Exhibit 99(a)
MANAGEMENT AGREEMENT
This Management Agreement is made and entered into this 10th day of June, 1994,
by and between Gamblers Supply Management Company, a South Dakota corporation
(hereafter "Operator") and the Marquette Gaming Corporation, an Iowa nonprofit
corporation (hereafter "MGC").
WHEREAS, Operator desires to operate and manage casino gambling on excursion
gambling boats and related activities in and about Marquette, Iowa (hereafter:
"gaming operation"); and
WHEREAS, MGC desires to promote economic development in the Marquette, Iowa
vicinity, by conducting- excursion gambling under applicable Iowa gaming laws
and regulations and desires Operator to manage the gaming operation, all in
accordance with the terms and conditions of this Agreement as hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Appointment of Operator and Manager.
A. Acceptance. Marquette Gaming Corporation hereby appoints Gamblers Supply
Management Company, and Gamblers Supply Management Company hereby accepts such
appointment, as the exclusive Manager and Operator of the gaming operation upon
the terms and conditions hereinafter set forth.
B. Operator Activities. MGC acknowledges that the Operator is in the business of
managing gaming operations and may in the future engage in such activity both
for its own account and for others. It is hereby expressly agreed that the
Operator and its affiliates may engage in such activities and may manage or
operate facilities other than those to be managed for MGC whether or not such
other facility may compete directly or indirectly with those of MGC, except as
prohibited in paragraph 4.
C. Independent Contractor. In the performance of its duties under this
Agreement, the Operator shall occupy the position of an independent contractor
with respect to MGC. Nothing contained herein shall be construed as making the
parties hereto partners or joint venturers, nor, except as expressly otherwise
provided herein, construed as making the Operator an agent or employee of MGC.
D. Sponsoring Organization. MGC agrees to act as the "qualified sponsoring
organization" as that term is defined in Iowa Code Chapter 99F in connection
with the license applications of MGC and Operator to the Iowa Racing and Gaming
Commission ("IRGC").
2. Conditions Precedent. This Agreement and the appointment of Operator as
exclusive operating and management agent is subject to the conditions precent
that:
A. Prior to commencing operation, Operator and MGC shall obtain the required
licenses from the Iowa Racing and Gaming Commission to conduct casino gambling
and to operate an excursion gambling boat;
B. Approval of this Agreement, amendments thereto, and other ancillary
agreements by the Iowa Racing and Gaming Commission;
C. The execution of a Dock Site Agreement by the City of Marquette, as Lessor,
and Gamblers Supply Management Company, as Lessee, in the form attached hereto
as Exhibit A, and incorporated herein by this reference;
D. Operator obtaining a permit from the U.S. Army Corps of Engineers to moor the
excursion and gambling boat in the Mississippi River channel at the dock site
described in Exhibit A and operate the boat in areas defined as Pools 9 and 10.
3. Term.
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A. The term of this Agreement shall be for a period of twenty-five (25) years
from the date this Agreement is executed. This Agreement may be terminated by
Operator upon one hundred eighty (180) days written notice by certified mail to
the registered agent of MGC, and upon such termination the Operator shall pay to
MGC in addition to all sums then accrued but not yet paid, an amount equal to
twenty-five percent (25%) of the payments received by MGC from the Operator
pursuant to this Agreement for the last full year of casino gambling prior to
termination. For purposes of this subparagraph, the "last full year" means the
year ending on the last anniversary date of the commencement of casino gambling
preceding the termination notice. If the termination notice is sent prior to the
first anniversary date of the commencement of casino gambling, the payment shall
be an amount equal to twenty-five percent (25%) of the payments received by MGC
from the Operator pursuant to this Agreement for the first full year of casino
gambling.
B. This Agreement shall automatically terminate upon the happening of the
following events:
i. Cancellation of gambling or excursion boat licenses as a result of an
unfavorable referendum after submission to the electorate;
ii. Non-renewal of licenses by the Iowa Racing and Gaming Commission; or
iii. Termination of the Dock Site Agreement. In the event this Agreement is
terminated as a result of a voluntary termination of the Dock Site Agreement
under paragraph 2A thereof, MGC shall receive that amount identified in
paragraph 3A of this Agreement.
