Document:

exv10w1

Exhibit 10.1

DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT

between

ABSTON-MCKAY VENTURES, LLC,

a Mississippi Limited Liability Company

as the Enterprise,

and

LAKES TUNICA CASINO MANAGEMENT, LLC,

a Minnesota limited liability company,

as Manager

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 Definitions
	 	 	-         5        -	 
	1.1 Definitions
	 	 	-         5        -	 
	1.2 Other Interpretive Provisions
	 	 	-        14        -	 
	 
	 	 	 	 
	ARTICLE 2 Casino Site Selection; Construction
	 	 	-        14        -	 
	1.1 Casino Site Selection
	 	 	-        14        -	 
	1.2 Development Services
	 	 	-        14        -	 
	1.3 Furnishings and Equipment
	 	 	-        14        -	 
	1.4 Advances for Costs of Construction
	 	 	-        15        -	 
	1.5 Title to Facility; Other Assets
	 	 	-        15        -	 
	 
	 	 	 	 
	ARTICLE 3 Authority and Duty of Manager
	 	 	-        15        -	 
	1.1 Appointment and Operating Standard
	 	 	-        15        -	 
	1.2 Limitations on Power and Authority
	 	 	-        16        -	 
	1.3 Overall Responsibilities
	 	 	-        17        -	 
	1.4 Compliance with Laws
	 	 	-        18        -	 
	1.5 Security
	 	 	-        19        -	 
	1.6 Accounting, Financial Records, and Audits
	 	 	-        19        -	 
	3.7. Cash Monitoring
	 	 	-        20        -	 
	3.8 Bank Accounts, Reserve Funds and Permitted Investments
	 	 	-        20        -	 
	3.9 Intentionally Omitted
	 	 	-        21        -	 
	3.10 Fire and Safety Services
	 	 	-        21        -	 
	3.11 Timely Payment of Costs of Operations
	 	 	-        21        -	 
	3.12 Acquisition of Gaming and Other Equipment
	 	 	-        21        -	 
	3.13 Hours of Operation
	 	 	-        22        -	 
	3.14 Access to Operations
	 	 	-        22        -	 
	3.15 Increased Public Safety Services
	 	 	-        22        -	 
	3.16 Advertising
	 	 	-        22        -	 
	3.17 Certain Meetings
	 	 	-        22        -	 
	3.18 Maintenance
	 	 	-        22        -	 
	3.19 Term
	 	 	-        22        -	 
	3.20 Representatives
	 	 	-        23        -	 
	3.21 Service Contracts; Purchase Orders
	 	 	-        23        -	 
	3.22 Taxes; Mortgages
	 	 	-        24        -	 
	 
	 	 	 	 
	ARTICLE 4 Personnel Matters
	 	 	-        24        -	 
	1.1 Employees
	 	 	-        24        -	 
	1.2 Project Employee Policies
	 	 	-        25        -	 
	1.3 Employee Background Checks
	 	 	-        25        -	 
	 
	 	 	 	 
	ARTICLE 5 Insurance
	 	 	-        26        -	 
	1.1 Duty to Maintain
	 	 	-        26        -	 
	1.2 The Manager to be Additional Insured
	 	 	-        26        -	 
	1.3 Evidence of Insurance
	 	 	-        26        -	 
	1.4 Insurance Proceeds
	 	 	-        27        -	 

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	 	 	Page	 
	ARTICLE 6 Budgets, Operating Plans, Compensation and Reimbursement
	 	 	-        27        -	 
	1.1 Projections and Budgets
	 	 	-        27        -	 
	1.2 Monthly Statements
	 	 	-        29        -	 
	1.3 Distribution of Revenues
	 	 	-        29        -	 
	1.4 Annual Audit; Termination Audit
	 	 	-        30        -	 
	 
	 	 	 	 
	ARTICLE 7 Termination/Material Breach
	 	 	-        32        -	 
	1.1 Termination for Material Breach
	 	 	-        32        -	 
	1.2 Mutual Consent
	 	 	-        34        -	 
	1.3 Involuntary Termination Due to Changes in Law
	 	 	-        34        -	 
	1.4 Other Rights upon Expiration or Termination; Ownership of Assets and Repayment of Obligations
on Termination
	 	 	-        35        -	 
	1.5 Notice of Termination
	 	 	-        36        -	 
	1.6 Cessation of Gaming at the Casino
	 	 	-        36        -	 
	1.7 Cumulative Remedies
	 	 	-        38        -	 
	1.8 PUNITIVE DAMAGES WAIVER
	 	 	-        38        -	 
	 
	 	 	 	 
	ARTICLE 8 Release and Indemnity
	 	 	-        38        -	 
	1.1 Third-Party Claims
	 	 	-        38        -	 
	1.2 Indemnity from the Manager
	 	 	-        39        -	 
	1.3 Indemnity from the Enterprise
	 	 	-        39        -	 
	1.4 Indemnity Against Unauthorized Debt and Liabilities
	 	 	-        39        -	 
	 
	 	 	 	 
	ARTICLE 9 Miscellaneous
	 	 	-        39        -	 
	1.1 Assignment and Subcontractors
	 	 	-        39        -	 
	1.2 Notices
	 	 	-        40        -	 
	1.3 Amendments
	 	 	-        40        -	 
	1.4 Counterparts
	 	 	-        40        -	 
	1.5 Force Majeure
	 	 	-        41        -	 
	1.6 Time is Material
	 	 	-        41        -	 
	1.7 Further Assurances
	 	 	-        41        -	 
	1.8 Severability
	 	 	-        41        -	 
	1.9 Representations and Warranties of the Manager
	 	 	-        41        -	 
	1.10 Representations and Warranties of the Enterprise
	 	 	-        41        -	 
	1.11 Applicable Law
	 	 	-        42        -	 
	1.12 Entire Agreement
	 	 	-        42        -	 
	1.13 No Partnership or Joint Venture; Limited Agency
	 	 	-        42        -	 
	1.14 Approvals
	 	 	-        42        -	 
	1.15 No Third-Party Beneficiaries
	 	 	-        42        -	 
	1.16 Non-disclosure
	 	 	-        42        -	 
	1.17 Non-Recourse
	 	 	-        43        -	 
	1.18 No Recording
	 	 	-        43        -	 
	1.19 Alterations
	 	 	-        44        -	 
	 
	 	 	 	 
	ARTICLE 10 Dispute Resolution
	 	 	-        44        -	 
	1.1 Disputes Between the Enterprise and Project Employees
	 	 	-        44        -	 
	1.2 Disputes Between the Enterprise and the Manager
	 	 	-        44        -	 
	 
	EXHIBIT B DEVELOPMENT SERVICES
	 	 	-        49        -	 

3

 

	 	 	 	 	 
	 	 	Page	 
	EXHIBIT C PROHIBITED ACTIVITIES
	 	 	-        59        -	 
	EXHIBIT D MANAGER RESPONSIBILITIES AND DUTIES
	 	 	-        61        -	 
	EXHIBIT E PRE-OPENING SERVICES
	 	 	-        63        -	 
	EXHIBIT F CORE POSITIONS
	 	 	-        64        -	 
	EXHIBIT G DIRECT AND INDIRECT OWNERSHIP OF MANAGER
	 	 	-        65        -	 

4

 

DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT

     THIS DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into
this 5th day of January, 2010 (“Effective Date”) by and among Abston-McKay Ventures, LLC, a
Mississippi limited liability company (the “Enterprise”), and Lakes Tunica Casino Management, LLC,
a Minnesota limited liability company (“Manager”).

RECITALS

     A. The Enterprise (acting either on its own or as a holding company) intends to use reasonable
efforts to obtain all legal right, title and interest to own and operate the Casino Facilities,
which will conduct gaming activities in accordance with all applicable Legal Requirements.

     B. Manager has represented to the Enterprise that it has the managerial and operational
capacity and skill to assist in the development and construction of the Casino Facilities and to
operate the Casino; and Manager agrees to provide the management expertise necessary to the
conducting of successful gaming operations.

     C. The Enterprise presently desires to retain the services of a management company, with
knowledge and experience in the gaming industry, to manage and operate its gaming operations at the
Casino Facilities.

     D. Manager is willing to provide such services, subject to the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the hereinafter mutual promises and covenants, and for
other good and valuable consideration as set forth herein, the receipt and sufficiency of which are
expressly acknowledged, the Enterprise, the Enterprise and Manager agree as follows:

ARTICLE 1

Definitions

     1.1 Definitions. As used in this Agreement, the terms listed below shall have the
meanings assigned to them:

     “Affiliate” means, with respect to any specified Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with the specified Person. For the purposes of this definition, “control” (including the
terms controlling, controlled by, or under common control with) means the possession, direct or
indirect, or the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, partnership or member interests, by contract or
otherwise.

     “Annual Report” has the meaning ascribed thereto Section 6.4(a).

     “Applicable Rate” means a variable annual rate of interest equal to the prime interest rate of
Chase Manhattan Bank U.S.A., N.A. (or any successor bank) plus two percent (2%). The Applicable
Rate shall change when and as the rate used to determine the Applicable Rate changes

     “Approved Budget” has the meaning ascribed thereto in Section 6.1(b).

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     “Approved Operating Plan” has the meaning ascribed thereto in Section 6.1(b).

     “Casino Facilities” means, collectively, the building housing the Casino, hotel, restaurants,
showrooms, retail space and other ancillary facilities (both gaming and non-gaming) and all the
parking areas, access drives, walkways, and similar improvements appurtenant to and serving such
building and the foregoing, together with all Furnishings and Equipment and personal property
(whether tangible or intangible) and all other components of the physical plant under Enterprise’s
ownership or control (including but not limited to mechanical, electrical, water and sewer systems,
but not including components of public utilities which may be located on the premises) used or to
be used in connection with the foregoing located on part of the land described on attached
Exhibit A, each whether now existing or hereafter constructed or acquired.

     “Control Agreements” shall mean all Loan Documents, any other development agreement with local
governmental authorities, any ground leases, space leases, license agreements, licenses, equipment
leases, service contracts, maintenance agreements, construction contracts, utility contracts,
insurance policies, any covenants, restrictions, easements and similar instruments affecting the
Casino Facilities or any part thereof, and any other material agreements with other third parties
or governmental entities affecting the Casino Facilities or any part thereof.

     “Core Positions” means, the positions listed in Exhibit F attached hereto.

     “Costs of Operations” means the total amount of all expenses and costs of any kind or nature
of operating, maintaining and owning the Casino Facilities in accordance with GAAP, including
without limitation:

	 	(i)	 	the cost of all food and beverages sold by the Casino Facilities and of all
operating supplies related thereto;
	 
	 	(ii)	 	salaries, wages and other benefits of the Casino Facilities’s personnel,
including costs of payroll taxes and employee benefits;
	 
	 	(iii)	 	the cost of all other materials, supplies, goods and services in connection
with the operation of the Casino Facilities including, without limitation, utilities,
trash removal, office supplies, security and all other services performed by third
parties, telephone and data processing equipment and other equipment;
	 
	 	(iv)	 	the cost of repairs to and maintenance of the Casino Facilities that are not
required to be capitalized pursuant to GAAP;
	 
	 	(v)	 	insurance and bonding premiums with respect to the Casino Facilities;
	 
	 	(vi)	 	all assessments, water/sewer charges, and other fees and charges payable by
or assessed against the Enterprise with respect to the operation of the Casino
Facilities;
	 
	 	(vii)	 	legal, consulting, lobbying, accounting and other fees for professionals for
services related to the operation of the Casino Facilities, including but not limited
to the cost of annual audits required under Section 6.4 below;

6

 

	 	(viii)	 	all expenses payable to the Mississippi Gaming Commission for oversight and
regulation, and any and all other regulatory or oversight expenses payable by the
Enterprise;
	 
	 	(ix)	 	all expenses for marketing the Casino Facilities, including all expenses of
advertising, sales, and public relations activities;
	 
	 	(x)	 	all promotional allowances, including all items “comped” to customers of the
Casino Facilities and described in clause (xv) of the definition of “Revenue
Exclusions”;
	 
	 	(xi)	 	all excise, sales, gross receipts, admission, entertainment, tourist or use
taxes, and device fees, real estate taxes, ad valorem taxes, personal property taxes,
utility taxes and other taxes (as those terms are defined by GAAP), assessments for
public improvements, and municipal, county and state license and permit fees; and,
	 
	 	(xii)	 	all rents payable pursuant to any ground lease for the subject property.

Cost of Operations shall not include federal, state, or local income tax payable by the Enterprise
or its members and any costs incurred by Manager or its Affiliates that are not expressly
reimbursable by the Enterprise pursuant to the terms of this Agreement.

     “County” means Tunica County, Mississippi.

     “Designated Court” means, collectively, (i) the United States District Court for the Northern
District of Mississippi, (ii) for any dispute with respect to which such court lacks jurisdiction,
any circuit or chancery court of competent jurisdiction located within a county in the Northern
District of Mississippi, and (iii) in either case, all courts to which an appeal therefrom may be
available.

     “Development Services” has the meaning ascribed thereto in Section 3.1(a).

     “EBITDA”
means earnings before interest, taxes, depreciation and amortization.

     “Effective Date” means the date referenced in the pre-amble of this Agreement.

     “Employment Laws” means, collectively, any federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, permits, judgments, orders and decrees affecting labor union
activities, civil rights or employment in the United States, including the Civil Rights Act of
1870, 42 U.S.C. §1981, the Civil Rights Acts of 1871, 42 U.S.C. §1983 the Fair Labor Standards Act,
29 U.S.C. §201, et seq., the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq., as amended, the
Age Discrimination in Employment Act of 1967, 29 U.S.C. §621, et seq., the Rehabilitation Act, 29
U.S.C. §701, et seq., the Americans With Disabilities Act of 1990, 29 U.S.C. §706, 42 U.S.C.
§12101, et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 301, et seq., the
Equal Pay Act, 29 U.S.C. §201, et seq., the National Labor Relations Act, 29 U.S.C. §151, et seq.,
and any regulations promulgated pursuant to such statutes, as amended from time to time, and
together with any similar laws now or hereafter enacted, including all rules, regulations and
policies imposed by the Mississippi Commission now or in the future concerning employment, such as
qualifications and any required certifications, credentialing or licensing of officers, directors,
board members and employees.

     “Facility Loan” means the financing by the Enterprise, as borrower, for any costs of the
development and construction of the Casino Facilities.

7

 

     “Fiscal Year” means the accounting year used for the operation of the Casino Facilities, which
shall be consistent with the accounting year of the Enterprise.

