DOCK SITE AGREEMENT
This Dock Site Agreement between the City of Marquette, Iowa
(hereafter "City") and Gamblers Supply Management Company, a South Dakota
corporation (hereafter "Company") is made this 10th day of June, 1994.
WHEREAS, the Company desires to operate and manage casino gambling on
excursion gambling boats and related activities in and about Marquette, Iowa;
and
WHEREAS, the City has entered into appropriate agreements with the
Iowa Department of Natural Resources relating to the control and ownership of
the docking facilities and adjacent land and desires to enter into an agreement
with Company for the development and management thereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Leased Premises. City leases to Company and Company rents from City
certain real property on the riverfront described as follows:
All that area bounded on the North by Bloody Run Creek, on the East by
the Mississippi River and on the South and West by the Sooline
Railroad right-of-way (hereafter "Dock Site"), more particularly
described in Exhibit A attached hereto and incorporated herein by this
reference.
2. Term.
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 Company upon one hundred eighty (180) days written notice sent by
certified mail to the City, and upon such termination, Company shall pay to City
in addition to all other sums then accrued but not yet paid, an amount equal to
twenty-five percent (25%) of the total payments received by the City in the form
of wagering taxes, statutory passenger admission fees, and rental payments
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. In the event 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 total of
such payments received by the City 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 excursion boat licenses as a result of
an unfavorable referendum after submission to the electorate;
(ii) Non-renewal of license by the IRGC; or
(iii) Termination of Management Agreement. In the event this Agreement
is terminated as a result of the voluntary termination of the Management
Agreement under paragraph 3A thereof, the City shall receive that amount
identified in paragraph 2A of this Agreement.
C. After the commencement of casino gambling operations, if the
Company, for reasons which are in the Company's exclusive control, fails to
regularly conduct casino gambling operations on an excursion boat which takes on
passengers exclusively at the leased premises for any continuous period of sixty
(60) days or more, such inactivity shall, unless Company resumes regularly
conducted gaming operations within thirty (30) days after written demand by the
City, constitute a voluntary termination of this Agreement by the Company under
paragraph 2A, above, and the Company shall pay to the City the amount provided
in paragraph 2A.
3. Conditions Precedent. This Agreement is subject to the conditions
precedent that:
A. Prior to commencement of operations, Company and the Marquette
Gaming Corporation (hereafter "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, if necessary, amendments thereto, and
other ancillary agreements by the Iowa Racing and Gaming Commission, or any
other state agency;
C. The execution of a Management Agreement by MGC and Gamblers Supply
Management Company in the form attached hereto as Exhibit C, and incorporated
herein by this reference;
D. Company obtaining a permit from the U.S. Army Corps of Engineers to
moor the excursion gambling boat and barge 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.
E. Approval of this Agreement by the Iowa Department of Natural
Resources.
4. Dock Site Development. The Company shall, at its expense,
construct improvements to the Dock Site for docking facilities and other
purposes relating to the operation of gambling excursion boats and associated
activities. The plans or said improvements are attached hereto as Exhibit B and
incorporated herein by this reference. The City's execution of this Agreement
constitutes approval of such plans. Upon approval of the completed improvements
by the City's Engineer and satisfactory evidence furnished by the Company that
all contractors and subcontractors have been fully paid, ownership of the Dock
Site improvements shall be transferred to the City by the Company, subject to
the terms of this Agreement. The Company agrees to maintain the Dock Site and
all improvements thereon in compliance with all applicable governmental
requirements
5. Rental. As rental for the Dock Site premises, including use of
the excursion
gambling boat dock and all other improvements thereon, the Company shall pay to
the City the following amounts:
A. The sum of One Hundred Five Thousand and No/100 Dollars
($105,000.00) per year, payable in equal monthly installments, on or prior to
the first day of each month, with the first installment due on the first day of
the month following execution of this Agreement; and
B. Twenty-five cents ($.25) per ticketed passenger embarking on any
excursion gambling boat operated by Company from the Dock Site, payable in
monthly installments, with the payment for each month due on or prior to the
15th day of the following month; and
C. 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 from the Dock Site, payable as provided in subparagraph
B., above.
D. Two and one-half percent (2.5%) of net gambling receipts in
excess of Twenty Million and No/100 Dollars ($20,000,000.00) with no applicable
cap during the first three (3) years of operation; and beginning with the fourth
year of operation, City shall receive 21% of net gambling receipts in excess of
Twenty Million and No/100 Dollars ($20,000,000.00) but not exceeding Forty
Million Dollars ($40,000,000.00), 5% of net gambling receipts in excess of
Forty Million and No/100 Dollars ($40,000,000.00) but not exceeding Sixty
Million and No/100 Dollars ($60,000,000.00), and 7.5% of net gambling receipts
in excess of Sixty Million and No/100 Dollars ($60,000,000.00), with no
applicable cap. "Net gambling receipts" are defined as gross gambling receipts
less winnings paid-to players and less any state wagering taxes paid. All sums
payable each year by the Company under this provision shall be paid within
ninety (90) days following each anniversary date of the commencement of casino
gambling.
