Exhibit 4.14
MANAGER SUBORDINATION AGREEMENT
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This MANAGER SUBORDINATION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is made as of August 20,
1997, by and among IBJ XXXXXXXX BANK AND TRUST COMPANY, a New York banking
corporation, as trustee (the "Trustee"), for the benefit of itself and the
holders of the Notes (as defined below), CASINO AMERICA, INC., a Delaware
corporation (the "Manager"), and ISLE OF CAPRI BLACK HAWK L.L.C., a Colorado
limited liability company (the "Company").
Recitals
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A. The Company and Isle of Capri Black Hawk Capital Corp. ("Capital
Corp" and, together with the Company, the "Issuers") shall issue $75,000,000
principal amount of their 13% First Mortgage Notes due 2004 with Contingent
Interest (the "Original Notes," and together with any New Notes issued in
exchange therefor, the "Notes") pursuant to that certain Indenture dated as of
August 20, 1997 (as amended, supplemented or otherwise modified from time to
time the "Indenture"), by and between the Issuers and the Trustee. All defined
terms used herein and not otherwise defined, shall have the meanings set forth
in the Indenture.
B. The Manager and the Company are parties to that certain Amended and
Restated Management Agreement dated as of July 29, 1997 (as amended,
supplemented or otherwise modified from time to time the "Management
Agreement"), pursuant to which the Company shall pay the Manager a management
fee in consideration of the Manager's services relating to the management and
operation of the Isle-Black Hawk.
C. As a condition to the purchase of the Notes, the parties have agreed
to enter into this Agreement.
Agreement
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NOW, THEREFORE, in consideration of the above recitals and the
provisions set forth herein, the Trustee, the Manager and the Company agree as
follows:
1. Subordination to Senior Debt. Notwithstanding any other
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provision of the Management Agreement, all payment obligations of the Company,
to the Manager arising under Section 9.1 of the Management Agreement, now
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existing or hereafter arising (other than reimbursement of expenses permitted
thereunder) (collectively, the "Subordinated Obligations") are and shall be
subordinate and junior in right of payment, to the extent and in the manner
hereinafter set forth, to the prior indefeasible payment in full of all Senior
Debt.
"Senior Debt" means (a) all indebtedness, liabilities and obligations
of every kind or nature, absolute or contingent, now existing or hereafter
arising, of the Company, its
successors and assigns, under the Indenture, the Notes or any Collateral
Documents, to the Trustee or any holder of Notes and their successors and
assigns and any Person who extends credit to the Company for the purpose of
refunding any such indebtedness, liabilities or obligations, including, without
limitation, the principal of, and interest on (including any interest accruing
after the commencement of any bankruptcy, insolvency or similar proceeding with
respect to the Company and any interest which would have accrued but for the
commencement of any such proceeding whether or not allowed as a claim in that
proceeding), and all premiums, fees, charges, expenses and indemnities arising
under or in connection with the Indenture, the Notes or any Collateral
Documents; and (b) any modifications, amendments, refundings, renewals or
extensions of any indebtedness or obligation described in clause (a) above.
Except as and to the extent provided hereinafter, the Manager will not ask,
demand, xxx for, take or receive from the Company, by set-off or in any other
manner, direct or indirect payment (whether in cash or property), of the whole
or any part of the Subordinated Obligations, or any transfer of any property in
payment of or as security therefor, so long as there exists a Default or an
Event of Default under the Indenture.
2. Distribution in Liquidation and Bankruptcy. In the event of any
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distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of the Company or the proceeds thereof (including any assets now or hereafter
securing any Subordinated Obligations), to creditors of the Company or upon any
indebtedness of the Company, by reason of the liquidation, dissolution or other
winding up, partial or complete, of the Company, or any receivership, insolvency
or bankruptcy proceeding, or assignment for the benefit of creditors or
marshalling of assets, or any proceeding by or against the Company for any
relief under any bankruptcy or insolvency law or laws relating to the relief of
debtors, readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions, or sale of all or substantially all of the assets of
Borrower, then and in any such event:
(a) The holders of Senior Debt shall be entitled to receive payment
in full in cash of all Senior Debt before the Manager shall be entitled to
receive any payment or other distributions on, or with respect to, the
Subordinated Obligations;
(b) Any payment or distribution of any kind or character, whether in
cash, securities or other property, which but for these provisions would be
payable or deliverable upon or with respect to the Subordinated Obligations
shall instead be paid or delivered directly to the Trustee for the benefit
of the holders of the Senior Debt for application on the Senior Debt,
whether then due or not due, until the Senior Debt shall have first been
fully and indefeasibly paid in cash;
(c) The Manager hereby irrevocably authorizes and empowers the
Trustee, and appoints the Trustee as attorney-in-fact, to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor, and to file and vote claims (in bankruptcy proceedings or
otherwise) and take such other actions, in the Trustee's own name or
otherwise, as the Trustee may deem necessary or
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advisable for the enforcement of these provisions. The Manager shall duly
and promptly take such action as may be reasonably requested by the Trustee
to assist in its collection of the Subordinated Obligations for the account
of any holder of the Senior Debt, and to file appropriate proofs of claim
with respect to the Subordinated Obligations and to vote the same, and to
execute and deliver to the Trustee on demand such powers of attorney,
proofs of claim, assignments of claim or other instruments as may be
reasonably requested by the Trustee to enable the Trustee or any other
holder of the Senior Debt to enforce any and all claims upon or with
respect to the Subordinated Obligations and to collect and receive any and
all payments or distributions which may be payable or deliverable at any
time upon or with respect to the Subordinated Obligations. In addition, the
Manager shall take no action (whether oral, written or otherwise) in
contravention of any action of the Trustee duly taken and permitted
hereunder;
(d) Should any direct or indirect payment be made to the
Manager upon or with respect to the Subordinated Obligations prior to the
payment in full of the Senior Debt in accordance with these provisions, the
Manager will forthwith deliver the same to the Trustee in precisely the
form received (except for the endorsement or assignment of the Manager
where necessary) for application on the Senior Debt, whether then due or
not due. Until so delivered, the payment or distribution shall be held in
trust by the Manager as property of the holders of the Senior Debt. In the
event of the failure of the Manager to make any such endorsement or
assignment, the Trustee, or any of its officers or employees, are hereby
irrevocably authorized to make the same; and
(e) Each of the parties hereby agrees that it shall be bound
by the terms and provisions hereof, notwithstanding the confirmation of a
plan of reorganization of the Company under Section 1129(b) of the
Bankruptcy Code.