     “Furnishings and Equipment” means all fixtures, furniture, and equipment required for the
operation of the Casino Facilities in accordance with the standards set forth in this Agreement,
including, without limitation:

     (i) cashier, money sorting and money counting equipment, surveillance and communication
equipment, and security equipment (including software);

     (ii) slot machines, video games of chance, table games, keno equipment and other gaming
equipment (including software);

     (iii) office furnishings and equipment;

     (iv) furniture, fixtures and equipment necessary for the operation of any portion of
the Casino Facilities for accessory purposes, including equipment for hotel, showrooms,
kitchens, laundries, dry cleaning, cocktail lounges, restaurants, public rooms, commercial
and parking spaces, and recreational facilities;

     (v) all other operating supplies, signage, trade fixtures, furnishings and equipment
now or hereafter located and installed in or about the Casino Facilities which are used in
the operation of the Casino Facilities in accordance with the Operating Standard.

     “GAAP” means generally accepted accounting principles, as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, consistently applied.

     “Gaming Laws” means, collectively, the Mississippi Gaming Control Act and any other gaming
regulations applicable to the Casino.

     “Gaming License” means (i) with respect to Manager, collectively, all necessary governmental
permits, approvals, consents and licenses/certifications which Manager may be required to obtain
and maintain under any Gaming Laws, as amended, from time to time, or under this Agreement in
connection with the operation of the Casino, and (ii) with respect to the Enterprise, collectively,
all other necessary governmental permits, approvals, consents and licenses/certifications which the
Enterprise may be required to obtain and maintain under any Gaming Laws, as amended, from time to
time (subject to the terms of this Agreement regarding Manager’s responsibilities), in connection
with the operation of the Casino.

     “Governmental Authority(ies)” means the United States, the State of Mississippi, the County
and any governmental court, agency, department, commission, board, bureau or instrumentality of the
foregoing and any quasi-governmental authority (including sewer district, storm water management
district or tollway authority), but only to the extent it has legal jurisdiction over gaming at the
Casino, the operation of the Casino, or the obligations of the Enterprise or the Manager under this
Agreement or any other Control Agreement.

8

 

     “Legal Requirements” means any and all present and future judicial, administrative, and
federal, state or local rulings or decisions, and any and all present and future federal, state or
local ordinances, rules, regulations, permits, licenses and certificates, in any way applicable to
the Enterprise, the Manager, or the Casino Facilities, including the Gaming Laws and Employment
Laws.

     “Lender” means any third party who makes the Facility Loan or any other loan to the
Enterprise.

     “Loan Documents” shall mean any and all notes or other instruments of indebtedness with regard
to the Casino Facilities or the Enterprise (including the Facility Loan, if any), and any
mortgages, deeds of trust, loan agreements, credit agreements, security instruments, environmental
indemnities or other loan documents executed in connection therewith.

     “Manager IP” has the meaning ascribed thereto in Section 2.5(b).

     “Management Fees” has the meaning ascribed thereto in Section 6.3(c).

     “Material Breach” has the meaning ascribed thereto in Section 7.1(c) and Section 7.1(d).

     “Opening Date” means the first day that all or any part of the Casino Facilities is open to
the public. Manager and the Enterprise agree that the Project Schedule (as defined in Exhibit B)
shall include the anticipated Opening Date and that, upon the written request of the Enterprise,
the Enterprise and the Manager shall execute and deliver written confirmation of the actual Opening
Date.

     “Operating Standard” has the meaning ascribed thereto in Section 3.1(a).

     “Person” means any person or entity, whether an individual, trustee, corporation, general
partnership, limited partnership, limited liability company, limited liability partnership, joint
stock company, trust, estate, unincorporated organization, business association, instrumentality,
firm, joint venture, Governmental Authority, or otherwise.

     “Player Lists” means and includes any documents or records (and any copies thereof),
electronic or otherwise, including any player lists developed as part of a player’s club, similar
promotional or incentive program, tracking system or otherwise and any documents or records
maintained solely for security purposes, created by or upon the request of Manager, any Affiliate
of Manager, the Enterprise, or any Affiliate of the Enterprise containing any information
whatsoever concerning the players, customers, visitors or other individuals participating in the
gaming operations or other operations of the Casino, together with the information contained
therein or otherwise known or developed by Manager or the Enterprise (or any of their respective
Affiliates and any of their respective Employees) in connection with the Casino, which documents
and records and information, shall be and remain, at all times, the sole property of the
Enterprise.

     “Pre-Opening Services” has the meaning ascribed thereto in Exhibit E.

     “Pre-Opening Period” has the meaning ascribed thereto in Exhibit E.

     “Project Budget” has the meaning ascribed thereto in Exhibit B.

9

 

     “Project Employee Policies” has the meaning ascribed thereto in Section 4.2.

     “Proposed Budget” has the meaning ascribed thereto in Section 6.1(b).

     “Proposed Operating Plan” has the meaning ascribed thereto in Section 6.1(b).

     “Revenue Exclusions” means, collectively, any and all (i) gratuities to employees of the
Casino Facilities paid directly by the player or included as a service charge; (ii) amounts paid to
or revenues generated by third parties in connection with catering inside or outside the Casino
Facilities (including rental of equipment or other personal property); (iii) sales taxes, excise
taxes, gross receipts taxes, admission taxes, entertainment taxes, tourist taxes, use taxes or
similar impositions collected directly from players, customers, tenants, licensees or
concessionaires or included as part of the sales price of any goods or services and remitted to the
appropriate taxing authorities in the amount collected; (iv) accounts receivable written off as
uncollectible, except to the extent amounts are subsequently collected or are recovered by the sale
of such accounts or otherwise; (v) proceeds of insurance (other than (A) business interruption
insurance proceeds received by the Enterprise after deducting therefrom all expenses incurred in
the adjustment or collection thereof and (B) any insurance proceeds received by the Enterprise to
reimburse it for any Costs of Operations actually incurred); (vi) proceeds of awards received in
condemnation (other than compensation received by the Enterprise for loss of business to the extent
attributable to the period in question after deducting therefrom all expenses incurred in obtaining
such compensation); (vii) proceeds of the sale or disposition of the Casino Facilities or any
portion thereof or any capital assets or of the refinancing of the Casino Facilities or any portion
thereof; (viiii) amounts reimbursed by the Enterprise to Manager or otherwise advanced and
deposited into the General Operating Account or other bank accounts used for the operation of the
Casino Facilities; (ix) interest earned on any amounts deposited into any such bank accounts; any
security deposits or similar deposits (except as applied or forfeited); (x) credits or refunds to
players, customers, tenants, licensees or concessionaires; (xi) any discounts to players for goods
or services provided; (xii) any gain or loss on the extinguishment of debt or any gain or loss on
the sale of an asset not in the ordinary course of business or other extraordinary items; (xiii)
all revenues and expenses that would be classified as non-operating for purposes of GAAP; (xiv)
revenues of tenants, licensees and concessionaires from their respective business operations at the
Casino Facilities (other than any portion thereof received by the Enterprise in the form of rents
and fees pursuant to their respective leases, licenses and concession agreements); and (xv)
complimentary services, items, goods, promotions, credits or discounts provided to any player, any
permitted or awarded “free play” and credits, coupons and vouchers issued for redemption by a
player for use at the Casino.

     “State” means the State of Mississippi.

     “Surviving Obligations” means, collectively, (i) the obligation of Manager to pay to the
Enterprise any amounts under this Agreement which accrued prior to the date of the expiration or
earlier termination of this Agreement, (ii) the obligation of the Enterprise to pay to Manager any
amounts under this Agreement (including any Management Fees) which accrued prior to the date of the
expiration or earlier termination of this Agreement, and (iii) any other obligations set forth
herein that expressly survive the expiration or earlier termination of this Agreement.

     “Terminating Party” has the meaning ascribed thereto Section 7.1(a).

     “Termination Report” has the meaning ascribed thereto Section 6.4(b).

10

 

     “Total Revenues” means all revenues and income (excluding the Revenue Exclusions and any
non-cash items) received by the Enterprise from the operation of the Casino Facilities in
accordance with GAAP.

     1.2 Other Interpretive Provisions.

          (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined.

          (b) The words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”

          (c) Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified,
subject to applicable Legal Requirements, if any, (ii) any reference herein to any Person shall be
construed to include such Person’s successors, personal representatives, heirs and permitted
assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used
in this Agreement (including in the Exhibits hereto), shall be construed to refer this Agreement in
its entirety and not to any particular provision thereof, (iv) all references in this Agreement to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement in which such references appear, and (v) any
reference to any law shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or supplemented from time
to time.

          (d) All recitals above and all Exhibits referenced herein are incorporated herein by this
reference.

          (e) No provisions of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such provision.

ARTICLE 2

Casino Site Selection; Construction

     2.1 Casino Site Selection. The Casino Facilities shall be constructed on the land
described in Exhibit A.

     2.2 Development Services. Manager and the Enterprise agree that Manager shall provide
certain development services as set forth in the terms and conditions of Exhibit B attached
hereto.

     2.3 Furnishings and Equipment. Manager shall consult with and advise the Enterprise
with respect to the procurement and purchase of Furnishings and Equipment required to operate the
Casino Facilities in conformity with the Operating Standard and the terms and conditions of this
Agreement, subject to compliance with the Project Budget (as defined in the attached Exhibit
B).

     2.4 Advances for Costs of Construction. Nothing herein contained shall obligate
Manager to arrange for a Lender to advance any costs of the construction of the Casino Facilities,
or make advances

11

 

directly to the Enterprise, for payment of any item not included in or in an amount in excess
of the Project Budget.

     2.5 Title to Facility; Other Assets.

          (a) The Furnishings and Equipment, and all related improvements and assets shall be the sole
and exclusive property of the Enterprise.

          (b) During the term of this Agreement, the Casino Facilities shall at all times be known as,
operated, and promoted under a name selected by the Enterprise. The Enterprise shall control the
use of the Casino Facilities name and any use of the Casino Facilities name shall inure to the
benefit of the Enterprise. In addition, the Enterprise shall control and have all right, title,
and interest in the Casino Facilities name and in any other names, concepts or other forms of
intellectual property (including but not limited to game and systems licenses and software, Player
Lists and related information, internal casino controls, developed game concepts, systems or other
gaming or administrative improvement rights) to be used, or actually used, or associated with the
Casino Facilities, or any part thereof and any use shall inure to the benefit of the Enterprise.
The Enterprise shall have the unlimited right to exploit these names, concepts and other forms of
intellectual property, now or hereafter, solely in connection with the Casino Facilities. Manager
hereby releases any rights, including trademark and copyright, in and to all of the names, concepts
and other forms of intellectual property to be (or which may be developed to be) used, actually
used, or associated with the Casino Facilities. Nothstanding anything herein to the contrary,
Manager shall retain all right, title and interst in any intellectual property used in connection
with the Casino Facilities and developed by Manager (a) prior to the Effective Date, or (b) for use
in its ordinary and customary business operations and not specifically for use in connection with
the Casino Facilities (the “Manager IP”). Manager hereby grants to Enterprise a perpetual,
nonexclusive, royalty-free license to use the Manager IP (including any employee manuals, employee
training systems and materials) in connection with the Casino Facilities.

          (c) Manager shall do and execute all and such further lawful and reasonable acts, conveyances
and assurances for the better and more effective carrying out of the intents and purposes of this
Section 2.5, as the Enterprise shall reasonably require from time to time

ARTICLE 3 Authority and Duty of Manager

     3.1 Appointment and Operating Standard.

          (a) Manager shall be deemed to be an independent contractor to the Enterprise for all purposes
under this agreement including but not limited to providing the services described in Section 2.2
hereof and the attached Exhibit B referenced therein (the “Development Services”) and
Manager shall not be the agent of the Enterprise and shall not have authority to act on behalf of
the Enterprise except and only to the extent specifically so provided for in this Agreement.

          (b) Subject to Section 3.1(a) above, the Enterprise hereby appoints the Manager as agent for
and on account of the Enterprise during the term of this Agreement for purposes of providing the
services and fulfilling the obligations required of Manager under this Agreement, subject to the
terms and conditions hereof. Manager accepts such appointment as the manager of the Casino
Facilities for the term of this Agreement on and subject to the terms and conditions set forth
herein and agrees to manage

12

 

the Casino Facilities, providing such services as are set forth herein and such additional services
as may be customarily provided by operators of other gaming facilities of similar size and scope.

          (c) In connection with such appointment, the Manager is hereby granted the necessary power and
authority to act in order to fulfill all of its responsibilities under this Agreement, subject to
the terms of this Agreement and subject to obtaining the Enterprise’s approval as and when required
under the terms and conditions of this Agreement. Without limiting the generality of the
foregoing, subject in each case to obtaining the Enterprise’s approval, the Manager shall have, and
the Enterprise does hereby grant to the Manager, the power and authority, as agent for the
Enterprise, to exercise the rights of the Enterprise under and to execute, amend or otherwise
modify any contracts associated with the operation of the Casino Facilities, including, without
limitation, purchase orders, equipment and retail leases, and contracts for utilities, maintenance
and repair services, and other services relating to the operation of the Casino Facilities.

          (d) Manager agrees to provide the Development Services and to manage the Casino Facilities in
accordance with the “Operating Standard”, which is defined as follows: (i)(A) in a commercially
reasonable, prudent, diligent and professional and workmanlike manner and (B) at least at a level
of service, operation and quality generally associated with Casino Facilitiess similar in size and
scope and geographical location to the Casino Facilities, (ii) in accordance with the terms and
conditions of this Agreement and in conformity in all material respects with the then current
Approved Budget and Approved Operating Plan, (iii) in accordance with the terms and provisions of
the Control Agreements, including the business plan and other plans and policies concerning Casino
Facilities operations as required thereunder subject to Section 6.1(e) hereof, (iv) in accordance
with the requirements of any carrier having insurance on the Casino Facilities or any part thereof,
(v) in compliance with all Legal Requirements, including all reporting, security, systems and other
requirements imposed by the Mississippi Gaming Commission, or any other governmental agency with
jurisdiction over the Casino Facilities, and (vi) in a manner reasonably expected to protect and
preserve the assets that comprise the Casino Facilities. In its capacity, Manager shall deal at
arm’s length with all third parties and its Affiliates and the Affiliates of the Enterprise.
Manager may not enter into agreements with Affiliates of Manager without the prior written consent
of the Enterprise (and, in such event, Manager shall have advised the Enterprise of the contracting
party’s status as an Affiliate of Manager).

          (e) The duties and authorities of the Manager shall be subject to the Control Agreements.

     3.2 Limitations on Power and Authority.

          (a) The exercise by the Manager of its power and authority granted pursuant to Section 3.1(b)
as the Enterprise’s agent shall be limited as provided in this Section 3.2 and in the budget
provisions of Article 6.

          (b) Notwithstanding its appointment as the Enterprise’s agent pursuant to Section 3.1(b):

(i) The Manager shall have no power or authority to act for or represent the
Enterprise except as specified in this Agreement.

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(ii) The Manager shall have no power or authority to exercise the rights of the Enterprise under or
to execute, amend or otherwise modify this Agreement on behalf of the Enterprise, and the
Enterprise shall retain the sole and exclusive such power and authority with respect to this
Agreement.

