EXHIBIT 10.3
MANAGEMENT AGREEMENT
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This Management Agreement (this "Agreement") is made and entered into as of
this 28th day of June, 1996, by and between ELDORADO RESORTS LLC, a Nevada
limited liability company (the "Company"), and RECREATIONAL ENTERPRISES, INC., a
Nevada corporation, and HOTEL-CASINO MANAGEMENT, INC., a Nevada corporation
("Managers").
RECITALS
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A. The Managers are Members of the Company.
B. Under that certain Operating Agreement, of even date herewith, by and
among all of the Members of the Company, the Managers have been appointed by the
Members of the Company to be "Managers" of the Company.
C. Among other duties that the Managers may have as Managers of the
Company, the Managers have agreed to provide planning, financial and related
services to the Company in accordance with the terms and provisions of this
Agreement and for the compensation provided for in this Agreement.
AGREEMENT
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NOW, THEREFORE, in accordance with the recitals set forth above and AS
CONSIDERATION for the representations, warranties, covenants and agreements set
forth in this Agreement, as well as for other good and valuable consideration
the receipt and sufficiency of which hereby are acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
MANAGEMENT SERVICES
The Managers shall provide to the Company executive oversight and
management services consistent with policies established by the Company's Board
of Managers (the "Board") and/or the Company's Chief Executive Officer,
President and Presiding Manager. The Manager shall (a) develop strategic plans
for the Company's business and prepare annual budgets and capital expenditure
plans for presentation to and approval by the Board, (b) provide advice and
oversight with respect to financial matters for the Company, (c) establish and
oversee the operation of financial accounting systems and controls, regularly
review the Company's financial
reports, including statements of operations of the Company, and prepare and make
reports concerning financial matters as requested by the Board and/or the
Company's Chief Executive Officer, President and Presiding Manger, (d) provide
planning, design and architectural services as directed by the Board and/or the
Company's Chief Executive Officer, and (d) furnish advice and recommendations
with respect to human resource issues, facilities relocations and expansions,
acquisitions, joint ventures and concerns that arise in connection with the
operations of the Company.
ARTICLE II
COMPENSATION
Section 2.1 Compensation. Compensation to be paid to Managers shall be
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determined in advance on a quarterly basis for each quarter at the beginning of
each quarter of each fiscal year of the Company. The Management Fee shall be
based upon the services performed by the Managers, together with the performance
of the Company in the preceding quarter and the anticipated services to be
provided by the Managers in the upcoming quarter; provided, however, that the
total annual Management Fee shall not exceed one and one-half percent (1-1/2%)
of the Company's Net Revenue as defined herein.
Section 2.2 "Net Revenue". For the purposes of this Agreement, Net
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Revenue shall mean all revenues of the Company, including, without limitation,
gaming, food and beverage, room and other revenues less promotional allowances
determined in accordance with generally accepted accounting principles and as
reflected on periodic financial reports of the Company.
Section 2.3 Employee Benefit and Expense Reimbursement. The Company shall
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reimburse the Managers for all reasonable out-of-pocket costs and expenses
incurred in performing the Managers' duties under this Agreement. The Company
shall provide insurance benefits to the employees of the Managers on the same
basis as provided to the employees of the Company.
ARTICLE III
TERM
Section 3.1 Term. Unless terminated earlier by the mutual agreement of
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the Company and the Managers, or unless terminated by the Company for Cause (as
defined in Section 3.2 hereof), the term of this Agreement shall be for a period
of THREE (3) years, commencing on the date of this Agreement. At the end of
such initial THREE (3) year period, this Agreement shall be renewed and the term
of this Agreement shall be extended automatically for an additional period of
THREE (3) years unless one party hereto at least THREE (3) calendar months
before the end of such
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initial THREE (3) year period gives written notice to the other party hereto of
such first party's intention to terminate this Agreement. Each renewed and
extended term of this Agreement shall be renewed and extended automatically for
an additional period of FIVE (5) years unless one party hereto at least THREE
(3) calendar months before the end of such renewed and extended term of this
Agreement gives written notice to the other party hereto of such first party's
intention to terminate this Agreement.