3. Permitted Payments. Subject to the provisions of Paragraphs 2
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and 4 of this Agreement, the Company may pay to and the Manager may accept
payment of amounts due under the Management Agreement, a copy of which is
attached hereto as Exhibit A. Except as otherwise expressly provided in the
Indenture, the Company and the Manager shall not change, alter, amend, waive or
otherwise modify the Management Agreement, without the Trustee's prior written
consent.
4. Default on Senior Debt. In the event that any Default or Event
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of Default shall occur and be continuing with respect to Senior Debt, or if any
payment of Subordinated Obligations would create a Default or Event of Default,
unless and until all Senior Debt shall have been indefeasibly paid in full in
cash, the right of the Manager to receive any payments or other distributions
with respect to Subordinated Obligations shall be suspended during the
continuance of such Default or Event of Default. If, notwithstanding the
foregoing, the Manager shall receive any payment or distribution of any kind
with respect to Subordinated Obligations(whether from any collateral securing
such obligations or otherwise), such payment or distribution shall be received
in trust for, and shall be delivered to the Trustee promptly in precisely the
form received (except for the endorsement or
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assignment of the Manager where necessary) for application on the Senior Debt,
whether then due or not due. Until so delivered, the payment or distribution
shall be held in trust by the Manager as property of the holders of Senior Debt.
5. No Acceleration or Exercise of Remedies. So long as any Senior Debt
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remains unpaid, the Manager will not (a) cause any portion of the Subordinated
Obligations to become due prior to the due date for such Subordinated
Obligations as set forth in the Management Agreement; (b) accept any payment,
prepayment or defeasance of any portion of the Subordinated Obligations prior to
the due date for such Subordinated Obligations as set forth in the Management
Agreement; (c) modify or alter in any way the provisions of the Management
Agreement if the effect of such is to accelerate the payments of Subordinated
Obligations due thereon; or (d) exercise any remedies with respect to the
Subordinated Obligations or any collateral at any time securing payment or
performance thereof unless and until, in each such case, all of the Senior Debt
shall have indefeasibly paid in full in cash, or the Trustee shall have
otherwise consented in writing.
6. Bankruptcy. Until the Senior Debt shall have been indefeasibly paid in
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full in cash, the Manager will not, without the prior consent of the Trustee,
commence, or join with any other person in commencing, any proceeding against
any Person with respect to the Subordinated Obligations under any bankruptcy,
reorganization, readjustment of debt, dissolution, receivership, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.
7. Continuing Subordination. The subordination effected by these
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provisions is a continuing subordination and may not be modified or terminated
by the Manager or any other holder of any Subordinated Obligations until all of
the Senior Debt shall have been indefeasibly paid in full in cash. At any time
and from time to time, without consent of or notice to the Manager or any other
holder of Subordinated Obligations, and without impairing or affecting the
obligations of any of them hereunder:
(a) The time for the Company's performance of, or compliance with, any
of its agreements contained in the Indenture, the Notes or the Collateral
Documents, or any other agreement, instrument or document relating to the
Senior Debt, may be modified or extended or such performance or compliance
may be waived;
(b) The Trustee may exercise or refrain from exercising any rights
under the Indenture, the Notes or the Collateral Documents, or any other
agreement, instrument or document relating to the Senior Debt;
(c) The Indenture, the Notes or the Collateral Documents, or any other
agreement, instrument or document relating to the Senior Debt, may be
revised, amended or otherwise modified for the purpose of adding or
changing any provisions thereof (including, but not limited to, an increase
in the interest charges), or changing in any manner the rights of the
Trustee or the Company;
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(d) Payment of the Senior Debt or any portion thereof may be extended
or refunded or any notes evidencing such Senior Debt may be renewed in
whole or in part;
(e) The maturity of the Senior Debt may be accelerated, and any
collateral security therefor or any other rights of the Trustee may be
exchanged, sold, surrendered, released or otherwise dealt with, in
accordance with the terms of any present or future agreement with the
Company and any other agreement of subordination (and the debt covered
thereby) may be surrendered, released or discharged, or the terms thereof
modified or otherwise dealt with in any manner;
(f) Any person liable in any manner for payment of the Senior Debt
may be released by holders of Senior Debt; and
(g) Notwithstanding the occurrence of any of the foregoing, these
subordination provisions shall remain in full force and effect with respect
to the Senior Debt, as the same shall have been extended, renewed, modified
or refunded.
8. Waivers. The Manager hereby waives, and agrees not to assert (a) any
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right, now or hereafter existing, to require the Trustee to proceed against or
exhaust any collateral at any time securing the Senior Debt, or to marshal any
assets in favor of the Manager or any other holder of any Subordinated
Obligations; (b) any notice of the incurrence of Senior Debt, it being
understood advances may be made under the Indenture, or any other agreement,
document or instrument now or hereafter relating to the Senior Debt, without
notice to or authorization of the Manager in reliance upon these subordination
provisions.
