MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is made effective as of
August 21, 1996 (the "Effective Date"), by and between CASINO MAGIC MANAGEMENT
SERVICES, CORP., a Minnesota corporation ("Manager") , CASINO MAGIC OF
LOUISIANA, CORP., a Louisiana corporation ("Owner"), and CASINO MAGIC CORP., a
Minnesota corporation ("Casino Magic").
RECITALS
A. Owner is developing a new dockside riverboat casino and
entertainment complex, Casino Magic-Bossier City, on a 23-acre site in Bossier
City, Louisiana, in connection with which owner intends to conduct its casino
operations on the recently constructed Bossier Riverboat and to provide a
37,000 square foot entertainment pavilion for land-based activities, including
gaming, entertainment, dining, hotel and/or related activities as may
currently or hereafter be permitted by law.
B. Casino Magic desires to grant a license to Owner for the usage of
the "Casino Magic" service ▇▇▇▇ and trade name in connection with the Bossier
Riverboat, the Facilities and related amenities.
C . Owner desires to have Manager manage its business, and Manager
desires to manage owner's business, all upon the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, Owner and Manager agree as follows:
1. DEFINITIONS AND REFERENCES.
1.1 Definitions. As used herein, the following terms shall have the
respective meanings indicated below:
(a) "Annual Plan" means the Annual Plan to be prepared by Manager and
approved by owner in accordance with the provisions of Section 6.2 hereof.
(b) "Bossier Riverboat" means a recently constructed riverboat to be
owned by Owner and operated from a permanent dockside mooring in Bossier City,
Louisiana. The Bossier Riverboat may offer the public gaming, food and
beverage, retail merchandise, entertainment, hotel and/or related activities.
(c) "Casino Magic-Bossier City" means the dockside riverboat casino
and entertainment complex to be opened and operated by Owner in Bossier City,
Louisiana.
(d) "Business" means all of the business operations of owner.
(e) "Commencement Date" means the date upon which owner first opens
the Bossier Riverboat to the public for business, which date shall be
confirmed in writing by owner and Manager.
(f) "Compensation" means 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.
(g) "Facilities" means the land-based portion of the Business with
such gaming, entertainment, dining, hotel (if any) and related activities as
may be currently or hereafter permitted by law-
(h) "Indenture" means that certain Indenture to be dated as of August
22, 1996, with Owner as Issuer, Jefferson Casino Corporation as Guarantor and
First Union Bank of Connecticut as Trustee, regarding $115,000,000 13'6 First
Mortgage Notes Due 2003 With Contingent Interest, Series A and Series B.
(i) "Notes" means the 13% First Mortgage Notes Due 2003 With Contingent
Interest issued by owner under the terms of the Indenture.
2. SCOPE OF AGREEMENT, RESPONSIBILITIES.
2.1 Authority of Owner's Board of Directors. The Board of
Directors of owner shall determine the general policy with respect to the
strategic planning of the Business and such matters as are customarily or as a
matter of Louisiana corporation or gaming law reserved for decision by a Board
of Directors.
2.2 Authority of Manager. Subject to the foregoing general
authority of owner's Board of Directors, and subject to the terms of this
Agreement, Manager shall exclusively supervise and direct the management and
operation of the Day-to-day-day activities of the Business for the account of
Owner. Manager shall have the authority and responsibility to: (i) determine
operating policy, standards of operation, quality of service, the maintenance
and physical appearance of the Bossier Riverboat and the Facilities and any
other matters affecting operations and maintenance; (ii) supervise and direct
all phases of advertising, sales and promotion for the Business; and (iii)
carry-out all programs contemplated by the Annual Plan. Owner agrees that it
shall cooperate with Manager in every reasonable and proper way to permit and
assist Manager to carry out its duties hereunder and comply with all
conditions or restrictions, if any, placed upon manager by any gaming
authority.
