Exhibit 10.11


 


CASINO MANAGEMENT
AGREEMENT


 


THIS CASINO
MANAGEMENT AGREEMENT (this “Agreement”), is
made and entered into on this [      ] day of [                                          ],
200[  ], by and between Cannery Casino Resorts, LLC, a Nevada limited
liability company (“CCR”), Rampart Resort Management, LLC, a Nevada
limited liability company (“Rampart”), The Cannery Hotel and Casino,
LLC, a Nevada limited liability company (“Cannery”), Nevada, LLC, a
Nevada limited liability company (“Nevada Palace”), and Millennium
Management Group II, LLC, a Nevada limited liability company (together with its
permitted successors and assigns, “Manager,” and together with CCR,
Rampart, Cannery and Nevada Palace, each, a “Party,” and collectively,
the “Parties”).


 


W I T N E S S E T H


 


WHEREAS,
Rampart, a wholly owned subsidiary of CCR, subleases the casino facilities
located in the casino hotel known as the JW Marriott Resort, located at the
intersection of Rampart Boulevard and Canyon Run Drive in Las Vegas,
Nevada, pursuant to that certain Casino Sublease Agreement made and entered
into as of April 1, 2002, as amended, by and between Hotspur Casinos
Nevada, Inc., a Nevada corporation (“Landlord”), and Rampart (the
“Rampart Sublease”), in which Rampart operates a casino and
related business operation known as the “Rampart Casino” (the “Rampart Operation”);


 


WHEREAS, Manager
has been providing certain management services to Rampart with respect to
the Rampart Operation pursuant to that certain Rampart Casino Management
Agreement by and between Rampart and Manager and dated as of April 1,
2002 (the “Rampart Management Agreement”);


 


WHEREAS,
Cannery, a wholly owned subsidiary of CCR, owns the property and casino hotel
project located at the intersection of Craig Road and Lossee Road in Las
Vegas, Nevada upon which Cannery operates a casino and related business
operation known as “The Cannery Hotel and Casino” (the “Cannery Operation”);


 


WHEREAS,
Manager has been providing certain management services to Cannery with respect
to the Cannery Operation pursuant to that certain The Cannery Management
Agreement by and between Cannery and Manager and dated as of May [      ],
2002 (the “Cannery Management Agreement”);


 


WHEREAS, each
of Cannery and Rampart desire to continue their respective engagement of
Manager to provide, and Manager desires to continue to provide, certain management
services to Rampart with respect to the Rampart Operation and to Cannery
with respect to the Cannery Operation, pursuant to the terms and subject to the
conditions set forth in this Agreement, which shall, effective as of the
Effective Date (as defined in Section 2.1), replace in their entirety each
of the Rampart Management Agreement and the Cannery Management Agreement,
which as of the Effective Date shall terminate and be null and void and of no
further force or effect;


 

















 


WHEREAS, Nevada
Palace, a wholly owned subsidiary of CCR, has acquired certain gaming assets and
has entered into a lease for certain property that Nevada Palace will use to operate
a casino and related business operation known as the “Nevada Palace Hotel and
Casino” (the “Nevada Palace Operation”);


 


WHEREAS, Nevada
Palace desires to engage Manager to provide, and Manager desires to provide, certain
management services to Nevada Palace with respect to the Nevada Palace
Operation, pursuant to the terms and subject to the conditions set forth in
this Agreement;


 


WHEREAS, if
gaming opportunities (other than the Rampart Operation, Cannery Operation
and Nevada Palace Operation) are accepted for exploitation by the Management
Committee of CCR in accordance with the procedures set forth in that certain
Amended and Restated Operating Agreement of Cannery Casino Resorts, LLC, dated
as of [                                        ],
200[  ] (the “Operating Agreement”) (each such gaming opportunity,
an “Eligible Operation,” and collectively with all such other gaming opportunities,
the “Eligible Operations,” and together with the Rampart Operation,
Cannery Operation and Nevada Palace Operation, each, a “Casino Operation,”
and collectively, the “Casino Operations”), it is contemplated that such
Eligible Operation would be pursued initially by CCR pursuant to a business
plan approved by the Management Committee of CCR and, thereafter, developed by
a newly formed Nevada limited liability company that would be owned, in whole
or in part, by CCR (each such limited liability company formed to own an Eligible
Operation, an “Eligible NewCo,” and together with Rampart, Cannery and Nevada
Palace and their respective permitted successors and assigns, each, an “Owner,”
and collectively, the “Owners”);


 


WHEREAS, CCR,
on behalf of each Eligible NewCo, desires to engage Manager to provide, and
Manager desires to provide, certain management services in respect of each
Eligible Operation and for each Eligible NewCo with respect to such Eligible
NewCo’s Eligible Operation, pursuant to the terms and subject to the conditions
set forth in this Agreement; and


 


WHEREAS, CCR
desires to engage Manager to provide, and Manager desires to provide, certain management
services to CCR with respect to CCR’s business operations and with respect to
certain Eligible Operations (prior to such time as an Eligible NewCo may engage
Manager to provide certain management services to such Eligible NewCo with
respect to such Eligible NewCo’s Eligible Operation), pursuant to the terms and
subject to the conditions set forth in this Agreement.


 


NOW,
THEREFORE, in consideration of the representations, warranties, covenants,
agreements and conditions set forth herein, and intending to be legally bound
hereby, the Parties agree as follows:


 


1.                                       ENGAGEMENT


 


1.1                                 Rampart Operation


 


Rampart hereby engages and retains
Manager, and Manager hereby agrees to be so engaged and retained by Rampart, to
perform the general management services set forth on Exhibit A
(the “General Management Services”) with respect to the Rampart Operation.


 


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1.2                                 Cannery Operation


 


Cannery hereby engages and retains Manager, and
Manager hereby agrees to be so engaged and retained by Cannery, to perform the
General Management Services with respect to the Cannery Operation.


 


1.3                                 Nevada Palace Operation


 


Nevada Palace hereby engages and retains
Manager, and Manager hereby agrees to be so engaged and retained by Nevada
Palace, to perform the General Management Services with respect to the
Nevada Palace Operation.


 


1.4                                 Eligible Operations Prior to Formation
of Applicable Eligible NewCo


 


With respect
to any Eligible Operation prior to the date of formation of the applicable
Eligible NewCo, CCR shall, pursuant to a business plan for such Eligible
Operation approved by the Management Committee of CCR, engage and retain
Manager, and Manager hereby agrees to be so engaged and retained by CCR, to perform the
developmental, construction and pre-opening services set forth on Exhibit B
(the “Development Services”) with respect to such Eligible Operation.


 


1.5                                 Eligible
Operations Following Formation of Applicable Eligible NewCo


 


Upon its
formation, each Eligible NewCo shall engage and retain Manager, and Manager
hereby agrees to be so engaged and retained by such Eligible NewCo, to perform the
General Management Services with respect to the Eligible Operation conducted by
such Eligible NewCo. In addition, upon its formation, each Eligible NewCo shall,
pursuant to a business plan for such Eligible Operation approved by the
Management Committee of CCR, engage and retain Manager, and Manager hereby
agrees to be so engaged and retained by CCR, to continue the Development
Services with respect to such Eligible Operation commenced in accordance with Section 1.4.


 


Upon formation
of any Eligible NewCo, CCR shall cause such Eligible NewCo to execute a counterpart of
this Agreement acknowledging such Eligible NewCo’s engagement of Manager to perform the
General Management Services and Development Services set forth in this Section 1.5,
on the terms and subject to the conditions set forth in this Agreement.


 


1.6                                 CCR


 


CCR hereby
engages and retains Manager, and Manager hereby agrees to be so engaged and
retained by CCR, to perform the following services:


 


1.6.1                        CCR
Services


 


Manager shall,
at CCR’s expense, perform those General Management Services as may be
applicable to CCR or as may be necessary or appropriate to enable CCR to
effectively and efficiently conduct CCR’s business of being a holding company
with respect to the Casino Operations including, without limitation (the “CCR
General Management Services”):


 


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(i)                                     Manager shall
prepare an Annual Operating Budget and a Long-Term Budget (collectively, for
any and all Casino Operations, and together with any Pre-Opening Budget,
Construction Budget and Development Budget, the “Budgets”) in
consultation with, and subject to the approval of, the Managers (as defined in
the Operating Agreement) of the Management Committee of CCR designated by OCM
AcquisitionCo, LLC (the “Oaktree Managers”), and revise and update such Budgets
in consultation with, and subject to the approval of, the Oaktree Managers.


 


(ii)                                  Other than as such
action may involve a manager or equityholder of Manager or a direct family
member of a manager or equityholder of Manager (which, in each case, shall
require the prior written consent of the Oaktree Managers before Manager may proceed;
provided, that, those related party transactions set forth on Schedule 3.25
of the CUPA shall not require such prior written consent so long as the terms
of such related party transactions do not change in any material respect;
provided, further, that the promotion of a direct family member of a manager or
equityholder of Manager from a position set forth on Schedule 3.25 of the
CUPA to a position substantially identical in title and function to a
then-existing non-Senior Officer position of CCR or an Owner, at a salary
commensurate with what would be paid to such non-Senior Officer if not such a
direct family member, shall not require such prior written consent so long as
such promotion is justified based on past performance as reasonably determined
by Manager), Manager shall arrange for the employment, payment, supervision and
discharge of employees of CCR, subject to the Section 5.5 and 5.8 of the
Operating Agreement and in accordance with CCR-approved policies adopted,
revised and updated by the Management Committee of CCR from time to time.


 


(iii)                               Other
than as such action may involve payments to Manager or an Affiliate,
manager, officer or equityholder of Manager or an Affiliate or direct family
member of a manager, officer or equityholder of Manager (which, in each case,
shall require the prior written consent of the Oaktree Managers before Manager may proceed;
provided, that, those related party transactions set forth on Schedule 3.25
of the CUPA shall not require such prior written consent so long as the terms
of such related party transactions do not change in any material respect), Manager
shall (A) arrange as necessary for the purchase of all supplies, equipment
and merchandise necessary for the proper operation of CCR’s business, and (B) arrange
for the engagement of advisors, consultants, or other professionals from
time-to-time as reasonably necessary to promote the sound and efficient
operation of CCR, including accountants, financial advisors, real estate advisors,
computer consultants, attorneys, and such other professionals as appropriate or
necessary for the proper operation of CCR’s business.


 


(iv)                              Other than legal actions
in which a conflict of interest arises between CCR and/or an Owner, on the one
hand, and Manager and/or an Affiliate, manager, officer or equityholder of
Manager and/or an Affiliate or direct family member of a manager, officer or
equityholder of Manager, on the other (which, in each case, shall require the
prior written consent of the Oaktree Managers before Manager may proceed),
Manager shall (A) commence legal actions concerning CCR on behalf of CCR
as are necessary or reasonably required, in the good faith opinion of Manager,
to preserve and protect the business of CCR and to collect sums due to CCR or due
to the Casino Operations; (B) advise the Management Committee of CCR of
the commencement and status of material legal actions concerning CCR


 


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or the Casino Operations; and (C) retain counsel in connection
with any action or proceeding commenced by or against CCR or Manager (to the
extent such action or proceeding by or against Manager relates to the services
provided by Manager under this Agreement) or concerning CCR.


 


1.7                                 Owner
and Manager Responsibilities


 


The Parties covenant,
agree and acknowledge that, unless expressly stated herein to the contrary, each
Owner shall be responsible for all direct costs, fees or expenses reasonably incurred
by Manager on behalf of such Owner for the provision of General Management
Services and Development Services (collectively, “Management Services”)
with respect to such Owner’s Casino Operation as set forth in this Agreement
and consistent with the applicable Budgets or other funding approved by Manager
and the Oaktree Managers. Notwithstanding the foregoing, Manager shall be solely
responsible for and pay Manager’s own expenses of operations, rent, overhead,
employee expenses and general business expenses relating to Manager’s business
of casino management services. In the event that Manager dedicates one or more
of Manager’s employees (which may include William Wortman or William
Paulos only with the express written consent of the Oaktree Managers) on a
temporary basis to one or more Casino Operation in order to fulfill its
obligation to provide Management Services under this Agreement, the applicable Owner
shall reimburse Manager for the gross payroll of such person(s) for the
relevant time.


 


2.                                       TERM


 


The term of this Agreement shall commence separately
with respect to each Casino Operation in accordance with this Section 2. The
obligations of the applicable Parties set forth in this Agreement with respect
to each Casino Operation shall commence as of the beginning of the applicable term
for such Casino Operation; provided, however, that the obligations of any Party
set forth herein that are expressly made to survive the termination of this
Agreement shall survive for the period set forth herein; and further provided,
however, that, after the termination of this Agreement, each Owner shall be
obligated to remit to Manager any Management Fee earned or accrued prior to the
termination of this Agreement and Manager shall be obligated to remit to each
Owner any Management Fee Excess (as defined in Section 3.2(b) below)
outstanding prior to the termination of this Agreement.


 


2.1                                Rampart Operation, Cannery Operation
and Nevada Palace Operation


 


With respect to each of the Rampart Operation,
the Cannery Operation, and the Nevada Palace Operation, the term of this
Agreement shall commence as of the Second Closing Date (as defined in that
certain Contribution and Unit Purchase Agreement dated as of May 10, 2005,
by and among CCR and various other parties named therein (the “CUPA”))
(the “Effective Date”) and shall continue until this Agreement is
terminated in accordance with Section 4.3, Section 6, Section 7 or
Sections 9.3 or 9.4 of this Agreement.


 


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2.2                                Termination of Rampart and
Cannery Management Agreements


 


As of the Effective Date, the Rampart Management
Agreement and the Cannery Management Agreement are hereby terminated and shall be
null and void and of no further force or effect.


 


2.3                                Eligible Operations – General
Management Duties


 


With respect to any and each Eligible
Operation (including those Eligible Operations acquired by CCR), the term of
this Agreement with respect to Manager’s obligation to perform General
Management Services (with the term for Development Services being governed by Section 2.4
below) shall commence on the Opening Date (as hereinafter defined) of such Eligible
Operation and shall continue until this Agreement is terminated in accordance
with Section 4.3, Section 6, Section 7 or Sections 9.3 or 9.4 of
this Agreement. “Opening Date,” as such term is used herein, shall mean,
with respect to each Eligible Operation (including those Eligible Operations
acquired by CCR), the date agreed upon by Manager and the Oaktree Managers that
all of the following have occurred (with respect to each such Eligible
Operation):


 


(i)                                     Construction of the
structure and improvements in which the applicable Eligible Operation is to be
conducted have been substantially completed;


 


(ii)                                  All furnishings,
fixtures and equipment (including, without limitation, all gaming, security,
surveillance and related equipment and financial controls) required for the
operation of the applicable Casino Operation (with respect to each Casino
Operation, the “FF&E”) have been substantially installed;


 


(iii)                               All approvals, licenses
and permits, whether temporary or permanent, necessary or required to own, open
and operate the applicable Casino Operation (with respect to each such Casino
Operation, the “Licenses”) have been obtained;


 


(iv)                              Adequate working capital
and minimum required cash reserves, as provided in the Pre-Opening Budget (as
hereinafter defined) with respect the applicable Eligible Operation, have been
duly deposited or furnished as applicable; and


 


(v)                                 The applicable
Eligible Operation (A) if a new casino operation, is ready to render “first-class”
service to patrons on a fully-operational basis, or (B) if an acquired
casino operation, is ready to render the same service to patrons on a
fully-operation basis as rendered immediately prior to such acquisition.