In the event this Agreement may cause the Manager to be deemed a surety,
the following provisions apply; provided, however, that nothing contained herein
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shall be deemed to be a guarantee by the Obligor of any obligations for the
payment of principal and interest of the Issuers under the Notes. The Manager
hereby waives and relinquishes all rights and remedies accorded by applicable
law to sureties or guarantors and agrees not to assert or take advantage of any
such rights or remedies, including, without limitation, (a) any right to require
the Trustee or any of the Holders (each a "Benefitted Party") to proceed against
the Company or any other Person or to proceed against or exhaust any security
held by a Benefitted Party at any time or to pursue any other remedy in the
power of a Benefitted Party before proceeding against the Manager with respect
to the Subordinated Obligations or other Person, (b) the defense of the statute
of limitations in any action with respect to the Subordinated Obligations
hereunder or in any action for the collection or performance of the Senior
Obligations, (c) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any Person or the failure of a Benefitted
Party to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any Person, (d) appraisal, valuation,
stay, extension, marshaling of assets, redemption, exemption, demand,
presentment, protest and notice of any kind, including, without limitation,
notice of the existence, creation or incurring of any new or additional
indebtedness or obligation or of any action or non-action of the part of a
Benefitted Party,
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the Company, any endorser, guarantor or creditor of the Company or on the part
of any Person under this or any other instrument or document in connection with
any Obligation or evidence of Indebtedness held by a Benefitted Party as
collateral or in connection with the Note Obligations, (e) any defense based
upon an election of remedies by a Benefitted Party, including, without
limitation, an election to proceed by non-judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of the
Manger, the right of the Manger to proceed against the Company or any other
Person for reimbursement, or both, (f) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal, (g) any duty on the part of a Benefitted Party to disclose to the
Manager any facts a Benefitted Party may now or hereafter know about the Company
or any other Person, regardless of whether a Benefitted Party has reason to
believe that any such facts materially increase the risk beyond that which the
Manager intends to assume, or has reason to believe that such facts are unknown
to the Manger, or has a reasonable opportunity to communicate such facts to the
Manager, because the Manager acknowledges that the Manager is fully responsible
for being and keeping informed of the financial condition of the Company or any
other Person and of all circumstances bearing on the risk of non-payment of any
Senior Obligations, (h) any defense arising because of the election of a
Benefitted Party, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code,
(i) any defense based upon any borrowing or grant of a security interest under
Section 364 of the Federal Bankruptcy Code, (j) any claim or other rights which
it may now or hereafter acquire against the Company or any other Person that
arises from the existence of performance obligations under the Indenture, the
Notes or any Collateral Document, including, without limitation, any right of
subrogation, reimbursement. No failure or delay on the Trustee's part in
exercising any power, right or privilege under this Agreement shall impair or
waive any such power, right or privilege. The Manager acknowledges and agrees
that any nonrecourse or exculpation provided for in the Indenture, the Notes or
any Collateral Document, or any othr provisionof this Indenture, the Notes or
any Colateral Document, limiting the Benefitted Parties' recourse to specific
collateral, or limiting the Benefitted Parties' right to enforce a deficiency
judgment against the Company, shall have absolutely no application to the
Manager's or the Company's liability under the Indenture, the Notes or any
Collateral Documents.
9. Lien Subordination. Any lien, security interest, encumbrance, charge
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or claim of the Manager on any assets or property of the Company or any proceeds
or revenues therefrom which the Manager may have at any time as security for any
Subordinated Obligations shall be, and hereby is, subordinated to all liens,
security interests, or encumbrances now or hereafter granted to the Trustee by
the Company or by law, notwithstanding the date or order of attachment or
perfection of any such lien, security interest, encumbrance or claim or charge
or the provision of any applicable law. Until all holders of Senior Debt have
received payment in full in cash of the Senior Debt, the Manager agrees that the
Manager will not assert or seek to enforce against the Company the Subordinated
Obligations or any interest of the Manager in any collateral for any portion of
the Subordinated Obligations and that the Trustee may dispose of any or all of
the collateral for the Senior Debt free of any and all liens, including, but not
limited to, liens created in favor of the Manager, through judicial or
non-judicial proceedings,
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in accordance with applicable law including taking title, after five (5) days
written notice to the Manager. The Manager hereby acknowledges that such notice
if given five (5) days prior to such disposition of any or all of the collateral
for the Senior Debt is sufficient and commercially reasonable. The Manager
hereby agrees that any such sale or other disposition of so much of the
collateral for the Senior Debt as is necessary to satisfy in full in cash all of
the Senior Debt shall be free and clear of any security interest granted to the
Manager; provided that the entire proceeds (after deducting reasonable expenses
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of sale) are applied in reduction of the Senior Debt. Upon the Trustee's
request, the Manager shall execute and deliver any releases or other documents
and agreements that the Trustee in its reasonable discretion deems necessary to
dispose of the collateral for the Senior Debt free of the Manager's interest in
the same. The Manager retains all of its rights as a junior secured creditor
with respect to the surplus, if any, arising from any such disposition of the
collateral for the Senior Debt.
10. Subrogation. The Manager hereby waives all rights of subrogation
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to the rights of the holders of Senior Debt to receive payments or
distributions, and any rights of subrogation to any collateral for the Senior
Debt, until the Senior Debt shall have been indefeasibly paid in full in cash.
Upon such payment in full, the Manager shall be subrogated to all rights of the
holders of Senior Debt.
11. Subordination Not Impaired by the Company. No right of any
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holder of Senior Debt to enforce the subordination of the Subordinated
Obligations shall be impaired by any act or failure to act by the Company or by
its failure to comply with these provisions.
12. No Third Party Beneficiaries. This Agreement is not intended to
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give or confer any rights to any person other than the holders of the Senior
Debt. No other party, including the Company, is intended to be a third party
beneficiary of this Agreement.
13. Legend on Note. If any portion of the Subordinated Obligations
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is evidenced by a promissory note, stock certificate or other instrument, the
Manager agrees to promptly add a legend thereto stating that the rights of any
holder thereof are subject to this Agreement.
14. Representations and Warranties. The Manager hereby represents
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and warrants that (a) the execution and delivery of this Agreement and the
performance by the Manager of its obligations hereunder have received all
necessary approvals and do not and will not contravene or conflict with any
provision of law or of any indenture, instrument or other agreement to which the
Manager is a party or by which it or its property may be bound or affected or
result in or require the creation or imposition of any mortgage, lien, pledge,
security interest, charge or other encumbrance in, upon or of any of its
properties or assets under any such indenture, instrument or other agreement,
(b) the Manager has full power, authority and legal right to make and perform
this Agreement, (c) the Manager has not assigned or transferred any indebtedness
owing by the Company or any of the collateral for the Subordinated Obligations
and that the Manager will not assign or transfer same, (d) this Agreement is the
legal, valid and binding obligation of the Manager, enforceable against the
Manager in accordance with its terms, and (e) the Subordinated Obligations are
not subject to any other subordination agreement.
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15. No Waiver. No failure on the part of the Trustee to exercise, no
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delay in exercising, and no course of dealing with respect to, any right or
remedy hereunder will operate as a waiver thereof; nor will any single or
partial exercise of any right or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right or remedy. This Agreement
may not be amended or modified except by written agreement of the Trustee, the
Manager, and the Company, and no consent or waiver hereunder shall be valid
unless in writing and signed by the Trustee.
