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EXHIBIT 10.6
FIRST AMENDED AND RESTATED
OPERATING AGREEMENT
of
BUFFINGTON HARBOR RIVERBOATS, L.L.C.
by and between
TRUMP INDIANA, INC.
and
BARDEN-DAVIS CASINO, L.L.C.
DATED: As of October 31, 1995
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FIRST AMENDED AND RESTATED
OPERATING AGREEMENT
of
BUFFINGTON HARBOR RIVERBOATS, L.L.C.
THIS FIRST AMENDED AND RESTATED OPERATING AGREEMENT (the
"Agreement") is made as of the 31st day of October, 1995 by and between
TRUMP INDIANA, INC., a Delaware corporation, having an office at 6012
W. Industrial Highway, Gary, Indiana 46406 (hereinafter sometimes
referred to as "Trump"), and BARDEN-DAVIS CASINO, L.L.C., an Indiana
limited liability company, having an office at Suite 2400, 400
Renaissance Center, Detroit, Michigan 48243 (hereinafter sometimes
referred to as "BDC"; Trump and BDC are hereinafter sometimes referred
to as the "Members" and individually as a "Member").
WITNESSETH:
WHEREAS, Trump and BDC have entered into certain agreements with
the City (this and all other capitalized terms having the meanings
ascribed to them below) and have been awarded Certificates of
Suitability by the Commission to conduct separate but coordinated
riverboat gaming operations in the City; and
WHEREAS, to acquire control over the common site from which the
aforementioned riverboat gaming operations are to be conducted, and in
anticipation of assigning the same to the LLC, Trump has acquired the
Lehigh Property, has entered into the Pre-Formation Agreements, and has
commenced development of the site for riverboat gaming operations in
accordance with the Site Plan; and
WHEREAS, Trump and BDC have formed Buffington Harbor Riverboats,
L.L.C., a Delaware limited liability company (the "LLC") pursuant to
the terms of an Operating Agreement dated as of September 27, 1995 (the
"Original Agreement"), for the purpose of acquiring the LLC Property
(including by accepting the contributions to the LLC by Trump as set
forth below), constructing common roadways, utilities and other
infrastructure improvements on the LLC Property in accordance with the
Site Plan, operating, maintaining, repairing and replacing the Common
Areas, and entering into agreements with each of Trump and BDC pursuant
to which each of Trump and BDC shall have the right to conduct separate
riverboat gaming operations and construct separate facilities, all as
more particularly described below; and
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WHEREAS, Trump and BDC desire to enter into this Agreement to
define and express all of the terms, covenants and conditions of the
LLC and their respective rights and obligations with respect thereto
and to, among other things amend and restate the Original Agreement to
reflect the facts that (i) the Members did not make the Initial
Contributions specified in Sections 4.1(a)(1) and (2) of the Original
Agreement upon execution of the Original Agreement, as the same were
delayed for reasons beyond the control of the Members; (ii) subsequent
to the execution of the Original Agreement, the Members entered into an
Agreement dated as of September 29, 1995 with the City, whereby certain
payments are to be made (or have been made) by each Member to the City
in lieu of the LLC conveying the City Property (as defined in the
Original Agreement) to the City; (iii) the Members desire to reduce the
number of Construction Representatives on the Construction Committee;
and (iv) the Members wish to restate Exhibits B-1, B-2, E, F and G to
include additional items; and
WHEREAS, Trump and BDC desire to be bound by this Agreement
pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:
1.1 "Act" means the Delaware Limited Liability Company Act, as
amended from time to time.
1.2 "Additional Facilities" shall have the meaning ascribed to it
in Section 3.1(e) below.
1.3 "Affiliate" means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with such Person. For purposes of this definition, "control" shall
mean the power to direct management or policies through ownership of
voting securities or similar equity interest.
1.4 "Agreement" means this First Amended and Restated Operating
Agreement, as the same from time to time may be amended, modified,
supplemented or restated.
1.5 "Bankruptcy" means, with respect to the applicable Person,
that such Person shall have (1) made an assignment for the benefit of
creditors; (2) filed a voluntary petition in bankruptcy; (3) been
adjudicated a bankrupt or insolvent; (4) filed a petition or answer
seeking for himself or itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under
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any statute, law or regulation; (5) filed an answer or other pleading
admitting or failing to contest the material allegations of a petition
filed against him or it in any proceeding set forth in (4) above; or
(6) sought, consented to, or acquiesced in the appointment of a
trustee, receiver, or liquidator of all or any substantial part of his
or its properties; or if 180 days after the commencement of any
proceeding against the Person seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any statute, law, or regulation, the proceeding has not been
dismissed, or if within 150 days after the appointment without his or
its consent or acquiescence of a trustee, receiver, or liquidator of
the Person or all or any substantial part of his or its properties, the
appointment is not vacated or stayed, or within 90 days after the
expiration of any such stay, the appointment is not vacated.
1.6 "BDC Costs" shall have the meaning ascribed to it in Section
4.1(c) below.
1.7 "BDC Memorandum of Understanding" means the Memorandum of
Understanding dated as of September 5, 1995 between BDC and the City.
1.8 "BDC Projects" means the projects which BDC is to develop on
parts of the LLC Property in its own name and right in order to satisfy
its obligations under its Certificate of Suitability, the BDC
Memorandum of Understanding and/or the Development Agreement, but
specifically excluding any obligations under the Development Agreement
of the LLC to develop projects in its name and right.
1.9 "Berthing Agreements" shall have the meaning ascribed to it in
Section 2.3(h) below.
1.10 "Capital Account" shall have the meaning ascribed to it in
Section 4.1(f) below.
1.11 "Cash Needs" of the LLC shall have the meaning ascribed to it
in Section 4.3(a)(3) below.
1.12 "Certificate" means the Certificate of Formation iled with
respect to the LLC in the office of the Delaware Secretary of State, as
the same may be from time to time amended, modified or supplemented in
accordance with the provisions of this Agreement.
1.13 "Certificate of Suitability" means the Certificate of
Suitability issued to BDC or Trump, as applicable, by the Indiana
Gaming Commission, as well as any Riverboat Owner's License issued to
BDC or Trump pursuant to their respective Certificates of Suitability.
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1.14 "City" means the City of Gary, Indiana.
1.15 "Code" means the Internal Revenue Code of 1986, as amended,
or any corresponding provision of any succeeding law.
1.16 "Commission" means the Indiana Gaming Commission.
1.17 "Common Areas" means that part of the LLC Property which is
intended to serve the gaming operations of Trump and BDC together with
the improvements to be constructed thereon, all as designated on the
Site Plan or as the same are to be designated on the Master Plan.
1.18 "Common Area Development Approvals" means the applications
for permits, licenses or approvals, together with any such permits,
licenses or approvals, which either Trump or BDC have applied for or
procured prior to the date of this Agreement, which pertain to the
development or construction of the Common Areas, including without
limitation the applications, permits, licenses and other approvals
listed on Exhibit A.
1.19 "Construction Committee" shall have the meaning ascribed to
it in Section 3.1(b) below.
1.20 "Development Agreement" means the Development Agreement to be
entered into among the City, the LLC, BDC and Trump pursuant to or in
furtherance of the Certificates of Suitability, the BDC Memorandum of
Understanding and the Trump Memorandum of Understanding (or, if
applicable, both of the separate development agreements to be entered
into between the City and BDC and the City and Trump).
1.21 "Event of Default" shall have the meaning ascribed to it in
Section 7.1(a) below.
1.22 "Harbor" means Buffington Harbor in the City of Gary,
Indiana.
1.23 "Harbor Lease Agreement" means the Harbor Lease Agreement
dated June 29, 1995 between Lehigh Portland Cement Company, as lessor,
and Trump, as lessee.
1.24 "Improvements Budget" shall have the meaning ascribed to it
in Section 3.10 below.
1.25 "Lehigh Property" means the real property interests purchased
by Trump from Lehigh Portland Cement Company, including the lessee's
interest under the Harbor Lease Agreement.
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1.26 "LLC" means the limited liability company to which this
Agreement pertains, as such limited liability company may from time to
time be constituted.
1.27 "LLC Property" means the Lehigh Property and any other real
property interests which the LLC acquires or leases, less any part of
the foregoing which is exchanged or otherwise disposed of by the LLC.
1.28 "Master Plan" shall have the meaning ascribed to it in
Section 3.1(e) below.
1.29 "Master Plan Improvements" shall have the meaning ascribed to
it in Section 3.1(e) below.
1.30 "Member" means any Person who is admitted to the LLC pursuant
to the provisions of this Agreement. The initial Members of the LLC
are Trump and BDC.
1.31 "New Harbor" shall have the meaning ascribed to it in Section
3.1(e) below.
1.32 "Operating Committee" shall have the meaning ascribed to it
in Section 3.2 below.
1.33 "Operating Plan and Budget" shall have the meaning ascribed
to it in Section 3.9(a) below.
1.34 "Operating Reserve" means a reserve to be maintained by the
LLC (initially to be funded as part of the Improvements Budget and
thereafter to be reflected in each year's Operating Plan and Budget and
funded under the Berthing Agreements) equal to one-half of the
projected funds (net of anticipated revenues other than borrowings)
required by the LLC in connection with its operations for the
applicable year, but excluding any funds required for construction of
the Site Plan Improvements or the Master Plan Improvements.
1.35 "Original Agreement" shall mean the Operating Agreement for
the LLC dated as of September 27, 1995.
1.36 "Percentage Interest" shall have the meaning ascribed to it
in Section 4.2 below.
1.37 "Person" means any individual, corporation, partnership
(general or limited), association, limited liability company, trust,
estate or other entity.
1.38 "Pre-Formation Agreements" means the agreements listed on
attached Exhibit B-1.
1.39 "Prime Rate" shall have the meaning ascribed to it in Section
4.1(e)(4) below.
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1.40 "Required Amount" shall have the meaning ascribed to it in
Section 4.3(a)(1) below.
1.41 "Site Plan" means the site plan attached as Exhibit C, as the
same may be modified or revised. The Site Plan depicts the Site Plan
Improvements on the LLC Property.
1.42 "Site Plan Improvements" means all of the improvements shown
on or contemplated by the Site Plan, including improvements to the
Harbor, a pavilion, parking areas and other improvements (save for
riverboats) necessary to serve the gaming operations of BDC and Trump.
1.43 "State" means the State of Delaware.
1.44 "Studies" means the agreements or studies listed on attached
Exhibit B-2.
1.45 "Trump Costs" shall have the meaning ascribed to it in
Section 4.1(b) below.
1.46 "Trump Memorandum of Understanding" means the Memorandum of
Understanding dated as of May 27, 1995 between Trump and the City.
1.47 "Trump Projects" means the projects which Trump is to develop
on parts of the LLC Property in its own name and right in order to
satisfy its obligations under its Certificate of Suitability, the Trump
Memorandum of Understanding and/or the Development Agreement, but
specifically excluding any obligations under the Development Agreement
of the LLC to develop projects in its name and right.
1.48 "Uncontrollable Expenses" shall have the meaning ascribed to
it in Section 3.9(a).
2. ORGANIZATION.
2.1 Name. The name of the LLC is Buffington Harbor Riverboats,
L.L.C., and such name shall be used at all times in connection with the
business and affairs of the LLC.
2.2 Organization of the LLC. The LLC has been organized under the
laws of the State and is qualified to transact business in the State of
Indiana. The LLC has been organized on the date of the filing of the
Certificate. The Members shall execute or cause to be executed and
filed such other documents and instruments with such appropriate
authorities as may be necessary or appropriate from time to time to
comply with all requirements for the formation
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and operation of a limited liability company in the State and for the
qualification of a limited liability company to transact business in
the State of Indiana.
2.3 Purpose of the LLC. The business and purposes of the LLC
shall be:
(a) To accept the contribution of the Lehigh Property and the
assignment of the Pre-Formation Agreements by Trump as contemplated
below, to accept the assignment of the Studies by BDC as contemplated
below, and to assume all obligations arising under the Pre-Formation
Agreements and/or the Studies so assigned, and to indemnify Trump or
BDC, as the case may be, with respect to liability under the
Pre-Formation Agreements and/or the Studies as provided below;
(b) To enter into leases, subleases or other arrangements
regarding the use or occupancy of all or part of the LLC Property with
BDC, Trump or any other Person, upon such terms and conditions as are
specified herein or are otherwise approved by the LLC;
(c) To make application for, process and negotiate all
governmental approvals or permits and/or private rights for land use,
utility services, drainage rights, dockage rights, access rights and
similar rights as may be necessary or desirable for implementing the
Site Plan;
(d) To construct the Site Plan Improvements;
(e) To obtain all necessary permits, licenses and approvals with
respect to the construction, operation, maintenance, repair and
replacement of the Common Areas;
(f) To construct, operate, maintain, repair and replace the Common
Areas;
(g) To enter into license agreements (each a "Berthing Agreement"
and both being the "Berthing Agreements") with each of Trump and BDC
with respect to the berthing of their respective riverboats within or
adjacent to the Common Areas and the terms on which such parties may
otherwise enjoy a license to use the Common Areas;
(h) To revise and refine the Site Plan and to develop, revise and
refine the Master Plan;
(i) Subject to the provisions of Section 3.1(e) below, to make
application for, process and negotiate all governmental approvals or
permits and/or private rights for land use, utility services, drainage
rights, dockage rights, access rights and similar rights as may be
necessary or desirable for implementing the Master Plan, and to
construct the Master Plan Improvements;
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(j) To otherwise develop, improve, manage, exchange, finance,
operate and deal with and in every way exercise complete control and
dominion over the Common Areas and all assets acquired and facilities
constructed in connection therewith; and
(k) To do all things necessary or desirable in connection with the
foregoing or as otherwise contemplated in this Agreement, including but
not limited to executing and delivering such documents and instruments
as are necessary to effectuate or memorialize any of the foregoing.