 


2.4                                Eligible Operations –
Development Duties


 


With respect to any Eligible Operation that
is not open for business and fully operational at the time such Eligible
Operation is accepted by the Management Committee of CCR in accordance with the
procedures set forth in the Operating Agreement (a “Going Concern”), the
term with respect to Manager’s obligation to perform Development Services for
an Eligible NewCo shall commence upon formation of the applicable Eligible
NewCo (and, at such time, shall be transitioned from being performed for CCR
pursuant to Section 2.5(B) below to being performed for such Eligible
NewCo) and shall continue thereafter up to the earlier of the Opening Date with
respect to such Eligible Operation or the date this Agreement is terminated in


 


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accordance with Section 4.3, Section 6,
Section 7 or Sections 9.3 or 9.4 of this Agreement; provided, however, that
Manager and CCR, on behalf of each applicable Eligible NewCo, covenant and
acknowledge that the Development Services set forth in Exhibit B Part A
may be performed from time to time as reasonably determined by Manager;
and further provided, however, that the term with respect to Manager’s
obligation to perform the Development Services set forth in Exhibit B
Part B shall commence a reasonable time prior to the Opening Date with
respect to each such Eligible Operation, as reasonably determined by Manager. Notwithstanding
the foregoing, as part of Manager’s General Management Services with
respect to any such Eligible Operation, Manager shall continue to perform any
Development Services after the Opening Date that, in Manager’s reasonable discretion,
are required to be performed after such Opening Date.


 


2.5                                CCR Services


 


With respect to CCR, the term of this
Agreement: (A) with respect to the CCR General Management Services, shall
commence as of the Effective Date and shall continue until this Agreement is terminated
in accordance with Section 4.3, Section 6, Section 7 or Sections
9.3 or 9.4 of this Agreement; and (B) with respect to Development Services
for any Eligible Operation prior to the time it is pursued by an Eligible NewCo,
shall commence at such time as such Eligible Operation is accepted by the
Management Committee of CCR in accordance with the procedures set forth in the
Operating Agreement and shall continue until the earlier of the date of
formation of the applicable Eligible NewCo (and, at such time, shall be
transitioned from being performed for CCR to being performed for such Eligible
NewCo pursuant to Section 2.4 above) or the date this Agreement is terminated
in accordance with Section 4.3, Section 6, Section 7 or Sections
9.3 or 9.4 of this Agreement.


 


3.                                       MANAGER’S
FEES


 


Each Owner shall pay to Manager the following
fees as compensation for Manager’s performance of the Management Services with
respect to such Owner’s Casino Operation:


 


3.1                                 Management Fee


 


(a)                                  For Management Services rendered
with respect to any Casino Operation on and after the commencement of the applicable
term with respect to such Casino Operation (except with respect to commencement
of the term pursuant to Section 2.4 or 2.5, for which an Owner shall have
no obligation to pay a Management Fee with respect to Development Services or
CCR General Management Services performed pursuant to Section 1.4, 1.5, 1.6,
2.4 or 2.5), for each Fiscal Year (as defined in Section 3.5), or fraction
thereof, the Owner of such Casino Operation shall pay Manager, and Manager
shall accept from such Owner, the Management Fee with respect to each such
Casino Operation. The “Management Fee” with respect to each Casino
Operation shall be as follow:


 


(i)                                     with respect to the Cannery
Operation, an amount equal to One Million Dollars ($1,000,000) per annum;


 


(ii)                                  with respect to the Rampart Operation,
an amount equal to Two Million Dollars ($2,000,000) per annum;


 


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(iii)                               with respect to the Nevada
Palace Operation following its Opening Date, an amount equal to four percent
(4%) of EBITDA (as defined in Section 3.5) derived from the operation of
the Nevada Palace Operation, but in no event less than an amount equal to Seven
Hundred Fifty Thousand Dollars ($750,000) per annum; and


 


(iv)                              with respect to any and each
Eligible Operation following its Opening Date, an amount (computed separately
with respect to each Eligible Operation) equal to four percent (4%) of EBITDA
derived from the operation of the applicable Eligible Operation, but in no
event less than an amount equal to Seven Hundred Fifty Thousand Dollars
($750,000) per annum.


 


(b)                                 The Management Fee set forth in
Sections 3.1(a)(i) and (ii) shall increase annually, and the minimum
Management Fees set forth in Sections 3.1(a)(iii) and (iv) shall
increase annually, commencing at the beginning of the first full Fiscal Year
following commencement of the applicable term with respect to each Gaming
Operation, and adjusting as of the beginning of each Fiscal Year thereafter
(regardless of whether or not the Management Fee payable pursuant to Sections 3.1(a)(iii) and
(iv) is based on EBITDA or the minimum Management Fee as of the time of
adjustment), in an amount equal to the percentage increase in the CPI (as
defined below) from the first day of the applicable Fiscal Year over the CPI as
it existed on the later of the month of commencement of the applicable term and
January of the immediately preceding Fiscal Year (calculated on a
percentage basis); provided, however, the Management Fee shall not be subject
to decrease below the rate in effect for the immediately preceding Fiscal Year.
“CPI” shall mean the Consumer Price Index, Urban Wage Earners and Clerical
Workers for West Urban, all items (1982-1984=100), as published by the Bureau
of Labor Statistics of the United States Department of Labor. If the CPI is
calculated from a base different from the base period 1982-84 = 100, such CPI
shall be converted to a base period of 1982-84 = 100 by use of a conversion
factor supplied by said Bureau of Labor Statistics. If the CPI is discontinued
or replaced during the term, such other comparable governmental cost of living
index or computation which replaces the CPI shall be used in order to obtain
substantially the same result as would be obtained if the CPI had not been
discontinued or replaced.


 


(c)                                  CCR, the owner of all of the
issued and outstanding equity interests in Rampart, Cannery and Nevada Palace,
and to be an owner of equity interests in each Eligible NewCo, which shall
derive a benefit from the Management Services to be performed for each Casino
Operation, hereby absolutely, primarily, unconditionally and irrevocably
guarantees to Manager, its successors and assigns, the full, prompt, complete, timely,
and absolute payment of the Management Fees. Guarantor’s liability pursuant
to this Section 3.1(c) shall be primary, and with respect to any
right of action which shall accrue to Manager relating to any Management Fee,
Manager may at its sole option and without notice or demand, proceed
directly against CCR without having proceeded against the applicable Owner.


 


3.2                                 Time of Payment of Management
Fee


 


(a)                                  With respect to the Management
Fee payable pursuant to Sections 3.1(a)(i) and (ii), such Management Fee
shall be paid by each Owner to Manager on a monthly basis, on the first day of
each calendar month with respect to Management Services performed during the
preceding calendar month. The Management Fee shall be prorated with respect to
any


 


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partial period. Each Owner hereby authorizes
Manager to pay Manager the Management Fee, monthly, from the Account
established in accordance with this Agreement with respect to such Owner’s
applicable Casino Operation.


 


(b)                                 With respect to the Management
Fee payable pursuant to Sections 3.1(a)(iii) and (iv), such Management Fee
shall be paid by each Owner to Manager on a monthly basis based on the higher
of (x) four percent (4%) of EBITDA for the preceding calendar month derived
from the operation of such Owner’s applicable Casino Operation and (y) the pro
rata portion (based upon the number of calendar months in such Fiscal Year, or
portion thereof) of the minimum Management Fee with respect to such Casino
Operation, on the first day of each calendar month on which EBITDA numbers for
the preceding calendar month are available, with respect to Management Services
performed during the preceding calendar month. Not later than thirty (30) days
after the receipt of the Annual Statement prepared with respect to each Casino
Operation for the calendar year in which the Effective Date or Opening Date, as
applicable, occurs and for each succeeding Fiscal Year, Manager and the Oaktree
Managers shall calculate the actual EBITDA for such Casino Operation determined
from the financial statements of each such Owner for the period ending on December 31
of the immediately preceding year (“Actual EBITDA”). If the Management
Fee calculated by Manager and the Oaktree Managers and determined on the basis
of Actual EBITDA for such Casino Operation shall be less than the Management
Fees paid in such Fiscal Year (or portion thereof) with respect to such Casino
Operation (hereinafter, the “Management Fee Excess”), the applicable
Owner shall deduct the dollar amount equal to the Management Fee Excess ratably
over the remaining monthly payments of the Management Fee for such year. Each
Owner hereby authorizes Manager to pay Manager the Management Fee, monthly,
from the Account established in accordance with this Agreement with respect to
such Owner’s applicable Casino Operation.


 


3.3                                 Reimbursement for Costs and
Expenses


 


Subject to the applicable Budgets or other
funding approved by Manager and the Oaktree Managers, each Owner shall at all
times be responsible for providing and shall at all times make available sufficient
working capital to finance and support the uninterrupted and efficient
development, construction, pre-opening and operation of such Owner’s Casino
Operation as a first-class gaming property as required by any lease or
sublease under which such Casino Operation operates or, if there is no such
requirement, consistent with the market in which such Casino Operation competes
(including, without limitation, supplying those funds and expenses enumerated
in Exhibit A Part F, and as projected in the Budgets with respect to
each such Casino Operation). It is the intention of the Parties that (in
accordance with Section 1.7 above) each Owner shall be responsible for all
direct costs, fees or expenses reasonably incurred by Manager on behalf of such
Owner for the provision of Management Services with respect to such Owner’s
Casino Operation as set forth in this Agreement and consistent with the
applicable Budgets or other funding approved by Manager and the Oaktree
Managers, such that all such costs, fees and expenses shall be payable by
Manager directly from the operating account established in accordance with this
Agreement with respect to such Owner’s applicable Casino Operation. Notwithstanding
the foregoing, each Owner shall reimburse Manager for all out-of-pocket costs
and expenses reasonably paid by Manager on behalf of such Owner for the
provision of Management Services with respect to such Owner’s Casino Operation
as set forth in this Agreement and consistent with the applicable Budgets or
other funding approved by Manager


 


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and the Oaktree Managers, and Manager may reimburse
Manager for such costs and expenses from the operating account established in
accordance with this Agreement with respect to such Owner’s Casino Operation.


 


3.4                                 Place of Payment


 


To the extent not paid from an operating
account established in accordance with this Agreement with respect to an Owner’s
Casino Operation, the Management Fee and reimbursement of out-of-pocket costs and
expenses shall be paid to Manager by the applicable Owner in U.S. Dollars at
Las Vegas, Nevada or such other convenient situs as may be reasonably
determined by Manager from time-to-time.


 


3.5                                 Definitions


 


In addition to the definitions provided
throughout this Agreement, the following definitions shall be applicable to
this Agreement.


 


3.5.1                        Affiliate


 


“Affiliate” means, as to any Person any
other Person that directly or indirectly through one or more intermediaries
controls, or is under common control with, or is controller by, such Person. As
used in this definition, “control” (and the correlative terms “controlled
by” and “under common control with”) shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies, whether though ownership of membership interests, by contract, or
otherwise. Notwithstanding the foregoing, Paulos, Wortman, Millennium Gaming
and Manager shall be deemed to be “Affiliates” of one another,


 


3.5.2                        EBITDA


 


“EBITDA” means the amount determined
by subtracting Operating Expenses from Gross Revenues for a Fiscal Year.


 


3.5.3                        Fiscal Year


 


“Fiscal Year” means and coincides with
and is identical to the calendar year for all purposes; provided, however, it
is understood that the first Fiscal Year under the Agreement may be a
partial calendar year.


 


3.5.4                        GAAP


 


“GAAP” means generally accepted
accounting principles applied on a consistent basis to the hotel and gaming
industry generally in accordance with the Uniform System of Accounts.


 


3.5.5                        Gross Revenues


 


“Gross Revenues”  means, for any Fiscal Year, all receipts,
revenues, income and proceeds of sale of every kind or nature derived directly
or indirectly from the operation of a Casino Operation, and services rendered
to, and rentals of all kinds received from tenants,


 


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subtenants, licensees and occupants of space
located in a Casino Operation, including, without limitation, all receipts,
revenues and income derived from: guest rooms, food and beverage operations,
bar and lounge operations; gross revenues from casino operations less sums paid
out as winnings (“Gaming Revenues”); meeting room facilities, space
rentals to stores and other tenants; proceeds from any “business interruption”
or “use and occupancy” policy of insurance; and any amount recovered in any
legal action or proceeding or settlement thereof which arose out of the
operation of a Casino Operation, which amount under GAAP, is properly included
as an income item. All of the foregoing shall be calculated on an accrual basis,
whether in cash or in credit. The following revenues are excluded from the
definition of Gross Revenues:


 


(i)                                     All taxes collected as direct
taxes from guests or patrons of a Casino Operation or in respect of any
business conducted in a Casino Operation to be paid to duly constituted taxing
authorities having jurisdiction, such as local gaming taxes, or withholding
taxes assessed against gaming patrons’ winnings, if applicable, sales taxes, or
“bed” taxes;


 


(ii)                                  Tips and service charges
collected for payment to employees; and


 


(iii)                               Proceeds of sales of property,
real and personal, other than sales in the ordinary course of a Casino
Operation’s business.


 


3.5.6                        Operating Expenses


 


“Operating Expenses” means all
operating expenses related to a Casino Operation for the applicable Fiscal Year
determined in accordance with GAAP, including, without limitation, Employment
Costs (as hereinafter defined), employer’s liability and similar operating
insurance premiums, License fees, professionals’ fees pertaining to operational
matters (excluding the Management Fee), and all real estate and personal
property taxes and assessments. The following shall be excluded from the
definition of Operating Expenses: debt service, if any; operating lease
payments or finance or carrying charges for FF&E; depreciation; and the
interest on monies borrowed by Owner.


 


3.5.7                        Person


 


“Person” means any natural person,
corporation, limited liability company, general partnership, limited
partnership, proprietorship, other business organization, trust, union or
association


 


4.                                       ASSIGNMENT,
TRANSFER, CHANGE OF CONTROL


 


4.1                                 By Manager


 


Manager shall have the right to assign this
Agreement to an Affiliate (as defined in Section 3.5.1) in which each of
William Paulos and William Wortman holds an equity ownership interest no less
than that held by him in Manager immediately prior to such assignment at any
time, provided such Affiliate assumes the obligations of Manager set forth
herein, but Manager shall have no other rights to assign this Agreement without
the prior written consent of the Oaktree Managers.


 


11





















 


During the term of this Agreement, neither
William Paulos nor William Wortman may directly or indirectly transfer
(including by sale, pledge, hypothecation or other disposition) any equity in
Manager (or any permitted assignee of Manager) such that they in the aggregate would
no longer directly hold more than 50% of the total equity of, and more than 50%
of the total voting power in, Manager (or any permitted assignee of Manager).


 


4.2                                 By Owner or CCR


 


CCR and the Owners shall have no right to
assign this Agreement without the prior written consent of Manager.


 


4.3                                 Termination Upon a Change of
Control


 


Unless CCR and Manager agree otherwise in
writing, this Agreement shall terminate with respect to a Casino Operation in
the event of a Change of Control (as defined below) of the corresponding Owner,
or in the Agreement’s entirety in the event of a Change of Control of CCR.