2.3 Duties and Obligations of Manager. Manager shall take all
actions which may be reasonably necessary or appropriate in connection with
the authority granted to it in accordance with the provisions of this
Agreement. Manager shall devote to its responsibilities hereunder such time
as may be reasonably necessary for the proper performance of all duties
hereunder. The standard of performance by Manager in managing the Business
shall be measured by what a reasonably prudent person would do consistent with
good business practices and policies. An organization chart detailing the
supervisory and management positions and personnel to be provided by Manager
to Owner is attached hereto as Exhibit "A. 11
2.4 Consultation with owner. Notwithstanding the foregoing,
manager shall at all times apprise owner, including the Board of Directors, of
all operating policies. Manager agrees to consult with owner as frequently as
Owner shall reasonably request to review operating policies and other matters
referenced to herein. Owner shall, at all times, have the right to enter the
Bossier Riverboat 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 deviates from the authority granted to Manager.
3. CONDITIONS PRECEDENT TO IMPLEMENTATION OF AGREEMENT. Owner and
Manager shall apply for and maintain any and all licenses and approvals
required in order to implement the provisions of this Agreement. This
Agreement is contingent upon the receipt of all such licenses and approvals.
4. TERM. The term of this Agreement shall continue until August 21,
2006,
unless sooner terminated as hereinafter set forth.
5. PRE-COMMENCEMENT DATE RESPONSIBILITIES.
5.1 Owner's Responsibilities. Owner, without cost or expense to
Manager, shall design, acquire, construct, and equip the Bossier Riverboat as
well as the Facilities, including, but not limited to, a dock or mooring
facility for the Bossier Riverboat, an entertainment pavilion and related
parking. All expenses and fees incident thereto shall be paid by Owner.
5.2 Manager's Responsibilities. From the date of this Agreement to
the Commencement Date (and thereafter as Owner may reasonably request) ,
Manager shall assist owner in designing, acquiring, constructing and equipping
all assets to be used by owner in the operation of the Business. manager
shall, at owner's expense, also be responsible for the development and
implementation of all preopening activities.
6. OPERATION OF THE BUSINESS:
6.1 Permits. Manager and Owner shall timely apply for, obtain and
maintain all licenses and permits required to operate the Business.
6.2 Annual Plan.
6.2.1 Preparation. With such cooperation and assistance of Owner
as Manager may request, Manager shall prepare for Owner's review and approval
not less than 90 days in advance of each fiscal year an Annual Plan for the
Business that includes without limitation:
(a) a forecast comprised of an estimated income and expenses by month
for the coming fiscal year;
(b) an estimated cash flow projection by month, and anestimate 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 listing all employees names, position 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 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 judgment 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 the Board of Directors, which approval will not be
unreasonably withheld or delayed. Owner shall approve or disapprove the
Annual Plan within 60 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 60-day period, such Annual Plan shall be deemed to
have been approved byowner 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 in a manner that is consistent with the Annual Plan
to provide the funds necessary to operate the Business.
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
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, such expenditures.
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 annually by the Board of Directors 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. Manager shall not be entitled
to make any expenditures in excess of the Annual Plan without first obtaining
the prior written approval of Owner, which approval shall not be unreasonably
delayed or withheld. Owner and Manager agree to cooperate with each other in
good faith in resolving disputes. Policy 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 Business. Manager shall hire on behalf of Owner
such casino managerial and other personnel as are customary in the industry.
The determination of Compensation for all employees shall be part of the
Annual Plan approved by Owner.
6.3.2 Personnel Expenses and Compensation. All employees at the
level of general manager of the Business or below shall be deemed employees of
Owner. More senior management personnel who perform services pursuant to this
Agreement and who are employees of either Manager or Casino Magic or any
affiliates thereof shall be deemed not to be employees of Owner, and Manager
shall be responsible for the Compensation of such persons. Additionally, the
Manager shall be responsible for determining the fitness and qualifications of
all casino employees, subject to Louisiana riverboat gaming licensing
standards.
6.3.3 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 Business, and all such fees and expenses payable to third
parties (other than Manager or its affiliates) shall be paid by owner.
6.4 Sales, Marketing and Advertising. Manager shall advertise and
promote the Business for Owner's account and shall institute and supervise a
sales and marketing program and coordinate and cooperate with tour programs
marketed by public carriers, travel agents and government tourist departments
when Manager deems the same to be advisable. 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 or contracted for separately.
