under the Right to Use. Public access
consistent with the public trust doctrine shall be
permitted;
provided, however, nondiscriminatory access restrictions are
permitted where necessary for safety or reasonable
commercial or operational considerations.
4. Public Trust Improvements. Xxxx or its assignees shall
construct the improvements described on Exhibit "F,"
attached hereto and incorporated herein by this reference,
on the Real Estate and such improvements shall be reasonably
available for use by the general public during the term of
the Right to Use.
5. Settlement of Quiet Title Action. The Agreement is intended
to be a full and complete settlement of the Quiet Title
Action and of the claims of State and Xxxx with respect to
ownership of the Real Property. The approval of this
Agreement by the District Court, the Iowa Natural Resource
Commission, and the Iowa State Executive Council shall be a
condition precedent to its effectiveness. Each of Xxxx and
the DNR agrees to use its best efforts to obtain the
approval of this Agreement by the Iowa State Executive
Council and the District Court.
6. Consideration. As additional consideration for the State's
settling the Quiet Title Action and the disputed claims with
respect to the Real Estate and granting the Right to Use to
Xxxx, Xxxx shall pay the Monetary Consideration into the
escrow created pursuant to the terms of the Escrow
Agreement. DNR shall use the Monetary Consideration to
purchase for the public privately-owned real estate which
abuts the Missouri River or adjoins State-owned real estate
which abuts the Missouri River. The DNR shall cause the
escrow agent to pay the Monetary Consideration at the
direction of the DNR, but only to sellers of such privately-
owned real estate pursuant to written purchase agreements
between the DNR and such sellers or to a third party whose
land is acquired to qualify such purchase agreement as an
agreement for exchange of like-kind real estate. The State
shall hold such acquired real estate in trust. The DNR or
another public agency shall maintain and manage the acquired
real estate for conservation purposes and for the benefit of
the public. The acquired real estate shall remain available
for use by the general public for all purposes consistent
with the public trust doctrine. The DNR has determined that
the present value of the foregoing payment exceeds the
present value of the aggregate amount that Xxxx might
otherwise be required to pay to the DNR as consideration for
the Right to Use under the DNR's Rule 571, Chapter 18. As
such, the foregoing payment shall be in lieu of, and in
complete and total satisfaction of, any payment that Xxxx
might otherwise be required to pay to the DNR as
consideration for the Right to Use under the DNR's Rule 571,
Chapter 18.
7. DNR Permit; Improvements. Pursuant to Section 461A.4 of the
1995 Code of Iowa, the DNR has issued Construction Permit
9538, dated April 19, 1995 (hereinafter referred to as the
"Existing Permit"), which authorizes inter alia excavation
of the boat mooring area and the construction of certain
improvements on the Xxxx Property. Paragraph 3 of the
Existing Permit which conditions the Existing Permit on,
inter alia, the approval "of a long term use agreement
covering the land on which the construction will occur" is
hereby deemed satisfied upon the date when this Agreement
becomes effective. Neither Xxxx nor its assignee shall
commence construction improvements on any portion of the
Premises until the DNR shall have granted a
permit under Section 461A.4 of the Iowa Code for such
improvements. The DNR shall not unreasonably withhold or
delay the approval and issuance of such permits. In
determining the reasonableness of the exercise of the DNR's
permitting authority, due consideration shall be given to
the DNR's grant of the Right to Use as consideration for the
covenants and agreements of Xxxx set forth herein, including
the payment of the Monetary Consideration.
8. Permits. Except as set forth in Section 7 hereof, Xxxx or
its assignees shall be solely responsible for obtaining any
and all necessary permits and authorizations for activities
including, without limitation, construction permits, casino
gambling boat licensing, and Section 404 permits.
9. Boundary Management. Xxxx and its assignees shall be
responsible for addressing any boundary problems affecting
title to the Premises during the term of the Right to Use.
Should any dispute arise during the term of the Right to Use
with respect to the boundary between the Premises and any
other property, Xxxx shall notify DNR and Xxxx and the DNR
shall cooperate in resolving such dispute.