 


A “Change of Control” means, with
respect to an Owner or CCR:


 


(a)                                  with respect to CCR only, either
OCM AcquisitionCo, LLC or Millennium Gaming, Inc. acquires 100% equity
ownership of CCR pursuant to Section 11.3 of the Operating Agreement, or
all or substantially all of the assets of CCR;


 


(b)                                 with respect to either such Owner
or CCR, a Person other than OCM AcquisitionCo, LLC or Millennium Gaming, Inc.
(together with any Affiliates of such Person or Persons otherwise associated
with such Person) or a “group” within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder, becomes, after the Effective Date, the
beneficial owner (as defined under Rule 13d-3 of the Securities Exchange
Act), directly or indirectly, of equity of such Owner or CCR, as the case may be,
entitling such Person or group to exercise, directly or indirectly, more than 50%
or the total voting power of all classes of equity of such Owner or CCR, as the
case may be;


 


(c)                                  with respect to either such Owner
or CCR, the consummation of a reorganization, merger or consolidation of such Owner
or CCR, as the case may be, with one or more other Persons which results
in CCR or the members of CCR before such reorganization, merger or consolidation,
as the case may be, not having more than 50% of the total voting power of
all classes of equity of the surviving Person or Persons after such
reorganization, merger or consolidation;


 


(d)                                 with respect to either such Owner
or CCR, a sale, transfer or other disposition of all or substantially all of
the assets of such Owner or CCR, as the case may be; and


 


(e)                                  with respect to either such Owner
or CCR, a dissolution or liquidation of such Owner or CCR, as the case may be.


 


12

















 


5.                                       AUDIT
RIGHTS


 


The Oaktree Managers, on behalf of CCR, may audit
the books of account and other records relating to or reflecting the results of
operations of any Casino Operation kept by Manager pursuant to Exhibit A Part I.
The Oaktree Managers may make such audit for the purpose of verifying the
accuracy of the financial statements provided by Manager pursuant to Exhibit A
Part G and the accuracy of costs, fees and expenses (including Management
Fees) incurred, and reimbursements paid to Manager, with respect to any Casino
Operation. The Oaktree Managers may exercise their right to audit such
books and records by notice to Manager no less than thirty (30) days prior to
the date the Oaktree Managers intend to commence their audit, and the Oaktree
Managers shall pay all fees, costs and expenses associated with such audit;
provided, however, that if such audit reveals that the actual costs, fees and
expenses (including Management Fees) for a Casino Operation for a reporting
period in any financial statement provided by Manager exceeds the costs, fees
and expenses (including Management Fees) reported in such financial statement
by more than 5%, then Manager shall pay all fees, costs and expenses associated
with such audit. Such audit shall be conducted by independent certified public
accountants selected by the Oaktree Managers, and in such a manner so as not to
disrupt unreasonably Manager’s duties to provide Management Services under this
Agreement. Any such audit shall be conducted only during normal business hours
and at the place where the books and records to be examined are normally kept.


 


6.                                       DAMAGE
AND DESTRUCTION


 


If one or more Casino Operation or any
portion thereof shall be damaged or destroyed at any time during the term with
respect to such Casino Operation by fire, casualty or other cause to such an
extent that it would be either impossible or impracticable, in the applicable Owner’s
sole discretion, to repair such Casino Operation or to continue to operate such
Casino Operation as a first-class gaming property as required by any lease
or sublease under which such Casino Operation operates or, if there is no such
requirement, consistent with the market in which such Casino Operation
competes, then the applicable Owner may terminate this Agreement by giving
written notice of termination to Manager, whereupon this Agreement as same
applies to the specified Casino Operation shall be terminated and of no further
force and effect with respect to the rights, duties and obligations with
respect to the specified Casino Operation, except with respect to the duties,
liabilities and obligations of the Parties which arose or accrued prior to
termination and continue to exist, or have cause to exist, post-termination. Otherwise,
this Agreement shall remain in full force and effect, and the applicable Owner
shall promptly rebuild such Casino Operation as a first-class gaming
property as required by any lease or sublease under which such Casino Operation
operates or, if there is no such requirement, consistent with the market in
which such Casino Operation competes at its sole cost and expense; provided,
that, no Management Fees relating to such Casino Operation (other than, if such
Casino Operation is the Cannery Operation or Rampart Operation, 50% of the
Management Fee set forth in Section 3.1(a)(i) or (ii), respectively,
so long as Manager is providing full and complete Development Services to such
Casino Operation) shall accrue or be payable by either CCR or the applicable
Owner from the time of such damage or destruction until the new Opening Date of
such Casino Operation. Notwithstanding anything to the contrary pursuant to
this Agreement, this Agreement shall continue in full force and effect with
respect to all Casino Operations not affected by such damage or destruction.


 


13





















 


7.                                       CONDEMNATION


 


If the entirety of one or more of the Casino
Operations shall be taken in eminent domain or condemnation proceedings, or the
equivalent thereto, or if any portion of the Casino Operation shall be taken in
eminent domain or condemnation proceedings, or the equivalent thereto, to such
an extent that in the sole discretion of the applicable Owner, it is impossible
or impracticable to continue to operate the Casino Operation, then, in either
of such events, the applicable Owner shall have the right to terminate this
Agreement by giving written notice of such termination to Manager and upon the
giving of such notice, this Agreement shall be terminated and of no further
force and effect with respect to the rights, duties and obligations with
respect to the specified Casino Operation, except with respect to the duties,
liabilities and obligations of the Parties which arose or accrued prior to
termination and continue to exist, or have caused to exist, post-termination. In
the event of termination under this Section 7, such termination shall be
effective upon the date of the applicable taking. The provisions of this Section 7
with respect to termination shall be applicable if the applicable Owner makes a
conveyance in lieu of condemnation, in which event the day of the execution and
delivery of such conveyance shall be the date of termination. If this Agreement
is not terminated in accordance with the terms of this Section 7, then
this Agreement shall remain in full force and effect and Owner shall promptly
rebuild or restore the Casino Operation as a first-class gaming property as
required by any lease or sublease under which such Casino Operation operates
or, if there is no such requirement, consistent with the market in which such
Casino Operation competes at its sole cost and expense; provided, that, no
Management Fees relating to such Casino Operation (other than, if such Casino
Operation is the Cannery Operation or Rampart Operation, 50% of the
Management Fee set forth in Section 3.1(a)(i) or (ii), respectively,
so long as Manager is providing full and complete Development Services to such
Casino Operation) shall accrue or be payable by either CCR or the applicable
Owner from the time of such taking until the new Opening Date of such Casino
Operation.


 


8.                                       NON-DISTURBANCE


 


Each Owner hereby covenants and agrees, and
it is the essence of this Agreement and as an inducement to execution, that
Manager, subject to the terms and conditions of this Agreement and the
Operating Agreement, shall have uninterrupted control of and the exclusive
responsibility for the operation of and the right to operate and manage each Casino
Operation during the term. Except as set forth in this Agreement or the
Operating Agreement, no Owner will interfere or involve itself with the
day-to-day operation of any Casino Operation. Each Owner further agrees to take
such action as is from time-to-time necessary to preserve such rights in
Manager for the term. Manager acknowledges that it is a fiduciary with respect
to each Owner, and agrees that it will discharge its fiduciary duties and
responsibilities in the control and operation of each Casino Operation in good
faith, using all commercially reasonable efforts and for the purposes of
maximizing the total enterprise value of CCR as a whole; provided, however,
that in no event shall any Owner make any claim against Manager on account of
any alleged errors of judgment made in good faith and using all commercially
reasonable efforts in connection with operation of any Casino Operation, unless
such error results from the gross negligence, wanton or willful misconduct or
recklessness of Manager.


 


14





















 


9.                                       DEFAULT


 


9.1                                 Default By Manager


 


The following events shall be deemed to be “Events
of Default” by Manager under this Agreement:


 


9.1.1                        Non-Compliance with Terms


 


Manager shall fail to comply, in any respect
material to CCR and the Owners in the aggregate, with any of the material terms,
conditions, provisions or covenants of this Agreement to be complied with or
performed by Manager and Manager shall not cure such failure within thirty (30)
days after written notice thereof given by the Oaktree Managers or the applicable
Owner to Manager, or, if such failure is not reasonably susceptible of being
cured within said thirty (30) day period, if Manager shall fail to commence to
cure such failure within said thirty (30) day period, or having commenced,
shall thereafter fail to complete the curing of such failure with reasonable
diligence and, in any event, within ninety (90) days after written notice
thereof has been given by the Oaktree Managers or the applicable Owner to
Manager.


 


9.1.2                        Insolvency


 


Manager shall become insolvent, shall make a
transfer in fraud of its creditors, or shall make an assignment for the benefit
of creditors.


 


9.1.3                        Bankruptcy Filing


 


Manager shall file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, or under any similar
law or statute of any governmental authority, or if Manager shall be adjudged
bankrupt or insolvent in proceedings filed against Manager thereunder.


 


9.1.4                        Appointment of Receiver


 


A receiver or trustee shall be appointed for
Manager or for all or substantially all of the assets of Manager, and such
appointment is not vacated or otherwise caused to be set aside within ninety
(90) days from the occurrence thereof.


 


9.1.5                        Loss of License


 


Manager’s Gaming License to operate a Casino Operation
shall at any time be suspended for any reason by the Gaming Authorities and
Manager shall fail to cure such suspension within thirty (30) days from such
suspension or such other period as the Gaming Authorities shall provide, or
Manager or any holder of any equity interest in Manager shall be temporarily or
permanently prohibited from deriving any benefit from the operations of a
Casino Operation as a direct result of the investigation or Gaming License
process by the Gaming Authorities and Manager shall fail to cure such
prohibition within thirty (30) days thereafter.


 


15

















 


9.2                                 Default by Owner


 


The following events shall be deemed to be
Events of Default by an Owner under this Agreement:


 


9.2.1                        Failure to Fund


 


Any Owner shall fail to provide sufficient
funds in the operating account established with respect to such Owner’s Casino
Operation to pay all of the current expenses, fees, bills or other charges in
connection with such Casino Operation, or to maintain the required working
capital deposits or Reserves (as hereinafter defined) as required herein, in
each case as set forth in this Agreement and consistent with the applicable
Budgets or other funding approved by Manager and the Oaktree Managers, within ten
(10) days after receiving written request therefor by Manager.


 


9.2.2                        Non-Compliance with Terms


 


Any Owner shall fail to comply, in any
material respect, with any of the material terms, conditions, provisions or
covenants of this Agreement to be complied with or performed by such Owner, and
such Owner shall not cure such failure within thirty (30) days after written
notice thereof given by Manager to such Owner, or, if such failure is not
susceptible of being cured within said thirty (30) day period, if such Owner
shall fail to commence to cure such failure within said thirty (30) day period,
or, having commenced, shall thereafter fail to complete the curing of such
failure with reasonable diligence and, in any event, within ninety (90) days
after written notice thereof has been given by Manager to such Owner.


 


9.2.3                        Insolvency


 


An Owner shall become insolvent, shall make a
transfer in fraud of its creditors, or shall make an assignment for the benefit
of its creditors.


 


9.2.4                        Bankruptcy Filing


 


An Owner shall file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, or under any similar
law or statute of any governmental authority, or if an Owner shall be adjudged
bankrupt or insolvent in proceedings filed against such Owner thereunder.


 


9.2.5                        Appointment of Receiver


 


A receiver or trustee shall be appointed for an
Owner or for all or substantially all of the assets of an Owner and such
appointment is not vacated or otherwise caused to be set aside within ninety (90)
days from the occurrence thereof.


 


9.2.6                        Loss of License


 


An Owner’s Gaming License to own or operate such
Owner’s Casino Operation shall at any time be suspended for any reason by the
Gaming Authorities and such Owner shall fail to cure such suspension within
thirty (30) days from such suspension or such other period as the Gaming
Authorities shall provide, or an Owner or any holder of any equity interest in an
Owner


 


16

















 


shall be temporarily or permanently
prohibited from deriving any benefit from the operations of the Casino
Operation as a direct result of the investigation or Gaming License process by
the Gaming Authorities and such Owner shall fail to cure such prohibition
within thirty (30) days thereafter.


 


9.3                                 Remedies for Default


 


Upon an Event of Default, Oaktree Managers
(in the case of an Event of Default by Manager under Section 9.1 above),
on behalf of CCR, or Manager (in the case of an Event of Default by an Owner
under Section 9.2 above) shall have the right to terminate this Agreement
without any prior notice to the defaulting Party, and to enforce this Agreement
and further, shall have such other rights and remedies on account of such
default, both at law and in equity (including the right to seek injunctive
relief without the posting of a bond which bond requirement, if applicable, is
hereby waived) as is provided, established or allowable under applicable law.


 


9.4                                 Automatic Termination


 


Upon the transfer of any Casino Operation at
a trustee sale or other foreclosure proceeding by or on behalf of any lender,
this Agreement shall automatically and immediately terminate with respect to
such Casino Operation and Manager shall have all remedies for default as set
forth in Section 9.3 herein but only with respect to such Casino Operation.


 


10.                                 MANAGEMENT
STANDARDS


 


Manager shall exclusively manage and maintain
the Operations in a manner utilizing standards and procedures which are
comparable to the management of a first-class gaming property as required
by any lease or sublease under which such Casino Operation operates or, if
there is no such requirement, consistent with the market in which such Casino
Operation competes, subject to such adjustments as Manager in its reasonable
discretion deems necessary. Manager shall establish such standards and
procedures in its reasonable discretion, subject to standards and procedures
required by law. Notwithstanding the foregoing, with respect to a Casino
Operation, Manager shall comply with the terms, conditions, provisions and
covenants under any lease or sublease under which such Casino Operation
operates (including, with respect to the Rampart Operation, the Rampart Sublease).


 


11.                                 COOPERATION
OF OWNER AND MANAGER


 


The Parties hereto shall cooperate fully with
each other during the term to facilitate the performance by the Parties of the
Parties’ obligations and responsibilities set forth in this Agreement. Owner
shall provide Manager with such information pertaining to such Owner’s Casino
Operation necessary to the performance by Manager of its obligations hereunder and
as may be reasonably and specifically requested by Manager from time to
time.


 


17

















 


12.                                 INDEMNIFICATION


 


12.1                           Manager’s Indemnification


 


Except as otherwise set forth herein, Manager
covenants and agrees that it will protect, keep and defend each Owner forever harmless
and indemnified against and from any penalty or damage or charges imposed for
any violation of any laws or ordinances, including, without limitation, Gaming
Laws, occasioned by the gross negligence, wanton or willful misconduct or
recklessness of Manager or those holding under Manager, and that Manager will
at all times protect, indemnify, defend and save and keep each Owner harmless
against and from any and all claims and against and from any and all loss,
cost, damage or expense, including reasonable attorneys’ fees, arising out of
any gross negligence, wanton or willful misconduct or recklessness of Manager
in any respect to comply with and perform all the requirements and
provisions hereof; except to the extent that any penalty, damage, charge, loss,
cost or expense is caused by the gross negligence, wanton or willful misconduct
or recklessness of any Owner or its members, managers, officers, employees, or
agents. Without limiting the generality of the foregoing, and with the
inclusion of the same exceptions as set forth above, Manager covenants and
agrees that it will protect, keep and defend each Owner forever harmless and
indemnified against any and all debt, claim, demand, suit or obligation of
every kind, character and description that may be asserted, claimed, filed
or brought against any Owner where such claim arises out of or is asserted in
connection with any Management Services, including, without limitation, any
claim by any subtenant, guest, licensee or invitee of Manager. This indemnity
does not apply to loss or damage occasioned by defects in the Casino Operation.
Nothing in this Section 12 shall override the right of Manager to employ
counsel as an Operating Expense and assert defenses as set forth in Exhibit A.
Notwithstanding the foregoing, this indemnity does not apply to any claim,
loss, cost, damage, expense, penalty or obligation in the event such claim,
loss, cost, damage, expense, penalty or obligation is within the scope of or is
the subject of one or more policies of insurance obtained by Manager or any Owner.
Under no circumstances shall the liability of Manager for indemnification
hereunder exceed the amount of One Million Dollars ($1,000,000) per Casino
Operation. The foregoing indemnity shall survive the termination of this
Agreement.