2.4 No Other Purpose. The LLC shall have no other purpose
(including, without limitation, no purpose having to do with the
operation of casinos, BDC Projects or Trump Projects), unless approved
by both Members in writing. The LLC shall not assume any obligation of
either or both of the Members to the City, the Commission or the State
of Indiana unless approved by both Members in writing.
2.5 Property for Resale; Terms of Ground Leases or Subleases. The
LLC shall not hold any real property primarily for resale to customers
in the ordinary course of its trade or business, but may lease,
sublease or exchange certain portions thereof in furtherance of the
LLC's activities. Unless otherwise agreed in writing by both Members,
any ground lease or sublease of part of the LLC Property by the LLC to
a Member or its Affiliate shall be for a nominal amount of rent (i.e.,
$1.00 per year), shall have a term ending ninety nine (99) years from
the date of this Agreement (or at such earlier date as the LLC's
interest or leasehold interest in the relevant property expires), shall
contain such customary terms as will facilitate the financing of the
contemplated improvements on the applicable part of the LLC Property by
the Member or its Affiliate, and shall obligate the tenant to pay
impositions (if any) on the applicable property.
2.6 Term. The term of the LLC commenced on the date of the filing
of the Certificate, and shall continue in existence until terminated
pursuant to this Agreement.
2.7 Registered Agent and Office. The registered agent is
Prentice-Hall Corporation Systems, Inc. The registered office is at 32
Loockerman Square, Suite L-100, Dover, Delaware 19901. The principal
place of business and mailing address of the LLC shall be determined by
the Members. The LLC may maintain additional offices at such locations
as the Operating Committee deems advisable.
2.8 Title to LLC Property. All of the LLC's right, title and
interest in tangible property, intangible property, real property,
personal property and other assets acquired by
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the LLC shall be held in the name of the LLC as an entity. The Members
shall execute such documents as may be necessary to reflect the LLC's
ownership interest in such property and shall record the same in such
public offices as shall be necessary to reflect such ownership interest
by the LLC. No Member shall have an ownership interest in any property
of the LLC in its individual name or right except any such right held
pursuant to a separate written agreement approved by both Members
(e.g., ground leases, subleases or Berthing Agreements), and each
Member's LLC interest shall be personal property for all purposes.
2.9 Tradename. The LLC shall adopt such tradename as may be agreed
upon by the Members in writing, consistent with a marketing strategy,
if any, adopted by the Operating Committee.
2.10 Mutual Representations and Warranties. Each Member and, in
the case of an organization, the persons executing this Agreement,
represents and warrants to the LLC and to the other Member that as of
the date of this Agreement:
(a) It is a corporation (or in the case of BDC, a limited
liability company) duly organized and validly existing under the laws
of the state of its organization and is qualified to do business in the
State of Indiana; has all necessary power and authority under its
Articles of Incorporation and Bylaws or other applicable organizational
documents and the laws of the state of organization to own its
properties and assets, to conduct its business as now conducted or as
contemplated by this Agreement, and to execute and deliver and perform
its obligations under this Agreement.
(b) The execution and delivery of this Agreement, the formation of
the LLC and the performance of all obligations hereunder required to be
performed by such Member have been duly authorized by all necessary
corporate (or other organizational) action and do not and will not
result in a breach or violation of, or default under, or will not with
the giving of notice or passage of time, or both, result in a default
under, its Articles of Incorporation and Bylaws (or other applicable
organizational documents), any agreement, commitment, order, judgment
or decree by which it or any of its constituent shareholders or members
or any of its respective properties is or are bound, or any statute,
regulation, order or other law by which it or any of its constituent
shareholders or members is or are subject.
(c) This Agreement is binding upon each Member and is enforceable
against it in accordance with its terms.
(d) It is not a "foreign person" within the meaning of Section
1445(f) of the Code.
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(e) It is the holder of a Certificate of Suitability and there is
no default thereunder by such Member.
2.11 Certain Trump Representations and Warranties. Trump hereby
represents and warrants to BDC that as of the date of this Agreement:
the Lehigh Property has not been previously pledged, assigned,
mortgaged, transferred or hypothecated by Trump and has not been
encumbered by Trump except for (i) property rights granted of record to
Lehigh Portland Cement Company contemporaneously with Trump's
acquisition of the Lehigh Property, and (ii) possible mechanic's liens
arising under Pre-Formation Agreements; Trump has provided to BDC true,
correct and complete copies of the Pre-Formation Agreements to which it
is a party; Trump has not made or executed any amendment, modification
or termination of the Pre-Formation Agreements, and each remains in
full force and effect; neither Trump nor an Affiliate of Trump has
entered into or is bound by any agreements, written or oral, pertaining
to the construction or development of the Common Areas or affecting the
LLC Property, other than the Pre-Formation Agreements, the Trump
Memorandum of Understanding and Trump's Certificate of Suitability; and
except as disclosed in writing on or prior to the date hereof, Trump is
not in material default under any Pre-Formation Agreement.
2.12 Certain BDC Representations and Warranties. BDC hereby
represents and warrants to Trump that as of the date of this Agreement
neither BDC nor an Affiliate of BDC has entered into or is bound by any
agreements, written or oral, pertaining to the construction or
development of the Common Areas or affecting the LLC Property, other
than the Studies, the BDC Memorandum of Understanding and BDC's
Certificate of Suitability, and BDC is not in material default under
any of the Studies.
3. MANAGEMENT AND DEVELOPMENT
3.1 Implementation of Site Plan
Construction Committee; Preparation of Master Plan.
(a) The Members agree that the LLC Property is to be developed in
accordance with the Site Plan, although in no event shall Trump or the
LLC have any responsibility for any BDC Project nor shall BDC or the
LLC have any responsibility for any Trump Project. Each Member agrees
to cooperate with the other in causing the LLC to construct the Site
Plan Improvements at the earliest practical time and at a cost within
the amounts budgeted therefor in the Improvements Budget. The Members
acknowledge that they must use every effort to reach timely agreement
on such construction plans and specifications as are necessary to
implement the construction
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of the Site Plan Improvements within the Improvements Budget. The
Members also shall use every effort to agree upon any modifications to
the Site Plan (and applicable construction plans and specifications)
which are necessary to complete the Site Plan Improvements in a timely
fashion within the Improvements Budget or in accordance with applicable
laws, rules and regulations, but the Site Plan shall not be modified
otherwise unless such modification is agreed to in writing by the
Members.
(b) In order to facilitate the construction of the Site Plan
Improvements, the management and control of such construction
activities shall be vested in a committee (the "Construction
Committee") consisting of one voting representative appointed by each
Member (each such representative, a "Construction Representative," and
both such representatives, collectively, the "Construction
Representatives").
(c) In the absence of a contrary direction from the Operating
Committee or both Members, the Construction Committee shall have
day-to-day authority over the construction of the Site Plan
Improvements, including oversight over and administration of the
applicable architect, engineering and construction contracts;
architect, supplier, engineer or contractor payments; and the award of
contracts in an amount less than two hundred fifty thousand ($250,000)
dollars; all provided that the same are in accordance with budgets and
schedules previously approved by the Operating Committee. All payments
shall be made in accordance with the disbursement procedures set forth
in Section 3.8(c) below. The LLC will retain or utilize the services
of the Persons in the capacities identified in attached Exhibit D,
unless the Members agree to the contrary.
(d) It is contemplated that each Construction Representative shall
have an ongoing presence in the City during the construction process,
and shall meet at the construction site (or at such other location as
the Construction Representatives agree upon) not less than twice each
week. The presence of both Construction Representatives at a meeting
of the Construction Committee shall constitute a quorum, and the
Construction Committee shall act only upon the affirmative approval of
both Construction Representatives. No Member shall be entitled to
compensation for the services of the Construction Representative
appointed by it. The LLC is a member-managed limited liability
company. Each Construction Representative shall be deemed to be the
agent of, and to represent, the Member that appointed him and her, and
shall owe his or her loyalty and duty to such Member.
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(e) The Members acknowledge that the Site Plan does not depict (i)
the BDC Projects, (ii) the Trump Projects, (iii) common areas ancillary
thereto which must be constructed on the LLC Property to satisfy each
Member's obligations to the City and the Commission, (iv) a new harbor,
lying to the west of the Harbor, which is contemplated under the Harbor
Lease Agreement as a dockage site to replace the Harbor (the "New
Harbor"), or (v) a new pavilion and related improvements which would be
appropriate to conduct riverboat gaming operations at the New Harbor
(the "Additional Facilities"). (The New Harbor and the Additional
Facilities collectively are referred to herein as the "Master Plan
Improvements"). The Members shall endeavor to prepare a site plan (the
"Master Plan") designating the areas in which the Trump Projects and
the BDC Projects are to be constructed and establishing the nature and
location of the Master Plan Improvements. The following provisions
apply to the Master Plan and the Master Plan Improvements:
(1) Unless otherwise agreed to in writing by the Members, the
areas to be designated on the Master Plan as the areas for the Trump
Projects and the BDC Projects shall be sufficient for each Member to
comply with its obligations to the Commission and/or the City, and the
desirability and fitness for its purpose of the areas to be ground
leased (or subleased) to each Member shall be reasonably equivalent.
(2) The Members acknowledge that the Master Plan Improvements
cannot be constructed unless the LLC receives the necessary permits,
licenses and other governmental approvals, including permits from the
Army Corps of Engineers.
(3) Pending a final determination by the Members as to whether the
LLC can and should construct the Master Plan Improvements, the Members
shall prepare the Master Plan to show the location and general nature
of the Master Plan Improvements and the BDC Projects and Trump
Projects, shall engage in preliminary design and engineering of the
Master Plan Improvements, and shall procure estimates of the costs of
construction associated with the Master Plan Improvements. In
connection with such activities, the Members shall establish and
approve a budget for the construction and development of the Master
Plan Improvements, in form similar to the Improvements Budget. Unless
otherwise agreed to the contrary, the Master Plan Improvements shall be
of at least the same capacity and quality as the Site Plan
Improvements.
(4) The LLC shall proceed with the construction and development of
the Master Plan Improvements if it receives all applicable permits,
licenses and other approvals necessary for such construction and
development, and if both Members agree in writing to do so.
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(5) The Members shall endeavor to finalize the Master Plan as soon
as practical after the date of this Agreement, and to formulate cost
estimates or projections for the Master Plan Improvements as soon as
practical after the Master Plan has been finalized.
(6) If due to requirements applicable to the LLC or both Members
under the Certificates of Suitability, the BDC and Trump Memoranda of
Understanding or the Development Agreement, the LLC or both Members are
required to relocate their gaming operations to the Master Plan
Improvements, and both Members do not agree that the LLC should
construct the Master Plan Improvements, then a Member that wishes to
construct the Master Plan Improvements shall have the right to enter
into a ground lease or sublease with the LLC for the applicable part of
the LLC Property on which the Master Plan Improvements are to be
located, and to construct the same in its own name and right and at its
own cost. Any such ground lease or sublease shall be on the terms and
conditions set forth in Section 2.5 above, although the ground lease or
sublease may include a right on behalf of the Member and the LLC to
share parts of the Common Areas that may service both the Site Plan
Improvements (for such duration as the same may be used for riverboat
gaming operations) and the Master Plan Improvements.
3.2 Operating Committee.
(a) The management and control of the ordinary business and
affairs of the LLC shall be vested in the Members. The Members shall
manage and control the business and affairs of the LLC (other than the
affairs managed by the Construction Committee established pursuant to
Section 3.1 above) through a committee (the "Operating Committee")
consisting of two voting representatives appointed by each Member (each
such representative, a "Representative," and all of such
representatives, collectively, the "Representatives"). Except as
otherwise provided in this Agreement the Operating Committee shall have
full and exclusive authority and discretion over the business of the
LLC. The presence of all four Representatives at a meeting of the
Operating Committee shall constitute a quorum.
(b) In connection with the development and construction of the
improvements on the Common Areas as designated in the Site Plan, and
the Master Plan Improvements, if applicable, the Operating Committee
shall:
(1) review and, if appropriate, refine or revise the Site Plan,
and approve constructions plans and specifications for the Site Plan
Improvements;
(2) develop traffic and circulation plans;
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(3) address environmental remediation issues, if any;
(4) obtain necessary permits, licenses and approvals, including
without limitation the permits or approvals required from the Army
Corps of Engineers in order to construct the Site Plan Improvements or
the Master Plan Improvements;
(5) arrange for construction and property insurance and contractor
bonding;
(6) engage necessary architects, engineers, designers, suppliers
and contractors required in connection with the design and construction
of the improvements that are to be part of the Common Areas;
(7) oversee compliance with any affirmative action, equal
employment opportunity or like requirements imposed on the LLC under
the terms of a Certificate of Suitability or the Development Agreement;
(8) make any decisions that otherwise are within the authority of
the Construction Committee to make, but upon which the Construction
Committee can not agree;
(9) oversee and manage aspects of project scheduling or
construction that are outside of the authority of the Construction
Committee; and
(10) develop the Master Plan.