10. DNR's Use of Premises. The DNR reserves the right to enter
upon the Premises at any time for any purpose in connection
with programs of the DNR and temporarily use the Premises in
such manner as does not materially interfere with the Right
to Use.
11. Expenditure of Funds. Nothing in this Agreement shall
obligate or bind either party to expend funds in excess of
the funds available to such party.
12. Indemnification. Neither the State, nor any agency,
official or employee thereof, shall be responsible for
accidents of any nature which may occur within or upon the
Premises. Xxxx and its successors and assignees hereby
agree to indemnify and hold harmless the State, its
agencies, officials and employees (collectively, the
"Indemnified Parties") from and against all liability, loss,
damage or expense (hereinafter collectively referred to as
"Loss") which may arise in consequence of the State's entry
into this agreement delegating authority to develop,
maintain and manage the Premises. However, neither Xxxx nor
its assignees shall have any duty to indemnify the
Indemnified Parties or hold the Indemnified Parties harmless
from Loss arising from the acts of officials, employees or
agents of the State while on the Premises.
13. Insurance. Xxxx or its assignee, shall maintain in force
(i) Commercial General Liability Insurance naming the State
as an additional insured with a minimum combined single
limit of $1,000,000 per occurrence with umbrella/excess
coverage of not less than $4,000,000 for Bodily Injury and
Property Damage and (ii) statutorily required Workers'
Compensation insurance. During the term of the Right to
Use, Xxxx or its assignee shall also maintain on file with
the State a current certificate of insurance certifying the
insurance coverages set forth above.
14. Term of Agreement. This Agreement and all obligations of
the parties set forth herein, shall become effective only
upon (i) the payment of the Monetary
Consideration as set forth above, (ii) the duly authorized
signature of the Director of the DNR and (iii) the closing
of the sale or other transfer of Xxxx'x interest in the Real
Estate to Ameristar Casinos, Inc., a Nevada corporation or
its designee (hereinafter called "Ameristar"). Unless and
until Xxxx sells or transfers its interest in the Real
Estate to Ameristar, the representations, recitals,
covenants and other provisions of this Agreement shall be
ineffective. This Agreement shall remain in full force and
effect until and including the date which is fifty (50)
years after the date this Agreement becomes effective.
15. Termination and Suspension For Cause. This Agreement may be
terminated upon thirty (30) days written notice to either
party should it be determined the other party shall have
failed in a material manner to comply with the terms of this
Agreement and such non-compliance shall have continued for
sixty (60) days after the party in non-compliance shall have
received written notice setting forth with specificity the
elements of the alleged non-compliance; provided, however,
if such non-compliance is not reasonably susceptible of cure
within such 60-day period and the party in non-compliance
begins to cure such non-compliance within such 60-day
period, then the party in non-compliance shall have such
additional period of time as it reasonably requires to cure
such non-compliance. In the event the party alleged to be
in non-compliance shall be unwilling or unable to cure such
non-compliance within the cure period set forth above, then
this Agreement shall terminate thirty (30) days after the
end of such time period allowed for curing the non-
compliance. In addition, in the event an unexpected
emergency endangers the public health or safety, then either
party may unilaterally suspend this Agreement and the Right
to Use, but only to the extent reasonably necessary to
protect the public health and safety. Such suspension shall
terminate and this Agreement shall be revived to the extent
such suspension ceases to be reasonably necessary to protect
the public health and safety.