16. Successors and Assigns. This Agreement, and the terms, covenants and
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conditions hereof, shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and assigns.
17. GOVERNING LAW. THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH
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AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
CHOICE OF LAW PRINCIPLES.
18. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. Severability. The invalidity, illegality or unenforceability in any
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jurisdiction of any provision in or obligation under this Agreement shall not
affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.
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IN WITNESS WHEREOF, this Subordination Agreement has been duly
executed as of the day and year first above written.
IBJ XXXXXXXX BANK AND TRUST
COMPANY, a New York banking corporation
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
CASINO AMERICA, INC., a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Secretary
ISLE OF CAPRI BLACK HAWK L.L.C., a
Colorado limited liability company
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Secretary
By: /s/ H. Xxxxxx Xxxx
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Name: H. Xxxxxx Xxxx
Title: Vice President
SUBORDINATION AGREEMENT
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Exhibit A
Management Agreement
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See attached.
EXHIBIT A
AMENDED AND RESTATED MANAGEMENT AGREEMENT
This, AMENDED AND RESTATED MANAGEMENT AGREEMENT (the "Management
Agreement"), dated as of this 29th day of July, 1997, is by and between CASINO
AMERICA, INC., a Delaware corporation ("Manager"), and ISLE OF CAPRI BLACK HAWK,
LLC, a Colorado limited liability company ("Owner") and is effective as of the
Closing Date, as defined in the Amended and Restated Operating Agreement of the
Owner of even date.
RECITALS:
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A. Owner proposed to acquire, construct, develop and equip a Casino
Facility including a casino, restaurant and a hotel in Black Hawk, Colorado.
B. Owner desires to have Manager manage the business operations of its
Casino Facility and Manager desires to manage Owner's Casino Facility, all upon
the terms and conditions of this Agreement.
C. Owner and Manager executes a Management Agreement, dated as of April
25, 1997, and wish by this Agreement to amend and restate the Management
Agreement dated as of April 25, 1997.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, Owner and Manager agree as follows:
1. DEFINITIONS AND REFERENCES.
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1.1 Definitions. As used herein, the following terms shall have the
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respective meanings indicated below:
(a) Annual Plan - The Annual Plan to be prepared by Manager and approved
by Owner in accordance with the provisions of Section 6.2 hereof.
(b) Casino Facility - The Casino Facility to be owned by Owner and
operated in Black Hawk, Colorado by Manager. The Casino Facility may have
gaming, hotel rooms, parking, food and beverage, gift shop and entertainment
together with other related activities.
(c) Commencement Date - The date upon which Owner fist opens the Casino
Facility to the public for business, which date shall be confirmed in writing by
Owner and Manager.
(d) Compensation - The direct salaries and wages paid to, or
accrued for the benefit of, any executive or other employee, including, without
limitation, employer's contributions under F.I.C.A., unemployment compensation
or other employment taxes, pension fund contributions, Worker's Compensation,
group life, accident, health and other insurance premiums, profit sharing, and
retirement plans, disability and other similar benefits.
(e) Operating Agreement - That certain Amended and Restated
Operating Agreement of Owner dated as of even date herewith by and between
Casino America of Colorado, Inc. and Blackhawk Gold, Ltd.
2. SCOPE OF AGREEMENT, RESPONSIBILITIES.
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2.1 Authority of Owner. Owner shall determine the general policy
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with respect to the management of its Casino Facility and shall have all other
decision making powers customarily afforded to an owner of a casino/hotel
facility, as well as any additional powers reserved to Owner hereunder.
2.2 Authority of Manager. Subject to the foregoing general
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authority of Owner, and subject to the terms of this Management Agreement,
Manager shall have the authority to exclusively supervise and direct the
management and operation of the day-to-day activities of the Casino Facility for
the account of Owner. Manager shall have the authority and responsibility (i)
to determine operating policy, standards of operation, quality of service, the
maintenance and physical appearance of the Casino Facility and any other matters
affecting operations and maintenance; (ii) to supervise and direct all phases of
advertising, sales and business promotion for the Casino Facility; and (iii) to
carry out all programs contemplated by the Annual Plan. Owner 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, if any, placed upon Manager by any gaming authority.
2.3 Duties and Obligations of Manager. Manager shall take all
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actions which may, in its sole discretion, be reasonably necessary or
appropriate in connection with the authority granted to it in accordance with
the provisions of this Management Agreement. Manager shall devote to its
responsibilities such time as may be reasonably necessary for the proper
performance of all duties hereunder. The standard of performance by Manager in
managing the Casino Facility shall be measured by commercial standards of
reasonableness in the industry consistent with food business practices and
policies. An organizational chart detailing the supervisory and management
positions and all other employees of the Manager will be provided by Manager to
Owner.
2.4 Consultation with Owner. Notwithstanding the foregoing,
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Manager shall at all times keep Owner reasonably apprised and aware of all
operating policies. Manager agrees to
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consult with Owner as frequently as Owner shall reasonably request to review
operating policies and other matters referred to herein. Owner shall, at all
times, have the right to enter the Casino Facility for the purpose of
inspecting same and reviewing the operations. Owner agrees that it and its
representatives will, at no time, act in a manner which is inconsistent with the
authority granted to Manager.
3. LICENSING. Other than as set forth in the Operating Agreement, Owner and
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Manager shall apply for and maintain at Owner's expense any and all licenses and
approvals required in order to implement the provisions of this Management
Agreement. The performance of any services pursuant to this Management
Agreement that require any such licenses and approvals is contingent upon the
receipt of all such licenses and approvals.
4. TERM. The term of this Management Agreement shall continue until December
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31, 2096, unless sooner terminated as hereinafter set forth.
5. PRE-COMMENCEMENT DATE RESPONSIBILITIES.
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5.1 Owner's Responsibilities. Owner, without cost or expense to
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Manager, shall design, acquire, construct and equip the Casino Facility. All
expenses and fees incident thereto shall be paid by Owner.
5.2 Manager's Responsibilities. From the date of this Management
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Agreement to the Commencement Date, Manager shall be available to consult with
Owner in designing, acquiring, constructing, and equipping all assets to be used
by Owner in the operation of the Casino Facility. Manager shall, at Owner's
expense and the Owner's approval, also be responsible for the development and
implementation of all pre-opening activities.