(iii) Except as stated herein, the Manager shall have no power or authority, without the prior
written approval of the Enterprise in each instance unless the specific transaction is described in
the Approved Budget approved in writing by the Enterprise, to (A) incur costs which are in excess
of the expenditures to be agreed upon in the Approved Budget, (B) sell, encumber or otherwise
dispose of any Furnishings and Equipment or other personal property located in the Casino
Facilities, except for inventory sold in the regular course of business and other items which must
be replaced due to age, obsolescence, or wear and tear, subject to the Approved Budget, or (C)
subject to the Approved Budget, purchase any Furnishings and Equipment or other personal property
or services from the Manager or any Affiliate of the Manager, if such purchase is to be included as
a Cost of Operations, unless such arrangement is specifically approved in writing by the
Enterprise.

          (c) Except as specifically authorized in this Article 3, the Manager shall not hold itself out
to any third party as the agent or representative of the Enterprise.

          (d) Notwithstanding anything to the contrary herein, the Manager shall have no power or
authority to do any of the prohibited activities as set forth on Exhibit C, attached hereto
and incorporated herein by reference

     3.3 Overall Responsibilities.

          (a) The Manager’s responsibilities shall include, among other things, maintenance and
improvement of the Casino Facilities and management of the Casino Facilities, provided that all
such responsibilities shall be carried out in accordance with the Operating Standard. The Manager
shall conduct and direct all business and affairs in connection with the day-to-day operation,
management and maintenance of the Casino Facilities, including the establishment of operating days
and hours, it being understood that the Enterprise and the Manager intend that the Casino
Facilities will be open 24 hours daily, seven days a week, in accordance with the Operating
Standard.

          (b) Without limiting the generality of the foregoing, the Manager’s responsibilities and
duties under this Agreement shall include the following:

(i) The Manager shall use reasonable measures for the orderly physical
administration, management, and operation of the Casino Facilities;

(ii) The Manager shall comply with all applicable provisions of the Internal Revenue Code,
including the prompt filing of any cash transaction reports and W-2G reports that may be required
by the Internal Revenue Service of the United States;

(iii) The Manager shall perform those additional responsibilities and duties set forth on
Exhibit D, attached hereto and incorporated herein by reference; and

(iv) The Manager shall perform those additional Pre-Opening Services set forth on Exhibit
E, attached hereto and incorporated herein by reference.

     3.4 Compliance with Laws.

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          (a) The Manager shall be responsible for complying with all applicable Legal Requirements,
including the Gaming Laws, in connection with the Casino Facilities. The Enterprise agrees to
cooperate with the Manager and aid the Manager in ensuring such compliance. In managing and
operating the Casino Facilities, the Manager shall comply with all Legal Requirements and all other
agreements affecting the same, including the Gaming Laws. Subject to the Approved Budget or
subject to the approval of the Enterprise as to an unbudgeted expenditure, Manager shall promptly
remedy any violation of any such laws, rules, regulations, ordinances, compacts or other agreements
which comes to its attention and shall give written notice to the Enterprise in the event that
Manager or any Affiliate of Manager receives any notice issued by the applicable governmental
authorities pursuant to the Gaming Laws which threatens suspension or revocation of the
Enterprise’s license or may be reasonably interpreted to prevent Manager from fulfilling its duties
under this Agreement. Manager shall also promptly give written notice to the Enterprise in the
event that Manager or any Affiliate of Manager receives any notice (written or oral) from any
governmental authority relating to any of the other gaming facilities Manager manages with regard
to compliance (or lack thereof) with any laws, regulations, orders, compacts, permits, licenses,
rules or contracts or agreements regulating, authorizing or otherwise applicable to gaming
operations (including the ability to conduct such operations).

          (b) The Enterprise agrees to cooperate with the Manager and the Manager agrees to take all
appropriate steps and execute all appropriate applications and documents to obtain all licenses,
approvals and permits required in connection with the Casino Facilities, including all necessary
approvals of Governmental Authorities of this Agreement and all liquor licenses for the
contemplated beverage operations at the Casino Facilities, all in accordance with the Approved
Operating Plan.

          (c) The Manager shall not commit any act of default under the terms and conditions contained
in any Control Agreement, provided, in the case of a monetary default, that funds are available to
Manager in the Approved Budget, shall not act or omit to act in the performance of its duties and
obligations under this Agreement in a manner giving rise to any liability under any indemnification
provisions set forth therein and shall promptly notify the Enterprise of any such default which
comes to the attention and knowledge of the Enterprise.

     3.5 Security. The Manager shall provide for appropriate security for the operation
of the Casino Facilities in accordance with the Approved Budget and Approved Operating Plan. Upon
agreement of the Enterprise and the Manager, any security officer may be bonded and insured in an
amount commensurate with his or her enforcement duties and obligations. The cost of any charge for
security and increased public safety services will constitute a Cost of Operations.

     3.6 Accounting, Financial Records, and Audits.

          (a) The Manager shall maintain full and accurate records and books of account for operations
of gaming activities and related ancillary operations managed by the Manager. Such records shall
be maintained at the Manager’s office located within the Casino Facilities and shall be made
available for immediate inspection and verification at all times. In addition, Manager shall not,
at any time, prevent or hinder the Enterprise’s access to all gaming machines and related systems
and system-produced gaming machine financial reports for any applicable period (Manager shall, in
addition, provide such reports promptly upon request of the Enterprise). The books and records and
all other records relating to or reflecting the operation of the Casino Facilities shall at all
times be the property of the Enterprise. Upon any termination of this Agreement, all of such books
and records forthwith shall be turned over to the Enterprise so as to insure the orderly
continuance of the operation of the Casino

15

 

Facilities. The Enterprise shall be responsible for filing with the IRS all required year-end
income tax returns, and Manager shall cooperate with and provide information requested by the
Enterprise’s accountants in regard to the preparation by such accountants and filing by the
Enterprise of such tax returns and any other income or other tax returns required by any
governmental authority.

          (b) During the Pre-Opening Period, the Manager shall establish (subject to the Enterprise’s
approval) and maintain satisfactory accounting systems and procedures that shall, at a minimum:

(i) include an adequate system of internal accounting controls;

(ii) permit the preparation of financial statements in accordance with GAAP;

(iii) be susceptible to audit;

(iv) permit the calculation of the Management Fees; and

(v) provide for the allocation of operating expenses or overhead expenses among the
Enterprise, the Manager and any other user of shared facilities or services.

The system of internal accounting controls will require the maintenance of records that, in
reasonable detail: (w) accurately and fairly reflect the transactions and dispositions of the
assets of the Casino Facilities; (x) provide reasonable assurance that gaming transactions are
recorded as necessary to permit preparation of Casino Facilities financial statements in accordance
with GAAP, and receipts and expenditures of the Casino Facilities are being made only in accordance
with authorizations of Casino Facilities management; (y) provide reasonable assurance regarding
prevention or untimely detection of unauthorized acquisition, use or disposition of the Casino
Facilities’s assets that could have a material effect on the Casino Facilities’s financial
statements; and (z) provide reasonable assurance of continued compliance with the terms and
conditions of all Control Agreements. Supporting records and the agreed upon accounting system
shall be sufficiently detailed to permit the calculation and payment of the Management Fees and to
permit the performance of any fee or contribution computations required under applicable laws or
regulations. Manager shall promptly caused to be corrected any weaknesses in internal controls or
errors in recordkeeping upon discovery.

          (c) Total Revenues and other income and revenue of every kind resulting from the operation of
the Casino Facilities will be calculated by the Manager for purposes of distribution daily and
distribution monthly, as the case may be, in accordance with Section 6.3 and copies of such
calculations shall be promptly supplied to the Enterprise as required by Section 6.2.

          (d) All records shall be maintained so as to permit the preparation of financial statements in
accordance with GAAP. The Manager shall furnish to the Enterprise monthly financial reports in
accordance with Section 6.2. Such reports shall provide reasonable detail as requested by the
Enterprise with respect to revenues and expenses of each profit center of the Casino Facilities.
The Manager shall make, or cause to be made, any reports or presentations to the Enterprise as are
requested, including any reports as may be required by the Lender or any Governmental Authorities.
In connection therewith, Manager shall provide, or cause to be provided, to the Enterprise, upon
request, copies of (i) bank statements, bank deposit slips and bank reconciliations, (ii) detailed
cash receipts and disbursement records, (iii) detailed trial balance (if available), (iv) paid
invoices, (v) summaries of adjusting journal

16

 

entries, (vi) supporting documentation for payroll, payroll taxes and employee benefits, and (vii)
all other financial reports and/or information reasonably requested by the Enterprise.

     3.7. Cash Monitoring. The Manager will promulgate (subject to the Enterprise’s
approval), and all parties and their respective employees, agents, and representatives will obey,
operational policies with respect to the handling of cash, security systems, and access to cash
cage, counting rooms, and other places where cash is kept and handled. Manager shall not, at any
time, prevent or hinder the Enterprise in monitoring and investigating systems for cash management
implemented by the Manager and to verify daily revenues and all other revenues and income of any
kind and nature of the Casino Facilities.

     3.8 Bank Accounts, Reserve Funds and Permitted Investments.

          (a) Subject to the terms of the Control Agreements, the Enterprise shall create an account or
accounts at a commercial bank that is organized under the laws of the United States of America or
any state thereof, and is a member of the Federal Deposit Insurance Corporation. Manager shall
deposit, or cause to be deposited, daily all revenues into such accounts The Manager, with the
approval of the Enterprise, shall also establish other segregated bank accounts for use in
connection with the operation of the Casino Facilities (collectively, the “Project Accounts”), each
of which must indicate the custodial nature of the accounts. The Enterprise shall have the right
to control such accounts and to authorize deposits and withdrawals of any size, with regard
thereto. The signatures of authorized representatives of the Manager shall be the only signatures
required to make withdrawals (by check or otherwise) from such accounts for single withdrawals of
less than $100,000.00, provided that the monies withdrawn by the Manager are to be used only in
accordance with the Approved Budget and only for the purposes set forth herein. If the amount of
any single withdrawal exceeds $100,000 (excluding amounts to be applied to payouts and prizes,
transfers to any designated payroll accounts, taxes, cash for day-to-day operational purposes, or
Management Fees), then the signature of the Enterprise’s designated representative will also be
required.

          (b) Unless instructed otherwise by the Enterprise, Manager agrees that it shall make, or cause
to be made, timely transfers from the account or accounts established pursuant to Section 3.8(a) of
all funds needed to pay Costs of Operations and disbursements required pursuant to Section 6.3.

          (c) Surplus funds may be invested by the Enterprise in a money market mutual fund registered
under the Investment Company Act of 1940 that invests exclusively in (A) marketable direct
obligations issued or unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, or (B) commercial
paper having, at the time of acquisition, a rating of A-1 or P-1 or better from either Standard &
Poor’s Corporation or Moody’s Investors Service, Inc., respectively.

     3.9 Intentionally Omitted.

     3.10 Fire and Safety Services. The Manager shall be responsible for obtaining
adequate coverage for fire and safety services and may, in its discretion, have such services
provided on a contractual basis by the local fire and police departments, provided the costs of
such services are in accordance with the Approved Budget and Approved Operating Plan.

     3.11 Timely Payment of Costs of Operations. The Manager shall be responsible for
paying, or causing to be paid, Costs of Operations on behalf of the Enterprise from the General
Operating Account or the Project Accounts, pursuant to procedures approved by Manager, so as to
avoid any late-payment

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penalties (except those incurred as a result of good faith payment disputes) to the extent
funds of the Casino Facilities are available in accordance with the Approved Budget; provided,
however, that payment of all such Costs of Operations shall be solely the legal responsibility of
the Enterprise, subject to the terms and conditions of this Agreement.

     3.12 Acquisition of Gaming and Other Equipment. Subject to the provisions of Section
2.3 and 3.21 hereof, all acquisitions of Furnishings and Equipment for the Casino Facilities after
the public opening of the Casino Facilities shall be purchased by the Manager as agent for the
Enterprise in accordance with the Approved Budget and Approved Operating Plan, for on behalf of the
Casino Facilities on a cash on delivery basis, unless otherwise directed by the Enterprise.

     3.13 Hours of Operation. The Manager shall be responsible for the establishment of
operating days and hours in accordance with the Approved Operating Plan. It is intended that the
Casino shall be operated seven days per week and twenty-four hours per day, subject to any
restrictions in the Legal Requirements.

     3.14 Access to Operations. Manager shall not take any action to block or hinder
immediate access by the Enterprise’s designated representative to (i) the gaming operation,
including gaming machine and table software, for inspection and generation of reports on payouts
and operations, (ii) reports of all gaming machine and gaming table software’s compliance with the
Gaming Laws, and (iii) all books and records relating to the gaming operation.

     3.15 Increased Public Safety Services. Increased actual costs of law enforcement and
police protection services required as a result of gaming activities in the Casino shall be paid as
Costs of Operations in accordance with the Approved Budget.

     3.16 Advertising. Subject to obtaining the Enterprise’s approval, the Manager shall
contract for and place advertising in accordance with the Approved Budget and Approved Operating
Plan. Advertising costs will be included in the operating budgets prepared in accordance with
Article 6. Manager shall prepare advertising plans and promotional material, and place advertising
as appropriate in compliance with applicable laws, as contemplated in the Approved Operating Plan
and subject to the Approved Budget.

     3.17 Certain Meetings. To facilitate oversight of the activities conducted pursuant
to this Agreement and to maintain communication generally between the individuals who will be
involved in supervising those activities, the Enterprise or its designated representative and the
Manager’s principal individuals will meet at least quarterly to review operations of the Casino
Facilities and any current issues pertaining thereto.

     3.18 Maintenance. The Manager will cause the Casino Facilities to be repaired and
maintained and operated in a clean, good and orderly condition, including interior and exterior
cleaning, painting and decorating, plumbing, carpentry, grounds and landscaping maintenance, snow
and ice removal and such other maintenance and repair work as may be desirable. Repairs and
maintenance will be paid in accordance with the Approved Budget as Costs of Operations.
Notwithstanding anything to the contrary contained in this Section, Manager shall not perform the
foregoing services with respect to any repairs or improvements to the Casino Facilities, unless (a)
the expenditure thereunder is provided for in the Approved Budget, or (b) such repair or
improvement is otherwise agreed to in writing by the Enterprise. In addition, notwithstanding the
Approved Budget, the Enterprise may, from time to time, make such alterations, additions or
improvements (including structural changes) to the Casino Facilities

18

 

and cause Furnishings and
Equipment to be changed, upgraded, replaced or added, as the Enterprise deems to be desirable and
all as Costs of the Operations, and Manager shall cooperate with the Enterprise in such regard.

     3.19 Term. This Agreement shall become effective on the Effective Date and will
terminate five (5) years after the Opening Date, unless terminated earlier in accordance with the
terms of this Agreement. At the time of the expiration of the initial five (5) year term, the
Manager shall have the right to renew for an additional three (3) year term upon the same terms and
conditions as set forth herein if, during each of the final two fiscal years of the initial term
the Enterprise achieves total EBITDA of twenty-two million dollars ($22,000,000).

