EXHIBIT 10.59
FIRST AMENDED AND RESTATED
OPERATING AGREEMENT
of
▇▇▇▇▇▇▇▇▇▇ HARBOR RIVERBOATS, L.L.C.
by and between
▇▇▇▇▇ INDIANA, INC.
and
▇▇▇▇▇▇-▇▇▇▇▇ CASINO, L.L.C.
DATED: As of October 31, 1995
FIRST AMENDED AND RESTATED
OPERATING AGREEMENT
of
▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ INDIANA, INC.,
a Delaware corporation, having an office at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter sometimes referred to as "▇▇▇▇▇"), and ▇▇▇▇▇▇-▇▇▇▇▇
CASINO, L.L.C., an Indiana limited liability company, having an office at Suite
2400, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter sometimes
referred to as "BDC"; ▇▇▇▇▇ and BDC are hereinafter sometimes referred to as the
"Members" and individually as a "Member").
WITNESSETH:
WHEREAS, ▇▇▇▇▇ 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, ▇▇▇▇▇ 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, ▇▇▇▇▇ and BDC have formed ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ and BDC pursuant to which each of ▇▇▇▇▇ and BDC shall have the right to
conduct separate riverboat gaming operations and construct separate facilities,
all as more particularly described below; and
WHEREAS, ▇▇▇▇▇ 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 ▇-▇, ▇-▇,
E, F and G to include additional items; and
WHEREAS, ▇▇▇▇▇ 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
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have the meanings set forth below:
1.1 "Act" means the Delaware Limited Liability Company Act, as
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amended from time to time.
1.2 "Additional Facilities" shall have the meaning ascribed to it in
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Section 3.1(e) below.
1.3 "Affiliate" means any Person directly or indirectly controlling
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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
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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
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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 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
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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
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(c) below.
1.7 "BDC Memorandum of Understanding" means the Memorandum of
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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
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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
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Section 2.3(h) below.
1.10 "Capital Account" shall have the meaning ascribed to it in
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Section 4.1(f) below.
1.11 "Cash Needs" of the LLC shall have the meaning ascribed to it in
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Section 4.3(a)(3) below.
1.12 "Certificate" means the Certificate of Formation iled with
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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
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Suitability issued to BDC or ▇▇▇▇▇, as applicable, by the Indiana Gaming
Commission, as well as any Riverboat Owner's License issued to BDC or ▇▇▇▇▇
pursuant to their respective Certificates of Suitability.
1.14 "City" means the City of Gary, Indiana.
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1.15 "Code" means the Internal Revenue Code of 1986, as amended, or
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any corresponding provision of any succeeding law.
1.16 "Commission" means the Indiana Gaming Commission.
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1.17 "Common Areas" means that part of the LLC Property which is
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intended to serve the gaming operations of ▇▇▇▇▇ 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
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permits, licenses or approvals, together with any such permits, licenses or
approvals, which either ▇▇▇▇▇ 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
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Section 3.1(b) below.
1.20 "Development Agreement" means the Development Agreement to be
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entered into among the City, the LLC, BDC and ▇▇▇▇▇ pursuant to or in
furtherance of the Certificates of Suitability, the BDC Memorandum of
Understanding and the ▇▇▇▇▇ 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 ▇▇▇▇▇).
1.21 "Event of Default" shall have the meaning ascribed to it in
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Section 7.1(a) below.
1.22 "Harbor" means ▇▇▇▇▇▇▇▇▇▇ Harbor in the City of Gary, Indiana.
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1.23 "Harbor Lease Agreement" means the Harbor Lease Agreement dated
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June 29, 1995 between Lehigh Portland Cement Company, as lessor, and ▇▇▇▇▇, as
lessee.
1.24 "Improvements Budget" shall have the meaning ascribed to it in
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Section 3.10 below.
1.25 "Lehigh Property" means the real property interests purchased by
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▇▇▇▇▇ from Lehigh Portland Cement Company, including the lessee's interest under
the Harbor Lease Agreement.
1.26 "LLC" means the limited liability company to which this Agreement
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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
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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
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3.1(e) below.
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1.29 "Master Plan Improvements" shall have the meaning ascribed to it
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in Section 3.1(e) below.