(c) In connection with the operation, maintenance, repair and
replacement of the Common Areas, the Operating Committee shall
coordinate and assist in establishing or shall otherwise provide for
the:
(1) scheduling of cruises. Unless the Members agree otherwise in
writing, cruises shall be staggered, and the schedules for each
Member's riverboat shall be equivalent in terms of the overall
desirability of their cruise times (e.g., each shall get an equal share
of the prime schedule slots);
(2) security for the Common Areas;
(3) transportation within the LLC Property;
(4) maintenance of Common Areas;
(5) hiring and training of employees and managing the Common Areas
on a day-to-day basis in a manner
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complying with the requirements of applicable laws, rules and
regulations, the Berthing Agreements and any other obligations of the
LLC;
(6) development and implementation of a name, theme and marketing
strategy for the LLC Property as a gaming destination. Absent
agreement by the Members on a different name, the name shall be
"Buffington Harbor." The overall project shall be promoted by the LLC
as a project by the name so selected, and while each Member may
separately advertise or market its riverboat, any reference in such
separate advertising to the location of the riverboat shall mention the
name of the overall project (e.g., the "Trump Boat" or the "BDC Boat"
at Buffington Harbor); and
(7) insurance and bonding for Common Areas.
(d) Except as provided in Section 3.3, in addition to and not in
limitation of the foregoing, the Operating Committee shall take such
other actions as may be reasonably necessary and desirable in
connection with the purposes of the LLC as provided in Section 2 of
this Agreement.
(e) The Members agree as follows with respect to Operating
Committee meetings:
(1) The Operating Committee shall meet on a regular basis, not
less frequently than bi-monthly. At such meetings the Operating
Committee shall: review the affairs and operations of the LLC,
including the status of the Site Plan, the Berthing Agreements and the
construction of the Site Plan Improvements; review and, if appropriate,
revise in light of actual experience the annual budget theretofore
approved by the Operating Committee; and consider and pass upon such
other matters which, pursuant to the provisions of this Agreement, are
to be submitted to the Operating Committee for its approval. All such
meetings shall be held in the vicinity of the Lehigh Property or at
such other location upon which the Members shall agree. Actions of the
Operating Committee shall be reflected in written consents, which may
be faxed or telephoned if confirmed in writing.
(2) Any Member shall have the right from time to time to call a
special meeting of the Operating Committee on not less than ten (10)
days' prior written notice to the other Member; provided, a special
meeting may be called upon three (3) days' prior telephonic notice if
the meeting is required to allow the LLC to make timely decisions
necessary to maintain construction or development progress or to
address other exigent circumstances. Each special meeting shall be
held at the principal office of the LLC or at such other location upon
which the Members shall agree.
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(3) All meetings hereinabove provided for may be conducted by
telephone.
(f) The Operating Committee may employ any Person, whether
directly or indirectly affiliated with or related to any Member, on
behalf of the LLC to render or perform a service (including but not
limited to leasing and financing) or to purchase merchandise or other
property, and neither the LLC nor any of the Members shall have any
rights in or to any income or profits derived therefrom by such Person
as a result of this Agreement. Any contract proposed to be entered
into between the LLC and such Person shall be disclosed in writing as
such to the Members in advance and (except as specifically waived in
writing by the Members) shall be on terms and conditions which are no
less favorable to the LLC than would be available from third parties.
(g) Except as specifically set forth herein, the Members shall not
be entitled to any compensation with respect to any duties performed
for or on behalf of the LLC. Each Member shall bear the cost of its
own personnel, the fees of its own legal counsel and overhead
(including any costs incurred in the name of an entity other than the
LLC unless such costs are incurred to third parties with the prior
written approval of the Operating Committee or the Members), which
costs shall not be charged to the LLC.
(h) The LLC is a member-managed limited liability company. Each
Representative shall be deemed to be the agent of, and to represent,
the Member that appointed him and her, and shall owe his or her loyalty
and duty to such Member. The two Representatives appointed by each
Member shall act in concert with one another in approving, or declining
to approve, any action of the Operating Committee.
3.3 Matters Requiring Special Approval of the Members. The
following shall require the unanimous approval of the Members, which
approval shall be evidenced by a written memorandum executed by an
authorized officer or member of each Member:
(a) The establishment and approval of the initial business plan
and budget;
(b) Approval of changes to the Site Plan or approval of the Master
Plan;
(c) Approval of changes to the Improvements Budget or to any
similar budget approved with respect to the Master Plan Improvements;
(d) Approval of a material change in the schedule for completion
of the Site Plan Improvements;
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(e) Subject to the provisions of Section 2.5 above, approval or
modification of the terms of any ground lease, sublease or other
agreement with respect to the BDC Projects or the Trump Projects;
(f) Approval of the terms of any financing for the construction of
improvements constituting part of the Common Areas;
(g) Establishment of the timing and amounts of any distributions
to the Members;
(h) Any decision to amend, renew, extend or otherwise change the
terms and conditions of a Berthing Agreement;
(i) The selection of the legal counsel and certified public
accountants for the LLC, although the certified public accountants
shall be a Big 6 accounting firm;
(k) The approval or modification of the terms of any development
agreement or other agreement between the LLC and the City or the State
of Indiana; and
(l) Any other matter which BDC and Trump both shall deem, in
writing, to be of fundamental importance to the LLC.
Notwithstanding the foregoing, if a Member or an Affiliate of a Member
causes, suffers or permits an Event of Default under the terms of its
Berthing Agreement or under any other agreement between the LLC and
such Member (or its Affiliate), the other Member shall have the power
and authority to determine whether, how and when the LLC will enforce
its rights or invoke its remedies with respect to such Event of
Default.
3.4 Members May Engage in Other Businesses.
The Members and each of the Construction Representatives and
Representatives and their respective Affiliates may engage
independently or with others in other business ventures of every kind
and nature including, but not limited to, the ownership, financing,
leasing, operation, management, brokerage, sale and development of real
property, or gaming operations, whether or not competitive with the
business of the LLC or any of its assets or facilities, and neither the
LLC, the Members, the Construction Representatives, the Representatives
nor their respective Affiliates, shall have any rights by virtue of
this Agreement in and to said independent ventures or to the income or
profits derived therefrom. Notwithstanding the foregoing, (a) any
direct or indirect interest of a Member or an Affiliate of a Member in
any contract or other act with or in respect of the LLC, other than its
interest as a Member, shall be disclosed in writing to
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the other Member, (b) a Member shall account to the LLC for any
property, profit or benefit derived by such Member or its Affiliate
from a use or appropriation of property of the LLC, including
information developed exclusively for the LLC, and (c) if a Member or
an Affiliate of a Member acquires or has acquired in its own name, any
property, permit, license or approval that is required by the LLC to
(i) construct and develop the Site Plan Improvements, (ii) construct
and develop the Master Plan Improvements, (iii) operate the Common
Areas, or (iv) otherwise carry out the purposes of the LLC, such Member
shall make, or shall cause its Affiliate to make, such property,
permit, license or approval available to the LLC on the terms and
conditions on which the Member or its Affiliate acquired the same.
3.5 Members' Liability.
(a) The Members, Construction Representatives and Representatives
shall not be responsible or accountable in damages or otherwise to the
LLC, any Member, Construction Representative, Representative or any
other Person for any acts performed in good faith within the scope of
authority conferred on them by this Agreement, or for their performance
of, or failure or refusal to perform, any acts required by or
prohibited or inhibited by any governmental act or decree of any
nature. The Members, Construction Representatives and Representatives
shall be entitled to indemnity from the LLC on account of any claim,
liability, action or damage arising from or relating to any action
taken by them, in good faith, for or on behalf of the LLC as aforesaid.
(b) Notwithstanding the foregoing, and subject to the management
prerogatives of each of the Members under this Agreement, each Member
agrees to act in good faith in participating in the affairs of the LLC
and in approving and taking actions required for the LLC to efficiently
conduct its operations so as to accomplish the purposes of the LLC,
including by (i) attending, or causing its Construction Representative
and Representatives to attend, meetings of the Members, the
Construction Committee or the Operating Committee, as applicable, (ii)
executing contracts and other documents that have been approved under
this Agreement, including checks for expenses that have been approved
during the budgeting process or otherwise, and (iii) otherwise not
impeding the ability of the LLC to accomplish its purposes so as to
permit the efficient construction and operation of the Common Areas.
(c) In the event any action or proceeding is instituted or
threatened against any Member, Construction Representative,
Representative or any of them, or any officer, director, shareholder,
guarantor or employee of a Member, in connection with the LLC Property
or the business or affairs of
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the LLC (except actions or proceedings between the Members or by the
LLC) or to which any of the foregoing may be a party on behalf of the
LLC, each Member, Construction Representative or Representative, as the
case may be, shall be entitled to retain legal counsel and other
experts at the expense of the LLC and (subject to the limitation of
liability set forth in Section 3.5(a)) any of the foregoing shall be
immediately reimbursed for, indemnified against and held harmless by
the LLC with respect to all liabilities, costs and expenses arising out
of, or in connection with, such action or proceeding, and whether or
not any of the foregoing is serving in such capacity as of the date
that such liability, costs or expenses are fixed or incurred and
without awaiting determination of the actual proceeding. In any action
commenced against the LLC, no Member, Construction Representative or
Representative shall be joined or named as a party, except as an
indispensable party as may be required by applicable statute or court
rule. In the event the indemnified Person is judicially determined not
to have acted in good faith with regard to the claim asserted against
it, such Person shall, in addition to its liability in respect of such
wrongful actions, forthwith reimburse the LLC for payments made to such
Person under this Section 3.5(c).
3.6 Bank Accounts.
All funds of the LLC shall be deposited and maintained in a bank
or banks designated by the Operating Committee and in accounts
established in the LLC's name. The Operating Committee shall pay out
of such accounts, to the extent of the funds from time to time therein,
all costs and expenses incurred in connection with the development,
construction, operation and management of the Common Areas and all
costs and expenses incurred in connection with the purposes of the LLC
as provided in Section 2. Checks or other documents of withdrawal
drawn upon the accounts shall be signed by two members of the Operating
Committee, one each from Trump and BDC, or by persons designated as
signatories on behalf of each Member.
3.7 Books and Records.
The Operating Committee shall keep full and adequate books of
account and other records reflecting the results of the LLC from
inception of the LLC. Such books and records shall be kept at the
offices of the LLC and shall at all times be kept in accordance with
(i) generally accepted accounting principles, consistently applied, and
(ii) such laws, rules, regulations and orders applicable to the LLC.
3.8 Financial Reports and Records.
(a) Financial Reports. The Operating Committee shall deliver to
the LLC within thirty (30) days after the end of each calendar month,
an unaudited financial statement prepared
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from the books and records of account maintained by the Operating
Committee which financial statement shall be set forth on an accrual
basis, containing (i) a balance sheet as of the end of such calendar
quarter; (ii) an income and loss statement; and (iii) copies of all
statements, if any, filed with the Commission. The Operating Committee
shall also deliver to the LLC, within ninety (90) days after the end of
each calendar year, an audited financial statement prepared by an
independent certified public accounting firm containing (i) a balance
sheet as of the end of such year; (ii) an income and loss statement for
such year; (iii) a statement of cash flows for such year; and (iv)
copies of all statements, if any, filed with the Commission. Once
received by the LLC, copies of all reports shall immediately be
delivered to each Member.
(b) Records. The Operating Committee shall keep complete records
of all revenues and expenses with respect to the management and
operation of the LLC Property and the Common Areas. Each Member shall
have the right, itself or through its representatives or accountants,
at its own expense, to inspect the books of account and records of the
LLC and audit the statements required by this Section 3.8, at any time
and from time to time during business hours of the LLC. Such
inspections and audits shall take place at the offices of the LLC and
out-of-pocket expenses incurred by the inspecting Member relative to
such audit shall be the responsibility of the inspecting Member.
(c) Construction Procedures. In connection with paying any
amounts payable in respect of construction of the Common Areas, the LLC
shall procure such sworn statements, waivers of lien, architect's
certificates, inspection reports and like documents as are typically
procured as part of prudent construction draw practices and procedures,
both to ensure that the applicable funds are being disbursed in
accordance with the relevant construction contract, architect's
agreement and/or construction management agreement (including
requirements relative to retainage and keeping the contracts in
balance) and to prevent mechanic's liens or similar impositions from
being imposed on the LLC Property or any part thereof. Also in
connection with such construction activities the LLC will prepare and
distribute to the Members cash flow statements on a periodic (not less
frequently than monthly) basis for each applicable construction
project, showing payments made to date, available funds, the
anticipated costs of completion and cost comparisons relative to
budget.
3.9 Annual Budget.
(a) The Operating Committee will prepare an annual business plan
and operating budget for each year (the "Operating Plan and Budget"),
which shall be submitted to the
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Members for approval and formal adoption. The Operating Plan and
Budget shall include the Operating Reserve. Upon approval by the
Members of the Operating Plan and Budget, the Operating Committee shall
have the right, without the further consent or approval of the Members,
to incur and pay the operating expenses and capital improvement costs
set forth therein, including Uncontrollable Expenses whether or not
they exceed the amounts reflected for them in the Operating Plan and
Budget; provided that in the case of any operating expense which is not
an Uncontrollable Expense, the Operating Committee shall not have the
right to incur or pay the same if it exceeds by more than 10% the
amount set forth on the appropriate line for the category of expense or
cost involved in the Operating Plan and Budget or if such expenditure
will cause the aggregate amount of operating expenses which are not
Uncontrollable Expenses to exceed by more than 5% the aggregate amount
of such operating expenses provided for in the Operating Plan and
Budget. As used in this Section 3.9, the term "Uncontrollable Expense"
shall mean an item of expense, the amount of which is not within the
power of the Operating Committee to control and shall consist of real
estate taxes, debt service payable in respect of any mortgage or other
loans obtained in accordance with the terms of this Agreement, amounts
required to meet the LLC's obligations under the "Lehigh Agreements"
(as defined in a certain Consent and Acknowledgement of even date
between the LLC, Lehigh Portland Cement Company and BDC), premiums for
insurance, fixed charges under contracts, utility charges and such
other costs and expenses as may hereafter be designated as
Uncontrollable Expenses by the Members.