     3.20 Representatives. To the extent any authorization, consent or other approval of
the Enterprise is required under this Agreement and the Enterprise shall have provided to the
Manager a resolution naming any individual or individuals authorized to represent the Enterprise
for purposes of any such authorization, consent or other approval, the Manager, absent actual
knowledge that such individual or individuals are not so authorized, shall be entitled to rely on
all decisions, authorizations, consents, and approvals provided by such individual or individuals
so named until such time as the Enterprise shall deliver to the Manager an additional resolution
revoking or otherwise modifying such authority. To the extent any authorization, consent or other
approval of Manager is required under this Agreement and Manager shall have provided to the
Enterprise a resolution naming any individual or individuals authorized to represent Manager for
purposes of any such authorization, consent or other approval, the Enterprise, absent actual
knowledge that such individual or individuals are not so authorized, shall be entitled to rely on
all decisions, authorizations, consents, and approvals provided by such individual or individuals
so named until such time as Manager shall deliver to the Enterprise an additional resolution
revoking or otherwise modifying such authority.

     3.21 Service Contracts; Purchase Orders. Manager shall assist, consult and advise the
Enterprise in the negotiation of service contracts and leases for Furnishings and Equipment
reasonably necessary or desirable in connection with the operation of the Casino Facilities in the
usual course of business, pursuant to the Approved Budget and Approved Operating Plan. Manager
shall assist, consult and advise the Enterprise with respect to the purchase of all Furnishings and
Equipment which in the normal course of business are necessary and proper to maintain the Casino
Facilities in accordance with the Operating Standard.

     3.22 Taxes; Mortgages. Manager shall, if and when requested by the Enterprise to do
so, (i) obtain and verify bills for real estate and personal property taxes, improvement
assessments and other like charges which are or may become liens against the Casino Facilities, and
pay such items in accordance with the Approved Budget in time to avoid penalty for late payment and
(ii) make payments on account of any applicable provision of any Control Agreement and the amounts
of such projected expenditures shall be included in the Approved Budget. Manager’s responsibility
for the foregoing shall be limited to funds authorized in the Approved Budget and available in the
General Operating Account.

ARTICLE 4

Personnel Matters

     4.1 Employees.

          (a) All employees involved with operation of the Casino Facilities throughout the Casino
Facilities subject to management by the Manager under this Agreement shall be employees of the

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Enterprise. The Manager shall be solely responsible for (i) making
recommendations to the Enterprise as to the hiring, training, promoting, supervising and firing of
all employees and (ii) training employees in Core Positions, in each case as may be required to
maintain the standard of quality of management and operation at the level consistent with the
Operating Standard, in accordance with Employment Laws, Project Employee Policies; provided,
however, notwithstanding the foregoing, the employment, advancement and termination of employees in
any of the Core Positions shall be subject to the mutual approval of the Enterprise and Manager.
Prior to making a recommendation as to the hiring of any employees in any of the Core Positions,
Manager shall deliver to the Enterprise the candidate’s resume and any other information reasonably
requested by the Enterprise, including background check information, and shall provide the
Enterprise with an opportunity to interview such person, if requested by the Enterprise. With
regard to any requests for approvals concerning employees, the Enterprise shall use reasonable
efforts to respond promptly.

          (b) Manager shall prepare the staffing plan and budget for employee compensation, for the
approval of the Enterprise.

          (c) Manager shall develop a policy and procedure in conjunction with the Enterprise, to
implement an executive development program for employees who are members of the Enterprise whereby
members will be prepared through training and education to assume key management positions within
the gaming and ancillary operations of the Casino Facilities.

          (d) All salaries, wages, employee insurance, worker compensation premiums, employment taxes,
government exactions of any kind related to employment, benefits, and overhead related to the
hiring, supervising, and discharge of employees, will be Costs of Operations, in accordance with
and subject to the Approved Budget and Approved Operating Plan.

          (e) Notwithstanding any other provision in this Agreement to the contrary, (i) Manager shall
indemnify and hold harmless the Enterprise for any and all claims, demands, obligations or
liabilities, including reasonable attorneys’ fees, that may arise against the Enterprise from or as
a result of actions, inactions or decisions made by Manager in connection with any personnel
matters, and (ii) the Enterprise shall indemnify and hold harmless Manager for any and all claims,
demands, obligations or liabilities, including reasonable attorneys’ fees, that may arise against
Manager from or as a result of actions, inactions, or decisions made by the Enterprise in
connection with any personnel matters.

          (f) Only the Enterprise (and not the Manager) shall have the right to enter into a collective
bargaining agreement (including any amendments thereto or modifications thereof) or deal with any
labor unions with respect to the employees at the Casino Facilities. The Manager shall not have
any authority to negotiate on behalf of the Enterprise with any labor organization or union with
regard to such employees.

     4.2 Project Employee Policies. The Manager shall prepare a draft of personnel
policies and procedures (the “Project Employee Policies”), including a job classification system
with salary levels and scales and job descriptions (including duties), in accordance with all
applicable Employment Laws and Gaming Laws, which policies and procedures shall be subject to
approval by the Enterprise. The Project Employee Policies shall include a grievance procedure in
order to establish fair and uniform standards for the Casino Facilities employees, which will
include procedures for the resolution of disputes between the Casino Facilities and Project
employees. The Manager shall be responsible for administering the Project Employee Policies.
Manager will not discriminate against any employee or applicant for

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employment because of race,
creed, color, sex, age, or national origin nor violate any applicable law, regulation or local
ordinance governing employer obligations.

     4.3 Employee Background Checks. Manager shall be responsible for ensuring that a
background investigation is conducted in compliance with all Legal Requirements including
Employment Laws, to the extent applicable, on each applicant for employment as soon as reasonably
practicable. No individual whose prior activities, criminal record, if any, or reputation, habits
and associations are known to pose a threat to the public interest, the effective regulation of
gaming activities, or to the gaming licenses of the Manager or the Casino, or to create or enhance
the dangers of unsuitable, unfair, or illegal practices and methods and activities in the conduct
of Casino gaming activities, shall knowingly be recommended for employment by Manager or be
employed by the Enterprise. The background investigation procedures shall be formulated by the
Manager so as to ensure that personnel meet all applicable regulatory requirements imposed by the
Mississippi Gaming Commission and to satisfy all Gaming Laws. Any cost associated with obtaining
such background investigations shall constitute a Cost of Operations subject to the Approved
Budget.

ARTICLE 5

Insurance

     5.1 Duty to Maintain. The Enterprise (or the Manager, acting as agent for the
Enterprise, at the Enterprise’s sole discretion), shall obtain and maintain, in accordance with and
subject to the Approved Budget, insurance coverages in forms and amounts consistent with comparable
facilities that will adequately protect the Enterprise and the Manager, but in no case less than
the amounts set forth in this Article, or as required by any Lender requirements, Legal
Requirements or Control Agreements, including the following coverages:

          (a) Workers’ Compensation. Adequate workers’ compensation insurance in accordance
with all applicable laws, including employer’s liability insurance, in amounts consistent with
comparable facilities.

          (b) Commercial General Liability. Commercial general liability insurance covering
operations of the Casino Facilities, including blanket contractual liability coverage, broad form
property liability coverage, and personal injury coverage in a minimum amount of $1,000,000 per
person/$3,000,000 per occurrence for bodily injury and $1,000,000 per person/$3,000,000 per
occurrence for property damage, with a maximum aggregate of $5,000,000.

          (c) Automobile. Comprehensive automobile liability insurance covering operations of
the Casino Facilities, including all owned, hired and non-owned automobiles, trucks, buses,
trailers, motorcycles or other equipment licensed for highway use with limits and coverage
consistent with comparable facilities.

          (d) Property Insurance. Replacement value all-risk casualty and extended hazard
insurance in coverage amounts consistent with comparable facilities that shall insure the Casino
Facilities and any fixtures, improvements and contents located therein against loss or damage by
fire, theft and vandalism.

          (e) Fidelity Bond. Fidelity bonds on Casino Facilities employees in amounts
consistent with comparable facilities.

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          (f) Unemployment Insurance. Unemployment compensation/disability insurance with
respect to the Casino Facilities employees in amounts consistent with comparable facilities.

     5.2 The Manager to be Additional Insured. Insurance policies referred to in Sections
5.1(b) and (c) shall name the Manager as an additional insured.

     5.3 Evidence of Insurance. From time to time as reasonably requested by the
Enterprise, the Manager shall supply to the Enterprise and any necessary Governmental Authorities
copies of the insurance policies required by this Article applicable to the Casino Facilities.

     5.4 Insurance Proceeds. The Enterprise shall have sole discretion to determine how to
apply any insurance proceeds received with respect to the Casino Facilities, subject only to the
terms and conditions of the Control Agreements; provided, however, that if there is any insurance
recovery for a claim related to the operation of the Casino Facilities for which either the
Enterprise or the Manager has previously paid from its own separate funds, then, to the extent of
amounts paid by either of such parties, the insurance proceeds will be paid over to them and the
balance shall be retained by the Enterprise.

ARTICLE 6

Budgets, Operating Plans, Compensation and Reimbursement

     6.1 Projections and Budgets.

          (a) Within thirty (30) days following receipt of a marketing study the Manager shall use its
best efforts to project expected revenues and expenses for the first three (3) years of the
Manager’s operation of the Casino Facilities, and shall provide any additional pro formas and/or
projections which may be reasonably requested by the Enterprise related to its efforts to obtain
financing for the project.

          (b) The Manager shall prepare an initial operating budget and business plan for the first
Fiscal Year of Casino Facilities operations under its management pursuant to this Agreement and
submit the same to the Enterprise for approval by the Enterprise at least one hundred twenty (120)
days prior to the anticipated Opening Date. Annual operating budgets and business plans shall be
submitted by the Manager to the Enterprise thereafter by no later than thirty (30) days prior to
the commencement of the next Fiscal Year. The proposed initial operating budget and plan and each
subsequent proposed annual operating budget and plan (the “Proposed Budget” and the “Proposed
Operating Plan” respectively) shall be subject to approval or disapproval in the Enterprise’s sole
discretion. The Proposed Budget and Proposed Operating Plan shall (i) set forth an estimated
projection of all income and expenses for the ensuing Fiscal Year, projected revenue and
miscellaneous income, and (ii) be prepared based on the best then current information available to
Manager and although not intended to be a guarantee thereof, shall constitute Manager’s best
efforts to accurately project levels of revenue and expenditures. The Proposed Operating Plan
shall include Manager’s detailed plan of operation for the Casino Facilities, including but not
limited to marketing and advertising, game mix (including denominations and theoretical hold
percentages), promotional items, hours of operation for all food and beverage venues, special
events (including gaming tournaments and concerts), and surveillance and security. Manager shall
review the Proposed Budget and Proposed Operating Plan with the Enterprise. The Enterprise may
approve or disapprove of any item on the Proposed Budget and any item on or aspect of the Proposed
Operating Plan. Upon approval by the Enterprise, the Proposed Budget, as and to the extent revised
during the review process, shall become the budget for the next full or partial Fiscal Year, as the
case may be (together with the maintenance capital expenditure budget approved by the Enterprise
under Section 6.1(d) below for the same period, collectively, the “Approved Budget”). Upon
approval by the Enterprise, the Proposed

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 Operating Plan, as and to the extent revised during the
review process, shall become the business plan for the next full or partial Fiscal Year, as the
case may be (the “Approved Operating Plan”). The Proposed Budget, as well as the Approved Budget
shall provide for reserves if and to the extent required under any of the Control Agreements or
otherwise directed by the Enterprise. The Enterprise and the Manager recognize that adjustments
may be proposed by Manager and, if approved by the Enterprise, made, to previously Approved Budget
and Approved Operating Plan from time to time during any Fiscal Year, to reflect the impact of
unforeseen circumstances, financial constraints, or other events. The Manager agrees to promptly
inform the Enterprise regarding any items of revenue or expense that are reasonably anticipated to
cause a material change in the Cost of Operations or the performance of the Casino Facilities not
in keeping with the Approved Budget or the Approved Operating Plan. The Manager shall operate the
Casino Facilities and make expenditures in connection therewith in accordance with the Approved
Budget and Approved Operating Plan. In the event the Enterprise does not approve the Proposed
Budget before commencement of the Fiscal Year, the Approved Budget for the prior Fiscal Year shall
be deemed to be in effect for that Fiscal Year until such time as the Enterprise approves the
Proposed Budget. Similarly, in the event the Enterprise does not approve the Proposed Operating
Plan before commencement of the Fiscal Year, the Approved Operating Plan for the prior Fiscal Year
shall be deemed to be in effect for that Fiscal Year until such time as the Enterprise approves the
Proposed Operating Plan.

          (c) Manager shall monitor the Approved Budget and Approved Operating Plan throughout the
Fiscal Year and shall meet (on-site or by telephone) not less than one (1) time per calendar month
with the Enterprise for purposes of reviewing Casino Facilities operations and to make any
revisions to the Approved Budget and/or Approved Operating Plan as may be required by the
Enterprise to maintain or improve profits and margins as originally budgeted and projected. In
addition, upon the request of either party, from time to time, the other party shall meet (on-site
or by telephone) with the requesting party to review and discuss the status of the Approved Budget
and Approved Operating Plan as compared to the actual income and expenses of the Casino Facilities.
To the extent necessary, Manager shall prepare and deliver to the Enterprise revised projections
of the income and expenses for the Casino Facilities for the balance of the then current Fiscal
Year and, to the extent approved by the Enterprise, such revised projections shall become part of
the Approved Budget and Approved Operating Plan.

          (d) At the same time that Manager prepares and submits any Proposed Budget to the Enterprise,
Manager shall prepare and submit an annual summary of the estimated replacement and maintenance
capital expenditures for the ensuing Fiscal Year to the Enterprise for approval. The proposed
capital expenditure budgets shall (i) include estimates of (x) expenditures for Furnishings and
Equipment, (y) expenditures for capital equipment not included in Furnishings and Equipment, and
(z) expenditures for renovations, alterations, and rebuilding of the Casino Facilities, and (ii) be
subject to approval by the Enterprise. Manager shall review said maintenance capital expenditure
budgets with the Enterprise. For budgeting purposes, Manager shall obtain bids for items
contemplated in the replacement and capital expenditures estimated for the first Fiscal Year of
said budget, to the best of Manager’s ability; however, any expenditures reflected in said budget
shall not be made by Manager without the approval of the Enterprise (except to the extent any
particular expenditure is also contemplated and expressly included in the Approved Budget). The
Enterprise may approve or disapprove of any item on such proposed budget. The Enterprise and the
Manager recognize that mutually agreeable adjustments may be made to previously
approved maintenance capital expenditure budgets from time to time during any Fiscal Year to
reflect the impact of unforeseen circumstances, financial constraints, or other events. The
Manager agrees to promptly inform the Enterprise and obtain the Enterprise’s approval regarding any
projects or expenditures that are reasonably anticipated to cause a material change in the Cost of
Operations not in keeping with the maintenance capital expenditure budget previously approved by
the Enterprise. The Manager shall make

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maintenance capital expenditures in accordance with such
approved maintenance capital expenditure budget.