The rental payments to be made by the Company shall be in addition to
all wagering taxes payable pursuant to Iowa law and the fifty cents ($.50) per
passenger admission fee which may be imposed on the Company by ordinance of the
City pursuant to Iowa Code (S) 99F.10. The City shall be granted access to such
records of the Company as may be necessary to verify passenger counts. For
purposes of this paragraph 5, "ticketed passengers" shall mean every person
admitted during a calendar day on the excursion gambling boat, except necessary
officials and employees of Company working on the boat.
6. Municipa1 Utilities. The Company shall construct and extend, at
its expense, water and sanitary sewer mains and related improvements from the
scares, municipal manhole to the above-described Dock Site. These utility
improvements shall be of sufficient quality and capacity to provide the
anticipated water and sanitary sewer needs of the excursion boat and associated
on-shore operations of the Company. The plans for such improvements shall be
subject to prior approval by the City and its Engineer. Upon approval of the
completed improvements by the City's Engineer and satisfactory evidence
furnished by the Company that all contractors and subcontractors have been fully
paid, ownership of the utility improvements shall be transferred to the City
together with all easements necessary for maintenance and access. The utility
improvements shall thereafter be part of the City's public utility system.
7. Dock Site and Utility Improvements Purchase and Financing. In
exchange for the transfer of ownership of the Dock Site improvements, as
provided in paragraph 4, the City agrees to pay the Company the sum of Two
Hundred Thousand and No/100 Dollars ($200,000.00) or the Company's cost to
construct such improvements, whichever sum is less. In exchange for the transfer
of ownership of the utility improvements, as provided in paragraph 6, the City
agrees to pay to Company the sum of Fifty Thousand and No/100 Dollars
($50,000.00) or the Company's cost to construct such improvements, whichever sum
is less. These obligations shall not be general obligations of the City but
shall be payable solely from rental payments, wagering taxes and passenger
admission fees received by the City from the Company's excursion gambling boat
operations, pursuant to this Agreement or Management Agreement, and the City
shall not be required to pay annually to the Company on account of such
obligations a total amount, including interest at eight percent (8%), which is
more than ten percent (10%) of the City's total annual combined revenue from
river boat revenue from this Agreement or from MGC, all as may be more
particularly provided in a separate loan agreement between the parties.
8. Barge for Docking and Mooring. The Company shall provide, at
its expense, a barge and docks necessary for the docking and mooring of the
excursion gambling boat to the Dock Site. The barge shall remain the exclusive
property of Company. The Company shall be responsible for the labor and expense
in attaching and maintaining the barge to the Dock Site.
9. Use of Dock Site. The Company and its employees, agents,
licensees, and invites shall have the exclusive use of the Dock Site and barge,
and no other person shall be entitled to dock or moor at said site without the
prior written consent of the Company. No excursion gambling boat except those
operated by Company shall be permitted to dock at said site without the prior
consent of the City.
10. Maintenance, Utilities, and Operating Expense. Company shall be
responsible for all maintenance, utility and operating expenses including the
cost of electrical expense, heating expense, snow removal, lawn care, janitorial
services, garbage, water, sewer and other utility expenses, repairs, maintenance
costs, and all other operating expenses incurred in the occupancy of the Dock
Site and real estate as described above.
11. Taxes. The Company shall pay all sums assessed as property taxes
on the leased premises or the improvements based upon the normal assessed value
of said premises before the same become delinquent. In no event shall the City
impose any special or otherwise discriminatory tax upon the premises.
12. Nondiscrimination. It is agreed that with respect to the use of
the premises covered by this Agreement, the Company shall not exclude anyone
from participation in, deny anyone the benefits of, or otherwise subject anyone
to discrimination because of the person's race, color, national origin, age or
disability.
13. Improvements. The Company may make such alterations and
improvements to the Dock Site, at the Company's expense, as it may deem
desirable, provided only that the plans for such additional alterations and
improvements first be submitted and approved in writing by the
City, which such approval shall not be unreasonably withheld, and further
provided that all necessary governmental approval shall have been secured by the
Company. All improvements shall become property of the City upon completion.