(b) If at any time the Operating Committee desires to make a
capital improvement, repair, replacement or alteration, or to incur an
operating expense, which is not provided for in an Operating Plan and
Budget, the Operating Committee shall not proceed with such
improvement, repair, replacement or alteration, and shall not incur
such expense, without the Members' prior written consent. If at any
time it becomes evident to the Operating Committee that the cost of any
capital improvement, repair, replacement or alteration provided for in
the Operating Plan and Budget will exceed by more than 10% the amount
budgeted therefor in such budget, or the aggregate amount of the cost
of all capital improvements, repairs, replacements and alterations
provided for in such budget will exceed by more than 5% the amount
budgeted therefor in such budget, the Operating Committee shall not
proceed further with the making of such improvement, repair,
replacement or alteration or, where the aggregate amount set forth in
the Operating Plan and Budget will be exceeded by more than 5%, with
any of such capital improvements, repairs, replacements or alterations,
without the written consent of the Members. Similarly, if at any time
it becomes evident to the Operating Committee that the cost of any
operating expense which is not an Uncontrollable Expense will exceed by
more than 10% of the
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amount set forth in respect thereof in the Operating Plan and Budget,
or the cost of all such expenses will exceed by more than 5% the
aggregate amount budgeted therefor in such Operating Plan and Budget,
the Operating Committee shall not incur the operating expense in
question, or, where the aggregate amount of such expenses will exceed
by more than 5% the aggregate amount budgeted for in such approved
Operating Plan and Budget, any of such operating expenses, without the
written consent of the Members.
(c) Notwithstanding anything to the contrary set forth in this
subsection, if in the reasonable good-faith judgment of the Operating
Committee any capital improvement, repair, replacement or alteration
must at any time immediately be undertaken, or any operating cost
immediately incurred, in order to protect any property or to avoid
accident or injury to Persons, the Operating Committee shall be free to
make such capital improvement, repair, replacement or alteration or to
incur such operating expense without regard to the approved Operating
Plan and Budget and without first securing the approval of the Members,
provided that the Operating Committee shall use its reasonable efforts
to limit the work performed to the minimum required to remedy the
emergency condition pending approval by the Members of more extensive
work and the Operating Committee shall notify the Members promptly of
any such expenditure made or incurred which exceeds $20,000.
(d) The initial Operating Plan and Budget shall be agreed to
within thirty (30) days after the date of this Agreement. Subsequent
Operating Plans and Budgets shall be agreed to prior to the
commencement of the applicable fiscal year of the LLC. If the Members
can not reach agreement on the Operating Plan and Budget for a fiscal
year, the Operating Plan and Budget shall be determined by (i)
adjusting Uncontrollable Expenses to the levels the Members anticipate
will be incurred or for which the LLC is contractually obligated, (ii)
establishing the Operating Reserve, and (iii) increasing the remaining
line items in the Operating Plan and Budget for the prior fiscal year
by five (5%) percent.
(e) If during any year it becomes apparent that the Operating Plan
and Budget does not reflect the amounts of money the LLC will have to
spend to (i) meet its contractural obligations under the Lehigh
Agreements or its obligations to a Member or an Affiliate of a Member
under the Assignment and Assumption Agreement of even date, or (ii)
maintain and operate the Common Areas in the manner and to the
standards contemplated by this Agreement (e.g., the Operating Plan and
Budget for the year in question did not accurately reflect the
applicable financial requirements or the occurrence of some
unanticipated event, such as an uninsured casualty), the Members shall
revise the Operating Plan and Budget for such
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year to reflect the amounts necessary for the LLC to meet such
contractural obligations or to maintain and operate the Common Areas in
the manner and to the standards contemplated by this Agreement;
provided, in no event shall such an obligatory increase or increases in
respect of expenses of the nature specified in subclause (ii) of this
subsection (e) be greater than two million five hundred thousand
($2,500,000) dollars during any fiscal year. In the event the
Operating Plan and Budget is increased in order to enable the LLC to
reimburse a Member for payments made by the Member as to which the
Member is entitled to indemnification or reimbursement from the LLC
under the Assignment and Assumption Agreement of even date, such Member
shall be entitled to a credit against amounts payable under its
Berthing Agreement in an amount equal to one-half of the payment so
made by the Member, which credit also shall serve to reduce the
indemnification or reimbursement obligation of the LLC to the Member.
3.10 Improvements Budget.
The Members have established a budget, a copy of which is attached
as Exhibit E (the "Improvements Budget") reflecting the costs (both
"hard" and "soft," but exclusive of Trump Costs and BDC Costs)
anticipated to be required from and after the date hereof to develop
and construct all the Site Plan Improvements and to fund the initial
Operating Reserve, but excluding costs associated with the construction
of the Master Plan Improvements. In refining such anticipated costs,
the LLC shall consult with (and if feasible procure bids or quotations
from) unaffiliated architects, engineers and contractors to confirm the
level of quality contemplated in the Site Plan and the anticipated
costs thereof. The Improvements Budget includes a contingency for
unanticipated conditions and/or inflationary increases. The initial
amount established for the Improvements Budget may be adjusted upward
or downward by a written agreement confirming such adjustment.
Notwithstanding the foregoing, if the LLC requires additional funds to
complete construction of and open the Site Plan Improvements, the
Members must increase the Improvements Budget to reflect the amounts so
needed, provided such obligatory increase shall in no event be more
than fifteen (15%) percent of the initial amount of the Improvements
Budget.
3.11 Decisions of the Operating Committee.
All decisions of the Operating Committee shall require the consent
of all of the Representatives. In the event that the Representatives
do not concur in any action, the arbitration procedures set forth in
Section 13 shall become applicable unless the Members agree upon the
action.
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4. CAPITAL CONTRIBUTIONS, PROFITS AND
LOSSES, AND DISTRIBUTIONS
4.1. Capital Contributions.
(a) Initial Capital Contributions. Each Member is making or shall
make the following contributions to the LLC (the "Initial
Contributions") at the times indicated below:
(1) Upon the execution of this Agreement Trump shall (i)
contribute the Lehigh Property to the LLC by transferring title to the
same by special warranty deed (or, in the case of the Harbor Lease
Agreement, by an assignment of the same), (ii) cause a title insurance
policy to be issued to the LLC, insuring the LLC's interest in the
Lehigh Property, each with a non-imputation endorsement and all at the
LLC's expense, (iii) cause the survey and environmental reports issued
to Trump in connection with its acquisition of the Lehigh Property to
be assigned or recertified to the LLC, and (iv) assign to the LLC
Trump's right, title and interest in and under the Pre-Formation
Agreements and the Common Area Development Approvals;
(2) Also upon execution of this Agreement BDC shall assign to the
LLC its right, title and interest in and under the Studies and have the
same certified to the LLC (to the extent reasonably required by Trump),
and shall contribute in cash or immediately available funds the sum of
six million seven hundred fifty thousand ($6,750,000) dollars;
(3) BDC shall from time to time after the date of this Agreement
make additional cash contributions to the LLC totalling thirteen
million nine hundred eighty nine thousand nine hundred ninety one
($13,989,991) dollars, which is the difference between the Trump Costs
and the contributions being made by BDC pursuant to subsection (2)
above (including the BDC Costs), as and when needed by the LLC to fund
construction of the Site Plan Improvements;
(4) After BDC has made additional cash contributions in the amount
specified in Subsection (3) above, each of Trump and BDC shall
contribute one-half (1/2) of the amounts needed from time to time by
the LLC to fund construction of the Site Plan Improvements and the
Operating Reserve until such time as each has contributed the aggregate
sum of eighteen million nine hundred ninety three thousand four hundred
fifteen ($18,993,415) dollars pursuant to this Subsection; and
(5) In connection with planning the construction of the Site Plan
Improvements the Members shall prepare or cause to be prepared cash
flow projections for such activities
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which identify the amounts needed from time to time by the LLC to fund
construction of the Site Plan Improvements. Such cash flow projections
shall determine the times at which capital contributions shall be
payable under Subsections (3) and (4) above absent any further
agreement of the Members. Notwithstanding the foregoing, in any event
the full amount of all capital contributions payable under Subsection
(3) shall be due and payable no later than December 1, 1995, and the
full amount of all capital contributions payable under Subsection (4)
shall be due and payable no later than March 1, 1996.
(b) Trump Costs. "Trump Costs" are hereby defined as the purchase
price of thirteen million five hundred thousand ($13,500,000) dollars
paid by Trump for the Lehigh Property plus or minus the closing
adjustments (such as tax prorations, transfer taxes, utility prorations
and like adjustments) paid or received by Trump in connection with such
acquisition, plus the other costs incurred by Trump on or after
December 9, 1994 in connection with such acquisition and development of
the LLC Property, all as listed on attached Exhibit F.
(c) BDC Costs. "BDC's Costs" are hereby defined as the fees or
other costs paid or incurred by BDC (or its Affiliates) on or after
December 9, 1994 for the design and engineering studies and surveys
obtained by BDC (or its Affiliates) for the Lehigh Property or the
Harbor or otherwise in connection with the development of the LLC
Property, all as those costs are listed on attached Exhibit G.
(d) Credits to Initial Capital Accounts. For the purposes of
determining the initial capital accounts of each Member resulting from
the capital contributions to be made pursuant to Section 4.1(a) above,
the parties agree that (i) the fair market value of the Lehigh Property
and the Pre-Formation Agreements, and the amount to be credited to
Trump's capital account in respect of the contribution thereof to the
LLC, is equal to the Trump Costs, and (ii) the fair market value of the
Studies, and the amount to be credited to BDC's capital account in
respect of the contribution thereof to the LLC, is equal to the BDC
Costs. Accordingly, the capital contributions of each Member after
each has made all of the capital contributions required under Section
4.1(a) shall be forty million eight hundred sixteen thousand four
hundred thirty three ($40,816,433) dollars.
(e) Other Actions in Connection With the Execution of this
Agreement. Within thirty (30) days of the date of this Agreement each
Member shall enter into a Berthing Agreement with the LLC on terms and
conditions that are the same for each Member and have been approved by
each of the Members. Each Berthing Agreement shall:
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(1) call for monthly payments in respect of the use of the
improvements on the Common Areas which, when taken with the payments
under the Berthing Agreement with the other Member, are sufficient to
enable the LLC to fund all costs and expenses of the LLC other than the
capital contributions referred to in Section 4.1(a) above and Section
4.1(h) below. The monthly payments under the Berthing Agreements shall
be determined by the Operating Plan and Budget. If the Operating Plan
and Budget is amended by the Members pursuant to Section 3.9, any
increase or decrease therein shall be spread evenly among the remaining
monthly payments due under each Berthing Agreement;
(2) provide the Member with the exclusive use of certain aspects
of the Site Plan Improvements (such as ticketing booths, money counting
facilities or marshalling facilities) which are designed to service the
gaming operations of such Member (with corollary facilities for the
exclusive use of the other Member under its Berthing Agreement);
(3) define an "Event of Default" thereunder as (i) a default
involving the payment of money which continues for ten (10) or more
days after the LLC (or the other Member) provides written notice of
such default, or (ii) a default not involving the payment of money
which continues for thirty (30) or more days after the LLC (or the
other Member) provides written notice of such default, although if the
default is of a nature that can not be cured within 30 days, an Event
of Default shall not be deemed to have occurred so long as within such
30 day period the Member commences (and thereafter diligently pursues
to completion) appropriate measures to cure the default;
(4) call for interest to accrue (and be payable immediately) at a
rate per annum equal to the prime rate published from time to time by
Chase Manhattan Bank (the "Prime Rate") plus five (5%) percent
(although in no event shall the rate exceed the maximum interest rate
permitted by applicable law), from the due date until final payment
thereof, on any amount that remains unpaid for more than ten (10) days
after the same constitutes an Event of Default;
(5) call for any payments of the nature referred to in subsection
(1) above which are payable during the period during which an Event of
Default has continued for thirty (30) or more days to be increased by
one hundred (100%) percent (and provide that the Member is relieved
from the obligation to make such payments during any period in which
the other Member is obligated to make increased payments under the
corresponding provision in its Berthing Agreement);
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(6) authorize the LLC to suspend the right of the Member to use
the Common Areas (including its right to dock its boat) if an Event of
Default continues for one hundred twenty (120) or more days or if the
Member is in default of its obligations under Section 4.1(a)(3) or (4)
or Section 4.1(h) of this Agreement for a period of thirty (30) or more
days, although such suspension shall cease if such defaulting Member
cures any and all defaults under the Berthing Agreement, under Section
4.1(a)(3) or (4) above or under Section 4.1(h) below within sixty (60)
days of the commencement of such suspension. Furthermore, if the
defaulting Member sells its entire interest in the LLC to a Person that
is not an Affiliate in accordance with Section 8(b) below, the
purchaser may lift the suspensions by curing any and all defaults under
the Berthing Agreement, under Section 4.1(a) above or under Section
4.1(h) below within thirty (30) days of the date on which such sale
occurs;
(7) authorize the other Member (or its designee) to acquire the
Member's right, title and interest under the Berthing Agreement on the
terms set forth in Section 7.2(b) below;
(8) obligate the LLC to maintain the improvements on the Common
Areas to an agreed upon standard consistent with the obligations of
each Member under its Certificate of Suitability; and
(9) contain notice and cure provisions that will provide customary
protections to a lender to the Member in order that the lender may cure
any default that could otherwise result in a suspension or termination
of the rights of the Member under the Berthing Agreement.