          (e) Manager shall prepare and submit to the Enterprise for approval any business plan,
including policies for comping and a marketing plan, floor plan, surveillance plan, and security
plan, all of which shall be consistent with the Approved Budget and Approved Operating Plan.

     6.2 Monthly Statements. The Manager shall be responsible for preparation of monthly
financial statements and shall furnish to the Enterprise’s designated representative financial
statements identifying, for each day for which such reports are normally available, the Total
Revenues and all other revenues and income of any kind or nature attributable to operation of the
Casino Facilities on such day. Within twenty one (21) days after the end of each calendar month,
the Manager shall provide verifiable financial statements in accordance with GAAP to the Enterprise
covering the preceding month’s operation of the Casino Facilities, including operating statements,
balance sheets, income statements and statements reflecting the amounts computed to be distributed
in accordance with Section 6.3. Without limiting the generality of the foregoing, such monthly
financial statements shall also include (i) a profit and loss statement comparing actual results to
both budget and the previous year’s actual results (if available), for both the current month and
Fiscal Year to date, (ii) a summary of operating expenses and net operating income, (iii) an
accounting of all inflows and expenditures relating to any reserves, (iv) a comparison of capital
expenditures to the then current capital budget, (v) working capital requests (if any), and (vi) a
narrative to include an executive summary and discussion of any variances from the Approved Budget
with respect to such month or year to date.

     6.3 Distribution of Revenues.

            (a) Following the Opening Date and continuing thereafter for the remainder of the term of this
Agreement, all amounts on deposit in the General Operating Account, net of amounts for the Costs of
Operations in accordance with the Approved Budget, shall be disbursed on a monthly basis as set
forth below, paid on or about the twentieth (20th) day of each calendar month for the
preceding month, Such amounts shall be disbursed from the General Operating Account in the
following order of priority (subject to adjustment as determined by the Enterprise):

	 	(i)	 	Current principal, interest and any other payments due on any
obligations to repay funding provided by the Lender in connection the Facility
Loan and/or equipping of the Casino Facilities;
	 
	 	(ii)	 	Management Fees due the Manager under Section 6.3(c) below
(provided that if the distribution under this subsection in any month is
insufficient to fund such payment in full, the unpaid amount shall be deferred
and paid under subsection (iii) below);
	 
	 	(iii)	 	Payment of amounts previously payable under subsections (i)
and (ii) above, but payment of which was previously deferred (including, with
respect to any deferred Management Fees, interest accrued thereon at the
Applicable Rate from the date on which such Management Fees and payments
otherwise would have been due and payable);
	 
	 	(iv)	 	Any monthly capital replacement or other reserve
contributions which have been created with the written approval of the
Enterprise; and

24

 

	 	(v)	 	All remaining of such amounts deposited in the General
Operating Account shall be disbursed to the Enterprise at the same time the
Management Fees are paid to the Manager, subject to the terms of any Control
Agreement.

            (b) For so long as this Agreement shall remain in effect during the term hereof and as
provided for in this Agreement:

	 	(i)	 	As compensation for the Manager’s management services
hereunder (such compensation being herein referred to as “Management Fees”),
for each Fiscal Year of the Casino Facilities’s operation the Manager shall be
entitled to management compensation equal to a fixed monthly fee of $50,000.00
commencing on the Opening Date payable on the 1st day of each month, plus a
percentage of EBITDA calculated at the end of each Fiscal Year and based upon
the audited financial statement of the Enterprise as follows: nine percent
(9%) of the first $10 million of EBITDA; eleven percent (11%) of EBITDA
between $10 million and $20 million; thirteen percent (13%) of all EBITDA in
excess of $20 million. The portion of the Management Fees based on EBITDA
shall be paid no later than the 15th day of the third month after
the close of each Fiscal Year. In computing EBITDA the fixed monthly
Management Fee of $50,000.00 per month paid during each Fiscal Year shall be
deducted prior to making such calculation.
	 
	 	(ii)	 	In addition to the recurring fees described above, the
Manager shall also receive a one-time payment of $500,000.00 when the
Enterprise obtains financing sufficient to proceed with the development of the
Casino Facilities. This payment will be distributed to the Manager by the
Enterprise upon closing of such development funds from the financing sources.
	 
	 	(iii)	 	Manager agrees to subordinate that portion of its Management
Fee based on a percentage of EBITDA (but not the fixed monthly fee described
in subpart (i) above or the one-time payment described in subpart (ii) above)
pursuant to a subordination agreement in form and substance reasonably
acceptable to Manager and lender provided that such agreement does not
restrict the payment of such Management Fee unless the Enterprise is in
default under the financing agreement with such lender.

            (d) The Manager, on behalf of the Casino Facilities, is responsible for making the
disbursements from the General Operating Account, as contemplated by this Section 6.3, to the
appropriate parties.

     6.4 Annual Audit; Termination Audit.

            (a) For each Fiscal Year, the Enterprise shall cause an audit to be conducted by an
independent certified public accountant from a nationally recognized accounting firm with more than
five (5) years of experience in audits of gaming resort operations selected and approved by the
Enterprise and reasonably acceptable to the Manager, and on or before seventy five (75) days after
the end of such Fiscal

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Year, such accounting firm shall issue a report (an “Annual Report”) with financial statements
in accordance with GAAP with respect to the operations of the Casino Facilities during such Fiscal
Year (or portion thereof in the case of the first Fiscal Year), including operating statements,
balance sheets, income statements and statements reflecting the amounts computed to be distributed
in accordance with Section 6.3, such Annual Report to be approved at an annual meeting to be held
at a location mutually agreed upon by the Enterprise and the Manager.

          (b) Following termination of this Agreement in accordance with its terms, such accounting firm
shall conduct an audit, and on or before ninety (90) days after the termination date shall issue a
report (a “Termination Report”) setting forth the same information as is required in the annual
report, in each case with respect to the portion of the Fiscal Year ending on the termination date.

          (c) If any such Annual Report or Termination Report reveals that the amounts paid to the
Enterprise or the Manager in accordance with Section 6.3 above for the relevant period are
different from the amount that should have been paid to such party based upon the provisions of
this Agreement, then to the extent either party received an overpayment, such party shall pay the
amount of such overpayment to the other party within twenty-five (25) days after the receipt by the
parties of such report, and to the extent either party was underpaid, such party shall receive a
payment from the other party of the amount of such underpayment within ten (10) days after the
receipt by the parties of such report.

     6.5 Collection of Revenues. All Total Revenues and any other income and revenue of
every kind resulting from the operation of the Casino Facilities shall be received and held in
trust by Manager for the benefit of the Enterprise. Manager shall use diligent efforts to collect
and account to the Enterprise for all revenues and other charges which may become due the
Enterprise at any time from occupants or others for sales or services provided in connection with
or for the use of the Casino Facilities or any portion thereof. In addition, Manager shall collect
and account to the Enterprise for any income from miscellaneous services provided to occupants or
the public, including restaurant income, parking income, occupant storage and coin-operated
machines of all types.

ARTICLE 7

Termination/Material Breach

     7.1 Termination for Material Breach.

          (a) Either the Enterprise or the Manager (the “Terminating Party”) may terminate this
Agreement if the other commits or allows to be committed a Material Breach or a Material Breach
with respect to the other occurs.

          (b) Except as otherwise expressly set forth herein, termination is not an exclusive remedy for
claims of a Material Breach, and the parties shall be entitled to other rights and remedies as may
be available pursuant to the terms of this Agreement or under applicable law.

          (c) For purposes of this Agreement, a “Material Breach” by or with respect to Manager is any
of the following circumstances:

(i) failure of Manager to perform any obligation under this Agreement in any
material respect for reasons not excused under Section 9.5 hereof (Force Majeure),
and failure to cure such breach within thirty (30) calendar days after receipt of
written notice from the Enterprise identifying the nature of the breach in specific
detail and its intention

26

 

to terminate this Agreement; provided, however, that if the
nature of such breach (but specifically excluding breaches curable by the payment of
money) is such that it is not possible to cure such breach within thirty (30) days, such thirty-day period shall
be extended for so long as Manager shall be using diligent efforts to effect a cure
thereof, but such period shall not be so extended for more than an additional sixty
(60) days (i.e., ninety (90) days in the aggregate);

(ii) commission of theft or misappropriation, fraud, felony, and other similar acts
if such act is detrimental to the Casino Facilities and the act was committed by
Manager or its Affiliate, or an employee or agent of Manager or its Affiliate;

(iii) the commission of gross negligence or willful misconduct in the performance of
its duties hereunder;

(iv) if Manager loses its Gaming License, commits an act that causes the Enterprise
to lose (through revocation, suspension or other similar means) or be threatened
with the loss of its Gaming License, or is determined to be an “unsuitable party”
for purposes of either party’s Gaming License or is subject to any other
determination or direction by any governmental authority by which the Enterprises
continuation of Manager as the manager of the Casino Facilities under this Agreement
would put the Enterprise’s Gaming License at risk of revocation, suspension,
termination or similar material adverse effect, or if Manager’s Gaming License is
suspended;

(v) any representation or warranty made by the Manager pursuant to Section 9.9
proves to be false or erroneous in any material respect when made;

(vi) EBITDA of less than five percent (5%) of gross revenues on an annual basis;

(vii) Manager’s bankruptcy (whether voluntary or involuntary) or placement into
receivership of Manager

          (d) For purposes of this Agreement, a “Material Breach” by or with respect to the Enterprise
is any of the following circumstances:

(i) failure of the Enterprise to perform any obligation under this Agreement in any
material respect for reasons not excused under Section 9.5 hereof (Force Majeure)
and failure to cure such breach within thirty (30) calendar days after receipt of
written notice from the Manager identifying the nature of the breach in specific
detail and its intention to terminate this Agreement; provided, however, that if the
nature of such breach (but specifically excluding breaches curable by the payment of
money) is such that it is not possible to cure such breach within thirty (30) days,
such thirty-day period shall be extended for so long as the Enterprise shall be
using diligent efforts to effect a cure thereof, but such period shall not be so
extended for more than an additional sixty (60) days (i.e., ninety (90) days
in the aggregate); or

(ii) any representation or warranty made by the Enterprise pursuant to Section 9.10
proves to be false or erroneous in any material respect when made.

27

 

(e) Any final notice of termination hereunder shall be in writing detailing the
reason the Terminating Party considers the Material Breach not to be cured and must
be delivered to the other party before such termination becomes effective.

     7.2 Mutual Consent. This Agreement may be terminated at any time upon the mutual
written consent and approval of the Enterprise and the Manager.

     7.3. Market Study Analysis. In the event a market study obtained by the Enterprise
after the execution of this Agreement causes Lakes to determine that it would be uneconomic for
Lakes to perform the services contemplated under this Agreement, Lakes shall have the right to
terminate this Agreement upon written notice to the Enterprise within ten (10) days after receipt
of such study by Lakes.

     7.4 Involuntary Termination Due to Changes in Law.

          (a) Subject to the terms and provisions of this Agreement, the Enterprise and the Manager
agree to use commercially reasonable efforts to conduct gaming activities in accordance with this
Agreement and to ensure that such activities and this Agreement conform to and comply with all
Legal Regulations.

          (b) In the event of any change in state or federal law that results in a final determination
by a Designated Court that this Agreement is unlawful, the Enterprise and the Manager shall each
use good-faith commercially reasonable efforts to amend this Agreement in a mutually satisfactory
manner which will comply with the change in applicable laws and not materially change the rights,
duties and obligations of the parties hereunder. In the event such amendment can not be legally
effected following exhaustion of all such good-faith commercially reasonable efforts (including the
lapse of all legal proceedings and appeal periods without favorable results), performance of this
Agreement shall be automatically suspended effective upon the date that performance of this
Agreement becomes unlawful by such final determination, and either party shall have the right to
terminate this Agreement upon written notice to the other party.

     7.5 Other Rights upon Expiration or Termination; Ownership of Assets and Repayment of
Obligations on Termination.

          (a) Following expiration or earlier termination of this Agreement for any reason:

(i) As between the Manager and the Enterprise, the Enterprise will retain full
ownership of the Casino Facilities, the Furnishings and Equipment and its assets and
all assets of the Casino Facilities (including the Casino, all plans and
specifications therefor, and any equipment, books and records, materials or
furnishings therein the acquisition of which constituted Costs of Operations).

(ii) Whether such termination was voluntary or involuntary, the Enterprise shall
have the obligation to pay any unpaid Management Fees to the extent accruing and
attributable to any period prior to the expiration or earlier termination of this
Agreement, which obligation shall survive the expiration or earlier termination of
this Agreement.

(iii) The Surviving Obligations shall survive expiration or earlier termination of
this Agreement.

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(iv) In the event of the expiration of the term or the termination of this Agreement
for any reason, Manager shall cooperate with the Enterprise in the orderly
transition of management of the Casino Facilities, and shall provide the Enterprise
or its designee prior to the expiration or termination with any and all books, records, documents,
contracts, and all other information relating to the Casino Facilities, whether such
information shall be in electronic, hard copy or any other form. In connection
therewith, Manager shall:

(A) promptly account for and deliver to the Enterprise all revenues, charges
and income from the Casino Facilities and any other monies of the Enterprise
held by Manager and cooperate with the Enterprise to close bank accounts
related to the operation of the Casino Facilities;

(B) deliver to the Enterprise, as and when received, any monies due the
Enterprise and received by Manager after the termination of this Agreement;

(C) deliver to the Enterprise, or to such other persons as the Enterprise
may designate in writing, all materials, records, ledgers, files, books,
contracts, documents and instruments relating to the Casino Facilities and
in the possession of Manager (including all Player Lists and information,
accounting data and records, rent rolls, payroll records, employment
records, originals and copies of all leases, service contracts and
agreements, checkbooks and any other financial records or instruments),
together with any computer software used in connection with the operation of
the Casino Facilities and gaming equipment, excluding any such computer
software which is either proprietary or licensed to Manager (provided,
however, that Manager shall reasonably cooperate with the Enterprise, at no
out-of-pocket cost to Manager, in the Enterprise’s efforts to obtain the
right to use any such computer software which is licensed to Manager);

(D) assign to the Enterprise all existing contracts, purchase orders,
service contracts, permits, licenses and other similar instruments relating
to the operation and maintenance of the Casino Facilities in the event that
such contracts, purchase orders, service contracts, permits, licenses and
instruments are in the name of Manager (excluding any such contracts,
purchase orders, service contracts, permits, licenses and instruments which
shall have been issued in Manager’s name and may not under law be assignable
to the Enterprise, provided, however, in such event Manager shall reasonably
cooperate, at no out-of-pocket cost to Manager, in the Enterprise’s efforts
to obtain replacement contracts, purchase orders, service contracts,
permits, licenses and instruments);

(E) deliver to the Enterprise (i) all keys and lock combinations for all
lock and security devices contained in the Casino Facilities, and (ii) a
current inventory of all operating equipment; and

(F) take any and all actions (including the execution of documents or
instruments) necessary or appropriate in the Enterprise’s reasonable
judgment to assist the Enterprise in the orderly termination of management
of the Casino Facilities by Manager and the orderly transition of such
management to a new manager designated by the Enterprise.