C. After the commencement of casino gambling operations, if the Operator, for
reasons which are in the Operator's exclusive control, fails to regularly
conduct casino gambling operations on an excursion boat which takes on
passengers exclusively at Marquette, Iowa, for any continuous period of sixty
(60) days or more, such inactivity shall, unless Operator resumes regularly
conducted gaming operations within thirty (30) days after written demand by MGC,
constitute a voluntary termination of this Agreement by the Operator under
paragraph 3A, above, and the Operator shall pay to MGC the
amount provided in paragraph 3A.
4. Exclusivity. MGC agrees during the term of this Agreement that it shall not,
without the prior written consent of Operator, enter into any agreement with any
entity other than Operator to operate casino gambling or excursion gambling boat
operations in Marquette, Iowa, or any other additional geographical area subject
to the jurisdiction or control of the City of Marquette or MGC. Operator agrees
during the term of this Agreement it will not permit the boarding of passengers
on any excursion gambling boat operated by it in Pool 9 or Pool 10 of the
Mississippi River at any site other than the Marquette dock site.
5. Duties and Authority of the Operator. Subject to any limitations imposed by
state law or regulations of the Iowa Racing and Gaming Commission, the Operator
shall have the following duties and authority:
A. Exclusive Authority. The Operator shall have the sole and exclusive authority
to fully and completely manage and operate all aspects of the excursion boat
gambling operation, including, without limitation, casino gaming, concessions,
personnel, entertainment, security, prices, terms and conditions of occupancy,
hours of operation, casino gaming, excursion routes, and all other affairs
associated with or related to the operation thereof.
B. Establish Policies. The Operator shall direct and establish policies and
procedures for the Operator's employees who will have direct responsibility for
gaming operations. The Operator shall have the sole discretion to establish
terms and conditions of employment, and all other related policies.
C. Acquisition. The Operator shall supervise and have control over the making
and executing of all decisions concerning the acquisition of equipment, whether
original or replacement, furniture, fixtures, supplies, and the purchase, lease,
or other acquisition of the same. The Operator shall have control over the
making and executing of all decisions concerning the maintenance and repair of
all gaming properties.
D. Selection of Vendors. The Operator shall select all vendors, suppliers, and
independent contractors and subcontractors with respect to the gaming operation
and shall hire, discharge, and supervise all labor and employees required for
the operation and maintenance of the gaming operation, including on-site
managers.
E. Agreements. The Operator may with the prior consent of MGC negotiate and
execute in the name of and on account of MGC such agreements as the Operator
deems necessary or advisable for the furnishing of utilities, services,
concessions, and supplies for the maintenance, repair and operation of the
gaming operation and such other agreements which may be beneficial to the
excursion gambling boat operation or incidental to the matters for which the
Operator is responsible hereunder.
F. Policy. The Operator shall make all policy decisions and shall have control
over the making of all the routine decisions in connection with the daily
operations of the gaming operation.
G. Compliance with Law. The Operator shall use its best efforts to cause all
things to be done, on behalf, in the name of and for the account of MGC,
necessary to comply with any statute, ordinance, law, rule, regulation, or order
of any governmental or regulatory body having jurisdiction over the matters
contained herein. The Operator shall apply for and attempt to obtain and
maintain all licenses and permits required or advisable (in the Operator's sole
judgment) in connection with the management and operation of all gaming
operations.
H. Accounting System. The Operator shall devise, establish, and supervise the
operation of an accounting system for the gaming operation.
I. Legal Actions. The Operator may with the prior consent of MGC cause to be
instituted, on behalf of and in the name of MGC, any and all legal actions or
proceedings it deems necessary or advisable to protect and maintain the gaming
operations as a commercially profitable business enterprise.
J. Insurance. Operator shall obtain, maintain, and keep in full force and effect
during the term of this Agreement comprehensive general public liability
insurance covering any premises at which the Operator conducts any activities
pursuant to this Agreement, operations, contracts, independent contractors,
personal injury and other normal coverage as provided by the standard "broad
form" liability policies against claims for bodily injury, death or property
damage, occurring in, on or about the premises, with coverage limits of not less
than $2,000,000.00 for bodily injury or death resulting from any one accident or
occurrence, but shall be increased to five million dollars ($5,000,000.00),
provided the cost per million for five million is not greater than the cost per
million for coverage of two million dollars. All insurance provided for herein
shall name MGC as an additional name insured and be effected under a valid and
enforceable policy or policies issued by insurers of recognized responsibility,
licensed to do business in the State of Iowa and approved by MGC. Certificates
of said policies, providing for thirty (30) days notice to MGC prior to
cancellation shall be delivered to MGC within twenty (20) days from the date of
the beginning of the term of this Agreement.