(f) Capital Accounts. There shall be established on the books of
the LLC for each Member a capital account (the "Capital Account"),
which shall consist of the value of such Member's capital contributions
pursuant to Section 4.1(a)(1) and (2), increased by (i) the amount of
all additional contributions, if any, to the capital of the LLC made by
such Member pursuant to Sections 4.1(a)(3) and (4), 4.1(h), 4.4 or
otherwise, and (ii) the amount of all Net Income credited to the
account of such Member pursuant to Section 4.5 and decreased by (x) the
amount of all Net Losses charged to the account of such Member pursuant
to Section 4.5, and (y) the amount of all distributions, if any, made
to such Member pursuant to Section 4.9 or otherwise. It is agreed that
the Initial Contributions of the Members pursuant to Section 4.1(a)
above shall result in the Capital Accounts of each Member being equal
after all such Initial Contributions have been made. Payments by the
LLC on account of an indemnification obligation of the LLC to a Member
shall not be deemed distributions to such Member.
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(g) Maintenance of Capital Accounts. Notwithstanding anything
herein to the contrary, it is the intention of the members to maintain
each Member's Capital Account in accordance with Treas. Reg. Section
1.704-1(b)(2)(iv).
(h) Additional Capital Contributions. The Members as such shall
not be bound by the obligations of the LLC, and shall not be obligated
to make contributions to the LLC in excess of the amounts provided for
in Section 4.1(a). Notwithstanding the foregoing, the Members hereby
agree to contribute additional funds in the form of capital
contributions to the LLC as follows: (i) on a pro rata basis in
proportion to their respective Percentage Interests, whenever the
Operating Committee discretionarily elects, but in no event unless such
additional funds are necessary to accomplish the business or purpose of
the LLC, (ii) if the Members approve (or are obligated under Section
3.10 above to approve) an increase in the Improvements Budget, each
Member shall contribute one-half of the difference within ten (10) days
after the approval of the increase in the Improvements Budget, and
(iii) if both Members agree in writing that the LLC is to construct the
Master Plan Improvements, each Member shall contribute one-half of the
funds necessary to permit the LLC to construct the Master Plan
Improvements within such time frame as the Members may establish in
connection with their agreement to construct the Master Plan
Improvements.
4.2 Percentage Interest in the LLC.
Each Member shall have an interest in the LLC ("the Percentage
Interest") of fifty (50%) percent.
4.3 Cash Needs, Contributions and Loans.
(a) It is understood that the LLC may from time to time require
funds in addition to the funds which may then be available to the LLC
out of (i) gross revenues generated from its operations (including
without limitation payments under the Berthing Agreements), (ii) loans
made to the LLC (not including loans made by the Members pursuant to
this Section 4 but including loans available to the LLC within the time
period the funds in question are required for use by the LLC), (iii)
contributions made by BDC and Trump to the capital of the LLC pursuant
to this Section 4, and (iv) in the event of a fire, other casualty or
condemnation, the amount of insurance proceeds or condemnation awards
available to the LLC to pay the costs of such repairs or restoration.
In order to help ensure that the LLC will have funds in amounts
sufficient to meet its needs at all times the Members agree as follows:
(1) If at any time either Member determines, in the exercise of
reasonable business judgment and good faith,
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that funds in an amount less than $100,000.00 are required to meet Cash
Needs of the LLC, such Member may, by notice (the "Cash Needs Notice")
to the Members, specify the entire amount of the Cash Needs of the LLC
at such time (the "Required Amount") and call upon the Members to
advance to the LLC their respective proportionate share, determined in
accordance with each Member's Percentage Interest, of the Required
Amount (each Member's "Requested Contribution"). The Cash Needs Notice
given to the Members shall be accompanied by documentation reasonably
satisfactory to the Members confirming the actual or estimated amount
of such Cash Needs of the LLC (and the Required Amount) for the period
for which such demand is being made (which period shall not be less
than thirty (30) days and shall not exceed ninety (90) days) and
itemizing how the Required Amount will be applied. Within thirty (30)
days after the date of the Cash Needs Notice, each Member shall advance
as a capital contribution to the LLC its Requested Contribution. Any
funds advanced by either Member to the LLC pursuant to this Subsection
4.3(a)(1) and not refunded to such Member shall, subject to the
provisions of Subsection 4.3(a)(2), constitute "Cash Needs
Contributions" and shall constitute contributions to the capital of the
LLC. No Member shall be personally liable to the LLC or the other
Member for its failure to advance funds to the LLC pursuant to this
Subsection 4.3(a)(1), but any Member who fails to advance a part of its
share of the Required Amount shall thereby become subject to the
provisions of Subsection 4.3(a)(2).
(2) If either Member (such Member being hereinafter referred to as
the "Non-Contributing Member") shall fail to advance all or any part of
its share of the Required Amount which it is called upon and requested
to advance pursuant to a Cash Needs Notice within thirty (30) days
after the date of such Cash Needs Notice (the "Due Date" shall be
deemed to be the last day of said 30 day period), the other Member (the
"Contributing Member") shall have the following rights and remedies
(which rights and remedies shall be exclusive):
(a) If the Non-Contributing Member shall have advanced none of its
share of the Required Amount on or before the Due Date, the
Contributing Member shall be relieved of any obligation to advance any
portion of its share of the Required Amount and shall be entitled, if
it so elects, to receive a refund from the LLC of all amounts which it
may have advanced to the LLC pursuant to the Cash Needs Notice.
(b) If the Non-Contributing Member shall have advanced part, but
not all, of its share of the Required Amount on or before the Due Date,
the Contributing Member shall be relieved of any obligation to advance
any portion of its share of the Required Amount in excess of its
Percentage
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Interest of the Base Amount and shall be entitled, if it so elects, to
receive a refund from the LLC of all amounts which it may have advanced
to the LLC pursuant to the Cash Needs Notice in excess of its
Percentage Interest of the Base Amount. As used in this Subsection
4.3(a)(2)(B), the term "Base Amount" shall mean the amount of the
Required Amount actually contributed by the Non-Contributing Member on
or before the Due Date, divided by the Percentage Interest of the
Non-Contributing Member.
(c) The Contributing Member shall be entitled, but shall not be
obligated, within sixty (60) days of the date of the Cash Needs Notice
to advance to the LLC (which for this purpose shall include not
electing to receive any refund to which it is entitled pursuant to
Subsections 4.3(a)(2)(a) or (b) above, as applicable) an amount equal
to all or any part of the excess of (i) the Requested Funds over (ii)
the Base Amount, if any, and such advance shall constitute a loan (a
"Cash Needs Loan") to the LLC, which Loan shall bear interest at the
Prime Rate plus five (5%) percent (although in no event shall such
interest rate exceed the maximum interest rate permitted by applicable
law), and shall be repayable, as to interest and principal, before any
other distributions are made to the Members as hereinafter provided in
Section 4.10.
(3) As used in this Section 4.3, "Cash Needs of the LLC" shall
mean and include any cash needs or requirements of the LLC of whatever
kind or nature subsequent to the date hereof for which sufficient funds
are not available to it from the sources described in Subsections
4.3(a)(i) through (iv), and shall include, without limiting the
generality of the foregoing, costs of repairs, alterations and
improvements to the LLC Property, operating costs of the LLC Property,
debt service payable under mortgages and other loans (other than Cash
Needs Loans) made to the LLC, real estate taxes and any other payments
which are necessary or appropriate to make in the ordinary course of
business to protect or further the interests of the LLC.
4.4 Income and Losses.
(a) For the purposes of this Agreement:
(1) "Net Income" and "Net Losses" with respect to any fiscal
period shall mean the net income or net losses of the LLC for that
period from the construction, operation and management of the LLC
Property (including the amount of any tax exempt income received or
accrued) after all operating expenses incurred in connection with the
LLC's business (including, without limitation, real estate taxes,
utilities, repairs and maintenance, management fees, insurance, labor
costs and interest on Cash Needs Loans and any other loans to the LLC)
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have been paid or accrued and after making allowance for depreciation
or amortization of the cost of the LLC Property and assets of the LLC
and expenditures of the LLC of the nature described in Section
705(a)(2)(B) of the Code (including expenditures treated as described
in Section 705(a)(2)(B) of the Code under Treas. Reg. Section
1.704-1(b)(2)(iv)(i) ("Section 705(a)(2)(B) Expenditures")) and after
taking into account any gain or loss arising from capital transactions.
Consistent with the foregoing definition, income, net losses, gain and
loss shall be determined on the same basis as reported by the LLC for
federal income tax purposes; provided, however, that in computing net
income, net loss, gain and loss of the LLC it shall be assumed that the
agreed fair market value of any property contributed to the LLC by any
Member is an amount equal to its initial tax basis.
4.5 Allocation of Net Income and Net Losses.
From and after the date of this Agreement, the Net Income and Net
Losses of the LLC for each calendar year or fraction thereof shall be
allocated to the Capital Accounts of the Members in accordance with
their Percentage Interests.
4.6 Special Allocations. From and after the date of this
Agreement, the following special allocation provisions shall apply:
(a) Qualified Income Offset. Notwithstanding the allocation
provided in Section 4.5 and except as otherwise provided in this
Section 4.6, in the event any Member receives an unexpected allocation
of Net Loss or deduction or an unexpected distribution as described in
Treasury Regulations 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that results
in a deficit balance in its Capital Account (after taking into account
reductions for the items set forth in Treasury Regulations
1.704-1(b)(2)(ii)(d)(4), (5), or (6)) in excess of (i) the amount such
Member is obligated to restore, if any, and (ii) the amount such Member
is deemed to be obligated to restore pursuant to the penultimate
sentence of Treasury Regulations l.704-2(g)(1) and Section
l.704-2(i)(5), such Member shall be allocated items of gross income or
gain in the amount necessary to eliminate such excess as quickly as
possible. This provision is intended to satisfy the definition of
"qualified income offset", as defined in Treasury Regulation
1.704-1(b)(2)(ii)(d).
(b) Minimum Gain. Notwithstanding the allocation provided in
Section 4.5 and except as otherwise provided in this Section 4.6, if
there is a net decrease in LLC Minimum Gain during any fiscal year,
each Member with a deficit Capital Account balance at the end of such
fiscal year (decreased by the amount such Member is obligated to
restore and the amount
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such Member is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations 1.704-2(g)(1) and
1.704-(2)(i)(5), and increased by the items set forth in Treasury
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6)) shall be
allocated items of gross income and gain for such fiscal year and, if
necessary, for subsequent fiscal years, in an amount equal to such
Member's share of the net decrease in such LLC Minimum Gain, determined
in accordance with Treasury Regulations Section 1.704-2(g)(2). This
provision is intended to satisfy the definition of a "minimum gain
chargeback" as defined in Treasury Regulations Section 1.704-2(f), and
the term "LLC Minimum Gain" shall have the meaning ascribed to the term
"Partnership Minimum Gain" in Treasury Regulation l.704-2(d).
(c) Gross Income Allocation. Notwithstanding the allocation
provided in Section 4.5 and except as otherwise provided in this
Section 4.6, in the event any Member has a deficit Capital Account at
the close of any fiscal year which is in excess of the sum of (i) the
amount. if any, such member is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount such Member is deemed
to be obligated to restore pursuant to the penultimate sentences of
Treasury Regulations Section l.704-2(g)(1) and 1.704-2(i)(5), each
Member shall be specially allocated items of gross income and gain in
the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 4.6 shall be made only if and to
the extent that such Member would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this
Section 4.6 have been made as if Section 4.6(a) and this Section 4.6(c)
were inoperative.
(d) Member Nonrecourse Deductions. Notwithstanding the allocation
provided for in Section 4.5 and except as otherwise provided in this
Section 4.6, any "Member Nonrecourse Deduction", defined as having the
meaning ascribed to the term "Partner Nonrecourse Deduction" in
Treasury Regulation Section 1.704-2(i)(2), for any fiscal year shall be
allocated to the Member who bears the economic risk of loss in
accordance with Treasury Regulation 1.704-2(i)(1), and if there is a
net decrease in Member Nonrecourse Debt Minimum Gain during any fiscal
year, each Member with a deficit Capital Account balance at the end of
such fiscal year (decreased by the amount, if any, such Member is
obligated to restore and the amount such Member is deemed to be
obligated to restore pursuant to the penultimate sentences of Treasury
Regulation 1.704-2(g)(1) and 1.704-2(i)(5), and increased by the items
set forth in Treasury Regulations 1.704-1(b)(2)(ii)(d)(4), (5) or (6))
shall be allocated items of gross income and gain for such fiscal year
and, if necessary, for subsequent fiscal years, in an amount equal to
such Member's share of the net decrease in such Member Nonrecourse Debt
Minimum Gain, determined in accordance with Treasury Regulation
1.704-2(i)(4). This provision is intended
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to comply with the chargeback provisions of Treasury Regulation
1.704-2(i)(4), and the term "Member Nonrecourse Debt Minimum Gain"
shall have the meaning ascribed to the term "Partner Nonrecourse Debt
Minimum Gain" in Treasury Regulation 1.704-2(i)(3).
(e) LLC Nonrecourse Deductions. Notwithstanding the allocations
provided for in Section 4.5 and except as otherwise provided in this
Section 4.6, any "LLC Nonrecourse Deductions", defined as having the
meaning ascribed to the term "Partnership Nonrecourse Deductions" in
Treasury Regulation 1.704-2(c), for any fiscal year shall be allocated
to the Members in accordance with their Percentage Interests as
provided under Treasury Regulation 1.704-2(e).