29

 

     7.6 Notice of Termination. In the event of a proposed termination pursuant to this
Article, the Enterprise shall provide notice of the termination to the Mississippi Gaming
Commission or other appropriate Governmental Authorities within ten (10) days after the termination if and to the
extent the Enterprise reasonably determines that such notice is required under applicable law.

     7.7 Cessation of Gaming at the Casino.

          (a) If, during the term of this Agreement, the level or type of the gaming operations legally
permitted at the Casino as of the Effective Date cannot be lawfully conducted at the Casino by
reason of the application of any legislation or court or administrative agency order or decree
adopted or issued by a governmental entity having the authority to do so, such gaming shall be
discontinued as of the effective date of the legislation, order or decree; and the Enterprise
shall, within sixty (60) days after such legislation, order or decree becomes effective, elect one
of the following three options:

(i) Suspend the term of this Agreement until such date on which such gaming at the
Casino becomes lawful again (during which period the term of the Agreement will be
tolled until such gaming at the Casino becomes lawful again and can be recommenced
operationally or the Enterprise and the Manager mutually agree otherwise, and the
period of cessation shall not be deemed to have been part of the term of this
Agreement and the term shall be extended by the length of time of the cessation); or

(ii) Suspend the term of this Agreement until such date on which such gaming at the
Casino becomes lawful again (during which period the term of the Agreement will be
tolled until such gaming at the Casino becomes lawful again and can be recommenced
operationally at the Casino or the Enterprise and the Manager mutually agree
otherwise, and the period of cessation shall not be deemed to have been part of the
term of the Agreement and the term shall be extended by the length of time of the
cessation), and with the prior approval of the Manager (which approval shall not be
unreasonably withheld), use the Casino for any other lawful purpose pursuant to a
use agreement containing terms reasonably acceptable to the Manager and the
Enterprise; or

(iii) Terminate this Agreement, whereupon this Agreement shall terminate and of no
further force and effect except with respect to the duties, liabilities and
obligations of the parties which arose or accrued prior to termination.

The Enterprise shall give Manager written notice of the Enterprise’s election within such sixty-day
period. If the Enterprise elects to suspend the term of this Agreement under this Section 7.6
(a)(i) or (ii) above, the Enterprise shall have the right (but not the obligation) to reinstate
this Agreement within sixty (60) days after the date on which gaming becomes lawful. The Enterprise
may exercise such right by giving Manager written notice of such reinstatement within said 60-day
period after the date on which gaming becomes lawful.

          (b) If, during the term of this Agreement, the Casino Facilities or any portion thereof is
damaged by casualty or other occurrence or taken by eminent domain or similar proceedings to the
extent, as reasonably determined by the Enterprise, that the level or type of the gaming operations
conducted at the Casino as of the Effective Date cannot be conducted at the Casino, the Enterprise
shall elect one of the following two options:

30

 

(i) suspend the term of this Agreement pending repair, restoration or reconstruction
of the Casino (during which period the term of the Agreement will be tolled until
such gaming can again be conducted at the Casino or the Enterprise and the Manager
mutually agree otherwise, and the period of cessation shall not be deemed to have
been part of the term of the Agreement and the term shall be extended by the length
of time of the cessation), and arrange for such repair, restoration or
reconstruction; or

(ii) terminate this Agreement, such termination to be effective on the sixtieth (60th)
day after written notice of termination shall have been delivered to Manager, whereupon this
Agreement shall terminate and of no further force and effect except with respect to the duties,
liabilities and obligations of the parties which arose or accrued prior to termination.

The Enterprise shall give Manager written notice of the Enterprise election under subsection within
sixty (60) days after such casualty or occurrence. The Enterprise alone has the authority to
submit, adjust and settle, on behalf of the Enterprise, all insurance claims associated with the
casualty or occurrence and conduct and settle or otherwise resolve any condemnation proceedings;
provided, however, that the Manager shall cooperate with the Enterprise’s efforts in such regard
and assist in the preparation of any submissions.

          (c) If for any reason either the Enterprise, Manager or the Casino, as applicable, fails to
obtain or loses its Gaming License(s) or any other governmental or quasi-governmental permits,
licenses, approvals or certificates under any applicable Legal Requirements required to operate the
Casino, the Enterprise or Manager shall have the right to terminate this Agreement upon
written notice to the other party, whereupon this Agreement shall terminate and be of no further
force and effect except with respect to the duties, liabilities and obligations of the parties
which arose or accrued prior to termination, unless such failure or loss arose out of or resulted
from a Material Breach by the party providing notice of termination (in which event Section 7.1(b)
hereof shall apply).

     7.8 Cumulative Remedies. All rights or remedies of the Enterprise or the Manager
under this Agreement shall be cumulative and may be exercised singularly in any order or
concurrently, at such party’s option, and the exercise or enforcement of any such right or remedy
shall neither be a condition to nor bar to the exercise or enforcement of any other right or
remedy.

ARTICLE 8

Release and Indemnity

     8.1 Third-Party Claims. Except as provided for in Sections 8.2 and 8.3 below, the
Enterprise shall not be entitled to recover from, and expressly releases, the Manager, its agents,
directors, officers, employees and Affiliates, and the Manager shall not be entitled to recover
from, and expressly releases, the Enterprise and its respective agents, directors, officers,
employees and Affiliates, from or for any third-party damages, claims, causes of action, losses and
expenses of whatever kind or nature, including attorneys’ fees and expenses incurred in defending
such claims, in connection with the lawful operation of the Casino Facilities in accordance with
the terms of this Agreement; and such claims, damages, losses or expenses shall be considered Costs
of Operations payable from the Project Account(s) with the approval of the Enterprise.

     8.2 Indemnity from the Manager. Notwithstanding Section 8.1, the Manager shall
upon request indemnify and hold the Enterprise and its respective agents, directors, officers,
employees and Affiliates harmless against any and all damages, claims, losses or expenses of
whatever kind or nature,

31

 

including reasonable attorneys’ fees and expenses incurred in defending such claims, resulting from
the gross negligence or willful or criminal misconduct of the Manager or any Affiliate of Manager
or their respective officers or directors of in connection with the Manager’s performance of this
Agreement (including any breach of this Agreement), and no such damages, losses or expenses shall
be paid from the Project Account(s), nor shall such losses or expenses to the extent paid by
Manager in full be considered Costs of Operations.

     8.3 Indemnity from the Enterprise. Notwithstanding Section 8.1, the Enterprise shall
upon request indemnify and hold the Manager, its agents, directors, officers, employees and
Affiliates harmless against any and all damages, claims, losses or expenses of whatever kind or
nature, including reasonable attorneys’ fees and expenses incurred in defending such claims,
resulting from the gross negligence or willful or criminal misconduct of the Enterprise or any
Affiliate of the Enterprise (other than Manager and its Affiliates) or their respective officers or
directors in connection with the Enterprise’s performance of this Agreement (including any breach
of this Agreement) and no such damages, losses or expenses shall be considered Costs of Operations
unless the inclusion of such damages, losses or expenses as Costs of Operations, is reasonably
appropriate under the circumstances and based on the nature of the claim.

     8.4 Indemnity Against Unauthorized Debt and Liabilities. Neither this Agreement nor
its performance (a) creates or implies a partnership between the Manager and the Enterprise, or (b)
authorizes the Enterprise to act as agent for the Manager, or, except to the extent expressly
provided herein, the Manager to act as agent for the Enterprise. The Manager hereby agrees to
indemnify and hold the Enterprise harmless from any third-party claims, actions and liabilities,
including reasonable attorneys’ fees, on account of obligations or debts of the Manager or the
Enterprise that the Manager is not authorized to undertake pursuant to the terms of this Agreement.

ARTICLE 9

Miscellaneous

     9.1 Assignment and Subcontractors.

          (a) Manager shall not assign this Agreement or delegate its duties hereunder, in whole or in
part, without the express prior written consent of the Enterprise. For purposes of this Agreement,
any change in or any sale, conveyance, transfer or other disposition, whether voluntarily,
involuntarily or otherwise, of the ownership interests in or substantially all the assets of
Manager Parent shall not be deemed to be an assignment hereunder.

          (b) The Enterprise may assign its rights and obligations under this Agreement at any time,
without the consent of Manager; provided however, that the Enterprise shall notify Manager in
writing of any such assignment at least thirty (30) days in advance thereof and any transfer or
assignment of this Agreement by the Enterprise shall include an express assumption by the
transferee or assignee of the Enterprise’s obligations hereunder and provided further than such
transferee or assignee is either the purchaser, lessee or other transferee of all or substantially
all of the Casino Facilities or an Affiliate of the Enterprise (provided, however, nothing herein
shall restrict the Enterprise from assigning this Agreement to any Lender as security or otherwise
as contemplated in any of the Control Agreements). For purposes of this Agreement, any change in
or any sale, conveyance, transfer or other disposition of, whether voluntarily, involuntarily or
otherwise, the direct or indirect ownership interests in the Enterprise or a change in control of
the Enterprise shall be deemed to be an assignment hereunder.

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          (c) Any assigning party engaging in a permitted assignment described above shall, and shall
cause its assignee, to execute and deliver to the other party such assignment and assumption
agreements together with evidence of the due authorization, execution, delivery and enforceability
of such assignment documents as may be reasonably requested. Any attempted assignment or
subcontracting without any consent and approval, to the extent such consent and approval is
required hereunder, shall be void. Subject to the preceding requirements, this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective successors and
permitted assigns.

     9.2 Notices. Any notice, consent or any other communication permitted or required
by this Agreement shall be in writing and shall be effective on the date sent and shall be
delivered by personal service, via telecopier with reasonable evidence of transmission, express
delivery or by certified or registered mail, postage prepaid, return receipt requested, and, until
written notice of a new address or addresses is given, shall be addressed as follows:

If to the Enterprise:

James Pettis

Wilson Carroll

WYATT, TARRANT & COMBS, LLP

4450 Old Canton Road, Ste. 210

Jackson, MS 39211

If to the Manager:

Tim Cope

President

Lakes Entertainment

130 Cheshire Lane

Minnetonka, MN 55305

With a copy to:

Damon Schramm

V.P. — General Counsel

Lakes Entertainment

130 Cheshire Lane

Minnetonka, MN 55305

     9.3 Amendments. This Agreement may be amended only by written instrument duly
executed by all of the parties hereto and with any and all necessary regulatory approvals
previously obtained.

     9.4 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
agreement. This Agreement may be executed and delivered by telecopier or other facsimile or
electronic mail transmission all with the same force and effect as if the same were a fully
executed and delivered original manual counterpart.

33

 

     9.5 Force Majeure. No party shall be in default in performance due hereunder if such
failure or performance is due to causes beyond its reasonable control, including acts of God, war,
terrorism, fires, floods, or accidents causing damage to or destruction of the Casino Facilities or
property necessary to operate the Casino Facilities, or any other causes, contingencies, or
circumstances not subject to its reasonable control which prevent or hinder performance of this
Agreement; provided, however, that the foregoing shall not excuse any obligations of the Enterprise
or any other Affiliate of the Enterprise to make monetary payments to the Manager or any Affiliate
of the Manager as and when required hereunder.

     9.6 Time is Material. The parties agree that time is of the essence and the time
and schedule requirements set forth in this Agreement are material terms of this Agreement.

     9.7 Further Assurances. The parties hereto agree to do all acts and deliver necessary
documents as shall from time to time be reasonably required to carry out the terms and provisions
of this Agreement.

     9.8 Severability. In the event that any provision of this Agreement is, by final order
of a Designated Court or Governmental Authority, held to be illegal or void, the validity of the
remaining portions of this Agreement shall be enforced as if this Agreement did not contain such
illegal or void clauses or provisions, and the parties shall use commercially reasonable efforts to
negotiate an amendment to this Agreement which will comply with the judicial order and maintain the
originally contemplated rights, duties and obligations of the parties hereunder.

     9.9 Representations and Warranties of the Manager. The Manager hereby represents and
warrants as follows:

          (a) This Agreement has been duly authorized, executed and delivered by the Manager and
constitutes a valid and binding obligation, enforceable against the Manager in accordance with its
terms.

          (b) The execution and delivery of this Agreement by Manager, the performance by the Manager of
its obligations hereunder and the consummation by the Manager of the transactions contemplated
hereby will not violate any contract or agreement to which the Manager or any Affiliate of Manager
is a party or any law, regulation, rule or ordinance or any order, judgment or decree of any
federal, state, or local court or require any regulatory approval beyond those contemplated herein.

          (c) The Manager has the full legal right, power and authority and has taken all action
necessary to enter into this Agreement, to perform its obligations hereunder, and to consummate all
other transactions contemplated by Agreement.

          (d) The Manager has been validly formed and is in good standing as a corporation, partnership,
limited liability company or other lawful entity, as the case may be and is and shall remain
qualified to do business in the State of Mississippi during the term of this agreement.

          (e) Notwithstanding anything herein to the contrary, the parties hereto acknowledge that
Manager has not yet been found suitable or obtained the necessary licensure from the Mississippi
Gaming Commission. Manager represents and warrants that it will obtain all licenses necessary to
provide the management services as contemplated under this Agreement prior to the Opening Date.

34

 

     9.10 Representations and Warranties of the Enterprise. The Enterprise hereby
represents and warrants as follows:

          (a) This Agreement has been duly authorized, executed and delivered by the Enterprise and
constitutes a valid and binding obligation, enforceable against the Enterprise in accordance with
its terms.

          (b) The execution and delivery of this Agreement by the Enterprise, the performance by the
Enterprise of its obligations hereunder and the consummation by the Enterprise of the transactions
contemplated hereby will not violate any contract or agreement to which the Enterprise or any
Affiliate of the Enterprise is a party or any law, regulation, rule or ordinance or any order,
judgment or decree of any federal, state, or local court or require any regulatory approval beyond
those contemplated herein.

          (c) The Enterprise has the full legal right, power and authority and has taken all action
necessary to enter into this Agreement, to perform its obligations hereunder, and to consummate all
other transactions contemplated by Agreement.

          (d) The Enterprise has been validly formed and is in good standing as a corporation,
partnership, limited liability company or other lawful entity, as the case may be.

     9.11 Applicable Law. This Agreement shall be interpreted and construed in accordance
with the laws of the State (without regard to its conflict of laws provisions) and applicable
federal laws.

     9.12 Entire Agreement. This Agreement, including all exhibits, represents the entire
agreement between the parties and supersedes all prior agreements relating to management of gaming
and ancillary operations conducted by the Enterprise at the Casino Facilities.