 


12.2                           Owner’s Indemnification


 


Except as otherwise set forth herein, each Owner
covenants and agrees to protect, keep and defend Manager forever harmless and
indemnified against and from any penalty or damage or charges imposed for any
violation of any laws or ordinances, including, without limitation, Gaming
Laws, occasioned by the gross negligence, wanton or willful misconduct or
recklessness of such Owner or those holding under such Owner, and that such Owner
will at all times protect, indemnify, defend and save and keep Manager harmless
against and from any and all claims and against and from any and all loss,
cost, damage or expense, including reasonable attorneys’ fees, arising out of
any gross negligence, wanton or willful misconduct or recklessness of such Owner
in any respect to comply with and perform all of the requirements and
provisions hereof; except to the extent that any penalty, damage, charge, loss,
cost or expense is caused by the gross negligence, wanton or willful misconduct
or recklessness of Manager or its members, managers, officers, employees or
agents. Without limiting the generality of the foregoing, and with the
inclusion of the same exceptions as set forth above, such Owner covenants and
agrees that it will protect, keep and defend Manager forever harmless and
indemnified against any and all debt, claim, demand, suit or obligation of
every kind, character and description that may be asserted, claimed, filed
or brought against Manager where such claim arises out of or is asserted in
connection with such Owner’s ownership of the Casino Operation or the real
property, improvements or structures within which or on which the Casino
Operation are situated.


 


18

















 


Notwithstanding the foregoing, this indemnity
does not apply to loss or damage occasioned by defects in the Casino Operation,
and this indemnity does not apply to any claim, loss, cost, damage, expense,
penalty or obligation in the event such claim, loss, cost, damage, expense,
penalty or obligation is within the scope of or is the subject of one or more
policies of insurance obtained by Manager or any Owner. Under no circumstances
shall the liability of an Owner for indemnification hereunder exceed the amount
of One Million Dollars ($1,000,000) per Casino Operation. The foregoing
indemnity shall survive the termination of this Agreement.


 


12.3                           Defense Counsel


 


Defense counsel engaged by Manager or any Owner,
as indemnitor, shall be reasonably acceptable to Manager and such Owner, as
indemnitee. Without limiting the generality of the foregoing, indemnitee shall
be promptly provided with copies of all claims and pleadings, as well as
correspondence, memos, documents and discovery with respect thereto, unless
within the scope of any applicable privilege, relating to any such matters. Indemnitee
shall be given prior written notice of all meetings, conferences and judicial
proceedings and shall be afforded an opportunity to attend and participate in
same. Indemnitee shall have the right to engage independent counsel, at its
sole expense, to represent indemnitee as additional and/or co-counsel in all
such proceedings, trials, appeals and meetings with respect thereto.


 


13.                                 CONFIDENTIAL
INFORMATION


 


13.1                           Except as required to perform Manager’s
duties pursuant to this Agreement and except as otherwise provided herein, Manager
agrees to hold, and Manager shall use its best efforts to cause its Affiliates,
agents, representatives and consultants to hold, the Company Confidential
Information (as hereinafter defined) in the strictest confidence and not to
disclose the Company Confidential Information to any Person, entity, party,
firm or corporation (other than agents or representatives of Manager), without
the prior express written consent of the Oaktree Managers (except as such
disclosures are required by applicable federal or state securities laws, Gaming
Laws, Gaming Authorities or under order of a court of competent jurisdiction or
as such disclosure is requested pursuant to oral questions, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative demand or other
similar process). In addition, Manager agrees that it shall cause all Company Confidential
Information in tangible form (whether contained in documents, drawings,
plans or other materials) to be returned to CCR and the Owners upon the
termination of this Agreement. Manager hereby agrees and acknowledges that CCR
and the Owners shall have sole and exclusive right, title, interest and
ownership to Company Confidential Information. This Section 13.1 shall
survive the termination of this Agreement.


 


13.2                           Except as required to perform their
obligations pursuant to this Agreement and except as otherwise provided herein,
CCR and each Owner agrees (and CCR hereby agrees on behalf of any and each
Eligible NewCo) to hold, and CCR and each Owner shall use its best efforts to
cause (and CCR shall use its best efforts to cause any and each Eligible NewCo
to cause) its respective Affiliates, agents, representatives and consultants to
hold, the Manager Confidential Information (as hereinafter defined) in the
strictest confidence and not to disclose the Manager Confidential Information to
any Person, entity, party, firm or corporation (other than agents or
representatives of CCR or such Owner), without the prior express written
consent


 


19

















 


of Manager (except as such disclosures are
required in applications or by applicable federal or state securities laws,
Gaming Laws, Gaming Authority or under order of a court of competent
jurisdiction or as such disclosure is requested pursuant to oral questions, interrogatories,
requests for information or documents in legal proceedings, subpoena, civil
investigative demand or other similar process). In addition, CCR and each Owner
agrees that it shall cause all Manager Confidential Information in tangible form (whether
contained in documents, drawings, plans or other materials) to be returned to
Manager upon the termination of this Agreement. CCR and each Owner hereby
agrees and acknowledges (and CCR hereby agrees and acknowledges on behalf of
any and each Eligible NewCo) that Manager has sole and exclusive right, title,
interest and ownership to Manager Confidential Information. This Section 13.2
shall survive the termination of this Agreement.


 


13.3                           “Company Confidential
Information” shall mean, other than Manager Confidential Information, all
information or data relating to CCR’s or any Owner’s finances or operations,
including, without limitation, all of the Intellectual Property (as defined in
the CUPA) used by CCR or any Owner in the conduct of its business, and all client
and customer lists and databases related to CCR or any Owner, as well as CCR’s
or any Owner’s ideas, inventions, creations, designs, plans, logos, diagrams,
motifs, works of authorship, works of visual art, business documents, contracts,
databases, and research and development information and data.


 


13.4                           “Manager Confidential
Information” shall mean all information or data relating to Manager’s finances
or know-how in managing casinos, including, without limitation, all research
and development information or data relating to player compensation
methodologies.


 


13.5                           In no event shall “Company
Confidential Information” or “Manager Confidential Information” include any information
or data that is:  (a) generally
publicly known, (b) learned from third parties or persons with a legal
right to disclose such information to the recipient, or (c) independently
created by the recipient through efforts in no manner associated with or
arising from any disclosure made by the other Party.


 


14.                                 HAZARDOUS
MATERIALS


 


“Hazardous Materials,” as used in this
Agreement, shall mean any substance or material if defined or designated as a
hazardous or toxic substance, or other similar term, by any federal, state or
local law, statute, regulation, or ordinance affecting any Casino Operation or
the land upon which any Casino Operation is situated (if owned by CCR or any
Owner), or the structures or improvements (if owned by CCR or any Owner) within
which any Casino Operation is operated (collectively, the “Property”).


 


With respect to the Property of any Eligible
NewCo, the applicable Owner represents and warrants after inquiry and
investigation that: (i) any handling, removing, transportation, storage,
treatment or usage of Hazardous Materials or toxic substances that has occurred
in connection with the Property has been in compliance with all applicable
federal, state and local laws, regulations and ordinances; (ii) no leak,
spill, release, discharge, emission or disposal of Hazardous Materials or toxic
substances has occurred in connection with the Property; and


 


20

















 


(iii) the Property is free of asbestos, toxic
or Hazardous Materials as of the date that the term of this Agreement commences
with respect to the Casino Operation of such Eligible NewCo.


 


Each Owner agrees to comply with all federal,
state and local environmental and real estate laws, including the Americans
With Disabilities Act, relating to such Owner’s ownership of such Owner’s
Casino Operations. Manager agrees to comply with all federal, state and local
environmental and real estate laws, including the Americans With Disabilities
Act, relating to Manager’s management and operation of the Casino Operations. All
expenses incurred in such compliance shall be Operating Expenses.


 


Without limiting the provisions of Section 13.2,
each Owner expressly agrees to indemnify, defend and hold Manager and its
managers, members, officers, employees and agents harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities (including sums paid
in settlements of claims) or loss, including reasonable attorneys’ fees,
consultant fees, and expert fees (consultants and experts to be reasonably selected
by Manager), which arise during or after the term as a result of any breach of such
Owner’s representation and warranty contained in this Section 14 or as a
result of such Owner’s failure to perform its covenant contained in this Section 14.
Without limiting the generality of the foregoing, the indemnification provided
by this Section 14 shall specifically cover costs incurred in connection
with any investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of the presence or suspected presence of
asbestos, other toxic or Hazardous Material in the Property, or the soil,
groundwater or soil vapor on or under the Property, except to the extent the
Hazardous Materials are present as a result of the actions of Manager, its
managers, members, employees or agents. The foregoing indemnity shall survive
the termination of this Agreement.


 


Without limiting the provisions of Section 13.1,
Manager expressly agrees to indemnify, defend and hold each Owner and its
managers, members, officers, employees and agents harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities (including sums paid
in settlements of claims) or loss, including reasonable attorneys’ fees,
consultant fees, and expert fees (consultants and experts to be reasonably selected
by Owner), which arise during or after the term as a result of any breach of
Manager’s representation and warranty contained in this Section 14. Without
limiting the generality of the foregoing, the indemnification provided by this Section 14
shall specifically cover costs incurred in connection with any investigation of
site conditions or any clean-up, remedial, removal or restoration work required
by any federal, state or local governmental agency or political subdivision
because of the presence or suspected presence of asbestos, other toxic or
Hazardous Material in the Property, or the soil, groundwater or soil vapor on
or under the Property, except to the extent the Hazardous Materials are present
as a result of the actions of such Owner, its members, managers, employees or
agents. The foregoing indemnity shall survive the termination of this
Agreement.


 


15.                                 ESTOPPEL
CERTIFICATES


 


Owner and Manager shall, at any time and from
time-to-time upon not less than ten (10) days prior written request by the
other, execute, acknowledge and deliver a statement in writing certifying that:


 


21

















 


(i)                                     This Agreement is unmodified and
in full force and effect (or, if modified, that the same is in full force and
effect, as modified, stating the modifications);


 


(ii)                                  The date to which payments have
been made under this Agreement; and


 


(iii)                               To the knowledge of each Owner
or Manager, as the case may be, no Event of Default hereunder on the part of
any other Party exists (except that if any such Event of Default does exist,
the certifying Party shall specify such Event of Default), it being intended
that any such statements delivered pursuant to this Section 15 may be
relied upon by any prospective purchaser, assignee, or mortgagee of any Owner’s
interest in such Owner’s Casino Operations, or of any Party’s interest in this
Agreement.


 


16.                                 NOTICES


 


All notices, offers or other communications
required or permitted to be given pursuant to this Agreement (including the Exhibit hereto),
including, without limitation, financial statements and cash reports delivered
pursuant to Exhibit A, shall be in writing and shall be considered as
properly given or made: (i) upon the date of personal delivery (if notice
is delivered by personal delivery); (ii) upon the date of delivery, as
confirmed electronically (if notice is delivered by facsimile transmission); (iii) upon
the date which is one (1) business day after deposit with a nationally
recognized overnight courier service (if notice is delivered by a nationally
recognized overnight courier service); or (iv) upon the date which is
three (3) business days after deposit with the U.S. Postal Service,
postage prepaid certified mail, return receipt requested (if notice is given in
such manner), and in any case addressed to the Parties at the addresses set
forth after their respective names below, or at such difference addresses as
they shall have advised the other in writing in accordance herewith.


 


	
  TO CCR (or its

  	
   

  
	
  MANAGEMENT

  	
   

  
	
  COMMITTEE) or

  	
   

  
	
  ANY OWNER:

  	
  211 North Rampart Boulevard

  
	
   

  	
  Las Vegas, Nevada 89145

  
	
   

  	
  Attn:

  	
  William Paulos

  
	
   

  	
  Attn:

  	
  William Wortman

  
	
   

  	
  Fax:

  	
  (702) 507-5992

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Michael E. Kearney

  
	
   

  	
  Santoro, Driggs, Walch, Kearney, Johnson &
  Thompson

  
	
   

  	
  400 South Fourth Street, Suite 300

  
	
   

  	
  Las Vegas, Nevada 89101

  
	
   

  	
  Fax:

  	
  (702) 791-1912

  
	
   

  	
   

  
	
   

  	
  and

  



 


22

















 


	
   

  	
  [Person to be designated by Oaktree]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  [Person to be designated by Oaktree]

  
	
   

  	
   

  
	
   

  	
   

  
	
  TO OAKTREE

  	
   

  
	
  MANAGERS:

  	
  [Person to be designated by Oaktree]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  [Person to be designated by Oaktree]

  
	
   

  	
   

  
	
   

  	
   

  
	
  TO MANAGER:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


17.                                 APPROVAL


 


In any instance where the approval or consent
of CCR, an Oaktree Manager, an Owner or Manager is required or permitted
hereunder, such approval or consent shall be in writing and such consent or
approval except as may otherwise be specified in this Agreement, shall not
be unreasonably withheld or delayed.


 


18.                                 RELATIONSHIP
OF PARTIES


 


Nothing set forth in this Agreement shall
constitute, or be construed to be or to create, a partnership, joint venture or
agency relationship between CCR or any Owner, on the one hand, and Manager, on
the other, with respect to the management of the Casino Operations.


 


19.                                 NO
WAIVER


 


No waiver of any covenant, term or condition
of this Agreement by any Party shall be construed as a waiver of a subsequent
breach of the same covenant, term or condition. The consent or approval by any
Party to or of any act by any other Party requiring such consent or approval
shall not be deemed to waive or render unnecessary, consent to or approval of
any subsequent similar act.


 


23

















 


20.                                 CHOICE
OF LAW AND FORUM


 


This Agreement shall be governed and
construed in accordance with the laws of the State of Nevada, regardless of the
places of its negotiation or execution and without regard to principles of
conflicts of law.


 


Subject to Section 29 below, the parties
hereto irrevocably agree that all actions shall be instituted in the federal or
state courts sitting in Reno, Nevada, and each party to this Agreement
irrevocably submits to the non-exclusive jurisdiction of and venue in the
courts of the State of Nevada and of the United States sitting in the City of Reno,
Nevada, in connection with any such proceeding, and waives any objection based
on forum non conveniens.


 


Subject to Section 29 below, each of the
Parties submits to the exercise of personal jurisdiction over them in the State
of Nevada in connection with any action or proceeding brought by any Party
relating to, arising from, or based on this Agreement, and each of the Parties
waives any objection to the exercise of personal jurisdiction over each of them
in connection with any such action or proceeding.


 


If any Party shall institute legal
proceedings against any other Party based on a cause of action or arising from
this Agreement, the non-prevailing Party in such proceeding shall pay the costs
and expenses incurred by the prevailing Party in such proceedings including
reasonable attorneys’ fees and any and all costs and fees incurred on appeal of
any lower court decision.


 


21.                                 ENTIRE
AGREEMENT; MODIFICATION


 


No employee, agent or representative of any
Party has the authority to bind any other Party to any oral additions,
modifications, representations or warranties concerning this Agreement. This
Agreement contains the entire agreement among the Parties with respect to its
subject matter, and no agreement shall be effective to change, modify or
terminate this Agreement in whole or in part, unless such agreement is in
writing and duly signed by the authorized representative of the Party against
whom enforcement of such change, modification or termination is sought. This
Agreement shall not be construed more strictly against one Party than against any
other Party merely by virtue of the fact that this Agreement may have been
physically prepared by one of the Parties, or such Party’s counsel, it being
agreed that all Parties and their respective counsel have mutually participated
in the negotiation and preparation of this Agreement.