1.30 "Member" means any Person who is admitted to the LLC pursuant to
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the provisions of this Agreement. The initial Members of the LLC are ▇▇▇▇▇ and
BDC.
1.31 "New Harbor" shall have the meaning ascribed to it in Section
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3.1(e) below.
1.32 "Operating Committee" shall have the meaning ascribed to it in
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Section 3.2 below.
1.33 "Operating Plan and Budget" shall have the meaning ascribed to it
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in Section 3.9(a) below.
1.34 "Operating Reserve" means a reserve to be maintained by the LLC
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(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
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LLC dated as of September 27, 1995.
1.36 "Percentage Interest" shall have the meaning ascribed to it in
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Section 4.2 below.
1.37 "Person" means any individual, corporation, partnership (general
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or limited), association, limited liability company, trust, estate or other
entity.
1.38 "Pre-Formation Agreements" means the agreements listed on
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attached Exhibit B-1.
1.39 "Prime Rate" shall have the meaning ascribed to it in Section
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4.1(e)(4) below.
1.40 "Required Amount" shall have the meaning ascribed to it in
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Section 4.3(a)(1) below.
1.41 "Site Plan" means the site plan attached as Exhibit C, as the
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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
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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 ▇▇▇▇▇.
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1.43 "State" means the State of Delaware.
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1.44 "Studies" means the agreements or studies listed on attached
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Exhibit B-2.
1.45 "▇▇▇▇▇ Costs" shall have the meaning ascribed to it in Section
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4.1(b) below.
1.46 "▇▇▇▇▇ Memorandum of Understanding" means the Memorandum of
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Understanding dated as of May 27, 1995 between ▇▇▇▇▇ and the City.
1.47 "▇▇▇▇▇ Projects" means the projects which ▇▇▇▇▇ is to develop on
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parts of the LLC Property in its own name and right in order to satisfy its
obligations under its Certificate of Suitability, the ▇▇▇▇▇ 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
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in Section 3.9(a).
2. ORGANIZATION.
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2.1 Name. The name of the LLC is ▇▇▇▇▇▇▇▇▇▇ Harbor Riverboats, L.L.C.,
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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
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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 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:
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(a) To accept the contribution of the Lehigh Property and the
assignment of the Pre-Formation Agreements by ▇▇▇▇▇ 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 ▇▇▇▇▇ or BDC, as the case may be, with respect to
liability under the Pre-Formation Agreements and/or the Studies as provided
below;
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(b) To enter into leases, subleases or other arrangements regarding
the use or occupancy of all or part of the LLC Property with BDC, ▇▇▇▇▇ 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 ▇▇▇▇▇ 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;
(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,
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without limitation, no purpose having to do with the operation of casinos, BDC
Projects or ▇▇▇▇▇ Projects), unless approved by both Members in writing. The LLC
shall not assume any obligation of either or both of the Members to the
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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
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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 ▇▇▇▇▇▇▇▇-▇▇▇▇
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Corporation Systems, Inc. The registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. 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
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in tangible property, intangible property, real property, personal property and
other assets acquired by 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
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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
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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:
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(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.
(e) It is the holder of a Certificate of Suitability and there is no
default thereunder by such Member.
2.11 Certain ▇▇▇▇▇ Representations and Warranties. ▇▇▇▇▇ hereby
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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 ▇▇▇▇▇ and has not been encumbered by ▇▇▇▇▇ 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; ▇▇▇▇▇ has
provided to BDC true, correct and complete copies of the Pre-Formation
Agreements to which it is a party; ▇▇▇▇▇ has not made or executed any amendment,
modification or termination of the Pre-Formation Agreements, and each remains in
full force and effect; neither ▇▇▇▇▇ nor an Affiliate of ▇▇▇▇▇ 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 ▇▇▇▇▇ Memorandum of Understanding and Trump's
Certificate of Suitability; and except as disclosed in writing on
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or prior to the date hereof, ▇▇▇▇▇ is not in material default under any Pre-
Formation Agreement.
2.12 Certain BDC Representations and Warranties. BDC hereby represents
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and warrants to ▇▇▇▇▇ 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.
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3.1 Implementation of Site Plan Construction
Committee; Preparation of Master Plan.