6. OPERATION OF THE BUSINESS.
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6.1 Permits. Manager and Owner shall timely apply for, obtain and
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maintain all licenses and permits required to operate the business (other then
gaming authority permits, licenses, and approvals required to be obtained by
parties other than owner or Manager), at Owner's expense.
6.2 Annual Plan.
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6.2.1 Preparation. With such cooperation and assistance of Owner as
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Manager may request, Manager shall prepare for Owner's review and approval not
less than thirty (30) days in advance of each fiscal year, an Annual Plan for
approval by Owner, which shall include:
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(a) a forecast comprised of estimated income and expenses by month
for the coming fiscal year;
(b) an estimated cash flow projection by month, and an estimate as to
the amount of funds needed for working capital requirements;
(c) a budget covering estimated expenditures for capital
improvements;
(d) an annual marketing plan; and
(e) an organizational chart of Owner, as of the date of the Annual
Plan, listing all employees, names, positions and compensation
(including key employees whether employees of Owner or charged to
Owner).
Manager shall not be deemed to have made any guarantee or warranty in connection
with the results of operations or performance set forth in the Annual Plan since
the parties acknowledge that the Annual Plan is intended to set forth objectives
and goals based upon Manager's best judgement of the facts and circumstances
known by Manager at the time of preparation.
6.2.2 Owner's Review and Approval. The Annual Plan will be subject to
---------------------------
the approval of Owner, which approval will not be unreasonably withheld or
delayed. Owner shall approve or disapprove the Annual Plan within twenty (20)
days after submission to Owner. If Owner fails to provide written notice to
Manager of any specific objections to a proposed Annual Plan within such twenty
(20)-day period, such Annual Plan shall be deemed to have been approved by Owner
as submitted. In the event Owner disapproves or raises any objections to the
proposed Annual Plan or any revisions thereto, Owner and Manager agree to
cooperate with each other in good faith to resolve the dispute. Owner agrees,
consistent with the Annual Plan, to provide the funds necessary to operate the
Casino Facility.
6.2.3 Compliance. Manager shall use all reasonable efforts to comply
----------
with the Annual Plan and shall not deviate in any substantial respect therefrom.
In the event Manager encounters circumstances which require unexpected
expenditures not foreseen at the time of preparation of the Annual Plan and
which Manager deems reasonably necessary, Manager may without Owner's approval,
make or cause to be made on account of Owner, any expenditures, provided,
however, that no such expenditures shall be made in violation of the applicable
provisions of the Operating Agreement. Manager, without Owner's approval, on a
monthly basis with full reporting to Owner, shall be entitled to increase the
total expenses budgeted within the Annual Plan by a percentage approved by Owner
to cover any expenditures that were underestimated at the time the Annual Plan
was prepared and that are reasonably necessary in Manager's sole discretion, to
carry out the provisions of this Agreement. Owner and Manager agree to cooperate
with each other in good faith in resolving disputes. Policy
-4-
changes not anticipated in the Annual Plan shall be submitted to Owner for
approval, which approval shall not be unreasonably delayed or withheld.
6.2.4 Specific Matters. The description of specific matters
----------------
hereinafter stated are in every respect subject to the prior approval of Owner
as part of its approval of the Annual Plan.
6.3 Personnel.
---------
6.3.1 General. Manager, for the account of Owner, shall hire,
-------
supervise, direct, discharge and determine terms of employment of all personnel
working for the Casino Facility. An organizational chart detailing the specific
type of personnel and functions shall be provided to Owner by Manager. The
determination of Compensation for all employees shall be part of the Annual Plan
approved by Owner.
6.3.2 Key Employees. The key employees may include, but are not
-------------
limited to, the general manager, director of gaming, director of food, beverage
and entertainment, director of marketing and director of finance and may, at the
option of Manager and with prior approval of Owner, be employees of Manager.
Owner shall reimburse Manager for the Compensation of such employees working for
the Casino Facility or primarily on behalf of Owner in connection with the
Casino Facility.
6.3.3 Personnel Expenses and Compensation. Subject to the above, it
-----------------------------------
is expressly understood and agreed that all other personnel of Owner are in the
sole employ of Owner.
6.3.4 Professional and Other Specialists. Manager shall have the
----------------------------------
right to retain legal counsel and such other professionals, consultants and
specialists as Manager deems necessary or appropriate in connection with the
operation of the Casino Facility. The selection of all professional firms shall
be subject to Owner's prior approval.
6.4 Sales, Marketing and Advertising. Manager shall advertise and
--------------------------------
promote the Casino Facility for Owner's account and shall institute and
supervise a sales and marketing program. Manager, in its sole discretion, may
cause participation in sales and promotional campaigns and activities involving
complimentary passage, food and beverages to travel agents, tourist officials
and airline representatives.
6.5 Other Services Provided by Manager. Other services, such as data
----------------------------------
processing, reservation system, internal audit, etc. may be provided by Manager
to Owner at an additional cost on a commercially reasonable basis, or may be
contracted for separately.
-5-
6.6 Maintenance and Repair. Owner shall be responsible for maintaining the
----------------------
property utilized in the business in good repair and condition. To implement
Owner's responsibility, Manager shall, on behalf of Owner, and at Owner's
expense, make or cause to be made, all repairs, replacements, corrections and
maintenance items as shall be required in the normal and ordinary course of
operation of the business.
6.7 Capital Expenditures. Owner recognizes the necessity of capital
--------------------
improvements and shall expend such amount for capital improvements as shall be
required in the normal and ordinary course of operation of the business
in conformity with the amounts approved as part of the Annual Plan.
6.8 Reimbursement. In addition to the Compensation provided for in Section
-------------
9 of this Management Agreement, Manager shall be entitled to be reimbursed for
the actual reasonable travel and entertainment expenses of all officers and
employees of Manager incurred in performing its duties hereunder in connection
with any phase of the operation of the Casino Facility. In addition, if
employees of Manager on a specific assignment for the benefit of the Casino
Facility are in a position that would otherwise be filled by an employee of
Owner, then Manager shall be entitled to be reimbursed by Owner for the
Compensation payable to such employees while working for the Casino Facility.