16. Surrender of Premises. Upon the earlier of (i) the
expiration or termination of this Agreement or (ii) the
permanent abandonment of the Premises by Xxxx or its
assignee or their successors in interest with respect to the
Premises (hereinafter collectively referred to as "User"),
User shall yield possession of the Premises to the DNR and
shall, within ninety (90) days after such time, at the DNR's
option, either (A) remove the improvements located on the
Premises from the Premises and restore the Premises to open
green space by removal of debris and grading and seeding the
Premises in a reasonable manner or (B) assign and transfer
the portion of the improvements located on the Premises to
the DNR in its then existing condition. No later than sixty
(60) days before the earlier of (i) expiration or
termination of this Agreement or (ii) the permanent
abandonment of the Premises by User, User shall deliver
notice (hereinafter called the "Termination Notice") to the
DNR requesting a meeting to discuss the disposition of the
Premises. Promptly thereafter, User and the DNR shall use
reasonable good faith efforts to meet at the Premises to
inspect the Premises and discuss the disposition of the
Premises. The DNR shall exercise the foregoing option on or
before the date which is five (5) days before the earlier of
(i) the expiration or termination, as the case may be, of
this Agreement or (ii) the permanent abandonment of the
Premises by User. If, due to unexpected or unforeseen
circumstances or the termination of this Agreement for
cause, User shall be unaware of the impending (i)
termination of this Agreement or (ii) permanent abandonment
of the Premises by User on the date when the Termination
Notice would otherwise be required to be given, then the
deadline for delivery of the Termination Notice shall be
equitably adjusted to reflect the date when User could
reasonably be expected to provide such notice.
17. Nondiscrimination. Xxxx shall not exclude any person from
participation in, or deny any person the benefits of, the
use of the Premises, or otherwise subject any person to
discrimination with respect to the use of the Premises
because of the person's race, color, national origin, age or
disability.
18. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of Iowa.
19. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and
their successors and assigns. Except as set forth in the
next sentence hereof, neither Xxxx nor any assignee of Xxxx
shall assign this Agreement without the consent of the DNR,
which consent shall not be unreasonably withheld or delayed.
Xxxx may assign this Agreement to Ameristar. BY EXECUTION
OF THIS AGREEMENT, THE DNR CONSENTS TO SUCH ASSIGNMENT, AND,
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, UPON
THE ASSIGNMENT OF THIS AGREEMENT TO AMERISTAR, XXXX SHALL BE
RELIEVED OF ALL OBLIGATIONS AND LIABILITIES UNDER THIS
AGREEMENT.
20. Interpretation. Should any dispute arise with respect to
the enforceability or legality of this Agreement, each
provision of this Agreement shall be interpreted so as to
make such provision legal and enforceable and, to the extent
any provision of this Agreement shall be determined to be
illegal or unenforceable as drafted, such provision shall be
deemed modified or limited to the extent necessary to cause
such provision to be enforceable and legal.
21. Financing. Xxxx'x assignee, Ameristar, contemplates
obtaining financing consisting of one or more construction
or permanent loans or a sale leaseback or similar
arrangement to be secured by all or a portion of the
improvements to be constructed on the Premises and User's
rights under this Agreement (together with any refinancings
of any of them, hereinafter called "Permitted Financing").
In the event User applies for or obtains any Permitted
Financing, the DNR shall for each such Permitted Financing,
notwithstanding the existence of any claim, dispute or
litigation between the parties hereto, promptly execute and
consent to a Mortgagee Attornment Agreement substantially in
the form attached hereto as Exhibit "G" and shall agree to
any additional terms or provisions reasonably requested by
the lender under the Permitted Financing which relate to
such lender's security interest in the improvements to be
constructed on the Premises or in this Agreement.
22. Limitations on Authority. Notwithstanding any other
provision of this Agreement, this Agreement shall not vest
in Xxxx the authority to exercise any governmental
functions or powers, including but not limited to, law
enforcement activities delegated to the DNR under applicable
regulations, statutes, and judicial decisions.
23. Recordation. Either party may record this Agreement in the
office of the Pottawattamie County Recorder upon the
satisfaction of all conditions precedent to the
effectiveness of this Agreement.
24. Preparation of Survey. The parties shall cooperate and use
commercially reasonable efforts to cause a survey (the
"Survey") of the Real Property to be prepared to describe
with greater particularity the boundary between the Xxxx
Property and the Premises. The legal descriptions of the
Xxxx Property and the Premises set forth in the Survey shall
be deemed binding upon Xxxx and the State upon approval of
the Survey by Xxxx and the DNR. Neither Xxxx nor the DNR
shall unreasonably delay or withhold such approval.