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(a) The Members agree that the LLC Property is to be developed in
accordance with the Site Plan, although in no event shall ▇▇▇▇▇ or the LLC have
any responsibility for any BDC Project nor shall BDC or the LLC have any
responsibility for any ▇▇▇▇▇ 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 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
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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.
(e) The Members acknowledge that the Site Plan does not depict (i) the
BDC Projects, (ii) the ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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
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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 ▇▇▇▇▇
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.
(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 ▇▇▇▇▇ 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
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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;
(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:
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(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 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 "▇▇▇▇▇▇▇▇▇▇ 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 "▇▇▇▇▇ Boat" or the "BDC
Boat" at ▇▇▇▇▇▇▇▇▇▇ 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.
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(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.
(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:
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(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;
(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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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,
-16-
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 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
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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 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 ▇▇▇▇▇ 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,
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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 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.
-19-
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 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
-20-
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 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 contractual 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
-21-
the Operating Plan and Budget for such 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 ▇▇▇▇▇), 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 totaling thirteen million nine
hundred eighty nine thousand nine hundred ninety one ($13,989,991) dollars,
which is the difference between the ▇▇▇▇▇ 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 ▇▇▇▇▇ 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 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)
-23-
above absent any further agreement of the Members. Notwith-standing 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) ▇▇▇▇▇ Costs. "▇▇▇▇▇ Costs" are hereby defined as the purchase
-----------
price of thirteen million five hundred thousand ($13,500,000) dollars paid by
▇▇▇▇▇ 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 ▇▇▇▇▇ in connection with such acquisition, plus the other costs
incurred by ▇▇▇▇▇ 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 ▇▇▇▇▇ 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:
(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
-24-
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 marshaling 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);
(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
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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.
(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. (S)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
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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 ▇▇▇▇▇ 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, 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
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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 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
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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) 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. (S) 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.
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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 1.704-2(g)(1) and (S)1.704-2(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 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 (S)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 (S)1.704-2(g)(2). This provision is intended to satisfy the
definition of a "minimum gain chargeback" as defined in Treasury Regulations
(S)1.704-2(f), and the term "LLC Minimum Gain" shall have the meaning ascribed
to the term "Partnership Minimum Gain" in Treasury Regulation 1.704-2(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 (S)1.704-2(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
-30-
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 (S)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 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.
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(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 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.
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4.8 Members' Interest in Profits.
----------------------------
Pursuant to Treas. Reg. (S) 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.
(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.
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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 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,
-34-
(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 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
-35-
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:
(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
-36-
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.
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.
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(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.
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
-38-
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 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.
-39-
(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 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 ▇▇▇▇▇.
---------------
Copies of all notices to ▇▇▇▇▇ shall be sent to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President, ▇▇▇▇▇ Indiana, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Copies thereof
shall concurrently be sent to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President -
Corporate and Legal Affairs, ▇▇▇▇▇ Indiana, Inc., ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇;
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
10.4 Notices to BDC.
--------------
Copies of all notices to BDC shall be sent to ▇▇▇ ▇. ▇▇▇▇▇▇, The
▇▇▇▇▇▇ Companies, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Copies thereof shall concurrently by sent to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇
▇▇▇▇▇▇▇, PLLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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
-40-
Indiana Riverboat Gambling Act and the regulations of the Commission.
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 (lst) arbitrator, failing which the first (lst)
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 controversy (within fifteen (15) days in the case of any expedited
proceeding) is
-41-
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:
(a) any amendment to, renewal or extension of, or other change in the
terms and conditions of the Berthing Agreements;
-42-
(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 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.
-43-
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 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.
-44-
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.
14.12 Tax Matters Partner.
-------------------
▇▇▇▇▇ shall be the Tax Matters Partner of the LLC for all purposes
under the Code, under the direction of the Operating Committee. However, ▇▇▇▇▇
shall not cause the LLC to exercise any election available to the LLC under the
Code, or take any
-45-
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.
"▇▇▇▇▇"
▇▇▇▇▇ INDIANA, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
"BDC"
▇▇▇▇▇▇-▇▇▇▇▇ CASINO, LLC
By: ▇▇▇▇▇▇ DEVELOPMENT, INC.,
Member
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
President
And
By: GARY RIVERBOAT GAMING, LLC
Member
By: ▇▇▇▇▇▇ MANAGEMENT, INC.,
Its Manager
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
President
-46-
EXHIBIT "A"
COMMON AREA DEVELOPMENT APPROVALS
1. United States Army Corps of Engineers permit application (Lehigh
Portland Cement Co., applicant) for modifications to ▇▇▇▇▇▇▇▇▇▇ Harbor.