6.6 Maintenance and Repairs. 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 in
Article 9, manager shall be entitled to be reimbursed for the 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 Business. Manager shall be entitled to make all
reimbursements authorized under this Section 6.8, or under any other
provision of this Agreement, provided that all such reimbursements shall be
made in a manner which is consistent with the provisions 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 cause employees of Owner to
maintain, at Owner's expense, full and complete books of account and such
other records as are necessary to reflect the operation of the Business. Such
books and records shall be maintained in accordance with generally accepted
accounting principles, on a calendar year basis, at Owner's offices in Bossier
City, Louisiana. Manager shall also prepare and file for owner, at Owner's
expense, all information and/or tax returns which may be required by any
governmental authorities.
7.1.2 Reports to Owner. Manager, at Owner's expense, shall deliver
or cause to be delivered to Owner monthly f financial statements together with
monthly cash flows and monthly comparison of operational income and expenses
versus the Annual Plan.
7.1.3 Owner's Right to Audit. Owner reserves the right upon
reasonable prior notice, to perform any and all additional audit tests
relating to the Business where accounting books and records are kept.
7.2 Bank Accounts. Owner shall establish accounts that are
necessary for the operation of the Business. Gross revenues from operations
shall be deposited in the bank accounts, and the Owner shall pay out of the
bank accounts, to the extent of the funds therein, all of its operating
expenses and other amounts as directed by manager.
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
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 the proprietary information referenced in this Section
8.2 does not include information which is clearly available in the public
domain.
8.3 Outside Activities of Parties. This Agreement shall be limited
to, the purposes set forth herein, and nothing in this 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 its 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 Agreement and which may
compete with or otherwise affect all or some aspects of the Business.
However, Manager agrees that it will not compete in any riverboat gaming
activities, within a 200-mile radius of the location of the Business during
the term of this Agreement, excluding the cities of Lake Charles, Louisiana
and Vicksburg, Mississippi.
9. COMPENSATION OF MANAGER.
9.1 In consideration for (i) the license of the "Casino Magic" name
pursuant to Article 10 hereof and (ii) the services provided pursuant to this
Agreement, Owner shall pay Manager a management fee equal to 10t of Adjusted
Consolidated Cash Flow (as defined in the Indenture) . The payment of
management fees will commence at such time as Business is operating (as
defined in the Indenture).
9.2 The management fee shall become due and payable 10 days after the
end of each month to the extent that Owner's Fixed Charge Coverage Ratio (as
defined in the Indenture) is at least 1.5 to 1.0 after giving effect to such
payment.
9.3 If the management fee cannot be paid, the management fee shall
accrue; provided, however, in the event that the voters in the Louisiana
Referendum do not approve the continuation of riverboat gaming in Bossier
Parish and Caddo Parish, Louisiana (or if the voters in the Louisiana
Referendum disapprove the continuation of riverboat gaming in one but not the
other of Bossier Parish or Caddo Parish, Louisiana until owner has obtained a
determination that the outcome of the Louisiana Referendum does not limit its
ability to conduct riverboat gaming operations at Casino Magic-Bossier City),
the Company shall not, directly or indirectly, pay any Management Fee to
Casino Magic or any of its affiliates. In such event, Manager shall still
have the obligation to provide management services to Owner.
9.4 No management fee will be payable if a default or event of
defaulthas occurred and is continuing under the Indenture. In the event of a
bankruptcy, reorganization, insolvency, dissolution or other winding-up of
owner, payment of the management fee shall be subordinated to the prior
payment in full in cash of all obligations under the Indenture and the Notes.
10. LICENSE.
10.1 Owner hereby acknowledges that Casino Magic is the sole owner of
all right, title and interest in and to the service ▇▇▇▇ and trade name
"Casino Magic" as used in connection with the business of gaming facilities
and related amenities, and that Owner's rights to use the aforesaid service
▇▇▇▇ and trade name derive solely from and are limited to this Article 10.