 


22.                                 SURVIVAL
AND CONTINUATION


 


Notwithstanding the termination of this
Agreement, all terms, provisions and obligations of any Party contained herein
which in order to give them effect and to accomplish their intent or purpose,
need to survive such termination shall, by agreement among the Parties, survive
and continue until they have been fully satisfied or performed.


 


24





















 


23.                                 DESCRIPTIVE
HEADINGS


 


The descriptive headings set forth in this
Agreement are inserted for convenience and for reference only and do not in any
way limit or amplify the terms and provisions of this Agreement.


 


24.                                 SUCCESSORS
AND ASSIGNS


 


The terms, provisions and covenants contained
in this Agreement shall apply to, inure to the benefit of, and be binding upon,
the Parties hereto and their respective successors and permitted assigns;
except as otherwise provided in this Agreement.


 


25.                                 FORCE
MAJEURE


 


The terms and condition of this Agreement
(with the exception of the obligation of Owner to pay any fee, cost or expense
or to transfer any funds or fund any Reserve or working capital reserve or fund
the amounts required by the terms of this Agreement or with regard to matters
pertaining to an approved assignment of this Management Agreement; provided,
that, no Owner shall be obligated to pay any Management Fee to the extent
Management Services relating to such Management Fee have been suspended) shall
be subject to force majeure. Neither Owner nor Manager shall be considered in
default in the performance of its obligation hereunder, if such performance is
prevented or delayed because of war, hostilities, revolution, civil commotion,
strike, lock-out, epidemic, fire, earthquake, wind, flood, or because of any
law, order, proclamation, regulation, or ordinance of any governmental
authority, or because of any act of God or any other cause whether of similar or
dissimilar nature beyond the reasonable control of the Party affected.


 


26.                                 AUTHORIZATION


 


Each of the Parties hereto represents to the
other Parties hereto that it has full power and authority to execute this
Agreement and to be bound by and shall perform in accordance with the
terms hereof. On request, each Party shall furnish to the other evidence of
such authority.


 


27.                                 COUNTERPARTS


 


Any number of counterparts of this Agreement may be
executed and delivered and each shall be considered an original and together
they shall constitute one agreement.


 


28.                                 SEVERABILITY


 


If any of the provisions of this Agreement or
its application shall be held by any court, regulatory agency, or other
governmental authority having competent jurisdiction over this Agreement, to be
invalid, illegal, or unenforceable in any respect, the Parties shall forthwith
cure such invalidity to the extent permitted by law, and notwithstanding the
fact that such provisions may be held to be of no force and effect, the
validity, legality, and enforceability of the remaining provisions contained
herein and any other application thereof shall not in any way be affected or
impaired thereby. If any such provision or portion thereof is declared invalid,
illegal, or unenforceable, the Parties to this agreement intend that, in lieu
of the invalid, illegal, or


 


25

















 


unenforceable provision or portion thereof,
there be added to this agreement a provision or portion thereof as similar in
substance to such invalid, illegal, or unenforceable provision or portion
thereof as may be possible so as to accomplish the purposes of such
invalid, illegal, or unenforceable provision or portion thereof.


 


29.                                 ARBITRATION


 


Except as otherwise expressly provided
herein, any dispute, claim or controversy arising out of or relating to this
Agreement or the transactions contemplated hereby shall be submitted for
resolution by arbitration in Los Angeles, California, or such other location as
the parties may agree to, before a sole arbitrator, in accordance with the
laws of the State of Nevada applicable to agreements made and to be
performed entirely therein. The arbitration shall be administered by JAMS
pursuant to its Comprehensive Streamlined Arbitration Rules &
Procedures, and the parties agree that the arbitrator may impose sanctions
in their discretion to enforce compliance with discovery and other obligations.
The arbitrator’s decision shall be final and binding upon the parties, and may be
entered and enforced in any court of competent jurisdiction by either of the
parties. The arbitrator shall have the power to grant temporary, preliminary
and permanent relief, including without limitation injunctive relief and
specific performance. Unless otherwise ordered by the arbitrator, the
arbitrator’s expenses shall be shared equally by the parties.


 


30.                                 SUBORDINATION


 


Unless and until all secured debt of CCR or
any Owner as in effect on the Effective Date or thereafter, and any and all
renewals, modifications, consolidations, replacements and extensions of any
such secured debt (collectively, the “Senior Indebtedness”) has been
paid and satisfied in full, Manager shall not accept or receive from CCR or any
Owner any Management Fees (or any other payments, premiums or other amounts,
which may now or hereafter be owing to Manager by CCR or any Owner,
including, without limitation, any receiver, trustee or debtor in possession,
under or in connection with this Agreement, whether such sums represent
management fees, reimbursements of costs or expenses, attorneys’ fees, charges,
or other obligations due or not due, whether incurred directly or indirectly
and whether absolute or contingent) (all such indebtedness, obligations and
liabilities shall collectively hereinafter be referred to as the “Subordinated
Indebtedness”); provided, however, unless and until an event
of default under the documents and instruments evidencing the Senior
Indebtedness has occurred, Manager may receive from CCR or any Owner such
payments as are permitted to be paid under this Agreement, in the amounts and
at the times specified herein, but in no event shall CCR or any Owner pay, and
Subordinated Creditor shall in no event receive or accept, any prepayments of
such amounts. This Section 30 shall be self-operative and no further
instrument of subordination shall be required to make any Senior Indebtedness
superior to the interest of Manager (as provided herein). Notwithstanding the
foregoing, Manager shall execute and deliver promptly any certificate or
agreement that any lender of, or administrative agent with respect to, the
Senior Indebtedness may reasonably request in confirmation of such
subordination.


 


[signature
page follows]


 


26

















 


IN WITNESS WHEREOF, each Party hereunto set its
hands effective as of the day and year first above written.


 


	
   

  	
  CANNERY:

  
	
   

  	
   

  
	
   

  	
  The Cannery Casino and Hotel, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Cannery Casino Resorts, LLC,

  
	
   

  	
   

  	
  a Nevada limited liability company,

  
	
   

  	
  Title:

  	
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RAMPART:

  
	
   

  	
   

  
	
   

  	
  Rampart Resort Management, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Cannery Casino Resorts, LLC,

  
	
   

  	
   

  	
  a Nevada limited liability company,

  
	
   

  	
  Title:

  	
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
   

  	
  Manager

  



 


[signature
page continues]


 


27

















 


	
   

  	
  CCR:

  
	
   

  	
   

  
	
   

  	
  Cannery Casino Resorts, LLC,

  
	
   

  	
  a Nevada limited liability company,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  MANAGER:

  
	
   

  	
   

  
	
   

  	
  Millennium Management Group II, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  NEVADA PALACE:

  
	
   

  	
   

  
	
   

  	
  Nevada, LLC,

  
	
   

  	
  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Cannery Casino Resorts, LLC,

  
	
   

  	
   

  	
  a Nevada limited liability company,

  
	
   

  	
  Title:

  	
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William C.
  Wortman

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  William J.
  Paulos

  
	
   

  	
   

  	
   

  	
  Manager

  
								



 


28

















 


	
  Agreed and acknowledged

  
	
  as of the day first set forth above

  
	
  by:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  William C. Wortman

  
	
   

  
	
   

  
	
   

  	
   

  
	
  William J. Paulos

  



 


29





















 


EXHIBIT A


 


General Management
Services


 


Manager shall provide, with respect to each
of the Casino Operations, on a Casino Operation-by-Casino Operation basis, such
management services as are usually and customarily performed by managers of a first-class gaming
property as required by any lease or sublease under which such Casino Operation
operates or, if there is no such requirement, consistent with the market in
which each such Casino Operation competes, in each case as set forth in this
Agreement and consistent with the applicable Budgets or other funding approved
by Manager and the Oaktree Managers, all at each such Casino Operation Owner’s
respective expense. Subject to the provisions of this Agreement and the
Operating Agreement, the Parties contemplate that Manager’s performance of the
Management Services will include Manager having uninterrupted control over the
operations of each Casino Operation, including, but not limited to, the casino,
hotel, entertainment and restaurant facilities of each such Casino Operation
(if any), and will, among other services, set various rates and prices, issue
casino credit, grant complimentaries, hire personnel and select marketing and
promotional campaigns, with respect to each such Casino Operation. In addition,
and more specifically, the following provisions shall govern certain of the
duties and obligations of each Owner and Manager with respect to each Casino
Operation (except as such Owner may agree that any of the following do not
apply with respect to such Owner’s Casino Operation):


 


A.                                   GENERAL
DUTIES


 


1.                                       Maximize
Patronage


 


Manager shall use all reasonable efforts to
maximize patronage of each Casino Operation.


 


2.                                       Prepare
Budgets


 


Manager shall prepare the Annual Operating
Budget and the Long-Term Budget in consultation with, and subject to the
approval of, the Oaktree Managers, and revise and update the Annual Operating Budget
and Long-Term Budget for each Casino Operation as required in consultation
with, and subject to the approval of, the Oaktree Managers. To the extent
required, Manager shall prepare a Construction Budget for any Owner
contemplating construction of substantial improvements and/or major
construction at a Casino Operation for approval by the Oaktree Managers.


 


3.                                       Sales,
Marketing and Advertising


 


Consistent with the Annual Operating Budget
for each Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager shall develop and update advertising, public relations, sales
and marketing plans; implement and supervise sales and marketing campaigns;
develop tour packages; develop and implement player development programs for
gaming activities; book entertainment appropriate for each Casino Operation;
and generally promote each Casino Operation and its respective Property.


 


30

















 


4.                                       Centralized
Booking System


 


Manager shall participate in and monitor
centralized computerized booking and reservations systems, or, if the applicable
Casino Operation is operated under a “Flag” or franchise and is participating
in the franchise reservation system, monitor same for efficiency and
productivity.


 


5.                                       Incentives
and Extensions of Credit to Promote Patronage


 


Consistent with the Annual Operating Budget for
each Casino Operation or other funding approved by Manager and the Oaktree
Managers, and in conjunction with player development programs established with
respect to each such Casino Operation, Manager shall provide complimentary
rooms, amenities and extensions of credit to the Casino Operation patrons to
promote gaming activities at such Casino Operation. In the exercise of Manager’s
reasonable business judgment and in conjunction with player development
programs, Manager shall obtain from patrons receiving credit, to the extent
permitted, and in accordance with the Gaming Laws, appropriate “markers” or “I.O.U.’s”
(all forms of credit, including the foregoing, collectively referred to as “Markers”),
in accordance with overall credit policies established for each Casino
Operation from time-to-time in consultation with the Owner of each such Casino
Operation.


 


6.                                       Employment of
Staff


 


Other than as such action may involve a
manager or equityholder of Manager or a direct family member of a manager or
equityholder of Manager (which, in each case, shall require the prior written
consent of the Oaktree Managers before Manager may proceed; provided,
that, those related party transactions set forth on Schedule 3.25 of the
CUPA shall not require such prior written consent so long as the terms of such
related party transactions do not change in any material respect; provided,
further, that the promotion of a direct family member of a manager or
equityholder of Manager from a position set forth on Schedule 3.25 of the
CUPA to a position substantially identical in title and function to a
then-existing non-Senior Officer position of CCR or an Owner, at a salary
commensurate with what would be paid to such non-Senior Officer if not such a
direct family member, shall not require such prior written consent so long as
such promotion is justified based on past performance as reasonably determined
by Manager) and consistent with the Annual Operating Budget for each Casino
Operation or other funding approved by Manager and the Oaktree Managers, Manager
shall arrange for the employment, payment, supervision and discharge of all employees
of each Casino Operation in accordance with the applicable Owner-approved
policies adopted by the Owner of each such Casino Operation.


 


7.                                       Purchase of
Supplies; Engage Professionals


 


Other than as such action may involve
payments to Manager or an Affiliate, manager, officer or equityholder of
Manager or an Affiliate or direct family member of a manager, officer or
equityholder of Manager (which, in each case, shall require the prior written
consent of the Oaktree Managers before Manager may proceed; provided,
that, those related party transactions set forth on Schedule 3.25 of the
CUPA shall not require such prior written consent so long as


 


31

















 


the terms of such related party transactions do not change in any
material respect) and consistent with the Annual Operating Budget for each
Casino Operation or other funding approved by Manager and the Oaktree Managers,
Manager shall arrange as necessary for the purchase of food, beverages,
operating supplies, merchandise, required FF&E and all other supplies
necessary for the proper operation of each Casino Operations as a first-class gaming
property as required by any lease or sublease under which such Casino Operation
operates or, if there is no such requirement, consistent with the market in
which such Casino Operation competes; arrange for the engagement of advisors,
consultants, or other professionals from time-to-time as reasonably necessary to
promote the sound and efficient operation of each Casino Operation, including
accountants, financial advisors, real estate advisors, computer consultants,
attorneys (subject to the limitations otherwise set forth herein), and such
other professionals as appropriate.


 


8.                                       Maintenance


 


Manager shall arrange and provide for the
maintenance and repair of each Casino Operation in accordance with the Annual Operating
Budget for each Casino Operation or other funding approved by Manager and the
Oaktree Managers, and standards consistent with each Casino Operation.


 


9.                                       Refurbish


 


Consistent with the Annual Operating Budget
for each Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager shall make available such of Manager’s personnel, and arrange
for such other personnel that, in Manager’s reasonable judgment, are needed to
prepare, review and implement plans and specifications for minor and routine
alteration or refurbishment of each Casino Operation as proposed by the
applicable Owner from time-to-time; and arrange for the design, selection, and
scope of replacement of FF&E.


 


10.                                 Improve Operations


 


Consistent with the Annual Operating Budget
for each Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager shall use Manager’s reasonable efforts to improve operations
or eliminate operational problems as necessary in the manner deemed appropriate
by Manager.


 


11.                                 Comply with Laws


 


Manager shall cause all such other things to
be done in or about each Casino Operation as shall be necessary to comply with
the Gaming Laws and requirements of the Gaming Authorities, and of any other
governmental authority having jurisdiction over the use, maintenance or
operation of each Casino Operation.


 


12.                                 Utility Services


 


Other than as such action may involve
payments to Manager or an Affiliate, manager, officer or equityholder of
Manager or an Affiliate or direct family member of a manager, officer


 


32

















 


or equityholder of Manager
(which, in each case, shall require the prior written consent of the Oaktree
Managers before Manager may proceed) and consistent with the Annual
Operating Budget for each Casino Operation or other funding approved by Manager
and the Oaktree Managers, Manager shall arrange for utility services,
telephone, vermin extermination, security, trash removal and other services
necessary or reasonably required for the operation of each Casino Operation as
a first-class gaming property as required by any lease or sublease under
which such Casino Operation operates or, if there is no such requirement, consistent
with the market in which such Casino Operation competes.


 


13.                                 Collection of
Revenue


 


Manager shall use all reasonable efforts to
collect all charges, rents, Markers and other amounts due on account of each Casino
Operation and cause the recovery and/or cause the surrender of space, as
applicable and necessary from each Casino Operation’s guests, patrons, tenants,
subtenants, parties providing exclusive services and concessionaires.


