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Excursion Boat Sponsorship And Operations Agreement

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Sectors: Leisure and Entertainment
Governing Law: Iowa, View Iowa State Laws
Effective Date: October 07, 2002
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AMENDED AND RESTATED
EXCURSION BOAT SPONSORSHIP AND OPERATIONS AGREEMENT


THIS AMENDED AND RESTATED EXCURSION BOAT SPONSORSHIP AND OPERATIONS AGREEMENT is made and entered into as of the 7th day of October, 2002, by and between Iowa West Racing Association (hereinafter referred to as "Iowa West"), an Iowa nonprofit corporation, and Ameristar Casino Council Bluffs, Inc. (hereinafter referred to as "Ameristar"), an Iowa corporation.


WHEREAS, on September 15, 1994, Iowa West and Ameristar entered into that certain Excursion Boat Sponsorship and Operations Agreement (the "Sponsorship Agreement"); and


WHEREAS, paragraph 11 of the Sponsorship Agreement provides that the initial term of the Sponsorship Agreement expires on December 31, 2002 and will be automatically renewed unless either party gives at least six months' prior notice of its intention not to renew the Sponsorship Agreement;


WHEREAS, on June 28, 2002, Ameristar gave written notice to Iowa West of its intention not to renew the Sponsorship Agreement;


WHEREAS, the parties have since come to a mutual agreement for the renewal of the Sponsorship Agreement on the terms set forth herein;


WHEREAS, paragraph 14 of the Sponsorship Agreement requires that any amendment to or modification of the Sponsorship Agreement would only be effective if it is in writing and signed by both parties, and, if required, approved by the Iowa Racing and Gaming Commission (the "Commission"); and


WHEREAS, the parties do now wish to amend and restate in its entirety the Sponsorship Agreement as hereinafter set forth.


NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby mutually agreed as follows:


1. LICENSE APPLICATION. Iowa West shall, each year, or as otherwise required, promptly and timely apply to the Commission pursuant to Chapter 99F of the Iowa Code as a sponsor for a license to conduct gambling games. Ameristar shall, each year, or as otherwise required, promptly and timely apply to the Commission for a license to operate an excursion gambling boat under Chapter 99F of the Iowa Code.


2. CONDITIONS PRECEDENT TO SPONSORSHIP AND OPERATIONS AGREEMENT. This Agreement shall be effective only upon the approval of this Agreement by the Commission. The parties shall coordinate their efforts and cooperate with one another to seek this approval as expeditiously as possible.


3. NON-ASSIGNABILITY OF LICENSES. Neither party may assign any of its rights, duties or obligations under any license issued by the Commission without the prior approval of the Commission.


4. LICENSE AGREEMENT AND OPERATION FEE.


(a) During the term of this Agreement, Ameristar shall pay to Iowa West an operation fee determined in accordance with the following schedule:


(i) A fee of five percent (5%) of the Adjusted Gross Receipts
generated by the Ameristar excursion gambling boat shall be
applicable to the first Thirty Million Dollars ($30,000,000) of
Adjusted Gross Receipts generated by the Ameristar excursion gambling
boat each calendar year;


(ii)A fee of four percent (4%) of the Adjusted Gross Receipts
generated by the Ameristar excursion gambling boat shall be
applicable to such Adjusted Gross Receipts in excess of Thirty
Million Dollars ($30,000,000) up to and including Sixty Million
Dollars ($60,000,000) each calendar year;


(iii) A fee of three percent (3%) of the Adjusted Gross Receipts
generated by the Ameristar excursion gambling boat shall be
applicable to such Adjusted Gross Receipts in excess of Sixty Million
Dollars ($60,000,000) up to and including Ninety Million Dollars
($90,000,000) each calendar year;


(iv) A fee of two percent (2%) of the Adjusted Gross Receipts
generated by the Ameristar excursion gambling boat shall be
applicable to such Adjusted Gross Receipts in excess of Ninety
Million Dollars ($90,000,000) up to and including One Hundred Twenty
Million Dollars ($120,000,000) each calendar year; and


(v) A fee of one-half of one percent (0.5%) of the Adjusted Gross
Receipts generated by the Ameristar excursion gambling boat shall be
applicable to such Adjusted Gross Receipts in excess of One Hundred
Twenty Million Dollars ($120,000,000) up to and including One Hundred
Fifty Million Dollars ($150,000,000) each calendar year.