However, Manager shall not be entitled to reimbursement for (i) any cost,
expense, liability or obligation deemed a contribution to the capital of Owner
under Section 3.1(b) of the Members Agreement of even date among Manager, Nevada
Gold & Casinos, Inc., Casino America of Colorado, Inc. and Blackhawk Gold, Ltd.
or (ii) the compensation of any other employee unless otherwise provided in this
Management Agreement. Manager shall be entitled to all reimbursements authorized
under this Section 6.8, or under any other provision of this Agreement, provided
that (i) no such reimbursement shall exceed the actual costs incurred by Manager
or, if such costs are not determinable, the fair market value of items for which
reimbursement is sought and (ii) all such reimbursements shall be made in a
manner which is consistent with the provision of the Annual Plan or as otherwise
agreed with Owner.
7. FISCAL MATTERS.
--------------
7.1 Accounting Matters and Fiscal Periods.
-------------------------------------
7.1.1 Books and Records. Manager shall maintain, or cause to be
-----------------
maintained, at Owner's expense, full and complete books of account and such
other records as are necessary to reflect the operating results of the Casino
Facility. Manager shall also prepare and file for Owner, at Owner's expense, all
informational and/or tax returns which may be required by any governmental
authority.
7.1.2 Reports to Owner. Manager, at Owner's expense, shall deliver or
----------------
cause to be delivered to Owner, monthly financial statements, which shall
include a statement of
-6-
cash flows, and monthly comparison of operational income and expenses versus the
Annual Plan.
7.1.3 Owner's Rights to Audit. Owner and the individual members of
-----------------------
the limited liability company reserve the right upon reasonable prior notice,
to perform any and all additional audit procedures relating to the business
where accounting books and records are kept.
7.2 Bank Account. All bank accounts for the Casino Facility shall be in
------------
the name of Manager, as agent for Owner. Owner and Manager shall agree on the
procedures for withdrawals and deposits of funds. Manager shall have the right
to designate individuals to disburse funds from the business bank accounts to
pay all costs and expenses of managing, operating and maintaining the business
and its properties, including authorized capital expenditures and management
fees due to Manager. Owner agrees that at all times during the term of this
Management Agreement, a bank balance as approved in the Annual Plan shall be
maintained in an amount necessary to provide sufficient working capital to
assure the uninterrupted and efficient operation of the business. Excess funds
shall be disbursed to Owner.
8. TITLE, OTHER MATTERS.
--------------------
8.1 Covenant of Title. Owner shall enable Manager to peaceably and
-----------------
quietly operate the business in accordance with the terms of this Management
Agreement.
8.2 Proprietary Information. All specifically identifiable information
-----------------------
developed by Manager for Owner shall be the property of both Manager and Owner.
All existing information of Manager previously developed by Manager at
Manager's expense, including, without limitation, all customer lists, gaming
and marketing strategies and other similar information, shall be the property of
Manager and not Owner and neither Owner nor any of its 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.
8.3 Outside Activities of Parties. This Management Agreement shall be
-----------------------------
limited to the purposes set forth herein and nothing in this Management
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 Management
Agreement and which may compete with or otherwise affect all or some aspects of
the Casino
-7-
Facility. However, both parties agree that they will not compete in any gaming
activities in Xxxxxx County, Colorado during the Term except as permitted under
the Operating Agreement.
9. COMPENSATION OF MANAGER.
-----------------------
9.1 In consideration for the services to be performed by Manager after
the Commencement Date, Manager shall be entitled to an annual management fee
equal to two percent (2%) of Revenues (as defined below), plus ten percent (10%)
of Operating Income (as defined below), but such fee shall not, in the
aggregate, exceed four percent (4%) of Revenues.
(a) Revenues means all revenues, less sales tax on such revenues,
determined on an annual basis received from the following sources: (i) gross
gaming receipts from the Casino Facility, less 50% of applicable gaming and
admission taxes from the operation of gaming in the Casino Facility; (ii) hotel
operations; (iii) food and beverage operations; (iv) all parking fees; (v) all
revenues generated from gift shops and arcades; (vi) other revenues, fees and
income, which are attributable to the operation of the Casino Facility. Revenues
derived from non-operating activities, such as the sale of capital assets are
excluded from the definition of Revenues.
(b) Operating Income means the income of the Casino Facility before
any management fee paid to Manager, distributions to Members of Owner, interest,
depreciation, amortization and write-off or start-up and pre-opening type
expenses and income taxes.
(c) The fee shall become due and payable ten (10) days after the end
of each month based upon the Revenues and Operating Income for the previous
month. Payment of such compensation may be paid to Manager by withholding
Revenues it has received for Owner's account; provided, however, that the fee
shall be accrued as a liability and not paid to the extent that Owner has not
generated sufficient cash flow to pay such fee. For these purposes, cash flow
shall be determined before capital expenditures and distributions to Members of
Owner.
10. INSURANCE.
---------
10.1 Coverage. Owner, for the benefit of both Owner and Manager, shall
--------
maintain adequate insurance during the term of this Agreement. The type and
amount of coverage shall be approved by Owner.
10.2 Policies and Endorsements.
-------------------------
10.2.1 Policies. All insurance coverage provided for hereunder shall
--------
be effected by policies issued by insurance companies with sound and adequate
financial
-8-
responsibility, or by self-insurance programs of either Manager or Owner. Either
party shall be entitled to object to an insurance company. Owner shall deliver
to the Manager duplicate copies of the insurance policies or certificates of
insurance with respect to all of the policies of insurance so procured,
including existing, additional and renewal policies, and in the case of
insurance about to expire, shall deliver duplicate copies of the insurance
policies or insurance certificates with respect to the renewal policies to the
other party not less than thirty (30) days prior to the respective dates of
expiration.
10.2.2 Endorsement. All insurance shall, to the extent obtainable,
-----------
have attached thereto:
(a) an endorsement that such policy shall not be canceled or
materially changed without at least thirty (30) days' prior written notice to
Owner and Manger; and
(b) an endorsement to the effect that no act or omission of Owner
or Manager shall affect the obligation of the insurer to pay the full amount of
any loss sustained.
(c) Owner and its members shall be named as additional insureds on
all policies.