 


14.                                 Legal Actions


 


Other than legal actions in which a conflict
of interest arises between CCR and/or an Owner, on the one hand, and Manager
and/or an Affiliate, manager, officer or equityholder of Manager and/or an
Affiliate or direct family member of a manager, officer or equityholder of
Manager (which, in each case, shall require the prior written consent of the Oaktree
Managers before Manager may proceed), on the other, and subject to the
limitations described hereafter, Manager shall commence legal actions
concerning each Casino Operation on behalf of the applicable Owner as are
necessary or reasonably required, in the good faith opinion of Manager, to
preserve and protect the assets constituting each Casino Operation and to collect
sums due on account of the operation of each Casino Operation; advise the Management
Committee of CCR of the commencement of material legal actions concerning such
Owner’s Casino Operations; and retain counsel, in the manner set forth
hereafter on behalf of the applicable Owner and Manager, in connection with any
action or proceeding commenced by or against the applicable Owner or Manager (to
the extent such action or proceeding by or against Manager relates to the
services provided by Manager under this Agreement)or concerning such Casino Operation.


 


15.                                 Concessions and
Leases


 


On behalf of the applicable Owner, Manager
shall grant concessions and leases for services customarily subject to
concession or lease, if, in Manager’s reasonable opinion, the granting of such
concessions and leases are deemed necessary or desirable; provided, that,
Manager may not grant such concession or lease to itself or an Affiliate,
manager, officer or equityholder of Manager or direct family member of a
manager, officer or equityholder of Manager, in each case without the prior
written consent of the Oaktree Managers.


 


16.                                 Licenses


 


Manager shall obtain and maintain all
Licenses as may be required by law in order to operate each Casino Operation,
including all alcoholic beverage facilities and gaming facilities as shall be
operated within each such Casino Operation.


 


33

















 


17.                                 Accounting and
Financial Controls


 


Manager shall establish such accounting
systems and internal controls as may be required by applicable Gaming Laws
and render such periodic financial reports and other reports with respect to
operations of each Casino Operation from time-to-time as may be
specifically required hereunder.


 


18.                                 Insurance


 


Manager shall advise the applicable Owner
with respect to, and assist the applicable Owner in obtaining, insurance
coverage and insurance policies hereafter described.


 


19.                                 Consultation with
Owner


 


At an Owner’s reasonable request, Manager
shall make Manager’s personnel available, upon reasonable notice, to consult
with and advise such Owner concerning all policies and procedures affecting the
conduct of the business of such Casino Operation and to consider in good faith
any suggestions with respect thereto made by the applicable Owner.


 


20.                                 Periodic Reporting
Requirements


 


At the reasonable request of a parent entity
of any member of CCR, Manager shall provide such information regarding the
Casino Operations, in form and substance reasonably satisfactory to such
parent entity, as required by such parent entity to comply with periodic
reporting requirements under federal or state securities law.


 


B.                                     THE BUDGETS


 


Manager shall submit the Budgets (or so many
Budgets as may be applicable with respect to each Casino Operation) for CCR
and each Casino Operation to the Oaktree Managers and the applicable Owner for the
Oaktree Managers’ and such Owner’s approval not later than thirty (30) days
prior to the beginning of each Fiscal Year, in a form reasonably
satisfactory to the Oaktree Managers and each applicable Owner, which shall
include for the ensuing Fiscal Year or portion thereof (and in the case of the
Long-Term Budget the following two years), as applicable, the following:


 


1.                                       Profit &
Loss Statement:  An estimated monthly
profit and loss statement prepared generally in accordance with GAAP with any
variations based on the Gaming Laws or applicable local laws or regulations
being duly noted;


 


2.                                       Receipts &
Expenditures:  A budget of receipts
and expenditures (including Management Fees) required for the operation of such
Casino Operation pursuant to the terms of this Agreement, including rates to be
charged and expenditure proposals for:


 


(A)                              payroll, including wages,
other remuneration, and fringe benefits;


 


34

















 


(B)                                food and beverage and
other operating supplies;


 


(C)                                FF&E;


 


(D)                               repair and maintenance;


 


(E)                                 revisions,
alterations, rebuilding, replacements, additions and improvements in and to such
Casino Operation;


 


(F)                                 advertising, marketing
and public relations;


 


(G)                                the engagement of
experts and consultants; and


 


(H)                               other operations.


 


3.                                       Assumptions:  Each Budget shall also contain, in narrative
form, the assumptions used as the basis of its preparation.


 


4.                                       Procedure for
Budget Approval and Dispute Resolution


 


The Oaktree Managers shall provide to Manager
their written approval or lack of approval (including written comments setting
forth in reasonable detail the reasons for the Oaktree Managers’ lack of
approval) of each Budget with respect to a Casino Operation not later than
thirty (30) days after the Oaktree Managers’ receipt of such Budget. If the
Oaktree Managers have not provided to Manager their lack of approval of such
Budget within such thirty (30) day period, such Budget shall be deemed approved
by the Oaktree Managers. If the Oaktree Managers do not approve all or any
portion of such Budget (a “Disputed Item”), Manager shall attempt to
reach an agreement with the Oaktree Managers with respect to the Disputed Items.
Both the Oaktree Managers and Manager will proceed with due diligence and in
good faith to attempt to reach agreement with respect to the Disputed Items. If
the Oaktree Managers and Manager have not reached an agreement with respect to
the Disputed Items within a thirty (30) day period after Manager’s receipt of
the Disputed Items (“Manager’s Review Period”), such Parties shall, not
later than seven (7) days after the expiration of Manager’s Review Period,
submit the Disputed Item(s) and all relevant information pertaining thereto,
without regard to the strict rules of evidence, to certified public
accountants of recognized standing mutually agreeable to the Oaktree Managers
and Manager (the “Determining Accountants”). Within thirty (30) days
after the receipt of the dispute for resolution, the Determining Accountants
shall determine the appropriate amount to be budgeted for the Disputed Item(s)
based upon all relevant factors, including the desire of the Oaktree Managers
and Manager to maintain and operate such Casino Operation in accordance with
standards for a first-class gaming property as required by any lease or
sublease under which such Casino Operation operates or, if there is no such
requirement, consistent with the market in which such Casino Operation competes,
the Gaming Laws, and applicable local laws and customs (to the extent such
local customs are consistent with the terms and intent of this Agreement). The
determination of the Determining Accountants with respect to the Disputed
Item(s) shall be final and conclusively binding upon the Oaktree Managers and
Manager. Pending Manager’s receipt of Oaktree Managers’ approval of a Budget with
respect to such Casino Operation pursuant to this Section B(4) and/or
a decision of the Determining


 


35

















 


Accountants, Manager shall be entitled to operate such Casino Operation
in accordance with the last Long-Term Budget (but with reference only to the
Fiscal Year of such Long-Term Budget corresponding to the then-current Fiscal
Year) approved by the Oaktree Managers; provided, however, that Manager shall
endeavor in good faith to preserve the Oaktree Managers’ objections to any
Disputed Items pending the Determining Accountants’ decision. The final Budget
resulting from the Determining Accountant’s decision as to any Disputed Item(s)
shall be effective immediately upon receipt by Manager of the Determining
Accountants’ written decision, but such Budget shall not affect any
expenditures made or committed to by Manager in accordance with the immediately
preceding sentence.


 


5.                                       Compliance
with Modification to the Budgets


 


During each Fiscal Year, Manager shall, in
the performance of the Management Services with respect to each Casino
Operation, use and employ its reasonable efforts to comply with the Budgets
relating to such Fiscal Year with respect to each such Casino Operation. Manager
shall nevertheless retain the discretion to re-allocate part or all of the
amount budgeted with respect to any line item to another line item in the
budget provided the overall budget is maintained, and to make expenditures not
authorized under the applicable Budget under certain exigent circumstances if,
in Manager’s good-faith judgment, such expenditures are justifiable as a result
of recent changes in circumstances, such as increased bookings, increased
staffing needs or emergency repairs; provided, that, in each case, Manager
promptly provides the Management Committee of CCR a written explanation of such
re-allocation or expenditures. Notwithstanding the foregoing, in no event shall
Manager modify or adjust the Management Fees as provided in the Budget without
the prior written approval of the Oaktree Managers.


 


6.                                       Modification
to the Budget


 


If at any time during any Fiscal Year Manager
shall, in the performance of the Management Services with respect to each
Casino Operation, determine the Budget relating to such Fiscal Year with
respect to such Casino Operation is no longer appropriate due to significant
changes in conditions, circumstances or otherwise, Manager shall submit to the Oaktree
Managers for approval a revised Budget (the “Revised Budget”) for the
remainder of such Fiscal Year, indicating in narrative form the reasons
why the assumptions used as the basis of preparing the original Budget for such
Fiscal Year are no longer valid. If the Oaktree Managers do not approve all or
any portion of the Revised Budget, then the Oaktree Managers shall furnish
Manager with its written comments, in reasonable detail, setting forth the
reasons for its lack of approval, and the Oaktree Managers and Manager shall
attempt to agree with respect to the items to which the Oaktree Managers have
not approved. If an agreement is not reached before the expiration of a thirty
(30) day period immediately following the receipt by Manager of the Oaktree
Managers’ lack of approval, the dispute shall be submitted to the Determining
Accountants for resolution in accordance with the procedures set forth in Section B(4).


 


7.                                       Emergency
Expenditures


 


Whenever, by reason of circumstances beyond
the reasonable control of Manager with respect to each Casino Operation,
emergency expenditures are required to be made to ensure that


 


36

















 


the operating standards of a first-class gaming property as
required by any lease or sublease under which such Casino Operation operates
or, if there is no such requirement, consistent with the market in which such
Casino Operation competes are maintained, or to protect life, person, or
property, Manager may make emergency expenditures beyond the provisions of
the applicable Budget without the prior written consent of the Oaktree Managers,
provided that such expenditure does not constitute a default under the loan
documents evidencing the loan to CCR and/or the Owners from their most senior
secured lender (the “Loan Documents”) and that Manager promptly provides the
Management Committee of CCR a written explanation of such expenditures.


 


C.                                     LEGAL SERVICES AND PROCEEDINGS


 


Other than legal proceedings in which a
conflict of interest arises between CCR and/or an Owner, on the one hand, and
Manager and/or an Affiliate, manager, officer or equityholder of Manager and/or
an Affiliate or direct family member of a manager, officer or equityholder of
Manager (which, in each case, shall require the prior written consent of the Oaktree
Managers before Manager may proceed), on the other, the following
provisions shall apply to any legal proceedings affecting a specific Casino Operation:


 


1.                                       Insured
Claims


 


All claims against the applicable Owner or
Manager (or Manager’s Affiliates who may be joined) arising out of the
operation of such Casino Operation that are covered in whole or in part by
insurance, shall be forwarded by Manager to the appropriate insurance carrier
or its agent for defense.


 


2.                                       Non-Extraordinary
Proceedings


 


(i)                                     Claims:  Manager shall have the right to commence
legal proceedings utilizing counsel designated by Manager and approved by the
applicable Owner of a non-extraordinary nature and involving monetary claims of
less than $250,000 relating to the operation of such Casino Operation, such as
collections, enforcement of contracts and leases and proceedings against the
guests, patrons, vendors, service contractors, and tenants of such Casino Operation.


 


(ii)                                  Defense:  Other than insured claims in which the
liability carrier has the right to choose counsel, Manager shall have the right
to defend, through counsel designated by Manager and approved by the applicable
Owner, legal proceedings of a non-extraordinary nature against the applicable Owner
or Manager (or Manager’s Affiliates who may be joined) resulting from the
operation of such Casino Operation, such as guest claims for loss of property,
or injury to persons, and claims relating to employment at such Casino
Operation.


 


3.                                       Extra-Ordinary
Proceedings


 


(i)                                     Claims:  Manager shall commence legal proceedings that
are of an unusual nature or involving monetary claims of $250,000 or more relating
to the operation of such Casino Operation upon the approval by the Management
Committee of CCR of the


 


37

















 


proceeding and counsel designated by Manager. Manager shall furnish the
Management Committee of CCR with periodic status reports with respect to such
proceedings.


 


(ii)                                  Defense:  All claims against the applicable Owner or
Manager (or Manager’s Affiliates who may be joined) arising out of the
operation of such Casino Operation of a more significant nature and involving $250,000
or more and as to which any insurance company denies coverage (or reserves
rights as to coverage), shall be coordinated with the Management Committee of
CCR and counsel designated by Manager shall be subject to the approval of the Oaktree
Managers. Manager shall furnish the Management Committee of CCR with periodic
status reports with respect thereto.


 


4.                                       Coordinated
Defense


 


In the event that a suit is instituted
against Manager or its Affiliates, in which the applicable Owner is also named
as a party defendant, such Owner and Manager shall coordinate the defense of
such suit. Nothing herein contained shall be construed as preventing such Owner
from joining with Manager in any legal proceedings or any action on behalf of
or against the Casino Operation, whether of an extraordinary or non-extraordinary
nature. If a conflict of interest arises between the legal positions taken by the
applicable Owner and Manager that such Parties are unable to waive or otherwise
agree upon, then such Parties may each engage counsel of their own
choosing.


 


D.                                    CENTRALIZED PURCHASING AND
RELATED SERVICES


 


If any other hotels, casino hotels, resorts,
restaurants, casinos, gaming facilities, or related facilities operated by
Manager or its Affiliates maintain or adopt a centralized purchasing system
whereby operating supplies, food, FF&E, consumables, computer services,
insurance coverages under a group plan, public relation services, sales and
marketing services, group advertising, reservation systems, or other items or
services or programs are purchased or contracted for on behalf of the
participants from suppliers or providers designated by Manager or its
Affiliates (other than Manager or an Affiliate, manager, officer or
equityholder of Manager or an Affiliate or direct family member of a manager,
officer or equityholder of Manager, which, in each case, shall require the
prior written consent of the Oaktree Managers before Manager may proceed),
then Manager shall have the option (but not the obligation) to cause any or
each Casino Operation to participate in such centralized system for so long as
Manager is operating such Casino Operation provided that the cost to such
Casino Operation of such items, services, or programs (taking into account the
quality of the items, services, or programs purchased or contracted for and the
payment terms relating to such items, services, or programs) are not significantly
less favorable to such Casino Operation than the cost that could be obtained by
the Casino Operation from unaffiliated third parties.


 


E.                                      BANK ACCOUNTS


 


The following shall be applicable to all bank
accounts maintained in connection with each Casino Operation:


 


38

















 


1.                                       Hotel and
Casino Accounts


 


Manager shall establish one or more bank
accounts bearing the name of such Casino Operation at a commercial bank or
banks selected by Manager in consultation with the applicable Owner that shall,
in all respects, have: (i) the capability of servicing all of the hotel (if
any) (“Hotel”) and casino (“Casino”) operations of such Casino
Operations; (ii) a substantial capital base; (iii) insured accounts,
if applicable; and (iv) armored or other available security services
(together with any accounts opened pursuant to Section E(6) below, the
“Accounts”).


 


2.                                       Deposit and
Transfer of Funds


 


All funds of any kind or nature received
either by Manager or the applicable Owner in connection with the operation of such
Casino Operation shall be deposited into the Accounts. Subject to the
requirements and prohibitions of applicable laws, in no event will any of the
monies deposited in the bank accounts be commingled with other funds. Manager may transfer
between the Accounts such funds which in Manager’s reasonable business judgment
may be needed for any area of operations. Checks and other documents of
withdrawal on the bank account need be signed only by duly authorized
representatives of Manager.


 


3.                                       Interest


 


All interest, if any, earned on the Accounts
shall accrue to the benefit of the applicable Owner. Manager shall make
available to the applicable Owner, from time-to-time, when reasonably requested
by the applicable Owner or the Oaktree Managers, all records with respect to
the bank accounts.


 


4.                                       Statements


 


Manager shall use its best efforts to provide
to the applicable Owner a report of the cash receipts of such Casino Operations
on a weekly basis or as soon as practicable. Manager shall provide a monthly
statement to the applicable Owner summarizing all activity in the Accounts.