K. Payment of Taxes, Assessments and Other Charges. The Operator shall pay all
taxes, personal and real, assessments and other charges of every kind and nature
properly levied by any federal, state or local governmental authority with
respect to the gaming operations, on behalf of and in the name of MGC. The
Operator's responsibilities shall include furnishing such office space and/or
other facilities to such regulatory authorities as may be required.
L. Limitations. Notwithstanding anything to the contrary, the Operator shall not
be required to do, or cause to be done, anything for the account of MGC (i)
which may make the Operator liable to third parties; (ii) which constitutes
impermissible delegation of the duties and responsibilities of MGC, including,
but not limited to, the purchase and construction of capital improvements, the
sale or disposition of all or substantially all of MGC's assets; or (iii) which
may not be commenced, undertaken, or completed because of acts of God, strikes,
governmental regulations or laws, acts of war, or other types of events beyond
the Operator's control whether similar or dissimilar to the foregoing.
M. Excursion Gambling Boat. The Operator shall furnish, at its sole expense, an
excursion gambling boat with a minimum capacity of 750 passengers which will
take on passengers exclusively at the
leased premises described in the Dock Site Agreement.
6. Compensation Payable to MGC. As compensation for the rights granted to the
Operator under this Agreement, the Operator shall pay to MGC the following
amounts:
A. Twenty-five cents ($.25) per ticketed passenger embarking on any excursion
gambling boat operated pursuant to this Agreement, payable in monthly
installments, with payments for each month due on or prior to the 15th day of
the following month; and
B. Beginning with the fourth year of this Agreement, the additional sum of
twenty-five cents ($.25) per ticketed passenger embarking on any excursion
gambling boat operated pursuant to this Agreement, payable as provided in
subparagraph A.; and
C. For purposes of paragraphs 6A and 6B, "ticketed passenger" shall mean every
person admitted during a calendar day on the excursion gambling boat, except
necessary officials and employees of Operator working on the boat.
The parties agree that the fees set forth in this paragraph are the sole
compensation to which MGC is entitled to under this Agreement. The Operator
agrees that neither it nor its officers, directors, partners, and shareholders,
if any, shall receive any share, percentage, or proportion of the money received
for admissions to the excursion gambling boat.
7. Wagering Taxes and Admission Fees. Operator shall pay any admission fees and
wagering taxes imposed pursuant to law.
8. License Applications. MGC and Operator agree to cooperate in the preparation
and filing of all documentation required by the Iowa Racing and Gaming
Commission. MGC and Operator will seek approval for a license to conduct the
gaming operations under Iowa Code Chapter 99F, and under applicable rules and
regulations of the IRGC. Operator shall pay for any required application fees,
bonds, and annual license fees.
9. Reports, Accounting and Auditing. The parties shall prepare and file all
reports, including financial reports, as may be required by each of them,
respectively, by applicable law and regulation of the Iowa Racing and Gaming
Commission. Each party shall keep such books and records and have audits
performed from time to time as required of each of them, respectively, by
applicable law and regulation. Operator shall pay for any and all audit and
accounting services for any reports, accounting, and audits required of either
party by the IRGC.
Each party agrees that the IRGC and every other party to this Agreement shall
have the right to audit each party's records to the extent necessary to provide
verification of compliance under this Agreement. In the event any party is not
in compliance with the terms of this Agreement, then in addition to all other
remedies provided for by law, each party shall have the right to specifically
enforce the terms and provisions of this Agreement.
10. Compliance with Laws. The parties jointly agree and hereby accept the
responsibility for compliance with the laws of Iowa and the rules promulgated by
the IRGC from time to time, as well
as the laws of any other applicable governmental agency. Each party shall have
the right to contest by legal action or appeal any government law, regulation,
order, judgment or fine imposed upon said party. If a government agency imposes
a certain amount of time within which a party is permitted the opportunity to
take some corrective or other action, said party shall not be in default under
the terms of this Agreement until such time has passed and the corrective action
has not been taken, or the party has initiated legal action or an appeal to
obtain reversal of such requirement.