Section 3.2 Termination for Cause. The Company may terminate this
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Agreement and the services of one or both of the Managers if, in the performance
of such Manager's duties under this Agreement, such Manager commits any felony,
commits gross negligence in the performance of the Manager's duties under this
Agreement, willfully engages in any activity that is contrary to the best
interests of the Company and willfully disregards instructions from the Board or
the Company's Chief Executive Officer, President and Presiding Manager to cease
such activity, or otherwise willfully violates and disregards instructions from
the Board and/or the Company Chief Executive Officer, President and Presiding
Manager with respect to such Manager's responsibility and authority in
performing such Manager's duties under this Agreement.
ARTICLE IV
SCOPE OF DUTIES AND OBLIGATIONS
Notwithstanding any other term or provision of this Agreement, the Managers
shall not be required to devote their full time to the business or affairs of
the Company but shall devote the time reasonably necessary to perform the duties
and obligations of the Managers under this Agreement.
ARTICLE V
CONFIDENTIALITY AND NONDISCLOSURE
The Managers acknowledge that information, observations and data obtained
by the Managers and their personnel during the term of this Agreement concerning
the business or affairs of the Company and its affiliates are the property of
the Company. The Mangers shall not disclose to any unauthorized person or use
for the Managers' own account any of such information, observations or data
without the written consent of the Board, and the Managers shall require all
personnel and other persons performing duties under
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this Agreement on behalf of the Managers to agree to be bound by comparable
limitations. Notwithstanding the foregoing, nothing in this Agreement shall
prevent the disclosure of information, observations or data that becomes
generally known to and available for use by the public other than as a result of
a disclosure by any person or entity owing a duty of confidentiality to the
Company. Upon the termination of this Agreement, the Managers shall deliver to
the Company all memoranda, notes, plans, records, reports and other documents,
and all copies thereof, regarding Company business or affairs, that the Managers
then may possess or have under their control as a result of being or having been
the Managers under this Agreement. The obligations of the Managers set forth in
this Article V shall continue and remain in force and effect for a period of TWO
(2) years following the termination of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Successors and Assigns. This Agreement is intended to bind
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and inure to the benefit of and be enforceable by the parties hereto and their
respective permitted successors and assigns. the Managers may not delegate or
assign any of their respective duties or obligations under this Agreement except
to any corporation, partnership, limited liability company or other entity under
the same control as currently in place for each Manager.
Section 6.2 Notices. All notices or other communications required or
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permitted to be given under this Agreement shall be in writing and shall be (a)
delivered personally, (b) sent via Federal Express (or via another comparable
overnight delivery service), (c) sent via facsimile machine or (d) mailed,
certified or registered mail, return receipt requested, to the parties hereto at
the addresses set forth in relation to the signature lines of this Agreement.
Personally delivered notices shall be deemed given upon actual personal delivery
to the intended recipient. Facsimile notices shall be deemed given upon
completion of transmission of the receiving facsimile machine and the return to
the transmitting facsimile machine of an acknowledgment of the receipt thereof.
Notices sent via Federal Express (or via another comparable overnight delivery
service) shall be deemed given on the business day immediately following the day
of dispatch. Mailed notices shall be deemed given upon the earlier of THREE (3)
business days after deposit into the United States mail, registered or
certified, with postage fully prepaid, or the date of actual receipt as
evidenced by the return receipt.
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Section 6.3. Severability. If any sentence, paragraph, clause or
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combination of the same is this Agreement is held by a court of competent
jurisdiction to be unenforceable in any jurisdiction where it is so held, the
remainder of this Agreement shall remain binding on the parties hereto in such
jurisdiction as if such unenforceable provision had not been contained herein.
The enforceability of such sentence, paragraph, clause or combination of the
same in this Agreement otherwise shall be unaffected and shall remain
enforceable in all other jurisdictions.
Section 6.4. Governing Law. The validity, construction, interpretation
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and enforceability of this Agreement shall be determined and governed by the
laws of the State of Nevada.
