EXHIBIT 10.9
EXPENSE REIMBURSEMENT/SHARING AGREEMENT
THIS EXPENSE REIMBURSEMENT/SHARING AGREEMENT ("AGREEMENT") is executed
as of this 7th day of October, 2003, by and between The Majestic Star Casino,
LLC, an Indiana limited liability company ("MAJESTIC STAR"), and Xxxxxx Nevada
Gaming, LLC, a Nevada limited liability company ("XXXXXX NEVADA").
W I T N E S S E T H:
WHEREAS, Majestic Star employs certain executives and other employees
who also provide management services to Xxxxxx Nevada, and Majestic Star desires
to pay, and Xxxxxx Nevada desires to reimburse Majestic Star for, Employee
Expenses (as defined below) on the terms and conditions set forth herein; and
WHEREAS, Majestic Star and Xxxxxx Nevada desire to memorialize their
agreement with respect to the payment and reimbursement of Employee Expenses;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties do hereby agree as
follows:
1. Employee Expenses. Majestic Star agrees to pay all costs and
expenses of executives and certain other employees agreed to by the parties,
including, but not limited to, salaries, bonuses, benefit payments, insurance,
supplies, certain cost savings resulting from synergies and such other costs and
expenses agreed to by the parties (collectively, "EMPLOYEE EXPENSES").
2. Reimbursement. Effective upon and beginning on the closing of
the transactions contemplated by that certain Purchase Agreement, to be entered
into on or about the date hereof, by and among Majestic Star, The Majestic Star
Casino Capital Corp., Xxxxxxxxx & Company, Inc., Xxxxx Fargo Securities, LLC and
certain affiliates of Majestic Star, Xxxxxx Nevada agrees to reimburse Majestic
Star for the Employee Expenses paid by Majestic Star in an amount equal to the
greater of: (i) $500,000 per year (or such pro rata amount as may be
applicable), or (ii) the actual amount of all Employee Expenses (the
"REIMBURSEMENT PAYMENT"). Such Reimbursement Payment shall be due and payable as
follows:
(a) Xxxxxx Nevada shall pay to Majestic Star, on or prior
to the first day of each month, an amount equal to $41,666.67.
(b) If, at the end of each of (i) the first half of the
fiscal year, and (ii) the fiscal year, the actual amount of Employee Expenses
incurred to date is greater than (A) $250,000 in the case of the first half of
the fiscal year, and (B) $500,000 in the case of the fiscal year, or such pro
rata amount as may be applicable, Majestic Star shall notify Xxxxxx Nevada of
the amount of such difference (the "EXCESS EMPLOYEE EXPENSE AMOUNT") within
sixty (60) days after each of the first half of the fiscal year, and the fiscal
year, as the case may be. Xxxxxx Nevada shall have thirty (30) days after
receipt of such notice to either (1) pay the Excess Employee Expense Amount or
(2) object to the Excess Employee Expense Amount, in which event the parties
shall negotiate in good faith to resolve such dispute.
In the event such payments are not paid to Majestic Star when due,
Majestic Star may charge Xxxxxx Nevada a late payment equal to 1.5% of the late
Reimbursement Payment and interest thereon at an annualized rate of 10% per
annum. The parties may modify the Reimbursement Payment from time to time in
accordance with the following procedures: (I) a party may request modification
to the Reimbursement Payment upon at least three (3) days prior written notice
to the other party; (II) during such three-day period, (A) the other party may
agree to such modification (whereby the modification shall become effective as
of the date set forth in the notice) or (B) the other party may refuse to agree
to such modification (whereby the modification shall not be effective and the
parties shall negotiate in good faith as to a different modification, which
shall become effective if and when an agreement is reached); and (III) in the
event there is no response from the other party within the three day period
described above, the proposed modification shall become effective as of the date
set forth in the notice.
3. Access to Records. Upon request, Majestic Star shall provide
Xxxxxx Nevada access to any and all records reasonably related to Executive
Expenses paid by Majestic Star and reimbursed by Xxxxxx Nevada pursuant to this
Agreement.
4. Termination. Subject to Section 1, this Agreement may be
terminated by either party upon thirty (30) days prior written notice. This
Agreement shall automatically terminate effective upon the closing of a sale of
the Fitzgeralds Casino in Las Vegas, Nevada by Xxxxxx Nevada.
5. Miscellaneous.
(a) This Agreement sets forth the entire understanding of
the parties with respect to the subject matter hereof. This Agreement may not be
modified, waived, terminated or amended, except expressly by an instrument in
writing signed by the parties hereto.
(b) This Agreement may be assigned or pledged in whole or
in part by a party with the consent of the other parties.
(c) In the event that any provision of this Agreement
shall be held to be void or unenforceable in whole or in part, the remaining
provisions of this Agreement and the remaining portion of any provision held
void or unenforceable in part shall continue in full force and effect.
(d) Except as otherwise specifically provided herein,
notice given hereunder shall be deemed sufficient if delivered personally or
sent by registered or certified mail to the address of the party for whom
intended at the principal executive offices of such party, or at such other
address as such party may hereinafter specify by written notice to the other
party.
(e) No waiver by any party of any breach of any provision
of this Agreement shall be deemed a continuing waiver or a waiver of any
preceding or succeeding breach of such provision or of any other provision
herein contained.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
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(g) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Expense
Reimbursement/Sharing Agreement as of the day and year first above written.
THE MAJESTIC STAR CASINO, LLC
By: _________________________
Name:
Title:
XXXXXX NEVADA GAMING, LLC
By: _________________________
Name:
Title:
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