 


5.                                       Fidelity
Bonds


 


All of each Owner’s employees or representatives
who are authorized signatories on any of the Accounts shall be bonded or
otherwise insured as to fidelity. The form and content of such bond or
insurance shall be subject to the reasonable approval of the applicable Owner. The
applicable Owner and Manager shall both be named as obliges or insureds, as
appropriate, under such bond or insurance policy and Manager and the applicable
Owner shall both have the right to enforce the terms of any such bond or
insurance policy.


 


6.                                       Other
Accounts, Funds of Owner


 


Manager shall open such other bank accounts with
respect to such Casino Operations as may be agreed upon from time-to-time
by the applicable Owner and Manager or as required by law. All funds in the bank
accounts and all other accounts relating to such Casino Operation maintained
pursuant to this Agreement shall, at all times, be deemed to be the funds of the
applicable Owner.


 


39

















 


F.                                      OWNER’S OBLIGATION TO PROVIDE
FUNDING


 


The following shall apply to the funding
needs of each Casino Operation:


 


1.                                       Funding an
Essential Requirement


 


It is of the essence in this Agreement that each
Owner shall, at all times, maintain sufficient funds in such Owner’s applicable
Accounts, or other reserve accounts, to pay all duly and properly incurred
obligations of the applicable Casino Operation on a current basis as set forth
in this Agreement and consistent with the applicable Budgets or other funding
approved by Manager and the Oaktree Managers, and to comply with the Gaming
Laws and any other applicable laws or regulations pertaining to any accounts or
required reserves. The Parties acknowledge and agree that Manager shall have no
obligation to pay or satisfy any obligation or other cost or expense of
development, capitalization, property acquisition, operation, employment,
marketing or other costs and expenses of owning and operating such Casino
Operation that is the subject of this Agreement except such costs and expenses
as Manager may incur in connection with its own operations and
obligations.


 


2.                                       Working
Capital


 


Each Owner shall with respect to such Owner’s
Casino Operation make available to Manager sufficient working capital for the operation
of such Owner’s Casino Operation, including, without limitation, (a) sufficient
working capital or reserves as may be required by the Gaming Authorities
and lenders or mortgagees to conduct the operation of the Casino Operation and (b) such
sufficient additional Casino working capital as may be adequate to meet
the needs of the table betting limits appropriate to the Casino operations with
respect to such Owner’s Casino Operation in accordance with the related Annual
Operating Budget (collectively, with respect to each Casino Operation, the “Reserves”).
CCR in respect of the CCR Annual Operating Budget shall provide sufficient
working capital for the expenditures described in such Budgets.


 


3.                                       Failure to
Fund


 


If at any time the available Reserves, or any
other separate reserve, shall not be sufficient or available to pay all of the
current expenses, fees, bills or other charges incurred in connection with the
operation and maintenance of the applicable Casino Operation as set forth in
this Agreement and consistent with the applicable Budgets or other funding
approved by Manager and the Oaktree Managers, including the payment of the
Management Fee, all of which are to be paid from the applicable Account, or to
comply with applicable laws or regulations, or to meet or maintain Reserve
requirements at a level sufficient to maintain established betting limits,
Manager shall so advise the applicable Owner, in writing, and shall provide the
applicable Owner with a statement of the amount of funds necessary to cure such
insufficiencies. Thereupon, the applicable Owner shall immediately provide
sufficient monies to remedy any such insufficiency or shortfall. The failure of
the applicable Owner to provide such funds shall excuse Manager from only those
Management Services hereunder directly and materially affected by any such
insufficiency or shortfall during the occurrence thereof. Manager shall be free
in its reasonable business judgment to adjust betting limits to the extent
permitted under the


 


40

















 


Gaming Laws, in order to: first, meet payment obligations for Operating
Expenses with respect to such Casino Operation; and second, continue gaming
operations and table betting limits to the extent and to the level permitted by
the available Reserves.


 


G.                                     FINANCIAL STATEMENTS


 


The financial statements for each Casino
Operation shall be prepared in the following manner:


 


1.                                       Monthly
Statements


 


Manager shall prepare and deliver to the
Management Committee of CCR within thirty (30) days after the end of each month
the following financial statements prepared generally in accordance with GAAP:


 


A.                                   A profit and loss
statement showing the results of operations of each Casino Operation for the
immediately preceding month and for the Fiscal Year through such month,
including a comparison with (1) the corresponding month for the
immediately preceding Fiscal Year and for the immediately preceding Fiscal Year
through such corresponding month and (2) the projections contained in the
applicable Budgets.


 


B.                                     A summary balance
sheet for each Casino Operation as of the end of the immediately preceding
month, including a comparison with the end of the corresponding month for the
immediately preceding Fiscal Year.


 


C.                                     A summary cash
flow statement for each Casino Operation for the immediately preceding month
and for the Fiscal Year through such month, including a comparison with the
corresponding month for the immediately preceding Fiscal Year and for the
immediately preceding Fiscal Year through such corresponding month.


 


D.                                    A summary statement
of costs, fees and expenses (including Management Fees) incurred, and
reimbursements paid to Manager, for each Casino Operation during the
immediately preceding month and for the Fiscal Year through such month.


 


Such statements shall be prepared from the
books of account maintained by Manager and shall be in form and substance
reasonably satisfactory to the Oaktree Managers.


 


2.                                       Annual
Statements


 


Not later than fifty (50) days immediately
following the end of each Fiscal Year, Manager shall cause to be prepared and
delivered to the Management Committee of CCR financial statements for such
Fiscal Year in form and substance reasonably satisfactory to the Oaktree
Managers (with respect to each Casino Operation, the “Annual Statement”),
which shall consist of: (i) a balance sheet; (ii) a profit and loss
statement showing the results of operations; (iii) a statement of earnings
and retained earnings; (iv) a statement of change in financial position;
and (v) such other financial statements or reports as are required by the
Gaming Authorities or Gaming Laws or by any parent entity of any member of CCR to
comply with


 


41

















 


periodic reporting requirements under federal or state securities law. Such
financial statements shall be prepared by and shall contain a certificate of independent
certified public accountants of recognized standing selected by Manager and
reasonably satisfactory to the Oaktree Managers, to the effect that, subject to
such qualifications reasonably acceptable to the Oaktree Managers as shall be
contained therein, such financial statements fairly present the financial
position, results of the operations and changes in financial position of such
Casino Operation for the Fiscal Year, or other reporting period then ended, in
conformity with GAAP.


 


3.                                       Quarterly
Statements


 


Not later than twenty-five (25) days
immediately following the end of each quarter of a Fiscal Year, Manager shall
cause to be prepared and delivered to the Management Committee of CCR financial
statements for such quarter in form and substance reasonably satisfactory
to the Oaktree Managers, which shall consist of: (i) a balance sheet; (ii) a
profit and loss statement showing the results of operations; (iii) a
statement of earnings and retained earnings; (iv) a statement of change in
financial position; and (v) such other financial statements or reports as
are required by the Gaming Authorities or Gaming Laws or by any parent entity
of any member of CCR to comply with periodic reporting requirements under federal
or state securities law.


 


H.                                    PAYMENT IN EXCESS FUNDS TO OWNER


 


Upon the written request of an Owner, Manager
shall pay to the applicable Owner all funds in the Account in excess of those
reasonably required to meet all of the operating, capital, and other Reserves
imposed by any lender, and other financial requirements of such Casino
Operation including, without limitation, all minimum working capital
requirements and Reserve requirements imposed by law. Manager, at the request
of an Owner, shall establish such cash management procedures and accounts from
time-to-time at institutions directed by the applicable Owner, for the deposit
of such excess funds on behalf of such Owner. All income derived thereform shall
accrue to the applicable Owner.


 


I.                                         BOOKS, RECORDS AND ACCOUNTS


 


Manager shall keep full, adequate and
accurate books of account and other records relating to or reflecting the
results of operations of each Casino Operation on an accrual basis, in
accordance with GAAP, consistently applied, including costs, fees, and expenses
(including Management Fees) incurred by Manager, and reimbursements paid to
Manager, for the provision of Management Services to an Owner or with respect
to a Casino Operation (collectively, the “Books and Records”). The books
of account and all other records relating to or reflecting the results of operations
of each Casino Operation shall be kept at such Casino Operation and shall be
made readily available to the applicable Owner and its representatives, and the
Management Committee of CCR, the Oaktree Managers and its or their
representatives, and any other supervisory or regulatory authority having
jurisdiction over such Owner or such Casino Operation, including the Gaming
Authorities, at all reasonable times upon reasonable notice, for review, examination,
audit, inspection and transcription. All of such books and records pertaining
to such Casino Operation, including, without limitation, books of account,
guest records and front office records, shall at all times be the property of the
applicable Owner and shall not be removed from such Casino Operation by Manager
without the prior written consent


 


42

















 


of the Oaktree Managers. Upon any termination hereof, all such books
and records shall immediately be turned over to the applicable Owner, so as to
ensure the orderly continuance of the operation of such Casino Operation with
copies (at the expense of the applicable Owner) retained by Manager.


 


J.                                        EMPLOYMENT AND LABOR ISSUES


 


1.                                       Compensation


 


Manager shall establish employee compensation
for nonexecutive employment, on a Casino Operation by Casino Operation basis. The
Management Committee of CCR shall have the final determination with respect to
any labor negotiations and by virtue of its participation in the preparation
and approval of each Budget, shall have general authority over employee
compensation. Executive compensation shall conform with the estimates of
the applicable Budget.


 


2.                                       Employment
Costs


 


All claims, liabilities or obligations
arising during or after the term with respect to the employees of a Casino
Operation relating to salaries, wages, compensation, overtime pay, holiday pay,
vacation pay, raises, bonuses, employee benefits, severance pay, grievances
under union contracts, unfair labor practice charges before any governmental
labor board or authority, worker’s compensation, disability, unemployment
benefit, breach of employment contracts, safety and health matters, and
employment discrimination of any nature whatsoever, and any and all court costs
and legal fees incurred in defending such claim (collectively, “Employment
Costs”) shall be charged to and payable by the applicable Casino Operation
as an Operating Expense.


 


3.                                       Disputes With
and Claims By Employee


 


The defense of employment and labor claims
(collectively, “Employment Claims”) to the extent appropriate, may be
defended at a Casino Operation’s administrative level with the assistance of
the Casino Operation’s human resources manager. Manager, on behalf of the
applicable Owner and itself, may engage employment and labor counsel as
needed. The cost of defending Employment Claims, as well as sums required for
settlement, reinstatement, back pay and the like, as required, shall be charged
as an Operating Expense with respect to a Casino Operation. Settlements that
exceed $100,000 shall be subject to the approval of the Management Committee of
CCR, which approval shall not be unreasonably withheld.


 


K.                                    PAYMENT OF TAXES


 


On behalf of each Owner, Manager shall, as an
expense of the applicable Casino Operation and as reflected in the applicable Budget,
pay or cause to be paid, before they become delinquent, all taxes, assessments,
excises, levies, License and permit fees and other charges (including all
penalties and interest relating thereto, regardless of whether such interest or
penalties are reflected in the applicable Budget) general and special, ordinary
and extraordinary, foreseen and unforeseen, of any kind or nature whatsoever,
which shall or may during the term


 


43

















 


of this Agreement be levied, assessed,
charged and/or imposed by any public or quasi-public authority upon, or accrue,
or become due and payable, out of or on account of, or become a lien on, the Property,
the Casino Operation, FF&E, or other real and personal property serving the
Casino Operation, as applicable, and any related Property.


 


L.                                      PAYMENT OF MORTGAGES


 


Subject, with respect to Rampart and the
Rampart Operation, to the Rampart Sublease and the Casino Prime Lease
Agreement made and entered into as of April 1, 2002 by and between Hotspur
Resorts Nevada, Inc., a Nevada corporation, and Landlord (the “Casino
Lease”), on behalf of each Owner, Manager shall, as an expense of the Casino
Operation operated by such Owner, and as reflected in the applicable Budget,
pay or cause to be paid before they become delinquent, all mortgages, ground
leases, leases, and other liens secured, in whole or in part, by a lien or
leasehold on the Property and other real or personal property serving the Casino
Operation, as applicable, and any related Property.


 


M.                                 COMPLIANCE WITH LAWS


 


Manager shall:


 


(i)                                     Not use any Casino Operation or
any portion thereof, and Manager shall use diligent efforts to see that others
do not use such Casino Operation or any portion thereof, for any use or purpose
in violation of the Gaming Laws or of any other valid and applicable law or
regulation of any lawful authority having jurisdiction over the Casino
Operation;


 


(ii)                                  In all respects use
all reasonable efforts to cause the use and operation of the Casino Operation
to comply with all valid and applicable laws and regulations of all applicable
governmental authorities;


 


(iii)                               Other that as otherwise
required under this Section M, comply with the requirements of all
governmental authorities that may exercise governmental or
quasi-governmental control over any Casino Operation (provided that Manager
shall have no obligation to so comply or to correct any alleged defect unless
the same is specifically called to the attention of Manager by the applicable Owner
or by any such governmental authority); and


 


(iv)                              Comply with all
requirements of the Gaming Authorities and the Gaming Laws as modified from
time-to-time, as if such Gaming Laws were fully set forth herein.


 


N.                                    PHYSICAL PLANT AND PROPERTY
MAINTENANCE


 


Subject, with respect to Rampart and the
Rampart Operation, to the Rampart Sublease and the Casino Lease, the
following provisions shall apply to each Casino Operation’s physical plant, fixtures
and personalty:


 


1.                                       No Changes
Without Owner’s Consent


 


Except as set forth in Section N(2), no
changes shall be made to the Casino Operation’s structure or any improvements
now or hereafter comprising a Casino Operation without the


 


44

















 


consent of the Management Committee of CCR, which consent such Management
Committee shall be entitled to withhold in its sole discretion; provided,
however, that such withholding of consent has not and will not cause such
Casino Operation to fall below a level of quality for a first-class gaming
property as required by any lease or sublease under which such Casino Operation
operates or, if there is no such requirement, consistent with the market in
which such Casino Operation competes.


 


2.                                       Alterations,
Remodeling, Demolition


 


Manager shall, consistent with the applicable
Budgets or other funding approved by Manager and the Oaktree Managers (and,
with respect to Rampart and the Rampart Operation, in accordance with
the provisions of the Rampart Sublease), have the right to alter, remodel
and/or demolish the Casino Operation’s structure and any improvements now or
hereafter comprising such Casino Operation, or to replace or add to any of the
FF&E located within the Casino Operation without any additional prior
consent of the applicable Owner.


 


3.                                       Repairs,
Replacements, Maintenance


 


Manager shall, from time-to-time consistent
with the applicable Budgets or other funding approved by Manager and the
Oaktree Managers (and, with respect to Rampart and the Rampart Operation,
in accordance with the Rampart Sublease), make such expenditures as an
Operating Expense for repairs and maintenance of FF&E, for the
replacements, renewals and additions to minor operating equipment, and for minor
capital improvements (meaning those capital improvements other than structural
repairs and changes and extraordinary repairs to or replacement of FF&E as
necessary or required, in Manager’s reasonable opinion) to keep the Casino
Operation operating as a first-class gaming property as required by any
lease or sublease under which such Casino Operation operates or, if there is no
such lease or sublease, consistent with the market in which such Casino
Operation competes. If any repairs or maintenance shall constitute corrective
work for which the applicable Owner has received or is entitled to the benefit
of the guarantee or warranty of any builder, contractor or any supplier of
labor or material in connection with the construction of the Casino Operation
or with respect to the FF&E installed therein, then Manager may invoke
such guarantees or warranties in either the applicable Owner’s or Manager’s
name and the applicable Owner shall cooperate fully with Manager in the
enforcement thereof. The applicable Owner reserves the right to sell any of the
FF&E located in its Casino Operations from time-to-time, provided that such
Owner substitutes FF&E of like kind, quality and utility.