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Notwithstanding the foregoing, if any law or set of laws in the State of Nevada
requires or otherwise dictates that the laws of another state or jurisdiction
must be applied in any proceeding involving this Agreement, then such Nevada law
or set of laws shall be superseded by this Section 6.4, and the remaining laws
of the State of Nevada nonetheless shall be applied in such proceeding.
Section 6.5. Choice of Forum. Any judicial proceeding brought by any
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party hereto as a result of a dispute or controversy arising out of or related
to this Agreement shall be commenced in courts located within Washoe County,
Nevada. All parties hereto agree to submit to the jurisdiction of the federal
and state courts located within such county in the event of such a dispute or
controversy.
Section 6.6. Headings. The headings and captions appearing at the
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beginning of each Article and Section of this Agreement are included herein for
the convenience of reference only, do not constitute a part of this Agreement
and shall not be deemed to limit, characterize or in any way affect any term or
provision of this Agreement. This Agreement shall be enforced and construed as
if no headings or captions appeared herein.
Section 6.7. Waiver. No waiver of any breach or default of this Agreement
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by any party hereto shall be considered to be a waiver of any other breach or
default of this Agreement.
Section 6.8. Remedies. Each of the parties to this Agreement shall be
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entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any term or provision of this Agreement and
to exercise all other rights existing in its favor. The parties to this
Agreement agree and acknowledge that money damages may not be an adequate remedy
for any breach of any term or provision of this Agreement and that any party to
this Agreement in its sole and absolute discretion may apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce or prevent any breach of any term or provision of
this Agreement.
Section 6.9. Venue and Arbitration. Any dispute arising under this
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Agreement shall be submitted to binding arbitration under the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
shall be conducted in Reno, Nevada, before a single arbitrator selected by the
Managers and the Company, or, if they are unable to agree on the identity of the
arbitrator, before a panel of three (3) arbitrators, one (1) selected by the
Mangers, one (1) selected by the Company, and the third selected by the other
two (2) arbitrators. Failing the selection of any required arbitrator, the
selection of such
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arbitrator shall be made by the American Arbitration Association. The award of
the arbitrators shall be final and binding, and judgment on the award may be
entered by any court of competent jurisdiction located within Washoe County,
Nevada. This submission and agreement to arbitrate shall be specifically
enforceable. The prevailing party or parties in any such arbitration or in any
action to enforce this agreement to arbitrate shall be entitled all reasonable
costs and expenses, including attorneys' fees, incurred in connection therewith.
Section 6.10. Attorneys' Fees. If a dispute arises with respect to this
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Agreement, the party prevailing in such dispute shall be entitled to recover all
expenses, including, without limitation, reasonable attorneys' fees and expense,
incurred in ascertaining such party's rights and in preparing to enforce and in
enforcing such party's rights under this Agreement, whether or not it was
necessary for such party to institute suit.
Section 6.11. Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original, but all of which,
when taken together, shall constitute one agreement.
Section 6.12. Entire Agreement. This Agreement contains the entire
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agreement between the parties hereto relating to the subject matter of this
Agreement, and no written or oral prior representations, agreements or
warranties of any party hereto shall be of any force or effect unless embodied
herein.
IN WITNESS WHEREOF, the Company and the Managers have executed this
Agreement on the date first written above.
The "Company"
ELDORADO RESORTS LLC
A Nevada Limited Liability Company
By: /s/ Donald L. Carano
________________________________
DONALD L. CARANO,
Chief Executive Officer,
President and Presiding Officer
By: /s/ Raymond J. Poncia, Jr.
________________________________
RAYMOND J. PONCIA, JR.,
President of Hotel-Casino
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Management, Inc., Assistant
Presiding Manager of the Company
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"Managers"
RECREATIONAL ENTERPRISES, INC.,
A Nevada Corporation
By: /s/ Donald L. Carano
________________________________
DONALD L. CARANO, President
HOTEL-CASINO MANAGEMENT, INC.
A Nevada Corporation
By: /s/ Raymond J. Poncia, Jr.
__________________________________
RAYMOND J. PONCIA, JR., President
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