10.2 Casino Magic hereby grants to Owner the non-exclusive license to
use "Casino Magic" as a service ▇▇▇▇ and as part of its trade name solely in
connection with the business of gaming facilities and related amenities.
Owner agrees not to use said name and ▇▇▇▇ in any other business. Owner's
rights hereunder shall extend only to operations in the cities of Bossier
City, Louisiana and Shreveport, Louisiana and to the promotion and marketing
of Owner's gaming activities in a manner generally consistent with the
marketing and promotional activities of Casino Magic and its other
subsidiaries. All use of "Casino Magic" as a service ▇▇▇▇ and as part of its
trade name shall inure to the benefit of Casino Magic.
10.3 Casino Magic shall have the right to control the nature and
quality of all services of which the "Casino Magic" name and ▇▇▇▇ is used
hereunder. Casino Magic has the right to inspect and evaluate the services
produced in thebusiness operated by Owner and has approved its nature and
quality. owner agrees that said services shall be maintained at this same
level of quality and grants to Casino Magic the right, at reasonable times, to
inspect its services and business as desired by Casino Magic to assure that
said quality is maintained. Owner also agrees to inform Casino Magic in
writing of any complaints received by it concerning the quality of services
sold or offered under the "Casino Magic" name or ▇▇▇▇.
10.4 Owner agrees to display and use the "Casino Magic" name and ▇▇▇▇
only in the manner authorized by Casino Magic and approved by Casino Magic.
If Owner desires to make any change in said display and use, it shall first
submit such change to Casino Magic for its prior approval.
10.5 Owner will not register or attempt to register "Casino Magic" as
any part of its own name or marks, and will cooperate fully as requested by
Casino Magic in connection with any registration by Casino Magic of said ▇▇▇▇.
10.6 Owner will promptly inform Casino Magic of any infringement of
the "Casino Magic" name or ▇▇▇▇ or of any protest by others to Owner
concerning its use of the name and ▇▇▇▇, and will cooperate fully with Casino
Magic in connection with any litigation, administrative proceedings, or
protests which Casino Magic deems desirable in connection with the protection
of or maintenance of rights to make decisions concerning the initiation,
defense, compromise or settlement of any action involving the name or ▇▇▇▇.
10.7 If Casino Magic should determine that owner is in breach of this
Article 10 and the services sold or offered under the "Casino Magic" name
and ▇▇▇▇ hereunder are deficient and are not of satisfactory quality in the
sole discretion of Casino Magic, it shall so inform owner in writing,
whereupon owner shall have 30 days within which to cure said breach and
deficiency. If Owner does not cure said breach and deficiency within that
time to the satisfaction of Casino Magic, its right to use the "Casino Magic"
name and ▇▇▇▇ shall forthwith terminate notwithstanding the term of this
license.
10.8 If Owner files a petition in bankruptcy or is adjudicated a
bankrupt, if a petition in bankruptcy is filed against owner, if it becomes
insolvent or makes an assignment for the benefit of creditors or any
arrangements pursuant to any bankruptcy law, if owner discontinues its
business or a receiver is appointed for it or its business, the license
granted hereunder shall terminate, and all use of the "Casino Magic" name and
▇▇▇▇ shall cease.
10.9 Unless earlier terminated pursuant to a breach of this Article
10 as set forth in Section 10.7 or Section 10.8, Owner's license to use the
"Casino Magic" name and ▇▇▇▇ hereunder shall remain in effect during the term
hereof. After the expiration of this Agreement the license shall
automatically renew on an annual basis unless terminated by Casino Magic with
30 days notice for breach of any of the terms of this Article 10.
10.10 Upon termination of owner's rights to use the "Casino Magic"
name and ▇▇▇▇ for any reason hereunder, owner shall immediately take steps to
effect a change of its trade marks, service marks, trade names and assumed
names so as to remove from it the words "Casino Magic" or any confusingly
similar ▇▇▇▇ or terms.
10.11 Owner may not assign, sublicense or otherwise transfer any of
its rights under this Article 10 to any third party without the prior
written consent of Casino Magic, which consent may be arbitrarily withheld.
11. INSURANCE.
11.1 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 Manager.