(f) Limitation on Loss Allocations. The Net Losses allocated
pursuant to Section 4.5 shall not exceed the maximum amount of Net
Losses that can be allocated without causing any Member to have a
deficit balance in such Member's Capital Account at the end of any
fiscal year (decreased by the amount,
if any, such Member is obligated to restore to the LLC and the amount
such Member is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations 1.704-2(g)(1) and
1.704-2(i)(5), and increased by the items set forth in Treasury
Regulations 1.704-1(b)(2)(ii)(d)(4), (5) or (6)). All Net Losses in
excess of the limitations set forth in this paragraph shall be
allocated among the Members, pro-rata, to the extent each,
respectively, is liable or otherwise bears the economic risk of loss
with respect to any debt or other obligation of the LLC.
(g) Curative Allocations. The allocations set forth in Section
4.6 (the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulations 1.704-1 and 1.704-2.
Notwithstanding any provision of Section 4.6 (other than the Regulatory
Allocations and the provisions of Section 4.7), the Regulatory
Allocations shall be taken into account in allocating Net Losses and
Net Income and items of gross income, gain and deduction among the
Members so that, to the extent possible, the net amount of such
allocations to the Members shall be equal to the net amount that would
have been allocated to the Members if the Regulatory Allocations had
not occurred.
(h) In-Kind Contributions. In accordance with Code Section 704(c)
and the Treasury Regulations thereunder, Net Income, gain, Net Loss and
deduction with respect to any property contributed to the capital of
the LLC shall, solely for tax purposes, be allocated among the Members
so as to take account of any variation between the adjusted basis of
such property to the LLC for federal income tax purposes and its
initial fair market value. Any elections or other decisions
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relating to such allocation shall be made by the Operating Committee in
any manner that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 4.6(h) are solely for
purposes of federal, state and local taxes and shall not affect, or in
any way be taken into account in computing, any Member's Capital
Account or share of Net Income, Net Losses, other items or
distributions pursuant to any provision of this Agreement.
4.7 Authority To Vary Allocations. The Members intend that each
Member's distributive share of gross income, Net Income, gain, Net Loss
or deduction (or item thereof) shall be determined and allocated in
accordance with Sections 4.5 and 4.6 to the fullest extent permitted by
Code Section 704(b). To preserve and protect the determinations and
allocations provided for in Sections 4.5 and 4.6, the Operating
Committee shall, and hereby is authorized and directed to, allocate Net
Income, gross income, gain, Net Loss or deduction (or item thereof)
arising in any year differently than otherwise provided for in Sections
4.5 and 4.6, if, and to the extent that, allocating Net Income, gross
income, gain, Net Loss or deduction (or item thereof) in the manner
provided for in Sections 4.5 and 4.6 would cause the determinations and
allocations of each Member's distributive share of Net Income, gross
income, gain, Net Loss or deduction (or item thereof) not to be
permitted by Code Section 704(b) or any Treasury Regulations
promulgated thereunder. Any allocation made by the Operating Committee
pursuant to this Section 4.7 shall be deemed to be a complete
substitute for any allocation otherwise provided for in Section 4.5 or
4.6 and no amendment of this Agreement or approval of any Member shall
be required.
4.8 Members' Interest in Profits.
Pursuant to Treas. Reg. Section 1.752-3(a)(3), the Members'
interests in LLC profits shall be the Percentage interests of the
Members.
4.9 Distributions to Members.
(a) As used in this Agreement, the term "Excess Cash Flow" for any
calendar year or fraction thereof shall mean the amount, if any, of
cash available to the LLC after (i) payment of all operating expenses,
and (ii) the establishment of the Operating Reserve and such other
reserves as may determined in the sole discretion of the Operating
Committee. Any cash included as part of the Improvements Budget shall
not be deemed to be available to the LLC for distribution under this
Section until such time as the Site Plan Improvements have been
completed and all construction and development costs associated
therewith have been paid; thereafter, any surplus funds from the
Improvements Budget shall be available for distribution under this
Section.
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(b) From and after the date of this Agreement, but subject to the
provisions of Section 9.2, the Excess Cash Flow for each calendar year
or fraction thereof shall be distributed to the Members as follows, and
in the following order of priority:
(1) An amount of Excess Cash Flow up to the amount of the accrued
and unpaid interest on Cash Needs Loans shall first be paid as interest
to the Members in proportion to the amount of such interest owed to
each;
(2) An amount of Excess Cash Flow up to the then aggregate unpaid
principal balance of Cash Needs Loans shall next be distributed to the
Members in proportion to the amount of such principal owed to each; and
(3) The balance, if any, of Excess Cash Flow shall be distributed
to the Members in proportion to their respective Percentage Interests
in the LLC.
5. ACCOUNTING
5.1 Accounting Decisions.
All decisions as to accounting principles and elections, whether
for book or tax purposes (and such decisions
may be different for each such purpose), shall be approved by the
Operating Committee.
5.2 Tax Returns.
The LLC, under the supervision of the Operating Committee, will
prepare and timely file federal and state income tax returns of the
LLC. As promptly as practicable, and in any event, in sufficient time
to permit timely preparation and filing by each Member of its
respective federal and state tax returns, the LLC shall deliver to each
Member a copy of each federal and state tax return or tax report filed
by the LLC.
5.3 Elections.
To the extent that the LLC may or is required to make elections
for federal, state or local tax purposes, and to the extent that
Members may or are required to make such elections concerning the
business and properties of the LLC and such elections may not be made
in different ways by different Members, such elections shall be made in
such manner as is best calculated, in the judgment of the Operating
Committee, to minimize taxable income of the LLC and maximize
deductions therefrom. In the event of the transfer of all or part of
the interest of a Member, the Members shall elect pursuant to
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Section 754 of the Code to adjust the basis of the LLC's property.
5.4 Information Concerning Basis.
Each Member shall furnish to the LLC information as to its
adjusted basis for federal income tax purposes of all property
contributed by such Member to the LLC pursuant to Section 4.
6. WITHDRAWAL; ADJUDICATION; DISSOLUTION
6.1 Withdrawal.
Except as specifically permitted under the terms of this
Agreement, no Member may withdraw or resign from the LLC. If a Member
shall withdraw or resign from the LLC (the "Withdrawn Member"), then at
the election of the other Member (a) the Berthing Agreement with the
Withdrawn Member shall immediately terminate, (b) the Withdrawn Member
shall have no right to use any of the Common Areas, (c) the
Construction Representative selected by the Withdrawn Member shall
immediately be removed from the Construction Committee, (d) the
Representatives selected by the Withdrawn Member shall immediately be
removed from the Operating Committee, (e) the business theretofore
conducted by the LLC shall thereafter be controlled by the Construction
Representative or the Representatives selected by the remaining Member,
(e) the Withdrawn Member shall remain liable to other Members as if it
were a Member but shall no longer have the rights and powers of a
Member, (f) the Withdrawn Member shall be liable to other Members for
any loss or damages resulting from such withdrawal, and (g) the
Withdrawn Member shall be entitled to, and only to,
(i) those distributions to which the Withdrawn Member would
otherwise be entitled, as and when made, until such time, if ever, the
LLC (at the direction of the remaining Member) elects to pay the
Withdrawn Member, in 24 interest-free installments, the sum described
in Section 604 of the Act, less
(ii) any amounts owing by the Withdrawn Member pursuant to this
Subsections 6.1, as may be set off by the LLC for the account of the
LLC or the other Member.
6.2 Adjudication of Incompetency;
Death, Disability or Dissolution of a Member.
In the event any Member (the "Terminating Member") voluntarily
withdraws from the LLC or suffers death, mental incapacity or
dissolution, then the other Member (the "Non-Terminating Member") or
its designee, shall succeed to the
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rights and obligations of the Terminating Member, the Berthing
Agreement with the Terminating Member shall immediately terminate and
the Terminating Member shall have no right to use any of the Common
Areas.
7. EVENTS OF DEFAULT; REMEDIES.
7.1 Events of Default.
(a) The following shall constitute events of default under this
Agreement ("Events of Default"):
(1) The failure of any Member to make a capital contribution to
the LLC as required by the provisions of Section 4.1(a)(3) or (4) or
Section 4.1(h); or
(2) The failure of any Member to fulfill any of its other
obligations under this Agreement within thirty (30) days after written
notice from the other Member, which default may be cured during such
thirty (30) day period; or
(3) A Member causes, permits or suffers an Event of Default under
its Berthing Agreement; or
(4) A Member suffers Bankruptcy.
7.2 Remedies in the Event of a Default by a Member. If a Member
causes, permits or suffers an Event of Default under this Agreement,
such Member (the "Defaulting Member") shall be subject to the following
remedies, each of which shall be cumulative and not exclusive of any
other right or remedy of the other Member:
(a) During any period in which an Event of Default continues: (i)
the Defaulting Member's approval shall no longer be required for any
action by the LLC which is specified under Section 3.3 above, and (ii)
the Construction Representative and the Representatives selected by the
Defaulting Member which is in default or deemed to be in default under
this Agreement shall be suspended from participation in the
Construction Committee and the Operating Committee, and (iii) the
Construction Committee and the Operating Committee shall thereafter be
controlled by the Construction Representative or the Representatives
selected by the other Member.
(b) If such Event of Default continues for a period of more than
two hundred seventy (270) days, the other Member shall have a right to
acquire (or to have its designee acquire) the interest of the
Defaulting Member in the LLC and all of the Defaulting Member's right,
title and interest in its Berthing Agreement on the following terms and
conditions:
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(1) The purchase price shall be one million ($1,000,000) dollars.
(2) Any such acquisition shall be subject to the approval of the
Commission.
(3) In connection with such acquisition the Defaulting Member
shall be removed as a Member and the acquiring party shall be
substituted as a Member.
(4) Such right may only be exercised by the other Member by
providing a written notice to the Defaulting Member within ninety (90)
days of the date which is 270 days after the commencement of the Event
of Default. Such notice shall specify a closing date for the
acquisition, which closing date shall be not less than thirty (30) days
or more than ninety (90) days after the date of the notice.
The parties acknowledge that the other Member shall have a right to
obtain specific performance of the obligations of the Defaulting
Member's to transfer its interest as a Member in the LLC and its right,
title and interest in and under its Berthing Agreement, it being
recognized that such interests are unique and that there would be no
adequate remedy at law or in damages for a failure or refusal by the
Defaulting Member to honor and perform such obligations in a timely
fashion. The foregoing sentence shall not be construed to imply that
the remedy of specific performance or other equitable relief is not
available, or should not be ordered, for breaches of other obligations
of the Members under this Agreement.
(c) If such Event of Default is a failure to make an obligatory
capital contribution under Sections 4.1(a)(3) or (4) or 4.1(h), in
addition to any other remedy, the other Member shall have the right to
invoke the rights and remedies set forth in Sections 4.3(a)(2)(a)
through (c), in which event the Required Amount shall be deemed to be
the amount of the capital contributions to be made by the Members.
Notwithstanding the last parenthetical clause of the introductory
paragraph of Section 4.3(a)(2), in connection with exercising any right
or remedy under the subsection a Member may exercise any other right or
remedy available to it under this Agreement.
(d) If the Event of Default is a failure to make an obligatory
capital contribution under Section 4.1(a)(3) or (4) above, in addition
to the remedies referred to above, and as a condition to curing such
Event of Default, the Defaulting Member shall pay to the other Member
an amount equal to five (5%) percent of the amount by which it is in
default in making the applicable capital contribution.
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8. SALE OR ASSIGNMENT OF INTEREST
(a) No interest of any Member in the LLC or otherwise under this
Agreement shall be sold, transferred, pledged, encumbered, hypothecated
or assigned, unless (i) such transaction complies with any relevant
provisions of Section 8(b), (ii) any sale or other assignment of the
interest subsumes the Member's entire interest in the LLC (including
all of the Member's voting rights, powers of appointment, informational
rights, Percentage Interest and Capital Account), (iii) the
counterparty to the transaction expressly acknowledges that it acquires
its rights in or against the interest subject to the terms of this
Agreement (which shall continue to govern) and such counterparty
assumes in writing any obligations of the selling Member from and after
the date of such assumption under this Agreement and the Assignment and
Assumption Agreement of even date, (iv) reasonable assurances are
provided to the remaining Member that all monetary obligations
hereunder of the selling Member prior to the date of such assumption
have been or will be satisfied, and (v) such transaction would not
result in a breach or default under any agreement to which the LLC is a
party or give rise to the right to accelerate the maturity of any LLC
indebtedness or result in any fees or penalties to the LLC (unless the
transferee or assignor indemnifies the LLC against such fees or
penalties in a manner reasonably satisfactory to the non-transferring
Member or pays such fees or penalties).
(b) A Member may sell its entire interest in the LLC to any Person
which simultaneously acquires or has acquired a Certificate of
Suitability or a Riverboat Owner's License issued by the Commission for
use at the LLC Property. A Member may pledge its entire interest in
the LLC as additional security to a lender which has made a loan to the
Member which is secured by the Member's interest in its riverboat(s)
being berthed pursuant to a Berthing Agreement with the LLC and the
proceeds of which are being applied to the payment (or reimbursement)
of costs associated with this project, including the refinancing of
such loans; provided, in no event shall any such loan (or refinancing)
serve as security for, or be cross-collateralized with, a loan that is
not made in respect of this project.