2. Indiana Department of Natural Resources permit application (Lehigh
Portland Cement Co., applicant) for modifications to ▇▇▇▇▇▇▇▇▇▇ Harbor.
3. Site clearance permit from the City of ▇▇▇▇.
4. Demolition permit from the City of ▇▇▇▇.
5. Application for use variance from the City of ▇▇▇▇.
Exhibit "B-1"
PRE-FORMATION AGREEMENTS
1. Agreement of Sale between Lehigh Portland Cement Company and ▇▇▇▇▇
Indiana, Inc. dated May 10, 1995;
2. Corporate Warranty Deed between Lehigh Portland Cement Company and ▇▇▇▇▇
Indiana, Inc. dated June 29, 1995, recorded July 7, 1995, as Instrument
#95038220;
3. Environmental Disclosure Document for Transfer of Real Property dated
June 29, 1995, recorded July 7, 1995, as Instrument #95038221;
4. Easement Agreement between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana,
Inc. dated June 30, 1995, recorded July 7, 1995, as Instrument #95038222;
5. Operations Agreement between Lehigh Portland Cement Company and ▇▇▇▇▇
Indiana, Inc. dated June 30, 1995, recorded July 7, 1995, as Instrument
#95038223;
6. Agreement Concerning Use Agreement between Lehigh Portland Cement Company
and ▇▇▇▇▇ Indiana, Inc. dated June 30, 1995, recorded July 7, 1995, as
Instrument #95038224;
7. Access Easement between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana,
Inc. dated June 30, 1995, recorded July 7, 1995, as Instrument #95038225;
8. Agreement with Respect to Railroads between Lehigh Portland Cement Company
and ▇▇▇▇▇ Indiana, Inc. dated June 30, 1995, recorded July 7, 1995, as
Instrument #95038226;
9. Utility Easement between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana,
Inc. dated June 30, 1995, recorded July 7, 1995, as Instrument #95038227;
10. Memorandum of Lease between Lehigh Portland Cement Company and ▇▇▇▇▇
Indiana, Inc. dated June 30, 1995, recorded July 7, 1995, as Instrument
#95038228;
11. Vendor's Affidavit by Lehigh Portland Cement Company dated June 29, 1995;
12. Standard Extended Coverage Questionnaire by Lehigh Portland Cement Company
and ▇▇▇▇▇ Indiana, Inc. dated June 29, 1995;
13. Harbor Lease Agreement between Lehigh Portland Cement Company and ▇▇▇▇▇
Indiana, Inc. dated June 29, 1995;
14. Certified Copy of Resolution of Lehigh Portland Cement Company dated June
29, 1995;
15. Agreement between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana, Inc.
dated June 30, 1955;
16. Tax Agreement between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana, Inc.
dated June 29, 1995;
17. Tax Escrow Agreement among Lehigh Portland Cement Company, ▇▇▇▇▇ Indiana,
Inc. and Chicago Title Insurance Company dated June 29, 1995.