11.2 Policies and Endorsements.
11.2.1 Policies. All insurance coverage provided for hereunder
shall be effected by policies issued by insurance companies with sound and
adequate financial responsibility. Either party shall be entitled to object
to an insurance company. owner shall deliver to 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 30 days prior
to the respective dates of expiration.
11.2.2 Endorsement. All insurance shall, to the extent
obtainable, have attached thereto:
(a) an endorsement that such policy shall not be canceled ox
materially changed without at least 30 days' prior written notice to Owner and
Manager; 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.
11.2.3 Named Insureds. All policies of insurance shall be carried
in the names of Owner and Manager. All liability policies shall name Owner
and Manager, and in each case any affiliates which either may specify, and
their respective directors, officers, agents, employees, and members of the
Board of Directors, as additional insureds.
12. INDEMNIFICATION.
12.1 Indemnification. Manager agrees to indemnify and hold owner
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, or relative to, any allegation, claim, civil or criminal action,
proceeding, charge or prosecution, including but not limited to, injuries to
persons or damage to property or the Business or any matters arising out of
the employment or Compensation of employees or former employees of Manager
(collectively "Claims") which may be alleged, made, instituted or maintained
against Manager or Owner, jointly or severally, arising out of or based upon
the management, operation, condition or use of the Business; the performance
or non-performance of the Agreement by Manager, its agents or employees only
to the extent in each case that any such liability results from the gross
negligence or willful misconduct of Manager.
12.2 Related Matters.
12.2.1 Procedures. Manager shall reimburse Owner for any legal
fees and costs, including attorneys, 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 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 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.
12.2.2 Indemnified Parties. The indemnities contained in this
Article 12 shall run to the benefit of both owner and its affiliates, and
its directors, officers, shareholders and employees.
12.2.3 Survival. The provisions of this Article 12 shall survive
any cancellation, termination or expiration of this 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 Article 12.
13. DEFAULT AND TERMINATION.
13.1 Events of Default.
13.1.1 Manager. It shall be an event of default under this
Agreement (an "Event of Default") if Manager (a "Defaulting Party") fails to
perform or materially comply with any of the covenants, agreements, terms or
conditions contained in this Agreement applicable to Manager and such failure
continues for a period of 30 days after written notice thereof from owner (a
"Non-Defaulting Party") specifying in detail the nature of such failure, or,
if such failure is of a nature that it cannot, with due diligence and good
faith to cure the same and thereafter to prosecute the curing of such failure
to completion with due diligence within 90 days thereafter.
13.1.2 Owner. It shall also be an Event of Default if owner (a
"Defaulting Party") (a) fails to make any monetary payment required under this
Agreement on or before the due date and such failure continues for five
business days after written notice from Manager (a "Non-Defaulting Party")
specifying such failure, (b) fails to pay the entire management fee for a
period of six consecutive months, or (c) fails to perform or materially comply
with any of the other covenants, agreements, terms or conditions contained in
this Agreement applicable to owner (other than monetary payments) and such
failure continues for a period of 30 days after written notice thereof from
Manager to Owner specifying in detail the nature of such failure, owner will
be in default under this Agreement. Notwithstanding the foregoing, failure to
pay any management fee which is not permitted to be paid under the Indenture
will not be a default under this Agreement.
13.2 Termination.
13.2.1 General. If an Event of Default occurs and has not been
cured, this Agreement shall terminate at the election of the Non-Defaulting
Party. Notice of termination pursuant to this Article 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 60 nor more than 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 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
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
necessary to perform its obligations hereunder; or
(c) Manager:
(i) applies for or consents to the appointment of, or taking possession
by, a receiver, custodian, trustee, liquidator or other similar official of
all of its assets;
(ii) makes a general assignment for the benefit of creditors;
(iii) is adjudicated a bankrupt or insolvent or has an order for relief
entered with respect thereto; or
(iv) files a voluntary petition, commences a voluntary case under the
federal bankruptcy laws as now or hereafter constituted or files a petition or
an answer seeking reorganization or any arrangement with creditors or takes
advantage of any bankruptcy, reorganization, insolvency, readjustment of
debts, dissolution or liquidation law or statute.