14. Mechanic's Liens. The Company shall not cause or suffer any lien
or encumbrance to attach to or go against the premises, improvements, building
or real estate upon which the forme- are located. If the Company shall cause a
lien or encumbrance to be filed, the Company shall cause the same to be canceled
and discharged of record by bond or otherwise as allowed by law at the expense
of the Company within thirty (30) days after the filing thereof.
15. Insurance. The Company shall, at its own cost and expense,
obtain and keep in force, at all times during the term of this Agreement, a
standard commercial general liability policy insuring the parties hereto against
all liability and loss for damage on account of public liability, including
injury, death, and property damage to third persons, allegedly occurring by
reason of the use of the premises, or the Company's operations thereon, with the
City as an additional named insured. Such policy shall be in an amount not less
than two million dollars ($2,000,000.00)single limit per occurrence but shall be
increased to five million dollars ($5,000,000.00) provided the cost per million
for five million dollars is not greater than the cost per million for coverage
of two million dollars. Certificates of said policies, providing for thirty (30)
days notice to the City prior to cancellation shall be delivered to the City
within twenty (20) days from the date of the beginning o' the term of this
Agreement. All insurance provided for herein shall 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 the City.
16. Second Street Lease. The City is the owner of platted Second
Street which adjoins the Company's real estate on the west. The City is
presently seeking a federal grant and construction permits from the Army Corps
of Engineers and the Iowa Department of Natural Resources under which the flood
dike presently located on the west edge of the Company's real estate would be
moved to the west portion of Second Street. This project would include the
installation of a new storm sewer conduit under the dike and, potentially, the
acquisition and development of nest wetlands to mitigate any loss of wetlands
now located on Second Street. If said grant and all necessary permits are
secured, and if the Company pays or reimburses to the City all of the City's
share of the expense for such dike and storm sewer development on Second Street,
the City agrees, following completion of the dike project, to lease to the
Company, for parking purposes only, a portion of Second Street described as
follows: all that part of platted Second Street south of Bloody Run Creek and
North of Brown Street which is suitable for use for vehicular traffic. Provided,
however, that the City may, upon sixty (60) days written notice, terminate the
lease as to the West twenty-two (22) feet of such suitable space if such space
is necessary for City use. The term of this lease shall be identical to that of
this Dock Site Agreement and shall terminate at the same time. No additional
rental payments by the Company shall be required beyond those provided in
paragraph 5 of this Agreement. The Company shall have the right to improve the
leased premises for parking purposes at its own expense, subject to prior
approval of improvement plans by the City. Any such improvements shall, if
requested by the City, be removed by the Company upon termination of this
Agreement.
17. Indemnification. The Company shall indemnify, defend and hold
harmless the City, 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 the City relating to any
accident, injury to or death of any persons, or loss of or damage to property
occurring in or about the Dock Site or in connection with the gaming operation,
compliance with applicable gaming laws, and payment of any fees or taxes imposed
with respect to gambling operations.
The City shall indemnify, defend and hold harmless the Company, 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 the Company relating to any accident, injury to
or death of any persons, or loss of or damage to property occurring in or about
the Dock Site as a result of any act or omission by City.
18. Skywalk. If at such time during the term of this lease Company
determines it is necessary to demolish the planned skywalk which extends to the
leased premises, Company hereby grants to City the option of acquiring the
skywalk, in which event City shall substitute its own demolition bond in place
of that bond required of the Company.
19. Access. The City shall have access to the premises at all
reasonable times in order to discharge any obligations it may cave pursuant to
all agreements the City may enter into with the Iowa Department of Natural
Resources.
20. Vacation Upon Expiration. Upon the Expiration of the term of
this Agreement, or as otherwise terminated as provided by this Agreement, the
Company shall quietly yield and surrender to the City the premises in as good
condition and repair as when taken, reasonable wear and tear excepted.
21. Default. In the event the Company fails to pay any rental due
hereunder or fails to keep and perform any of the other terms and conditions of
this Agreement, time being of the essence, then thirty (30) days after written
notice of default from City, City may, if such default has not been corrected,
resort to any and all legal remedies or combination of legal remedies which City
may desire to assert including but not limited to:
A. Declare this lease at an end and terminate it;
B. Sue for the rent due and to become due under the lease and for
any damages sustained by City.
22. 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. The parties hereby covenant they will agree to any amendments
to this Agreement which may be necessary y 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.
23. 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.
24. 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 .
25. 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, it is understood and agreed that the
Company may be sold to any party, and that said sale shall not constitute a
default under this paragraph or this Agreement.
CITY OF MARQUETTE, IOWA
By______________________
Its Mayor
By_____________________
Its Clerk
GAMBLERS SUPPLY MANAGEMENT COMPANY
/s/ John Parker
By _____________________
Its President
/s/ John Nix
By _____________________
Its V.P.