 


4.                                       Required
Structural Repairs


 


If structural repairs or changes to the Casino
Operation or extraordinary repairs to, or replacement of, any FF&E shall be
required during the term of this Agreement by the provisions of any mortgage
encumbering the Casino Operation, any loan agreement with respect to the Casino
Operation, or any lease or sublease under which the Casino Operation operates, in
order to maintain the Casino Operation in the operating condition of a first-class gaming
property as required by any lease or sublease under which such Casino Operation
operates or, if there is no such requirement, consistent with the market in
which such Casino Operation competes, by reason of any laws or regulations now
or hereafter in force, by order of any governmental


 


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authority or otherwise, or because Manager and the applicable Owner
jointly agree upon the desirability thereof, then, in any such event, such
repairs, changes or replacements shall be made by the applicable Owner, or at
the request of the applicable Owner, by Manager, at the applicable Owner’s sole
expense, and shall be made with as little hindrance to the operation of the
Casino Operations as is reasonably possible. Notwithstanding the foregoing, the
applicable Owner shall have the right to contest the need for any such repairs,
changes or replacements required by any law, regulation, or order of
governmental authority and may postpone compliance therewith, if so
permitted by law.


 


O.                                    INSURANCE


 


Consistent with the Annual Operating Budget
for each Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager shall procure and maintain, or cause to be provided and
maintained, with respect to each Casino Operation, insurance coverage in such
types and amounts as may be required by the Loan Documents, from time to
time.


 


1.                                       Other
Coverages


 


Consistent with the Annual Operating Budget
for each Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager may cause each or any Casino Operation to obtain such
coverages in respect of such other risks as Manager may reasonably
determine to be necessary or appropriate.


 


2.                                       Concessionaire’s
Coverage


 


Upon Manager granting any leases, licenses or
concessions in accordance with the provisions of this Agreement, Manager shall
require such tenants, licensees or concessionaires to carry such insurance as
is normal and customary for the relevant tenant, licensee or concessionaire,
and to furnish certificates evidencing such insurance in such reasonable
amounts as may be specified in the lease, license or concession or
otherwise agreed upon between Manager and the tenant, licensee and
concessionaire.


 


4.                                       Claim
Investigation


 


Manager shall promptly investigate or cause
to be investigated all accidents and claims for damage relating to the
operation and maintenance of the Casino Operation and related facilities, shall
report to the applicable Owner any such incident which is material, and Manager
shall investigate or cause to be investigated all damage to or destruction of
such Casino Operation or related facilities and shall report to the applicable Owner
any such incident which is material, together with the estimated cost of repair
thereof. In addition, Manager shall prepare any and all reports required by any
insurance company as a result of any such incident.


 


5.                                       Premium
Advance


 


If Manager, or any of its Affiliates, shall
pay or advance on behalf of the applicable Owner any insurance premiums or
related insurance costs, the applicable Owner shall repay same to Manager
promptly upon demand of Manager.


 


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6.                                       Access to
Insurance Information


 


Manager shall at all times make available to the
Management Committee of CCR, the Oaktree Managers, the applicable Owner or the
applicable Owner’s insurance agents or insurance brokers, all information
relating to existing coverages, claims histories as applicable, copies of
policies, certificates, binders and the like. Manager further authorizes the Management
Committee of CCR, the Oaktree Managers, the applicable Owner and its insurance
agents or brokers, to obtain such information directly from Manager’s insurance
agents, brokers, and insurance carriers, and hereby grants to the Management
Committee of CCR, the Oaktree Managers, the applicable Owner and its insurance
agents or brokers, full access to all such information.


 


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EXHIBIT B


 


Development, Construction and Pre-Opening Services


 


A.                                   PLANNING
AND CONSTRUCTION SUPERVISION SERVICES


 


With respect to any Eligible Operation, the Development
Services shall include: (a) consulting, pre-opening and technical services
to the applicable Owner in connection with planning, developing, constructing,
furnishing, equipping and staffing such Casino Operation; (b) assisting the
applicable Owner and the various Design Professionals (as defined below) and
contractors in the provision and coordination of their services, including, but
not limited to, the services set forth in below; and (c) all necessary
pre-opening services in preparation for the opening of the applicable Eligible
Operation, all in accordance with the applicable Budgets or other funding
approved by Manager and the Oaktree Managers. In addition, and more
specifically, the following provisions shall govern certain of the duties and
obligations of each Owner and Manager with respect to certain of the Eligible
Operations not constituting a Going Concern:


 


1.                                       Architect


 


Consistent with any Construction Budget or Development Budget for such
Casino Operation or other funding approved by Manager and the Oaktree Managers,
Manager shall review and critique architectural plans and specifications for the
Eligible Operation prepared and developed by the architect, as selected by the
applicable Owner (with respect to each Eligible Operation, the “Architect”);
and advise and consult with the Architect regarding the location and layout of
all hotel facilities and amenities, including, but not limited to, guest rooms,
public spaces, meeting and conference rooms, the casino, security and counting
rooms, and food and beverage facilities.


 


2.                                       Interior
Designer


 


Manager shall assist each Owner in selecting and retaining an interior
designer (the “Interior Designer”), and consistent with any Construction
Budget or Development Budget for such Casino Operation or other funding
approved by Manager and the Oaktree Managers, advise and consult with the
Interior Designer regarding the theme, layouts, design, and utility of the Eligible
Operation from an operational point of view; and review and critique design
proposals from the Interior Designer.


 


3.                                       Project
Manager


 


Manager shall meet with the project manager, as selected by the
applicable Owner (the “Project Manager”), on a regularly scheduled basis
to develop a construction schedule for the Eligible Operation; and assist
the Project Manager in coordinating the work of the Design Professionals (as
defined below).


 


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4.                                       Other
Design Professionals


 


Manager shall assist the applicable Owner in
selecting and retaining design, technical and installation experts and
consultants (collectively with the Architect, the Interior Designer and the
Landscape Designer (as defined below), the “Design Professionals”)
required for the design, selection and installation of equipment for systems
required by the Eligible Operation, including, but not limited to, kitchen,
laundry, telephone, communications, sound, computer, security and surveillance
systems; advise and consult with the Design Professionals with respect to hotel
and casino operations and systems.


 


5.                                       Purchasing
Agent


 


Manager shall assist each applicable Owner in
selecting and retaining a purchasing agent (the “Purchasing Agent”) for
the purchase, delivery and installation of all FF&E required for the Eligible
Operation.


 


6.                                       Landscape
Designer


 


Manager shall assist the applicable Owner in
selecting and retaining a landscape designer (the “Landscape Designer”).


 


7.                                       Budgets


 


Manager shall assist each applicable Owner in
developing a budget for pre-construction activities, such as design,
engineering, permitting, etc. (the “Development Budget”) and a
construction and FF&E budget, including, including, but not limited to,
kitchen equipment, laundry equipment, telephone and communications equipment,
sound equipment, casino and gaming equipment, security, surveillance and
closed-circuit television equipment, and other individual categories of
FF&E; and assist each applicable Owner and the Architect in developing an
overall budget for the design, development and construction of the Operations
(the “Construction Budget”).


 


8.                                       Equipment
Selection


 


Manager shall assist each applicable Owner in
selecting equipment for the Eligible Operation, including, but not limited to,
kitchen equipment, laundry equipment, telephone and communications equipment,
office equipment, accounting and business machines, casino and gaming
equipment, security, surveillance and closed-circuit television equipment and
other equipment and systems required for the operation of the Eligible
Operation.


 


9.                                       Periodic
Inspections


 


Manager shall
conduct inspections and reviews from time-to-time in coordination with the
Project Manager during the construction period, as the applicable Owner may reasonably
request with regard to such matters as the applicable Owner determines may be
useful to the applicable Owner in the applicable Owner’s overall supervision of
the construction of the Eligible Operation. For purposes of this Section 9,
the construction period shall commence as of


 


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the Effective Date and terminate on the Opening Date with respect to
each such Eligible Property.


 


10.                                 Responsibility
for Construction


 


Manager shall be responsible for supervising
construction of the Eligible Operation and all phases or portions thereof, and
the Project Manager shall report to Manager.


 


B.                                     PRE-OPENING
SERVICES


 


The Management Services shall also include
all necessary pre-opening services in preparation for the opening of the Eligible
Operation as follows:


 


1.                                       General
Pre-Opening Services


 


In general, consistent with the Pre-Opening
Budget for such Casino Operation or other funding approved by Manager and the
Oaktree Managers, Manager shall be responsible, on behalf of the applicable Owner,
for coordinating the activities necessary or reasonably required to open the Eligible
Operation for business, including (i) assuring that the applicable Owner
has properly staffed and equipped the Eligible Operation, and (ii) coordinating
and implementing a program for marketing the guest rooms, gaming operations,
facilities, and services of the Eligible Operation.


 


2.                                       Budget


 


Manager shall assist each applicable Owner in
preparing a Pre-Opening Budget for the Eligible Operation and its various
departments.


 


3.                                       Concepts
For Food and Beverage, Lounge and Other Specialized Facilities.


 


Manager shall develop operating concepts in
consultation with the applicable Owner for food, beverage and lounge facilities
and other specialized facilities of the Eligible Operation and assist the
applicable Owner in selecting and establishing menus, pricing and uniforms..


 


4.                                       Staffing
Tables


 


Consistent with the Pre-Opening Budget for
such Casino Operation or other funding approved by Manager and the Oaktree
Managers, Manager shall prepare and cause the Eligible Operation to implement
staffing tables, employment timetables, employee hiring and training guidelines
and other programs relating to staffing the Eligible Operation.


 


5.                                       Staff
Retention


 


Other than as such action may involve a
manager or equityholder of Manager or a direct family member of a manager or
equityholder of Manager (which, in each case, shall require the prior written
consent of the Oaktree Managers before Manager may proceed), and
consistent with the Pre-Opening Budget for such Casino Operation or other
funding approved by Manager


 


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and the Oaktree Managers, Manager shall recruit and hire on behalf of the
applicable Owner at an appropriate time prior to the Operating Date with
respect to such Eligible Operation a general manager, a resident manager, if
applicable, a human resources manager, a food and beverage manager, a casino
manager, a controller, a director of sales, a head housekeeper, and other
required department heads in accordance with hiring criteria approved by the
applicable Owner; and thereafter, with the assistance of such department heads,
Manager will cause to be hired on behalf of the applicable Owner a full staff
of employees for the Eligible Operation.


 


6.                                       Casino
Concepts


 


Manager shall assist the applicable Owner in
developing casino operating concepts, selecting gaming equipment, preparing a
casino marketing strategy and player development programs, and developing a
credit policy and credit collection system.


 


7.                                       Advertising
and Marketing


 


Manager shall assist the applicable Owner in
preparing pre-opening advertising, marketing and public relations budgets which
will form part of the Pre-Opening Budget, hire on behalf of the
applicable Owner advertising and public relations firms, and manage and
coordinate their activities so as to develop a cohesive and coordinated
pre-opening program for advertising, marketing and public relations, all
subject to the applicable Owner’s approval.


 


8.                                       Sales
Personnel and Sales Office


 


Manager shall hire on behalf of the
applicable Owner sales and marketing personnel; establish a sales and marketing
program, which may include, with the applicable Owner’s consent,
participation in or maintenance of one or more remote sales and marketing offices
to attract group, corporate and package tour accounts (collectively, the “Sales
Office”) for the purpose of selling and marketing rooms, meeting rooms,
casino and gaming activities and other facilities of the Eligible Operation
prior to the Opening Date and thereafter. Manager may cause the Sales
Office and its staff to be shared and used in common with other casinos,
hotels, or other related facilities under management by Manager, or any of its
Affiliates, or other compatible gaming, hospitality, or travel industry
organizations in order to promote operational efficiencies.


 


9.                                       Centralized
Bookings


 


Manager shall cause the participation of the Eligible
Operation in a centralized telephone booking system, including the use of “800”
numbers, computerized bookings with computer-assisted confirmations, or include
such services as part of the services provided by a “Flag” or franchise,
if applicable.


 


10.                                 Licenses
and Permits


 


Manager shall assist the applicable Owner in
securing all Licenses necessary to own, open and operate the Eligible Operation,
including any approvals, licenses and permits required by the Gaming
Authorities (collectively, with respect to each Eligible Operation, “Gaming
Licenses”).


 


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11.                                 Market
Studies


 


Consistent with the Pre-Opening Budget for
such Casino Operation, Manager shall cause the update of any market study
previously prepared on behalf of the Eligible Operation, as may be
reasonably required prior to the Opening Date.


 


12.                                 Accounting
Systems


 


Manager shall establish appropriate
accounting systems, internal financial controls, financial reporting systems,
and such other systems and methods of reporting, including those required by
applicable gaming laws and regulations (the “Gaming Laws”) as
promulgated by such applicable governmental authority supervising gaming
activities (the “Gaming Authorities”), and as may be necessary or
appropriate for the Operations and all of its activities.


 


13.                                 Tenants
and Concessionaires


 


Manager shall assist Owner in procuring
tenants and concessionaires, taking into account local custom and usage,
including the leasing, and when applicable, the operating of sundry shops,
beauty shops, boutiques, health clubs, recreational facilities and such shops and
facilities as may be deemed appropriate for the operation of the Eligible
Operation.


 


14.                                 Entertainment


 


Manager shall book entertainment appropriate
for the facilities of the Eligible Operation.


 


C.                                     OWNER’S OBLIGATION TO PROVIDE
FUNDING


 


The following shall apply to the funding
needs of each Casino Operation:


 


1.                                       Construction Finance


 


Each Owner shall, by a date reasonably in
advance of commencement of construction with respect to such Owner’s Casino
Operation (if applicable) and reasonably acceptable to Manager and the
applicable Owner, provide to Manager with evidence of the availability of
sufficient construction finance to complete the construction in accordance with
the related Construction Budget and sufficient working capital or reserves as may be
required by the lenders or mortgagees to commence such construction.


 


2.                                       Initial
Working Capital


 


Each Owner shall, by a date reasonably in
advance of the Opening Date with respect to such Owner’s Casino Operation (if
applicable) and reasonably acceptable to Manager and the applicable Owner, make
available to Manager sufficient initial working capital to commence operations
with respect to such Owner’s Casino Operation (if applicable) and sufficient
working capital or reserves as may be required by the Gaming Authorities
and lenders or mortgagees to commence Casino operations with respect to such
Owner’s Casino Operation (if applicable) and such sufficient additional Casino
working capital as may be adequate to meet the needs of the


 


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table betting limits appropriate to the Casino operations with respect
to such Owner’s Casino Operation (collectively, with respect to each Casino
Operation, the “Reserves”).


 


3.                                       Failure to
Fund


 


If at any time the available construction
funds or any other reserve, shall not be sufficient or available to pay all costs
of construction under the related Construction Budget, or the pre-opening expenses,
fees, bills or other charges incurred in connection with the opening of the Owner’s
Casino Operation under the related Pre-Opening Budget, Manager shall so advise
the applicable Owner, in writing, and shall provide the applicable Owner with a
statement of the amount of funds necessary to cure such insufficiencies. Thereupon,
the applicable Owner shall immediately provide sufficient monies to remedy any
such insufficiency or shortfall. The failure of the applicable Owner to provide
such funds shall excuse Manager from only those Management Services hereunder
directly and materially affected by any such insufficiency or shortfall during
the occurrence thereof.


 


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