No fee shall be payable with respect to any Adjusted Gross Receipts generated by the Ameristar excursion gambling boat in excess of One Hundred Fifty Million Dollars ($150,000,000) each calendar year. The operation fee shall be paid monthly on or before the 10th day of the month following the month in which the Adjusted Gross Receipts were generated upon which such operation fee is based. As used herein, the term "Adjusted Gross Receipts" shall have the same meaning as set forth in Section 99F.1(1) of the Iowa Code.


(b) Ameristar shall be solely responsible for the payment of all admission fees owing to the state and local governments under Section 99F.10 of the Iowa Code or any


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succeeding provision, including admission fees relating to passengers with complimentary passes. The parties agree that the fees set forth above are the only sums to which Iowa West is entitled under this Agreement (other than amounts payable pursuant to the indemnification provision set forth herein), and all such fees paid to Iowa West are deemed and agreed to be subject to the restrictions imposed by Section 99F.6(4)(a) of the Iowa Code or any succeeding provision.


(c) Ameristar shall pay to the Commission all the wagering taxes imposed by Section 99F.11 of the Iowa Code or any succeeding provision.


(d) Ameristar shall indemnify and hold Iowa West harmless from any and all claims relating to all sums due for admission fees owing to any government entity under Section 99F.10 of the Iowa Code or any succeeding provision, all income or excise taxes owed to the United States or any state government, and all wagering taxes owing to the State of Iowa under Section 99F.11 of the Iowa Code or any succeeding provision; provided, however, that Ameristar shall have no liability or obligation to indemnify or hold Iowa West harmless from any tax liability Iowa West may incur with respect to the monies paid to Iowa West by Ameristar.


5. LICENSE APPLICATION FEES AND ATTORNEYS FEES. Each party hereto shall be responsible for its own license fees and expenses in connection with the approval and performance of this Agreement, and any application fee required in connection therewith, including DCI investigation fees, and its own attorneys fees in connection with this Agreement and the license applications contemplated hereby.


6. IOWA WEST ORGANIZATIONAL AND GOVERNANCE REQUIREMENTS.


(a) REPRESENTATIONS OF IOWA WEST. Iowa West represents and warrants to Ameristar that as of the date of this Agreement: each of Iowa West, the Foundation (defined below) and Wescorp (defined below) is a nonprofit corporation organized, existing and in good standing under the laws of the State of Iowa; the articles of incorporation of each of Iowa West and the Foundation respectively authorize only a single membership in each such corporation, and Wescorp is the sole member of each of Iowa West and the Foundation.


(b) COVENANTS OF IOWA WEST. At all times during the term of this Agreement following the Effective Date (as defined below), Iowa West agrees that:


(i) Grant Committee. Iowa West Foundation (the "Foundation")
shall permit each operator of an excursion gambling boat or land-based
gaming facility for which Iowa West or an affiliate serves as the
qualified sponsoring organization (each, a "Sponsored Gaming Entity") to
appoint one (1) representative to the Foundation's Grant Committee
(being an advisory committee to the board of directors of the
Foundation); provided, however, that each person so appointed must, at
the time of appointment, have obtained the age of majority, must be a
permanent legal resident of Pottawattamie County, Iowa (the "County"),
and must be knowledgeable in matters concerning the City of Council
Bluffs, Iowa (the "City") and the County and the


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purposes of Iowa West and the Foundation's Grant Committee. All such
appointees must maintain continuing permanent residency in the County in
order to be eligible to continue to serve on such Committee. The
Foundation may refuse to seat any such appointee who, based upon the
reasonable and good faith determination of the Wescorp Board (as defined
below), does not meet such requirements and any such appointee who is
seated may be removed from the Committee if such residency is not
maintained. If such appointee is not seated or is removed, the Sponsored
Gaming Entity that appointed such unqualified or removed appointee,
shall have the right to designate a qualified replacement. The
Foundation's Grant Committee shall consist of the number of
representatives named by the Sponsored Gaming Entities, plus an
additional number of members equal to not less than 75% of the number of
directors of Wescorp and not more than 100% of the number of directors
of Wescorp. All members of the Foundation's Grant Committee, other than
the appointees of the Sponsored Gaming Entities, shall be members of the
Wescorp Board and shall be appointed by the Wescorp Board.


(ii) Wescorp Board of Directors.