     9.13 No Partnership or Joint Venture; Limited Agency. Nothing contained in this
Agreement shall constitute or be construed to be or to create a partnership or joint venture
between the Enterprise, its successors or assigns, and Manager, its successors or assigns. Manager
shall act as an independent contractor with the limited powers of agency expressly authorized by
the Enterprise in this Agreement (which agency shall not be coupled with an interest) and, in
exercising such powers of agency, Manager shall be an agent of the Enterprise solely for the
purpose of performing the applicable management functions for the Enterprise within the scope of
this Agreement. This Agreement does not create in Manager any interest in the Casino Facilities,
including any of the Furnishings and Equipment.

     9.14 Approvals. Whenever pursuant to this Agreement, the Enterprise exercises any
right given to it to approve or disapprove or to provide or withhold consent, or any arrangement or
term is to be satisfactory or acceptable to the Enterprise, all such decisions, directions and
determinations made by the Enterprise shall be reasonably made and not unduly withheld or delayed,
except as otherwise expressly provided for in this Agreement, and shall be final and conclusive.

     9.15 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies on any Person other than (i) the parties and their respective successors and permitted
assigns, and (ii) any indemnitee to the extent such indemnitee is expressly granted certain rights
of defense and indemnification in this Agreement.

35

 

     9.16 Non-disclosure. The parties agree not to divulge to third parties the terms of
this Agreement or any other proprietary or confidential information exchanged between the parties
pursuant to or in connection with this Agreement, unless (i) the information is required to be
disclosed pursuant to judicial order or Legal Requirements, (ii) the information is at the time of
disclosure already in the public domain through no fault of such party, or (iii) unless mutually
agreed. This prohibition shall not apply to disclosures by either party to their attorneys,
accountants, or other professional advisers, or disclosure by the Manager or the Enterprise to
their respective Affiliates (provided that the Enterprise and the Manager shall cause their
respective Affiliates to comply with the terms of this Section). In situations where disclosure of
the terms of this Agreement to regulatory, governmental or judicial entities is required by law or
regulations, the parties will make reasonable efforts to secure confidential treatment of the
economic terms of this Agreement by such entities; provided, however, this disclosure restriction
shall not prohibit the Manager making any filings in compliance with federal or state securities
laws as it deems legally necessary.

     9.17 Non-Recourse.

     (a) Manager shall look only to the Enterprise’s estate and interest in the Casino Facilities
for the satisfaction of Manager’s remedies or for the collection of a judgment (or other judicial
process) requiring the payment of money by the Enterprise in the event of any default by the
Enterprise hereunder, and no other property or assets of the Enterprise or its past, present or
future managers, members, partners, officers, directors, shareholders, principals or employees,
disclosed or nondisclosed, shall be subject to levy, execution or other enforcement procedure for
satisfaction of Manager’s remedies under or with respect to this Agreement or have any liability
for any obligation or liabilities of the Enterprise under this Agreement. This limitation shall not
apply to remedies or judgments arising from either the gross negligence or willful or criminal
misconduct of any person acting for or on behalf of the Enterprise or any Affiliate of Enterprise
in connection with the Enterprise’s performance of this Agreement

     (b) The Enterprise shall look only to Manager and its interest in the Enterprise for the
satisfaction of Enterprises’s remedies or for the collection of a judgment (or other judicial
process) requiring the payment of money by the Manager in the event of any default by the Manager
hereunder, and no property or assets of Manager Parent or its past, present or future officers,
directors, shareholders, principals or employees, disclosed or nondisclosed, shall be subject to
levy, execution or other enforcement procedure for satisfaction of Enterprise’s remedies under or
with respect to this Agreement or have any liability for any obligation or liabilities of the
Manager under this Agreement.

     9.18 No Recording. This Agreement shall not be recorded in the public records of any
jurisdiction. This Agreement shall not create an interest in real property in favor of Manager and
nothing herein shall create an agency coupled with an interest; Manager expressly waives any such
interests.

     9.19 Alterations. The Enterprise may, from time to time, make such changes,
additions, alterations, improvements and modifications to the Casino Facilities, including within
the gaming floor as to the location, configuration and mix of gaming machines and stations, as the
Enterprises determines to be desirable. Manager agrees to cooperate with the Enterprise, without
fee, in connection with any such changes, additions, alterations, improvements and modifications.

ARTICLE 10

Dispute Resolution

     10.1 Disputes Between the Enterprise and Project Employees. The Manager shall develop
an employee dispute resolution policy for the Enterprise’s approval, and the Manager, as agent of
the

36

 

Enterprise, shall ensure that the Casino Facilities’s general manager shall implement and
administer the employee dispute resolution policy after its adoption, subject to Approved Budget.

     10.2 Litigation Between the Enterprise and the Manager. All litigation between the
Manager and the Enterprise with respect to this Agreement or a party’s performance hereunder shall
be resolved in the Designated Court. This agreement shall be governed and construed in accordance
with the laws of the State of Missisippi without regard to Mississippi’s choice-of-law rules.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the above written
date.

	 	 	 	 	 	 	 	 
	ABSTON-MCKAY VENTURES, LLC	 	LAKES TUNICA CASINO MANAGEMENT, LLC
	 
	 	 	 	 	 	 
	 
	By:

	 	/s/ Norfleet Abston 	 	By:	 	/s/ Lyle Berman 
	 

	 	 
	 	 	 	 
	 

	 	Norfleet Abston

Its: President
	 	 	 	Lyle Berman

Its: Chief Executive Officer

LIST OF EXHIBITS

	 	 	 
	Exhibit A

	 	Legal Description
	Exhibit B

	 	Development Services
	Exhibit C

	 	Prohibited Activities
	Exhibit D

	 	Manager Responsibilities and Duties
	Exhibit E

	 	Pre-Opening Services
	Exhibit F

	 	Core Positions
	Exhibit G

	 	Direct and Indirect Ownership of Manager

37

 

EXHIBIT A

LEGAL DESCRIPTION

     A legal description of a 122.60 acre tract, more or less, being located in Section 18,
Township 3 South, Range 11 West, Tunica County, Mississippi, and being more particularly described
as follows:

Beginning at a found rail road iron located on the southwest corner of Section 18,
Township 3 South, Range 11 West, Tunica County, Mississippi; thence run North
eighty-nine degrees two minutes fifty-four seconds East (N 89o 02’ 54” E), a
distance of one thousand five hundred forty-one and 10/100 (1,541.10) feet to a
found rail road iron, said point being the Point of Beginning of the hereinafter
described tract; thence North zero degrees sixteen minutes fifty-nine seconds West
(N 00o 16’ 59” W), a distance of two thousand eight hundred twenty-sixty and 22/100
(2,826.22) feet to a point; thence North eighty-one degrees twenty-eight minutes
thirty-seven seconds East (N 81o 28’ 37” E), a distance of two thousand four hundred
seventy-nine and 93/100 (2,479.93) feet to a point; thence South zero degrees
sixteen minutes fifty-nine seconds East (S 00o 16’ 59” E), a distance of one
thousand seventy-five and 02/100 (1,075.02) feet to an iron pin located on the
boundary of the Board of Levee Commissioners for the Yazoo — Mississippi Delta
Levee District tract (Levee); thence along said Levee tract south forty-six degrees
seven minutes thirty-seven seconds West (S 46o 07’ 37” W), a distance of two hundred
forty-three and 20/100 (243.20) feet to an iron pin; thence along said Levee tract
South twenty-seven degrees forth-eight minutes fifty-one seconds West (S 27o 48’ 51”
W), a distance of four hundred seventy-eight and 65/100 (478.65) feet to an iron
pin; thence along said Levee tract South forty-eight degrees four minutes fifteen
seconds West (S 48o 04’ 15” W), a distance of one thousand four hundred thirty-eight
and 72/100 (1,438.72) feet to an iron pin; thence along said Levee tract South
forty-six degrees fifty-eight minutes three seconds West (S 46o 58’ 03” W), a
distance of eight hundred twenty-six and 94/100 (826.94) feet to an iron pin on the
south line of said Section 18; thence along said south line of Section 18, South
eighty-nine degrees

 

 

forty-nine minutes twenty-eight seconds West (S 89o 49’ 28” W), a distance of three
hundred seventy and 40/100 (370.40) feet to the true point of beginning.

 

 

EXHIBIT B

DEVELOPMENT SERVICES

SECTION 1:

CONSTRUCTION MANAGER — ADVISOR

GENERAL STATEMENT OF SERVICES

1.1 This Exhibit is intended to, and shall, govern all work and services provided by Manager and
all work and consulting services provided by the Manager for the Development Project (defined
below), whether initiated or performed prior or subsequent to the execution of the Agreement.

1.2 As provided in greater detail throughout this Exhibit, Manager has been retained by the
Enterprise to advise and assist the Enterprise in connection with the development, design,
construction and commissioning of the Casino Facilities for use as a Casino and the selection,
acquisition and installation of Furnishings and Equipment (the “Development Project”), including
the following:

(1) consult, assist and advise the Enterprise in the development of the Project Budget and the
Project Schedule (each as defined herein), as well as the delineation of the scope and nature of
work on the Development Project;

(2) consult, assist and advise the Enterprise in assessing and monitoring the pre-construction
costs and schedule for the purpose of facilitating the performance and completion of the
Development Project within the time and budgetary limitations established as provided herein;

(3) consult advise the Enterprise with respect to value-engineering matters;

(4) consult, assist and advise the Enterprise in the selection and acquisition of Furnishings and
Equipment;

(5) consult, assess and monitor costs incurred on the Development Project for compliance with the
Project Budget;

(1) consult, assess and monitor the construction on the Development Project for compliance with the
Design Documents, the Project Schedule and the Construction Contract(s);

(7) perform such additional consulting services as may be reasonably requested.

1.3 Manager shall not be responsible for the acts and/or omissions of the Enterprise’s Contractors
and/or other persons performing work on the Development Project that are not employed by or on
behalf of Manager. Manager shall have no responsibility pursuant to this Exhibit for design errors,
omissions or inconsistencies committed by Architect or any engineer employed by the Enterprise to
design the Development Project. Nothing contained in herein, however, shall diminish Manager’s
responsibility for any damages incurred by the Enterprise as a consequence of Manager’s own failure
to perform in accordance with this Exhibit.

 

 

EXHIBIT C

PROHIBITED ACTIVITIES

     In addition to the limitations set forth elsewhere in this Agreement, the Manager shall have
no authority on behalf of the Enterprise to do, and shall not do, any of the following prohibited
activities (the “Prohibited Activities”) without the Enterprise’s approval in each instance unless
the specific transaction is described and authorized in the Approved Budget:

	1.	 	Remove any fixed assets, supplies, furniture, fixtures, equipment, inventories or
operating supplies from the Casino Facilities (including Furnishings and Equipment), except in
the ordinary course of business or in connection with the disposition of obsolete, worn-out
damaged items;
	 
	2.	 	Borrow money, guaranty the debts of any third person, or mortgage, pledge, grant a
security interest in or otherwise encumber all or any part of the Casino Facilities;
	 
	3.	 	Make, execute or deliver on behalf of the Enterprise any assignment for the benefit of
creditors, or any guaranty, indemnity bond, or surety bond;
	 
	4.	 	Confess any judgment on behalf of the Enterprise or the Casino Facilities;
	 
	5.	 	File a voluntary or consent to an involuntary bankruptcy with respect to the Casino
Facilities;
	 
	6.	 	Enter into, modify or terminate any lease, agreement to lease, option to lease,
license, franchise agreement (if any), operating agreement, management agreement or similar
arrangement relating to any portion of the Casino Facilities or the approval of any sublease
of space in the Casino Facilities;
	 
	7.	 	Select or retain a construction manager, general contractor, architect, managing
agent, legal counsel, rental agent, accountant or insurance carrier for Casino Facilities, or
the election as to whether and when to have an audit conducted of the fiscal affairs of the
Casino Facilities;
	 
	8.	 	Institute or defend litigation on behalf of the Casino Facilities or the Enterprise;
	 
	9.	 	Enter into, amend or terminate any Control Agreement including any service contract,
contract for goods or services of any kind or similar agreement, except in accordance with
Section 3.21;
	 
	10.	 	Write-off, forgive or otherwise defer any receivable or rent in excess of $2,500 in
any instance, subject to an aggregate cap of $10,000 in any given calendar year;
	 
	11.	 	Direct any employee of the Enterprise to take any action which Manager does not have
the authority to take or, if taken by Manager, would constitute a breach of Manager’s
obligations under the Agreement; and
	 
	12.	 	Take any other action or decision outside the scope of the ordinary day-to-day
business affairs of the Casino Facilities.

 

 

EXHIBIT D

MANAGER RESPONSIBILITIES AND DUTIES

     In addition to the other responsibilities and duties set forth in this Agreement (including in
Article 3) and subject to the terms and conditions of the Agreement, including the Approved Budget
and applicable limitations of authority, Manager shall:

	1.	 	Cooperate with the Enterprise (but not act as leasing agent) in the Enterprise’s
efforts to lease any office, restaurant or retail space at the Casino Facilities or on
adjacent outparcels available for lease to third parties; it being agreed that all such leases
shall be in Enterprise’s name and shall be executed only by the Enterprise;
	 
	2.	 	Check all bills received for the services, work and supplies ordered in connection
with maintaining and operating the Casino Facilities and, to the extent there are funds
available from the Enterprise and subject to the Approved Budget, pay such bills as and when
the same shall become due and payable;
	 
	3.	 	Inspect the Casino Facilities at adequate intervals and submit in writing to the
Enterprise any recommendations concerning the condition of the Casino Facilities and its
operations;
	 
	4.	 	Cooperate in all reasonable respects with any sale by the Enterprise of the Casino
Facilities or any portion of the Casino Facilities;
	 
	5.	 	Report to the Enterprise any incident which occurs on or around the Casino Facilities
that could lead to legal liability resulting from property damage (including due to theft,
vandalism or fire) or personal injuries (including slip and falls and assaults) promptly (but,
in any event, within 48 hours of Manager learning of such incident) and reasonably comply with
the Enterprise’s policies and procedures disclosed in writing to Manager concerning the
reporting, investigating and handling of any such incidents and/or subsequent claims (and
Manager shall cause its employees to comply with the same) and timely prepare and maintain
written incident reports of all accidents and other incidents and provide copies of same to
the Enterprise promptly;
	 
	6.	 	Pay (prior to imposition any penalty, late fee or adverse consequence), on the
Enterprise’s behalf (this duty shall not be construed as placing any obligation on Manager to
advance or use its own funds to make any such payments in connection with any of Manager’s
duties as set forth herein), all Costs of Operations of the Casino Facilities in accordance
with the Approved Budget and, at the option of the Enterprise, any or all other costs and
expenses associated with the Casino Facilities, as and when the same are due, but in any case
subject to the Enterprise’s direction, including in the context of any contest or dispute over
the applicable expenses and costs (and shall advise the Enterprise in writing upon learning
that the funds in the Approved Budget will be insufficient to make such payments);
	 