(d) The occurrence of an Event of Default under this Article 13 and
the expiration of the time to cure such Event of Default; or
(e) The consummation of a condemnation of substantially all of the
Bossier Riverboat and Facilities.
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 Agreement by the Non-Defaulting Party upon
an Event of Default shall be without prejudice to any right the Non-Defaulting
Party may have to damages, injunctions, specific performance or other legal or
equitable remedies by reason of any breach, default or noncompliance by the
Defaulting Party with such Defaulting Party's covenants, obligations and
agreements hereunder.
14. 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 (i) registered or certified
United States Mail, postage prepaid, return receipt requested, (ii) overnight
courier such as Federal Express, (iii) telecopy (with original to follow by
United States Mail) , or (iv) hand delivery addressed to the respective
parties at the addresses or telecopy numbers stated below:
If to Manager: Casino Magic Management Services, Inc.
Attn: President
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Owner: Casino Magic of Louisiana, Corp.Attn: President
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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If to Casino Magic:
Casino Magic Corp.
Attn: President
711 Casino Magic Drive
Day ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as Manager, owner or Casino Magic may have specified
in a notice duly given as required herein to the other parties.
15. RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS.
15.1 Relationship. None of the Manager, Owner or Casino Magic
shall be construed as joint venturers or partners of each other by reason of
this Agreement and none shall have the power to bind or obligate the other
except as specifically authorized and set forth in this Agreement.
Nevertheless, Manager is granted such authority and powers as may be
reasonably-necessary for it to carry out the provisions of this Agreement.
This 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
managed aspects of Business.
15.2 Contractual Authority. Subject to the limitations thereon set
forth in this 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 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 Agreement and the intent hereof.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana. 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 Agreement shall
be declared invalid or unenforceable, Manager shall have the option to
terminate this Agreement.
17. MISCELLANEOUS.
17.1 Successors and Assigns. Manager shall not assign the whole or
any portion of this Agreement or any payments due Manager hereunder, without
owner's consent, which consent will not be unreasonably withheld. No
prohibited assignment, whether voluntary or involuntary, by operation of law,
under legal process or proceedings, by receivership, in bankruptcy or
otherwise, shall be valid or effective. owner shall not assign the whole or
any portion of this Agreement, except to an affiliate without Manager's
consent, except as collateral for any financing obtained in connection with
the development and or operation of the Business. If the Agreement is
assigned to an affiliate, Manager shall continue to be responsible under this
Agreement.
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 Business to protect the Business or the health, safety or welfare of
guests or employees to the Business for reasons of force majeure, such as, but
not limited to, weather, river conditions, 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 Business, reopening and commencing operation
when Manager and Owner determine in good faith that such may be done without
jeopardy to the Business, 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, Manager and Casino Magic represent to
the other that it has full power and authority to execute this 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 then in effect
as published in the Wall Street Journal.
17.5 Entire Agreement; Amendments. This Agreement sets forth the
entire and only agreement or understanding between Owner, Manager and Casino
Magic relating to the subject matter hereof and supersedes and cancels all
previous agreements, negotiations, commitments and representations in respect
hereof among them. Owner has not relied on any projection of earnings,
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 Agreement may not be amended in any
respect except by an instrument in writing signed by the Owner, Manager and
Casino Magic.
17.6 Survival of Covenants. Any covenant, term or provision of
this Agreement which, in order to be effective, must survive the termination
of this 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 Agreement, shall be
construed or held to be a waiver of any succeeding or preceding breach 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
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 withholding returns, 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 be 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 Agreement may be executed in several original counterparts, each of which
shall be deemed an original for all purposes and all such counterparts shall
constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date and year first above written.
CASINO MAGIC MANAGEMENT SERVICES, CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Vice President/General Counsel and Secretary
CASINO MAGIC OF LOUISIANA, CORP.
By: /s/ JayS. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Its: Executive Vice President, Chief Financial
Officer and Treasurer
CASINO MAGIC CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇ ▇. ▇▇▇▇▇
Its: Executive Vice President, Chief Financial
Officer and Treasurer