18. Opinion Letter of Sellers' Counsel (Burke, Murphy, ▇▇▇▇▇▇▇▇ & Cuppy) dated
June 29, 1995;
19. Lehigh Portland Cement Company Secretary's Certificate dated June 29, 1995;
20. FIRPTA Certification of Lehigh Portland Cement Company dated June 29, 1995;
21. Certificate of Good Standing for Lehigh Portland Cement Company
(Pennsylvania) dated June 20, 1995;
22. Certificate of Authorization for Lehigh Portland Cement Company (State of
Indiana) dated June 28, 1995;
23. Affidavit (as to Gross Income Tax Due) of Lehigh Portland Cement Company
dated June 30, 1995;
24. Affidavit (as to deferred maintenance) of ▇▇▇▇ ▇▇▇▇▇▇▇ dated June 30, 1995;
25. Certificate of Insurance (evidencing insurance in favor of ▇▇▇▇▇ Indiana,
Inc.) dated June 20, 1995;
26. Secretary's Certificate of ▇▇▇▇▇ Indiana, Inc. dated June 29, 1995;
27. Certificate of Authorization for ▇▇▇▇▇ Indiana, Inc. (State of Indiana)
dated June 26, 1995;
28. Pro-Forma Policy #▇▇-▇▇-▇▇▇ dated June 30, 1995 issued by Chicago Title
Insurance Company and such matters as are disclosed therein;
29. Plat of Survey - Sections 23 & 26, TWP. 37N. R.9W., 2nd P.M., prepared by
▇▇▇▇ Associates, dated June 29, 1995;
30. Letter Agreement (with respect to hold open agreement) of Chicago Title
Insurance Company dated June 29, 1995;
-2-
31. Settlement Statement among Lehigh Portland Cement Company, ▇▇▇▇▇ Indiana,
Inc. and Chicago Title Insurance Company dated June 29, 1995;
32. Personal Undertaking Against Mechanic's Liens by Lehigh Portland Cement
Company dated June 29, 1995;
33. Personal Undertaking (GAP) among Lehigh Portland Cement Company, ▇▇▇▇▇
Indiana, Inc. and Chicago Title Insurance Company dated June 29, 1995;
34. Stipulation for Dismissal with Prejudice as to Defendant Lehigh Portland
Cement Company;
35. Exhibits to Agreement of Sale Dated May 10, 1995 between Lehigh Portland
Cement Company and ▇▇▇▇▇ Indiana, Inc. dated June 29, 1995;
36. Exhibit "L"/Endorsement to Non-Disclosure Agreement dated as of May 10, 1995
between Lehigh Portland Cement Company and ▇▇▇▇▇ Indiana, Inc.;
37. Agreement Regarding Restrictive Covenants between City of ▇▇▇▇ and USX
Corporation dated as of March __, 1995.
38. Construction Escrow Agreement between Lehigh Portland Cement Company and
▇▇▇▇▇ Indiana, Inc. dated August 15, 1995;
39. Architect Agreement between ▇▇▇▇▇ Indiana, Inc. and ▇▇▇▇▇, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& Hazaveh, Architects, dated August 25, 1995;
40. Mechanical and Electrical Engineering Proposal of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Associates dated June 12, 1995;
41. Consulting Structural Engineering Services Proposal of ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Associates dated August 16, 1995;
42. Construction Management Agreement between ▇▇▇▇▇ Indiana, Inc. and ▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇, Inc. dated June 15, 1995;
43. Site and Civil Engineering Proposal of ▇▇▇▇ Associates, Inc. dated July 27,
1995;
44. Phase II Environmental Engineering Proposal of ▇▇▇▇▇ Environmental, Inc.
dated August 24, 1995;
45. Marine Design Proposal of ▇▇▇▇▇ & Associates dated May 3, 1995;
46. Interior Design Proposal of Interior Design International, Inc. dated
August 17, 1995;
-3-
47. Demolition Proposal of Congress Enterprises, Inc. dated July 19, 1995;
48. Sign Proposal of Corsair Graphics Sign Company dated July 14, 1995;
49. Security Temporary Service Agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Security, Inc. dated
July 13, 1995;
50. Demolition Agreement between ▇▇▇▇▇ Indiana, Inc. and National Wrecking
Company dated August 22, 1995 (and Change Order dated September __, 1995
between ▇▇▇▇▇ Indiana, Inc. and Colfex (an affiliate of National Wrecking
Company));
51. Electrical Transformer Relocation Agreement between Lehigh Portland
Cement Company and ▇▇▇▇▇ Electric Company, Inc. dated September 1, 1995;
52. Landscape Clean-up Estimate of ▇▇▇▇▇▇▇▇ Nursery, Inc. dated August 17, 1995;
53. Environmental Survey Proposal of Allstate Environmental, Inc. dated August
16, 1995.
54. General Consulting Services Agreement between ▇▇▇▇▇ Indiana, Inc. and
▇▇▇▇▇▇▇ Environmental Consultants, Inc.