10.2.3 Named Insureds. All policies of insurance shall be carried in
--------------
the name of Owner and Manager. All liability policies shall name Owner and
Manger, and their respective members, managers, directors, officers, agents and
employees, as additional insureds.
-9-
11. Indemnification.
---------------
11.1 Indemnification. Manager agrees to indemnify and hold Owner free and
---------------
harmless from any loss, liability, claim, demand, legal proceeding or cost
(including attorneys' fees, costs, expenses and other charges) which is not
covered by insurance proceeds and which Owner may sustain, incur or assume as a
result of any allegation, claim, civil or criminal action, proceeding, charge or
prosecution (collectively "Claims") which may be alleged, made, instituted or
maintained against Manager or Owner, jointly or severally, to the extent arising
out of or based upon (a) Claims by the employees of the Manager (including
without limitation injury or compensation Claims); (b) the performance or non-
performance of the Management Agreement by Manager, its agents or employees; or
(c) the acts or failure to act of Manager, its employees or agents in a manner
consistent with the standards set forth in Section 2.3 above. Notwithstanding
the foregoing, Manager shall not be liable to indemnify and hold Owner harmless
to the extent of any such loss, liability or cost which (i) results from the
negligence of Owner, its agents (other than Manager) or employees or (ii)
consists of consequential or punitive damages (including any such damages
asserted by a third party). Nothing contained in this Section 11 or this
Agreement shall constitute a guaranty or commitment by the Manager of the
operating results or business prospects of the Casino Facility.
11.2 Related Matters.
---------------
11.2.1 Legal Fees, Etc., Procedures. Manager shall reimburse Owner for
----------------------------
any legal fees and costs, including attorney's fees and other litigation
expenses, incurred by Owner in respect to which indemnity is granted hereunder.
If Claims are asserted or threatened, or if any action or suit is commenced or
threatened with respect thereto, for which indemnity may be sought against
Manager hereunder, Owner shall notify Manager in writing within thirty (30) days
after Owner shall have had actual knowledge of the threat, assertion or
commencement of the Claims, which notice shall specify in reasonable detail the
matter for which indemnity may be sought. Manager shall have the right, upon
notice to Owner given within thirty (30) days of its receipt of Owner's notice,
to take primary responsibility for the prosecution, defense or settlement of
such matter and payment of expenses in connection therewith. Owner shall
provide, without cost to Manager, all relevant records and information
reasonably required by Manager for such prosecution, defense or settlement and
shall cooperate with Manager to the fullest extent possible. Owner, at Owner's
sole cost and expense, shall have the right to employ its own counsel in any
such matter with respect to which Manager has elected to take primary
responsibility for prosecution, defense or settlement.
-10-
11.2.2 Indemnified Parties. The indemnities contained in this
-------------------
Section 11 shall run to the benefit of both Owner and its affiliates, and its
directors, officers, shareholders and employees.
11.2.3 Survival. The provisions of this Section 11 shall survive any
--------
cancellation, termination or expiration of this Management Agreement and shall
remain in full force and effect until such time as the applicable statute of
limitation shall cut off all claims which are subject to the provisions of this
Section 11.
12. DAMAGE TO AND DESTRUCTION OF THE BUSINESS.
-----------------------------------------
12.1 Restoration. Provided that there are sufficient insurance proceeds,
-----------
in the event fire or other casualty shall damage or destroy the property used in
the Casino Facility, Owner shall be required to repair, restore or replace the
same to the extent as may be limited by insurance proceeds. If there are not
sufficient insurance proceeds and Owner no longer desires to operate the Casino
Facility, Manager shall have the option, exercisable within ninety (90) days of
such casualty, to obtain the license to operate the Casino Facility subject to
appropriate regulatory approval. Owner shall use its best efforts to assist
Manager in obtaining the license. In the event fire or other casualty shall
damage or destroy the Casino Facility, Owner shall have the choice of repairing,
restoring or replacing the same to the extent as may be limited by insurance
proceeds. If Owner determines that it is not in its best interest to restore the
Casino Facility, the Management Agreement will terminate.
13. DEFAULT AND TERMINATION.
-----------------------
13.1 Events of Default. It shall be an event of default hereunder (an
-----------------
"Event of Default") if Manager or Owner (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 Management 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.
13.2 Termination.
-----------
13.2.1 General. If an Event of Default occurs and has not been
-------
cured, this Management Agreement shall terminate at the election of the
Non-Defaulting Party. Notice of
-11-
termination pursuant to this Section 13 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 13.1 hereof. Manager shall receive all funds due to it at the time of
Termination.
13.2.2 Termination. In addition to the foregoing, this Management
-----------
Agreement shall terminate upon any of the following events:
(a) The mutual agreement of the parties; or
(b) The inability of either party to receive or maintain the
licenses to perform their obligations hereunder; or
(c) 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
an 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.
13.2.3 Waiver. The waiver of any one Event of Default shall not be
------
construed as the waiver of any other Event of Default.
13.3 Remedies Cumulative. Except as herein provided to the contrary, the
-------------------
termination of this Management Agreement by the Non-Defaulting Party upon an
Event of Default shall be without damages, injunctions, specific performance or
other legal or equitable
-12-
remedies by reason of any breach, default or non-compliance by the Defaulting
Party with such Defaulting Party's covenants, obligations and agreements
hereunder. 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 13.4 before proceeding to arbitration as provided in
Section 13.5. 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.
13.4 Negotiation. If a dispute arises, any party to the dispute will give
-----------
notice to each other party. If Owner is not a party to the dispute, notice will
be given to Owner. After notice has been given, the parties in good faith will
attempt to negotiate a resolution of the dispute.
13.5 Arbitration. If within 30 days after the notice provided in Section
-----------
13.4, a dispute is not resolved through negotiation or mediation, the dispute
will be arbitrated. The parties to the dispute agree to be bound by the
selection of an arbitrator, and to settle the dispute exclusively by binding
arbitration in accordance with the following provisions:
(a) All parties to the dispute will collectively select one
arbitrator. If they fail to do so within 45 days after the notice provided in
Section 13.4, one or more parties will request the American Arbitration
Association to submit a panel of five arbitrators who are qualified to resolve
the matters in dispute from which the choice will be made. The party requesting
the arbitration will strike first, followed by alternative striking until one
name remains. A similar procedure will be followed if there are more than two
parties. The parties may be agreement reject one entire list, and request a
second list. If selection by the above method is not completed within 90 days
after the notice provided in Section 13.4, or if there are more than four
parties, then an arbitrator will be selected by the American Arbitration
Association. The arbitrator so selected will then arbitrate the dispute in
Denver, Colorado, and issue an award.