11. Default. The occurrence of any one or more of the following events shall
constitute a default by a party hereunder:
A. Failure of a party to perform or comply with any of the duties or obligations
imposed under the terms of this Agreement.
B. Suspension or revocation of any party's license under Chapter 99F of the Iowa
Code by the State of Iowa or IRGC.
C. Any party's adjudication as bankrupt or insolvent, or the appointment of a
receiver or an assignment for the benefit of creditors by or on behalf of any
party.
D. Liquidation of dissolution of a party, which liquidation or dissolution is
not caused by the other party.
E. At no time during the term of this Agreement shall Operator cause such
license (or renewal thereof) to be suspended, revoked or terminated for a period
in excess of one hundred twenty (120) days.
If one of the foregoing acts occurs and is not remedied by the defaulting party
within thirty (30) days after giving of written notice by any non-defaulting
party of said default, then the non-defaulting party shall have all legal and
equitable rights and remedies provided by law, including without limitation,
termination of this Agreement, specific performance, or injunctive relief. The
remedies of the non-defaulting party shall be cumulative, and the exercise of
any one or more remedies provided at law shall not be construed as a waiver of
any other remedies.
12. Indemnification. operator shall indemnify, defend and hold harmless MGC, its
officers, directors, employees, and agents, from and against any and all
liabilities, obligations, claims, damages, causes of action, costs and expenses,
incurred by, or asserted against MGC relating to any accident, injury to or
death of any persons, or loss of or damage to property occurring on the
excursion gambling boat or related to the gaming operation, compliance with
applicable gaming laws and pay of any fees or taxes imposed with respect to
gambling operations.
MGC shall indemnify, defend and hold harmless the Operator, its officers,
directors, employees, and agents, from and against any and all liabilities,
obligations, claims, damages, causes of action, costs and expenses, incurred by,
or asserted against Operator by reason of any accident, injury to or death of
any persons, or loss of or damage to property occurring as a result of any act
or omission by MGC arising out of the gaming operation.
13. MGC Office Space. Operator agrees to provide MGC with office space
sufficient for storage of
MGC records and for board of directors meetings. MGC agrees that it will be
responsible for maintaining its own employees, including but not limited to
payment of compensation and all other legally imposed obligations.
14. Entire Agreement. This Agreement shall constitute the entire agreement and
understanding between the parties and supersedes any prior agreement or
understanding relating to the subject matter of this Agreement. This Agreement
may be modified or amended only by a written agreement signed by all the
parties, and subject to the approval of the IRGC, if necessary. The parties
hereby covenant they will agree to any amendments to this Agreement which may be
necessary or desirable in order to conform to federal tax law, Iowa statutes, or
administrative rules, including future legislative enactments and rules,
provided that such amendments do not materially alter the rights or obligations
of either party hereunder.
15. Severability. In the event any portion of this Agreement is determined by
competent jurisdiction to be void, illegal, or otherwise unenforceable, all
other terms of the Agreement shall remain in full force and effect and this
Agreement shall be in full force as if the void, illegal, or otherwise
unenforceable provisions did not exist.
16. Benefit. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs, successors
and assigns.
17. Assignment. No party shall assign its rights or duties under this Agreement
without the prior written consent of the remaining parties, and in no event
shall any such assignment relieve the assigning party of its obligations under
the Agreement; provided, however, that the operator is specifically prohibited
from subcontracting any of its duties relating to casino gambling.
Notwithstanding the foregoing, it is further understood and agreed that the
operator may be sold to any party, and that said sale shall not constitute a
default under this paragraph or this Agreement. Provided further, that the
Operator shall not unreasonably withhold its consent to the assignment by MGC of
its rights under this Agreement to another "qualified sponsoring organization"
under Iowa Code Chapter 99F if such assignment is approved by the IRGC and if
such assignment does not alter the rights of the Operator hereunder.
GAMBLERS SUPPLY MANAGEMENT COMPANY
/s/ John Parker
By: ___________________________________
President
Its: __________________________________
MARQUETTE GAMING CORPORATION
/s/ G. William Dickey
By: ___________________________________
President
Its: __________________________________
/s/ Todd Kamm
By: ___________________________________
Secretary
Its: __________________________________