(c) Any purported sale, transfer, pledge, encumbrance,
hypothecation, grant of a security interest or assignment in violation
of this Agreement shall be void and of no force or effect and shall in
no way limit, modify, alter or impair the Member's obligations under
this Agreement or create any rights on the part of the purported
transferee, assignee or creditor against the LLC or the other Member.
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9. TERMINATION AND LIQUIDATION OF THE LLC
9.1 Dissolution. The LLC shall be dissolved upon the occurrence
of any of the following events:
(a) December 31, 2035;
(b) The sale or other disposition of substantially all of the
LLC's assets;
(c) The written consent of all Members;
(d) The withdrawal, Bankruptcy or dissolution of any Member;
provided, however, that the LLC's existence shall not terminate if,
within ninety (90) days after such event, (i) the LLC has at least two
(2) Members, and (ii) a majority in interest of the Members (determined
independently by reference to Percentage Interests and by reference to
Capital Accounts) elects to continue the LLC's existence, or
(e) Upon entry of a decree of judicial dissolution.
9.2 Winding-Up.
(a) Upon dissolution of the LLC, the Operating Committee shall
conclude the affairs of the LLC. The LLC's assets may be liquidated
and distributed in cash, or, if the Operating Committee unanimously so
determines, distributed in kind. To the extent such assets cannot
either be sold without undue loss or readily divided for distribution
in kind to the Members, the LLC may, as determined by the Operating
Committee, convey those assets to a trust or other suitable holding
entity established for the benefit of the Members in order to permit
the assets to be sold without undue loss and the proceeds thereof
distributed to the Members at a future date. The legal form of the
holding entity, the identity of the trustee or other fiduciary, and the
terms of its governing instrument shall be determined by the Operating
Committee.
(b) Pursuant to the winding-up of the LLC, the LLC's assets shall
first be applied to the payment of, or to a reserve for the payment of,
LLC liabilities (including Cash Needs Loans and other debts to Members
and their Affiliates and further including such provision for
contingent or unforeseen liabilities as the Operating Committee deems
appropriate), and then shall be distributed to the Members in
accordance with their respective positive Capital Accounts after the
allocations pursuant to Sections 4.5 through 4.8 and after any
distributions pursuant to Section 4.9 for the then-current fiscal year.
If assets are distributed in kind, the assets so distributed shall be
valued at their then-current fair-market values and the unrealized
appreciation or depreciation in value of such assets shall be allocated
to the Members' respective
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Capital Accounts as if such assets had been sold, and such assets shall
then be distributed to the Members in accordance with their respective
positive Capital Accounts as so adjusted.
(c) A taking of all or substantially all of the LLC's property and
assets in condemnation or by eminent domain shall be treated in all
respects as a sale of the LLC's assets upon the dissolution and
liquidation of the LLC pursuant to this Section 9. In such event any
portion of the property and
assets of the LLC not so taken shall be sold and the proceeds, together
with the condemnation award, distributed in the manner provided for in
this Section 9.
(d) The amount by which the fair market value of any property to
be distributed in kind to the Members exceeds or is less than the basis
of such property (determined without regard to any election under
Section 754 of the Code) shall, to the extent not otherwise recognized
to the LLC, be taken into, account in computing gain or loss of the LLC
for purposes of crediting or charging the Capital Accounts of, and
distributing proceeds to, the Members under this Section 9.
(e) If, following the termination of the LLC, any asset of the LLC
is sold in a transaction in which, by reason of the provisions of
Section 453 of the Code, gain is realized but not recognized, such
realized gain shall be taken into account in computing gain of the LLC
for the purposes of making allocations under Section 9.2(b) hereof and
distributions of proceeds to the Members under Sections 9.2 hereof.
10. NOTICES
10.1 Notices by Registered or Certified Mail.
(a) All notices, demands or requests provided for or permitted to
be given pursuant to this Agreement must be in writing. All notices,
demands and requests to be sent by any party hereto or to any other
party shall be deemed to have been properly given or served by
depositing the same in the United States Mail, postpaid and registered
or certified, with return receipt requested, or by delivering the same
to an overnight delivery service of nationally recognized standing, and
addressed to the party to whom the notice, demand or request is
intended, at its address designated hereinbelow or to such other
address as such party may hereafter designate by written notice.
(b) All notices, demands and requests shall be effective upon
being deposited in the United States Mail or being delivered to an
overnight delivery service of nationally recognized standing. However,
the time period in which a response to any such notice, demand or
request must be given
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shall commence to run three (3) days from the date of such mailing or
two (2) days from the date of such delivery.
10.2 Routine Communications.
Notwithstanding the foregoing, routine communications,
distribution checks, copies of financial statements, etc., may be sent
by ordinary first-class mail.
10.3 Notice to Trump.
Copies of all notices to Trump shall be sent to Nicholas L. Ribis,
President, Trump Indiana, Inc., 725 Fifth Avenue, New York 10022.
Copies thereof shall concurrently be sent to Robert M. Pickus,
Executive Vice President - Corporate and Legal Affairs, Trump Indiana,
Inc., c/o Trump Plaza Hotel & Casino, The Boardwalk at Mississippi
Avenue, Atlantic City, New Jersey 08401; and Peter Michael Laughlin,
Esq., Ribis, Graham & Curtin, 4 Headquarters Plaza, Morristown, New
Jersey 07962-1991.
10.4 Notices to BDC.
Copies of all notices to BDC shall be sent to Don H. Barden, The
Barden Companies, 400 Renaissance Center, 24th Floor, Detroit, Michigan
48243. Copies thereof shall concurrently by sent to Cameron H.
Piggott, Esq., Dykema Gossett, PLLC, 400 Renaissance Center, Detroit,
Michigan 48243.
11. NO RIGHT TO OBLIGATE OR INCUR LIABILITIES
FOR OTHER MEMBERS
Each of the Members hereby covenants and agrees that it will not,
during the term of this LLC, do any act or incur any obligation on
behalf of the LLC of any kind whatsoever, except as herein expressly
authorized and permitted in this Agreement and each Member hereby
agrees to indemnify and hold harmless the other Members from any
obligation or liability, including the reasonable expenses of defense
thereof, arising out of its breach of any of the provisions hereof.
12. COMPLIANCE WITH INDIANA GAMING REGULATIONS
12.1 Transfer of LLC Interest.
Notwithstanding anything to the contrary contained in this
Agreement, any sale, transfer, assignment or other conveyance of all or
any part of the interest (whether legal or beneficial) of any Member in
the LLC shall be subject to and conditioned upon, to the extent
applicable, the provisions of the Indiana Riverboat Gambling Act and
the regulations of the Commission.
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12.2 Licensing.
If it is determined by any agency or regulatory body or by the
provisions of any applicable law or regulation that the LLC or any
Member must be licensed or qualified in order to participate in the
affairs and ownership of the LLC, then each Member hereby agrees to
cooperate reasonably and promptly with the other in obtaining any and
all licenses, permits or approvals required by such governmental
authority or deemed expedient by the Members in connection with
applicable law or regulation.
13. ARBITRATION
13.1 Agreement to Arbitrate. Any controversy, dispute or claim
arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement shall be
resolved by binding arbitration conducted in Indianapolis, Indiana in
accordance with the then existing Commercial Arbitration Rules (the
"Rules") of the American Arbitration Association ("AAA"), specifically
including the Rules relating to "Expedited Procedures" (the "Expedited
Procedures").
13.2 Selection of Arbitrators. Each party to the dispute shall
by notice to the other party name an arbitrator and the two (2)
arbitrators so named shall decide upon a third (3rd) arbitrator. The
second (2nd) arbitrator to be appointed must be appointed by notice to
the party who appointed the first (1st) arbitrator within five (5)
business days after the notice of the appointment of the first (1st)
arbitrator, failing which the first (1st) arbitrator so appointed shall
act as the sole arbitrator. If pursuant to the preceding two (2)
sentences, two (2) arbitrators have been appointed by the parties and
if the two (2) so appointed do not agree upon a third (3rd) arbitrator,
the AAA in Indianapolis, Indiana shall be requested to submit a list of
five (5) persons to serve as the third (3rd) arbitrator. The parties
shall select the third (3rd) arbitrator from the list submitted,
provided that if the parties cannot agree upon the third (3rd)
arbitrator, then the third (3rd) arbitrator shall be selected from the
list of five (5) through the process of the two (2) arbitrators jointly
striking names from the list until one (1) name remains. The decision
of any two (2) of the arbitrators shall be final and binding upon all
parties. A judgment upon any award rendered by a majority of the
arbitrators may be entered and enforced in any court of competent
jurisdiction. Unless the arbitrators determine otherwise (which they
shall have the right to do), all costs and expenses of the arbitrators
shall be borne equally by the parties with the exception that the cost
of the arbitrator selected by each party shall be paid by the selecting
party. The arbitrators shall be requested to render an opinion within
thirty (30) days after the date the
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controversy (within fifteen (15) days in the case of any expedited
proceeding) is submitted to them. The above procedures contemplate
that there will only be two (2) parties to the arbitration proceeding;
if there are more, and the parties cannot agree upon the method of
choosing arbitrators, the method of proceeding shall be determined
pursuant to the then existing Commercial Arbitration Rules of the AAA.
13.3 Expenses. The arbitrator shall award to the prevailing party
in any arbitration proceeding commenced hereunder the prevailing
party's costs and expenses (including expert witness expenses and
reasonable attorneys' fees but excluding the cost of the arbitrator
selected by the prevailing party) of investigating, preparing and
presenting such arbitration claim.
13.4 Expedited Procedures. Each party hereto hereby consents to
the use of the Expedited Procedures without regard to the amount in
controversy and agrees to cooperate in all respects with the arbitrator
in order to permit a speedy resolution to such disputes. The arbitrator
shall convene a hearing as quickly as practicable after his or her
appointment, and in any event no later than fifteen (15) days after
such appointment. There shall be only one hearing, which shall not
exceed five (5) consecutive business days in length.
13.5 Submission to Jurisdiction; Agent to Service. EACH OF THE
PARTIES HERETO CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE CITY OF INDIANAPOLIS, STATE OF INDIANA, AND
IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS
AGREEMENT OR ANY AGREEMENT OR INSTRUMENT EXECUTED HEREUNDER, OTHER THAN
ANY ACTION OR PROCEEDING REQUIRED BY SECTION 13(a) HEREOF TO BE
SUBMITTED TO ARBITRATION, SHALL BE LITIGATED IN SUCH COURTS, AND EACH
OF THE PARTIES WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT, AND CONSENTS TO ALL SUCH SERVICE OR PROCESS MADE IN
THE MANNER SET FORTH IN SECTION 10 HEREOF. Nothing contained in this
Section shall affect the right of any party to serve legal process on
any other party in any other manner permitted by law. Nothing contained
in this Section shall affect the obligations of the parties with
respect to the arbitration of disputes under Section 13.1 hereof.
13.6 Certain Decisions or Disputes Not Subject to Arbitration.
Notwithstanding anything to the contrary in the foregoing, the
following decisions or disputes shall not be subject to arbitration:
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(a) any amendment to, renewal or extension of, or other change in
the terms and conditions of the Berthing Agreements;
(b) any decision by a Member to cause the LLC to enforce its
rights under a Berthing Agreement;
(c) approval of a change in the Improvements Budget, other than an
obligatory increase under the circumstances referred to in Section 3.10
above;
(d) a change in the Site Plan that is not required in order to
complete the Site Plan Improvements (i) in a timely fashion, (ii)
within the Improvements Budget, or (iii) in accordance with applicable
laws, rules and regulations;
(e) approval of the Master Plan, or the agreement of the Members
that the LLC should construct the Master Plan Improvements; and
(f) a change in the Master Plan Improvements that is not required
in order to complete the Master Plan Improvements (i) in a timely
fashion, (ii) within the agreed upon budget, or (iii) in accordance
with applicable laws, rules and regulations.
13.7 Certain Limitations on the Authority of Arbitrators.
Notwithstanding Sections 13.1 and 13.2 above, the arbitrator(s) shall
not have the authority to determine that the Site Plan or Master Plan
will include any improvements (temporary or permanent) that cost more
or are more extensive than the minimum amount reasonably necessary to
properly serve the operations of the riverboats, to meet any
contractual requirements undertaken by the LLC, or to enable the
Members to meet their respective obligations under the Development
Agreement or any obligations under the Certificates of Suitability or
Riverboat Owner's Licenses issued to the Members.
14. MISCELLANEOUS
14.1 Governing Law.
The LLC is and shall be a limited liability company existing under
and governed by the laws of the State of Delaware.
14.2 Waivers.
No consent or waiver, expressed or implied, by any Member to or of
any breach or default by the other of its obligations hereunder shall
be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such other party of the same or
any other
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obligations of such Member hereunder. Failure on the part of any Member
to complain of any act or failure to act of another Member or to
declare a Member in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Member of its rights
hereunder.
14.3 Severability.
If any provision of this Agreement or the application thereof to
any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
14.4 Covenant Against Partition.
Except as otherwise provided in this Agreement, the Members, on
behalf of themselves, their legal representatives successors and
assigns, hereby specifically renounce, waive and forfeit all rights
whether arising under statute, or by operation of law, to seek, bring,
or maintain any action in any court of law or equity for partition of
the Property, or any interest which is considered to be LLC property,
regardless of the manner in which title to any such property may be
held, and upon any breach of the provisions of this Section 14.4, the
other Member, in addition to all rights and remedies in law and equity,
shall be entitled to a decree or order restraining or enjoining such
application, action or proceeding.