(A) Prior to the Effective Date, Iowa Wescorp Association
("Wescorp") shall amend its bylaws to increase the size of its board of
directors (the "Wescorp Board") to seventeen (17) members, with the four
new members to be selected at Wescorp's 2003 Annual Meeting (which will
occur prior to February 1, 2003) (the "2003 Annual Meeting") as
described below for terms commencing on the date of the 2003 Annual
Meeting. Once a majority of the members of the Wescorp Board are
Nominated Directors (as defined below), Wescorp may amend its bylaws to
reduce the number of directors as and to the extent it deems such
reduction appropriate, provided that: (1) after such reduction, the
Wescorp Board shall continue to satisfy the requirement that a majority
of its members be Nominated Directors; and (2) the Wescorp Board shall
not be reduced below eleven (11) members.


(B) From the Effective Date until the expiration or
termination of this Agreement, selection of each member of the Wescorp
Board (including the re-election of sitting members eligible for
re-election) shall be made from a pool of nominees (the "Nominated
Pool") which will consist of:


(1) in the case of any board position for which a
sitting director is eligible for re-election, desires to be
re-elected, and is nominated by the Wescorp Board's nominating
committee, the sitting director, and


(2) a minimum of three nominees for each Wescorp Board
seat subject to election (or more nominees, if requested by
Wescorp) identified by each Nominating Body (which nominees may
include sitting directors eligible for re-election).


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It is understood that nominations are not specific to any particular
Wescorp Board seat in question. Any member of the Nominated Pool may be
elected to any seat on the Wescorp Board. As used herein, the term
"Nominating Body" or "Nominating Bodies" shall include the City Council
of the City, the Board of Supervisors of the County, the board of
directors of the Council Bluffs Chamber of Commerce, the Board of
Education of the Council Bluffs Community School District, and such
other governmental entities, civic and nonprofit organizations generally
representative of the broad-based constituencies within the greater
Council Bluffs/Pottawattamie County, Iowa community, if any, as may be
selected from time to time by the Wescorp Board (it being understood
and agreed that any nonprofit entity selected as a Nominating Body shall
be an established nonprofit organization with broad-based community
representation). Persons nominated by a Nominating Body who are selected
as directors of Wescorp (whether or not they are sitting directors
eligible for re-election) are hereinafter referred to as "Nominated
Directors." Any sitting director who is nominated for re-election by a
Nominating Body and is re-elected to the Board shall, from and after
such election and continuing for so long as such director thereafter
serves on the Board, be considered a Nominated Director, notwithstanding
the fact that such director was not a Nominated Director prior thereto.
All nominees must meet the minimum eligibility requirements for board
membership set forth in subparagraph 6(b)(ii)(D) hereof. In the event
that the Wescorp Board or its nominating committee reasonably and in
good faith determines that any nominee nominated by a Nominating Body
fails to meet such requirements, the Nominating Body which nominated
such nominee shall name a replacement nominee upon the request of
Wescorp. In the event that any Nominating Body shall fail or refuse to
nominate the number of nominees required under subparagraph (B)(2)
above, such failure shall not disqualify the remaining nominees (if any)
named by such Nominating Body or any other Nominating Body; provided,
that Wescorp may, at its option, request the remaining Nominating Bodies
to provide nominees to fill the pool of candidates to the required
number.


(C) Not later than February 1, 2003, the Wescorp Board shall
include not less than five (5) Nominated Directors. Not later than
February 1, 2005, the Wescorp Board shall include not less than seven
(7) Nominated Directors. Not later than February 1, 2007, and throughout
the remaining term of this Agreement, a majority of the members of the
Wescorp Board shall be Nominated Directors.


(D) It is understood and agreed that:


(1) the pool of nominees named by the Nominating Bodies
shall represent a diverse range of interests and points of view
within the greater Council Bluffs/Pottawattamie County, Iowa
community.


(2) the actual selection and terms of service of members
of the Wescorp Board shall be governed by the Articles of
Incorporation and Bylaws of Wescorp applicable thereto.


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(3) each nominee shall be a permanent legal resident of
the County, shall be of legal age, shall be generally familiar
with matters concerning the City, the County and the purposes of
Wescorp, shall be capable, in the reasonable and good faith
judgment of the Wescorp Board, of performing the duties of a
director, and shall meet such other uniformly applicable
eligibility requirements as may be established pursuant to the
bylaws of Wescorp.


(4) no nominee shall be an employee, officer or elected
official of any of the Nominating Bodies, any Sponsored Gaming
Entity, any formally-organized special interest group or any
formally-organized lobbying group; provided, however, that an
employee, officer or elected official of such a special interest
group or lobbying group shall be disqualified from the pool of
nominees only if the Wescorp Board reasonably and in good faith
determines that such nominee's role in or for such group involves
an actual or potential conflict of interest with the purposes of
Wescorp or the broad interests of the greater Council
Bluffs/Pottawattamie County,
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