(b) To the extent consistent with the provisions of this Article,
the arbitration will be conducted under the Commercial Arbitration Rules of the
American Arbitration Association and in accordance with Colorado law. The
arbitrator's decision will be made pursuant to the relevant substantive law of
the State of Colorado. The award of the arbitrator will be final, binding and
non-appealable. Judgment on the award may be entered in any court, state or
federal, having jurisdiction.
(c) The fees and expenses of the arbitrator, and the other direct
costs of the arbitration, will be shared by the parties to the dispute in equal
proportions. Each party to the dispute will bear its other respective costs and
expenses. If one or more Members are
-13-
included in the arbitration because of their membership or former membership in
Owner, such group will collectively be treated as one party to the dispute
(through Owner as a party).
140 NOTICES.
-------
14.1 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: Xxxx X. Xxxxxxxx, President
or his designee Manager
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
With copies thereof to the following:
Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxxx Xxxx. XX
Xxxxx 000
Xxxx Xxxxx, XX 00000
If to Owner: Isle of Capri Black Hawk L.L.C.
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
With copies thereof to the following:
H. Xxxxxx Xxxx, President, or his designee,
Nevada Gold and Casinos, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
or to such other address as either Manager or Owner may have specified in a
notice duly given as required herein to the other.
-14-
150 RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS.
-------------------------------------------
15.1 Relationship. Manager and Owner shall not be construed as joint
------------
venturers or partners of each other by reason of this Management Agreement and
neither shall have the power to bind or obligate the other except as
specifically authorized and set forth in this Management Agreement.
Nevertheless, Manager is granted such authority and powers as may be reasonably
necessary for it to carry out the provisions of this Management Agreement. This
Management 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 Casino Facility.
15.2 Contractual Authority. Subject to the limitations thereon set forth
---------------------
in this Management Agreement, and in conformity with the Annual Plan, Manager is
authorized to make, enter into and perform in the name of, for the account of,
on behalf of and at the expense of Owner 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
Management Agreement. Copies of all executed contracts shall be immediately
conformed and furnished to Owner.
15.3 Further Actions. Owner and Manager agree to execute all contracts,
---------------
agreements and documents and to take all actions necessary to comply with the
provisions of this Management Agreement and the intent thereof.
160 APPLICABLE LAW. This Management Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of Colorado. 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; provided, however,
that in the event any material part of Owner's obligations under this Management
Agreement shall be declared invalid or unenforceable, Manager shall have the
option to terminate this Management Agreement.
170 MISCELLANEOUS.
-------------
17.1 Successors and Assigns. Manager shall not assign the whole or any
----------------------
portion of this Management Agreement or any payments due Manager hereunder,
without the unanimous consent of the Members of Owner, which consent will not
be unreasonably withheld, except that Manager may make such assignment, without
Owner's or the Members' consent, to a Permitted Transferee as defined in the
Operating Agreement. Owner shall not assign the whole or any portion of this
Agreement, except to an affiliate of Owner, without Manager's consent, except as
collateral for any financing obtained in connection with the development and/or
operations of the Casino Facility. If the Agreement is assigned to an affiliate
of Owner, Manager shall continue to be responsible under this Agreement.
-15-
17.2 Force Majeure. If at any time it becomes necessary in Manager's
-------------
or Owner's reasonable opinion to cease operation of all or part of the Casino
Facility to protect the Casino Facility or the health, safety or welfare of
guests or employees of the Casino Facility 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 Manager or Owner may close and cease operations of all
or part of the Casino Facility, reopening and commencing operation when Manager
and Owner determine in good faith that such may be done without jeopardy to the
Casino 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 shall be extended
for a period of time equivalent to the delay from such cause.
17.3 Authorization. Owner and Manager represent to the other that it
-------------
has full power and authority to execute this Management Agreement and to be
bound by and perform the terms hereof. On request, each party shall furnish the
other evidence of such authority.
17.4 Interest. Any amount payable to a party hereunder which shall not
--------
be paid when due, shall accrue interest at the prime rate as published from time
to time in the Wall Street Journal.
17.5 Entire Agreement; Amendments. This Management Agreement sets
----------------------------
forth the entire and only agreement or understanding between Owner and Manager
relating to the subject matter hereof and superseded and cancels all previous
agreements, negotiations, commitments and representations in respect hereof
among them. Owner 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 Owner, or any of their respective 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 Management Agreement may not be amended in any respect except
by an instrument in writing signed by Owner and Manager.
17.6 Survival of Covenants. Any covenant, term or provision of this
---------------------
Management Agreement which, in order to be effective, must survive the
termination of this Management Agreement, shall survive any such termination.
17.7 No Waiver. No waiver by either party of a breach by the other
---------
party of any of the terms, covenants or conditions of this Management Agreement,
shall be construed or held
-16-
to be a waiver of any succeeding or preceding 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.
17.8 Compliance. In performing its obligations under this Management
----------
Agreement, Manager shall comply 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 witholding 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 maintained as a part of the books and records of Manager.
17.9 Headings. The headings hereunder are used for convenience only and
--------
shall not affect the construction or interpretation of any provision hereof.
17.10 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 an all such counterparts
shall constitute but one and the same agreement.
17.11 Commercial Reasonableness. Anything contained in this Management
-------------------------
Agreement to the contrary notwithstanding, all contracts and agreements entered
into by Manager hereunder, including any contracts on account of Owner, shall be
commercially reasonable.
-17-
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Management Agreement as of the date and year first above written.
CASINO AMERICA, INC., ISLE OF CAPRI BLACK HAWK,
a Delaware corporation L.L.C., a Colorado limited liability
company
By: /s/ Xxxxx X. Xxxxxxx By: Casino America of Colorado, Inc.,
-------------------------- Member
Its:
-------------------------
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Title: Exec. V.P.
----------------------------
Blackhawk Gold, Ltd., Member
By: /s/ H. Xxxxxx Xxxx
------------------------------
Title: President
----------------------------
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