14.5 Pronouns, etc.
All pronouns or any variations thereof shall be deemed to refer to
the masculine, feminine, or neuter, singular or plural, as to the
identity of the person or persons may require.
14.6 Entire Agreement.
This Agreement, together with other documents being executed of
even date, contain the entire agreement between the parties hereto
relative to the formation of the LLC and the LLC's ownership of the
Property as of the date of this Agreement, and all prior understandings
and agreements between the parties are merged in this Agreement.
Without limiting the foregoing, this Agreement amends, restates and
supercedes the Original Agreement, and supercedes any other agreements
regarding the Original Agreement executed in connection therewith.
Each Member acknowledges that it is not relying upon any statement or
representation made by the other Member not embodied herein or in the
Exhibits attached hereto, in instruments delivered pursuant to specific
provisions hereof, or in other instruments signed or delivered by the
parties (or the other party) in connection with the execution of the
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Original Agreement or the formation of the LLC or being signed or
delivered by the parties (or the other party) in connection with the
execution of this Agreement or the contributions referred to in Section
4.1(a) above. No variations, modifications or changes herein or hereof
shall be binding upon any Member hereto unless set forth in a document
duly executed by or on behalf of such Member.
14.7 Binding Agreement; No Third Party Beneficiaries.
Subject to the restrictions on transfers and encumbrances set
forth herein, this Agreement shall inure to the benefit of and be
binding upon the undersigned Members and their respective legal
representatives, successors and assigns. Whenever in this instrument, a
reference to any Member is made, such reference shall be deemed to
include a reference to the legal representatives, successors and
permitted assigns of such Member. However, in no event shall any third
party be deemed to be a third party beneficiary of this Agreement or
otherwise be entitled to enforce the terms and conditions of this
Agreement against the Members.
14.8 Force Majeure.
All obligations set forth in this Agreement shall be subject to
impossibility of performance as a consequence of any strike, lock-out,
fire, destruction, acts of God, restrictions of any governmental
authority, civil commotion or unavoidable casualty.
14.9 Captions; Exhibits.
The captions used herein are for convenience only and do not in
any way affect, limit, amplify or otherwise modify the terms and
provisions hereof. Exhibits A through G, inclusive, attached hereto
are a material part of this Agreement and are hereby incorporated
herein by reference.
14.10 Counterparts.
This Agreement may be executed in any number of counterparts, each
of which as executed shall be deemed to be an original, but all such
counterparts shall constitute one and the same instrument.
14.11 Time of the Essence.
Time is of the essence in the performance by the Members of their
obligations under this Agreement.
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14.12 Tax Matters Partner.
Trump shall be the Tax Matters Partner of the LLC for all purposes
under the Code, under the direction of the Operating Committee.
However, Trump shall not cause the LLC to exercise any election
available to the LLC under the Code, or take any other action in such
capacity, without the prior written consent of the other Member.
IN WITNESS WHEREOF, this Agreement is executed effective as of the
date first set forth above.
"TRUMP"
TRUMP INDIANA, INC.
By: Nicholas L. Ribis
--------------------------------
Nicholas L. Ribis
President
"BDC"
BARDEN-DAVIS CASINO, LLC
By: BARDEN DEVELOPMENT, INC.,
Member
By: Don H. Barden
--------------------------------
Don H. Barden
President
And
By: GARY RIVERBOAT GAMING, LLC
Member
By: BARDEN MANAGEMENT, INC.,
Its Manager
By: Don H. Barden
--------------------------------
Don H. Barden
President
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AMENDMENT NO. 1 TO FIRST AMENDED
AND RESTATED OPERATING AGREEMENT OF
BUFFINGTON HARBOR RIVERBOATS, L.L.C.
This Amendment No. 1 to First Amended and Restated Operating
Agreement (the "Amendment") is entered into as of this 23rd day of
April, 1996 by and between TRUMP INDIANA, INC., a Delaware corporation,
having an office at 6012 W. Industrial Highway, Gary, Indiana 46406
(hereinafter sometimes referred to as "Trump"), and THE MAJESTIC STAR
CASINO, LLC (formerly Barden-Davis Casino, LLC), an Indiana limited
liability company, having an office at Suite 2400, 400 Renaissance
Center, Detroit, Michigan 48243 (hereinafter sometimes referred to as
"Majestic"; Trump and Majestic are hereinafter sometimes referred to as
the "Members" and individually as a "Member").
WITNESSETH
WHEREAS, Trump and Majestic have formed Buffington Harbor
Riverboats, L.L.C., a Delaware limited liability company (the "LLC"),
pursuant to the terms of an Operating Agreement dated as of September
27, 1995 (the "Operating Agreement");
WHEREAS, Trump and Majestic amended and restated the Operating
Agreement by a First Amended and Restated Operating Agreement dated as
of October 31, 1995 (the Operating Agreement, as so amended and
restated, is hereinafter referred to as the "Agreement"); and
WHEREAS, the Members wish to amend the Agreement in the respects
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and
conditions hereafter contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings ascribed to them in
the Agreement.
2. Change of Member's Name. Majestic represents to Trump, and
Trump acknowledges, that Barden-Davis Casino, LLC has changed its name
to "The Majestic Star Casino, LLC" by filing with the Indiana Secretary
of State an amendment to its Articles of Organization. Majestic and
Trump agree to file with the Delaware Secretary of State an amendment
to the Certificate of Formation of Buffington Harbor Riverboats, L.L.C.
confirming Majestic's name change. Unless the context clearly requires
otherwise, all references in the Agreement to "BDC" shall be deemed to
refer to "Majestic".
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3. Establishment of Operating Subcommittee. The Members acknowledge and
agree that the Operating Committee can more effectively carry out and discharge
certain of its responsibilities relative to the operation and management of the
LLC through a subcommittee comprised of on-site personnel. Accordingly, a
subcommittee (the "Subcommittee") of the Operating Committee is hereby
established on the following terms:
(a) The Subcommittee shall have responsibility for the day-to-day
operations, management and maintenance of the Common Areas, and the
day-to-day delivery and supervision of services to be provided by the LLC
from time to time under any Berthing Agreement.
(b) The Subcommittee shall consist of two voting representatives, one
of whom shall be the general manager of Trump's on-site gaming operations,
and the other of whom shall be the general manager of Majestic's on-site
gaming operations. Each representative shall be employed on a full time
basis at the site of the LLC Property.
(c) Subject to overall direction from the Operating Committee, the
Subcommittee shall have the power and authority to perform the functions
and responsibilities of the Operating Committee as set forth in Section 3.2
of the Agreement, insofar as such functions and responsibilities pertain to
the matters referred to in subparagraph (a) above, provided that the
subcommittee shall not have the authority to enter into any contract or
other obligation or commitment in the name of or on behalf of the LLC that
involves an expenditure in excess of two hundred fifty thousand ($250,000)
dollars, or any employment contract or arrangement that involves the
payment of a salary or other compensation in excess of fifty thousand
($50,000) dollars per year.
(d) The Subcommittee shall submit periodic reports (not less than
monthly) to the Operating Committee, which shall include a summary of
operations, revenues, expenses, significant new contracts, obligations and
commitments and matters that should be acted upon by the Operating
Committee. The representatives of the Subcommittee shall endeavor to
attend the meetings of the Operating Committee, but shall not (i) be
members of the Operating Committee, (ii) vote on matters before the
Operating Committee, or (iii) be included in any determination of whether
or not a quorum of the Operating Committee has been constituted, unless
(and then only to the extent that) one or both representatives to the
Subcommittee also
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have been separately named under the terms of the Agreement as member(s) of
the Operating Committee. The presence and/or absence of any member(s) of
the Subcommittee, in their capacities as such, shall not affect the
validity of any action taken by the Operating Committee.
(e) The Subcommittee may act only by the affirmative vote of both
representatives; provided, that during any period in which an Event of
Default continues, the representative appointed by the Defaulting Member
shall be suspended from participating on the Subcommittee and the
Subcommittee may act by the affirmative vote of the other representative.
(f) The LLC is a member-managed limited liability company. Each
representative of the Subcommittee shall be deemed to be the agent of, and
to represent, the Member that employed him or her, and show all his or her
loyalty and duty to such Member.
4. Extension of Time for Agreement Upon Initial Operating Plan and Budget.
Section 3.9(d) of the Agreement is amended to provide that the date by which the
initial Operating Plan and Budget is to be agreed upon shall be April 30, 1996.
5. Amendment Regarding Increases in the Operating Plan and Budget. The
limitation on obligatory increases in the Operating Plan and Budget during any
fiscal year set forth in Section 3.9(e) of the Agreement shall be increased from
two million five hundred thousand ($2,500,000) dollars to five million
($5,000,000) dollars, if and to the extent the LLC requires funds in excess of
the amount of available insurance proceeds to repair or restore the Common Areas
following a casualty.
6. Amendment to Timing of Additional Capital Contributions. The parties
acknowledge that each Member has made the capital contributions required to be
made by it pursuant to Sections 4.1(a)(1), (2) and (3) of the Agreement
(although such acknowledgement shall not constitute a waiver of any claim or
right the LLC or the other Member may have with regard to any representation or
warranty with respect to any capital contribution). Section 4.1(a)(5) of the
Agreement is hereby deleted in its entirety and replaced with the following new
Section 4.1(a)(5):
Each of Trump and Majestic shall contribute one-half (1/2) of the
amount shown on the 60 Day Projection (as hereinafter defined) on or
before the fifth (5th) day of each month following issuance of a 60
Day Projection, and each such contribution shall apply
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against the Member's additional capital contribution due under Subsection
(4) above; provided, in any event each Member shall contribute the balance
of its additional capital contribution due under Subsection (4) above
(i.e., $18,993,415 less prior capital contributions by the Member under
Subsection (4) above or this Subsection) on or before June 1, 1996. For
purposes hereof the "60 Day Projection" shall mean the cash flow projection
forecasting the amount of additional funds required to construct the Site
Plan Improvements and to otherwise conduct the LLC's contemplated
operations during the sixty (60) days following such projection, all in
accordance with the Improvements Budget, taking into account cash on hand
and projected revenues for the applicable period. Each 60 Day Projection
shall be prepared by the Subcommittee on or before the first (1st) day of
each month commencing March 1, 1996. Notwithstanding anything herein to the
contrary, no member shall be obligated to make aggregate contributions
under this Section 4.1 in excess of one-half (1/2) of the Improvements
Budget.
7. Extension of Time For Berthing Agreements. Section 4.1(e) of the
Agreement is amended to provide that the date by which each Member shall enter
into a Berthing Agreement shall be April 30, 1996.
8. Amendment to Section 8(a) and (b). Section 8(a) and (b) of the
Agreement are hereby deleted and replaced with the following new Sections 8(a)
and (b):
(a) No interest of any Member in the LLC or otherwise under this
Agreement shall be sold, transferred, pledged, encumbered, hypothecated or
assigned, unless (i) such transaction complies with any relevant provisions
of Section 8(b), (ii) any sale or other assignment of the interest subsumes
the Member's entire interest in the LLC (including all of the Member's
voting rights, powers of appointment, informational rights, Percentage
Interest and Capital Account), (iii) except as to a pledge, granting of a
security interest or collateral assignment for security purposes (as to
which this subclause shall not apply), the counterparty to the transaction
expressly acknowledges that it acquires its rights in the interest subject
to the terms of this Agreement (which shall continue to govern) and such
counterparty assumes in writing any obligations of the selling Member from
and after the date of such assumption under this Agreement and the
Assignment and Assumption Agreement of even date, and reasonable assurances
are provided to the remaining Member that all monetary
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obligations hereunder of the selling Member prior to the date of such
assumption have been or will be satisfied, and (iv) such transaction would
not result in a breach or default under any agreement to which the LLC is a
party or give rise to the right to accelerate the maturity of any LLC
indebtedness or result in any fees or penalties to the LLC (unless the
transferee or assignor indemnifies the LLC against such fees or penalties
in a manner reasonably satisfactory to the non-transferring Member or pays
such fees or penalties).
(b) A Member may sell its entire interest in the LLC to any Person
which simultaneously acquires or has acquired a Certificate of Suitability
or a Riverboat Owner's License issued by the Commission for use at the LLC
Property. A Member may pledge, grant a security interest in or make a
collateral assignment of its entire interest in the LLC as security for a
loan, a surety bond, an extension of credit or a guaranty on behalf of, by
or to the Member; provided such loan, surety bond, credit or guaranty is
extended or issued in connection with the Member's financial or performance
obligations with respect to its gaming operations at the Property or with
respect to the LLC, including in connection with the Member's (i)
ownership, chartering, equipping or operation of its riverboat, (ii) gaming
equipment or other improvements, (iii) working capital needs, and (iv) past
or future capital contributions to the LLC, as well as for the extension,
reimbursement or refinancing of the foregoing; and further provided that
the loan, surety bond, credito or guaranty (or extension or refinancing of
the foregoing) does not serve as security for, and is not
cross-collateralized with, a loan that is not made in respect of the
Member's aforementioned obligations.
9. No Other Amendment. Except as amended and modified in the respects
specifically set forth above, the Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
"TRUMP"
TRUMP INDIANA, INC.
By: Robert M. Pickus
------------------------------
Robert M. Pickus
Its: Vice President
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"MAJESTIC"
THE MAJESTIC STAR CASINO, LLC
By: Barden Development, Inc.,
Member
By: Don H. Barden
-------------------------------
Don H. Barden
President
And
By: Gary Riverboat Gaming, LLC,
Member
By: Barden Management, Inc.,
Its Manager
By:
Don H. Barden
-------------------------------
Don H. Barden
President