	7.	 	Take all commercially reasonable steps (including by obtaining lien waivers in
connection with any payments to contractors, material suppliers or other vendors when
nonpayment of same could give rise to lien rights under applicable laws) to prevent the
creation of any claim for lien or encumbrance or security interest against the Casino
Facilities or any part thereof or any fund, account receivable or other asset of the
Enterprise, other than liens, encumbrances and security interests created or consented to by
the Enterprise;

 

 

	8.	 	In making any arrangements for service contracts, maintenance or the provision of any
services, materials or labor in connection with the performance by Manager of its duties under
the Agreement in the operation of the Casino Facilities, Manager shall take full advantage of,
and see that Enterprise receives credit for, all available rebates, commissions, discounts,
warranties and allowances;
	 
	9.	 	Supervise and purchase or arrange for the purchase in the most economical manner of
all inventories, provisions and operating supplies, which, in the normal course of business
are necessary and proper to maintain and operate the Casino Facilities;
	 
	10.	 	Perform any other service or activity incidental to the normal and professional
operation of a property of a similar type and character to the Casino Facilities, including
entering into service contracts, website agreements and other services as agent for Enterprise
subject to any applicable limitations on such authority hereunder (including as set forth in
Section 3.2, Section 3.21 and Exhibit C hereof);
	 
	11.	 	Provide the Enterprise with written notice of any suspension, revocation, termination
or default under any Control Agreement and any threatened suspension, revocation, termination
or default thereunder promptly (but, in any event, within 48 hours of Manager learning of the
same) and Manager shall promptly (but, in any event, within 48 hours) notify the Enterprise in
writing of any defects, governmental notices, threats of condemnation or litigation or other
issues that may impede or preclude Manager from providing any or all of the services required
of it hereunder, or otherwise from discharging its duties and obligations hereunder or that
may materially and adversely affect Casino Facilities operations or the physical condition of
the Casino Facilities, upon Manager learning of same;
	 
	12.	 	Obtain and verify (if requested by the Enterprise) bills for real estate and personal
property taxes, including assessments and other charges and recommend payment or appeal with
regard to the same;
	 
	13.	 	Provide such other services as are customary for managers of other gaming facilities
of similar size and scope; and
	 
	14.	 	Do any and all acts and things as reasonably requested by the Enterprise in writing
or as Manager may reasonably deem necessary or appropriate to carry out its responsibilities
under the terms of this Agreement and in accordance with the Operating Standard.

 

 

EXHIBIT E

PRE-OPENING SERVICES

     Prior to the Opening Date (such period after the date hereof until the Opening Date being the
“Pre-Opening Period”), in order to prepare the Casino Facilities for full operation, Manager shall
render the following services to the Enterprise (the “Pre-Opening Services”):

	1.	 	Prepare a pre-opening budget, concept plans for food and beverage outlets and
pre-opening marketing plan for the Enterprise’s approval.
	 
	2.	 	Prepare and put into effect a plan for the organization, services and sales
promotion for the Casino Facilities, subject to the approval of the Enterprise;
	 
	3.	 	Engage a third-party provider to develop and design the content of the website for
the Casino Facilities, for the Enterprise’s approval, and implement and administer same;
	 
	4.	 	Identify, recommend to the Enterprise, procure, and coordinate installation of
software for Casino Facilities operations, as approved by the Enterprise;
	 
	5.	 	Procure Furnishings and Equipment as necessary to open the Casino Facilities, as
approved by the Enterprise;
	 
	6.	 	Coordinate with the Enterprise’s development manager to transition closeout of
construction to Casino Facilities opening;
	 
	7.	 	Participate in the punch list walkthrough of the Casino Facilities with the
Enterprise;
	 
	8.	 	Obtain and maintain all warranties, guaranties and related information related to
the construction of, and Furnishings and Equipment procured for the Casino Facilities;
	 
	9.	 	Engage third-party service providers, per the Approved Budget, and enter into
contracts and arrangements with regard to the same, subject in each instance to the other
terms and provisions of this Agreement relating to such matters (including Section 3.21);
	 
	10.	 	Recruit and train the employees of the Casino Facilities, subject to Article 4 and
engage in test operations of the Casino Facilities, as and to the extent approved by the
Enterprise;
	 
	11.	 	Apply for and secure all governmental licenses and permits needed for Casino
Facilities operations, including food and beverage services;
	 
	12.	 	Prepare and carry out a program for the grand opening of the Casino Facilities, in
a manner approved by the Enterprise; and
	 
	13.	 	Render such other services incidental to the preparation and organization of the
Casino Facilities’s management and operation in contemplation of the Casino Facilities
opening for business as may be reasonably necessary or advisable.

 

 

EXHIBIT F

CORE POSITIONS

General Manager

Assistant General Manager

Chief Financial Officer

Tables Director

Slots Director

Food and Beverage Director

Human Resource Director

Security Director

Surveillance Director

Marketing Directorexv10w1

	 	 	 	 	 

Exhibit 10.1

2009 Long-Term Incentive Award Plan of

Walter Investment Management Corp.

Restricted Stock Unit Award Agreement

 

 

2009 Long-Term Incentive Award Plan of

Walter Investment Management Corp.

Restricted Stock Unit Award Agreement

     You have been selected to receive a grant of Restricted Stock Units (“RSUs”)
pursuant to the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp. (the
“Plan”) as specified below:

Participant:

Date of Grant:

Number of RSUs Granted:

Settlement Date:

Vesting Schedule: The RSUs shall vest according to the following schedule:

	 	 	 	 	 
	Date on Which RSUs Vest	 	Number of RSUs Vested	 	Cumulative Number of RSUs Vested
	 
	January 4, 2011

	 	One-Third	 	 
	January 4, 2012

	 	One-Third	 	 
	January 4, 2013

	 	One-Third	 	 

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of RSUs by
Walter Investment Management Corp., a Maryland corporation (the “Company”), to the Participant
named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing the grant of RSUs.
If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the
Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All
capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set
forth otherwise herein. The parties hereto agree as follows:

	1.	 	Employment With the Company. Except as may otherwise be provided in Section 5 or 6, the RSUs
granted hereunder are granted on the condition that the Participant remains an employee of the
Company from the Date of Grant through (and including) the Settlement Date.
	 
	 	 	This grant of RSUs shall not confer any right to the Participant (or any other Participant) to be
granted RSUs or other Awards in the future under the Plan.
	 
	2.	 	Timing of Payout. Payout of all RSUs shall occur as soon as administratively feasible after the
earlier of the Settlement Date, the Participant’s death,
Disability, Retirement, or a Change in Control
unless a Participant irrevocably elects to voluntarily defer the payout of RSUs to a specific
date or event as approved by the Compensation Committee and in compliance with 409A.
	 
	3.	 	Form of Payout. Vested RSUs will be paid out solely in the form of shares of stock of the Company.

1

 

	4.	 	Voting Rights and Dividends Equivalents. Until such time
as the RSUs are paid out in shares of Company stock, the
Participant shall not have voting rights. However, the
Company will pay Dividend Equivalents on the RSUs, in
the form of cash at such time as dividends are paid on
the Company’s outstanding shares of Common Stock.
	 
	5.	 	Termination of Employment.

	 	(a)	 	By Death. In the event the employment of the Participant with
the Company is terminated by reason of Death prior to
becoming partially or fully vested without restriction in all
or a portion of the RSUs, Participant shall become
immediately fully vested without restriction in all RSUs
granted pursuant to this Agreement.
	 
	 	(b)	 	By Disability or Retirement. In the event the employment of
the Participant with the Company is terminated by reason of
Disability or Retirement prior to becoming partially or fully
vested without restriction in all or a portion of the RSUs,
Participant shall become immediately fully vested without
restriction in all RSUs granted pursuant to this Agreement.
	 
	 	 	 	For purposes of this Agreement, (a) Disability shall be
defined as a “permanent and total disability” within the
meaning of Section 22(e)(3) of the Internal Revenue Code of
1986, as amended and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may
include, and (b) Retirement shall mean, Participant’s
voluntary termination of employment after such time as
either, Participant has reached the age of 60, or the sum of
Participant’s age and years of service with the Company
(inclusive of years served with any predecessor or successor
companies to the Company) exceeds 70; provided that, in
either case, Participant provides the Company with at least 6
months written notice of Participant’s intention to retire,
or such lesser time as the Company may agree.
	 
	 	(c)	 	For Cause. In the event the employment of the Participant
with the Company is involuntarily terminated for Cause, all
vested and unvested RSUs shall be forfeited.
	 
	 	 	 	For purposes of this Agreement, Cause means the Participant’s:

	 	i)	 	Willful failure to substantially perform the Executive’s
duties with the Company (other than any such failure
resulting from the Executive’s Disability or Retirement),
after a written demand for substantial performance is
delivered to the Executive that specifically identifies
the manner in which the Company believes that the
Executive has not substantially performed such duties, and
the Executive has failed to remedy the situation, to the
extent possible, within fifteen (15) business days of such
written notice from the Company or such longer time as may
be reasonably required to remedy the situation, but no
longer than forty-five (45) calendar days;
	 
	 	ii)	 	Conviction of, or plea of guilty or nolo contendere, to
any felony which, in the discretion of the Compensation
and Human Resources Committee of the Company’s Board of
Directors, is materially injurious to the Company or its
reputation or which compromises the Executive’s ability to
perform the Executive’s job function, or any other crime
involving moral turpitude or the personal enrichment of
the Executive at the expense of the Company;
	 
	 	iii)	 	Willful violation of any of the covenants contained in the
Participant’s employment agreement (e.g., Noncompete,
Nonsolicitation, Confidentiality, etc.), as applicable;
	 
	 	iv)	 	Act of dishonesty resulting in or intending to result in
personal gain at the expense of the Company; or
	 
	 	v)	 	Engaging in any act that is intended, or may be reasonably
expected, to harm the reputation, business prospects, or
operations of the Company.

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	 	 	 	For purposes of this Section 3, no act or omission by the
Executive shall be considered “willful” unless it is done
or omitted in bad faith or without reasonable belief that
the Executive’s action or omission was in the best
interests of the Company. Any act or failure to act based
upon: (i) authority given pursuant to a resolution duly
adopted by the Board; or (ii) advice of counsel for the
Company, shall be conclusively presumed to be done or
omitted to be done by the Executive in good faith and in
the best interests of the Company.
	 
	 	(d)	 	For Other Reasons. Subject to the Compensation and Human
Resource Committee’s (the “Committee”) discretion, if the
employment of the Participant shall terminate for any
reason other than the reasons set forth in this Section
5(a) through 5(c) herein, the Participant shall forfeit
the unvested portion of the RSU Award.

	6.	 	Change in Control. Notwithstanding anything to the
contrary in this Agreement, in the event of a Change in
Control of the Company and prior to the Participant’s
termination of employment, the Participant shall become
immediately fully vested without restriction in all
RSUs granted pursuant to this Agreement.
	 
	7.	 	Restrictions on Transfer. Unless and until actual shares of stock of the Company are received upon
payout, RSUs granted pursuant to this Agreement may not
be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated (a “Transfer”), other than by
will or by the laws of descent and distribution, except
as provided in the Plan.
	 
	8.	 	Recapitalization. In the event of any change in the
capitalization of the Company such as a stock split or
a corporate transaction such as any merger,
consolidation, separation, or otherwise, the number and
class of RSUs subject to this Agreement shall be
equitably adjusted by the Committee, in its sole
discretion, to prevent dilution or enlargement of
rights.
	 
	9.	 	Beneficiary Designation. The Participant may, from time
to time, name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any
benefit under this Agreement is to be paid in case of
his or her death before he or she receives any or all
of such benefit. Each such designation shall revoke all
prior designations by the Participant, shall be in a
form prescribed by the Company, and will be effective
only when filed by the Participant in writing with the
Secretary of the Company during the Participant’s
lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant’s death
shall be paid to the Participant’s estate.
	 
	10.	 	Continuation of Employment. This Agreement shall not
confer upon the Participant any right to continue
employment with the Company or its Subsidiaries, nor
shall this Agreement interfere in any way with the
Company’s right to terminate the Participant’s
employment at any time.

3

 

	11.	 	Miscellaneous.

	 	(a)	 	This Agreement and the rights of the Participant hereunder
are subject to all the terms and conditions of the Plan,
as the same may be amended from time to time, as well as
to such rules and regulations as the Committee may adopt
for administration of the Plan. The Committee shall have
the right to impose such restrictions on any shares
acquired pursuant to this Agreement, as it may deem
advisable, including, without limitation, restrictions
under applicable federal securities laws, under the
requirements of any stock exchange or market upon which
such shares are then listed and/or traded, and under any
blue sky or state securities laws applicable to such shares. It is expressly understood that the Committee is
authorized to administer, construe, and make all
determinations necessary or appropriate to the
administration of the Plan and this Agreement, all of
which shall be binding upon the Participant.
	 
	 	(b)	 	The Committee may terminate, amend, or modify the Plan;
provided, however, that no such termination, amendment, or
modification of the Plan may in any material way adversely
affect the Participant’s rights under this Agreement,
without the written consent of the Participant.
	 
	 	(c)	 	The Participant may elect, subject to any procedural rules
adopted by the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company
withhold and sell shares having an aggregate Fair Market
Value on the date the tax is to be determined, equal to
the amount required to be withheld.
	 
	 	 	 	The Company shall have the power and the right to deduct
or withhold from the Participant’s compensation, or
require the Participant to remit to the Company, an amount
sufficient to satisfy the minimum statutory required
withholding for federal, state, and local taxes (including
the Participant’s FICA obligation), domestic or foreign,
required by law to be withheld with respect to any payout
to the Participant under this Agreement.
	 
	 	(d)	 	The Participant agrees to take all steps necessary to
comply with all applicable provisions of federal and state
securities laws in exercising his or her rights under this
Agreement.
	 
	 	(e)	 	This Agreement shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as
may be required.
	 
	 	(f)	 	All obligations of the Company under the Plan and this
Agreement, with respect to the RSUs, shall be binding on
any successor to the Company, whether the existence of
such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the
Company.
	 
	 	(g)	 	To the extent not preempted by federal law, this Agreement
shall be governed by, and construed in accordance with,
the laws of the state of Maryland.
	 
	 	(h)	 	To the extent any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable or
invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
	 
	 	(i)	 	Notice hereunder shall be given to the Company at its
principal place of business, and shall be given to the
Participant at the address set forth below, or in either
case at such addresses as one party may subsequently
furnish to the other party in writing.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
Date of Grant.

	 	 	 	 	 
	 	Walter Investment Management Corp.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

ATTEST:

	 	 	 	 	 
	 	 	 	
 	 
	 	 	 	Participant
 	 
	 	 	 	Participant’s name and address: 	 
	 
	 	 	 	
 	 
	 
	 	 	 	
 	 
	 
	 	 	 	
 	 
	 
	 	 	 	
 	 

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