Following approval of the Survey, Xxxx and the DNR shall
each use its best efforts to cause the District Court to
enter a decree quieting title in the form of Exhibit "H"
attached hereto reflecting the legal descriptions set forth
in the Survey.
25. Approval by Executive Council of Iowa. Because portions of
this settlement agreement might be construed as requiring
approval of the Executive Council of Iowa, approval of the
Executive Council of Iowa shall be obtained before this
settlement agreement is presented to the District Court.
This Agreement is entered into as of the date first above
written.
XXXX FUELS, INC.
By: /s/ X.X. Xxxxx
Name: X.X. Xxxxx
Title: Vice President
ATTEST:
By: /s/ X. Xxxxx Coldwell
Name: X. Xxxxx Coldwell
Title: Secretary
This agreement is entered into under the authority of a
resolution adopted at the regular meeting of the Natural Resource
Commission on May 11, 1995 , as shown in
the minutes thereof.
IOWA DEPARTMENT OF NATURAL RESOURCES
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Director
APPROVED BY:
EXECUTIVE COUNCIL OF IOWA
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Secretary
STATE OF IOWA )
) ss.
COUNTY OF Polk )
On the _7__ day of ___June________________, 1995, before me,
a notary Public in and for said State, personally appeared Xxxxx
X. Xxxxxx who stated that he is the duly appointed and acting
Director of the Iowa Department of Natural Resources and that the
Iowa Natural Resource Commission by majority vote at its meeting
on May 11, 1995 authorized him to execute the foregoing
instrument, and that he executed the foregoing instrument as his
voluntary act and deed and as the voluntary act and deed of the
Iowa Department of Natural Resources.
/s/ Xxxxx X. Xxxxxx
Notary Public in and for the
State of Iowa
STATE OF KANSAS )
) ss.
COUNTY OF SEDGWICK )
On the __5__ day of __June_________________, 1995, before me,
the undersigned, a Notary Public in and for the State of Iowa,
personally appeared ____R.J. Witte___, to me personally known,
who being by me duly sworn, did say that (s)he is the ___Vice
President______ of the corporation executing the within and
foregoing instrument that the seal affixed thereto is the seal of
the corporation; that the instrument was signed and sealed on
behalf of the corporation by authority of its Board of Directors;
and that __R.J. Witte_______ as officer acknowledged the
execution of the foregoing instrument to be the voluntary act and
deed of the corporation, by it and by (him/her) voluntarily
executed.
/s/ Xxxxx X. Xxxxxx
Notary Public in and for the
State of Iowa
STATE OF IOWA )
) ss.
COUNTY OF POLK )
On the __7__ day of __June_________________, 1995, before me,
a notary Public in and for said State, personally appeared Xxxxx
Xxxxx who stated that she is the duly appointed and acting
Secretary of the Executive Council of Iowa and that the Executive
Council of Iowa by majority vote at its meeting on May 15, 1995
authorized her to execute the foregoing instrument, and that she
executed the foregoing instrument as her voluntary act and deed
of the Executive Council of Iowa.
/s/ Xxxxx X. Xxxxxxxx
Notary Public in and for the
State of Iowa
EXHIBIT "A"
THE REAL ESTATE
EXHIBIT "B"
DIAGRAM OF THE XXXX PROPERTY AND THE PREMISES
EXHIBIT "C"
FORM OF ESCROW AGREEMENT
EXHIBIT "D"
FORM OF THE BOUNDARY LINE AGREEMENT
EXHIBIT "E"
FORM OF THE AFFIDAVIT EXPLANATORY OF TITLE AND DISCLAIMER OF
INTEREST
EXHIBIT "F"
THE PUBLIC TRUST IMPROVEMENTS
EXHIBIT "G"
FORM OF MORTGAGEE ATTORNMENT AGREEMENT
EXHIBIT "H"
FORM OF COURT DECREE