55. ▇▇▇▇▇▇▇▇▇▇ Station Phase I Environmental Site Assessment (Draft) dated May
1995, prepared by Fluor ▇▇▇▇▇▇ Environmental Services, Inc.;
56. ▇▇▇▇▇▇▇▇▇▇ Station Phase II Environmental Site Assessment (Draft) dated May
1995, prepared by Fluor ▇▇▇▇▇▇ Environmental Services, Inc.;
57. Phase III letter proposal from Fluor ▇▇▇▇▇▇ Environmental Services, Inc.
dated December 14, 1994;
58. Authorization for Release of Confidential Information from the City of ▇▇▇▇
to Lehigh Portland Cement Company;
59. Non-Disclosure Agreement between the City of ▇▇▇▇ and Lehigh Portland Cement
Company dated July 14, 1994;
60. Certification of Compliance with Confidentiality Agreement dated May 12,
1995;
61. Authorization for Release of Confidential Information from ▇▇▇▇▇ Indiana,
Inc. to Lehigh Portland Cement Company;
62. Non-Disclosure Agreement by and between ▇▇▇▇▇ Indiana, Inc. and Lehigh
Portland Cement Company dated _______________, 1995;
-4-
63. Escrow Agreement among City of ▇▇▇▇, ▇▇▇▇▇ Indiana, Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇., Esq.;
64. Plat of Survey - Sections 23 & 26, TWP. 37N. R.9W., 2nd P.M., prepared by
▇▇▇▇ Associates, dated September __, 1995; and
65. Harbor Payment Commitment between ▇▇▇▇▇ Indiana, Inc. and Lehigh Portland
Cement Company.
Note: Notwithstanding the identification of any of the foregoing as proposals
or estimates, work has commenced and/or been completed with respect to those
matters set forth in items 39 through 54 inclusive 66 and 67.
66. Commitment with ▇▇▇▇▇ ▇▇▇▇▇ for site paving and additional site work for
$3,626,743.00.
67. Commitment with ▇▇▇▇ Marine for purchase of Barge EMC 424, with some
modifications thereto, for $650,000.00.
-5-
EXHIBIT "B-2"
STUDIES
1. Agreement for a Physical Model Study with Lehigh Portland Cement.
2. Harbor Payment Commitment with Lehigh Portland Cement, et al.
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Consulting Agreement.
4. ▇▇▇▇▇ Construction Consulting Agreement.
5. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates Consulting Agreement.
6. Transportation Consulting Group Consulting Agreement.
7. Design Workshop Consulting Agreement.
8. Survey by ▇▇▇▇ & Associates
EXHIBIT"C"
[SITE PLAN]
Exhibit "D"
CONSULTANTS
================================================================================
CONSULTANT AMOUNT STATUS
---------------------------------- ---------- -----------------------------
Architectural
▇▇▇▇▇, ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Hazavha 550,000 Awaiting contract review
--------------------------------------------------------------------------------
Mechanical & Electrical
Givovanetti & ▇▇▇▇▇▇▇ 122,500 Proposal signed, awaiting
Associates (GSA) contract
--------------------------------------------------------------------------------
Structural 67,000 Proposal signed, awaiting
contract
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Associates
--------------------------------------------------------------------------------
Construction Management 600,000 Contract executed
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Site & Civil 596,700 Proposal signed, awaiting
contract
▇▇▇▇ Engineering
--------------------------------------------------------------------------------
Environmental 50,000 Authorization letter sent,
awaiting contract
▇▇▇▇▇ Environmental
--------------------------------------------------------------------------------
Marine 340,200 Contract with Lehigh
▇▇▇▇▇ & Associates
--------------------------------------------------------------------------------
Landscape Architect and Master 55,775 Proposal in for review
Planning
Design work Shop
--------------------------------------------------------------------------------
Interior Design 122,400 Proposal signed, awaiting
contract
Interior Design International, Inc.
--------------------------------------------------------------------------------
Barge, Moorings, PMS 68,200 Proposal in for review
▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Contruction Management 220000 Proposal in for review
▇▇▇▇▇ Construction Company
--------------------------------------------------------------------------------
Pavilion & Barge Layout 36,400 Proposal in for review
Review
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates
--------------------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ & Associates 76,000 Proposal in for review
--------------------------------------------------------------------------------
Transportation Consulting Group 13,600 Proposal in for review
Parking Lot & Shuttle Layout
--------------------------------------------------------------------------------
Lighting, Security, Kitchen, etc. 100,000 Proposal not yet received
--------------------------------------------------------------------------------
TOTAL 3,018,775
================================================================================
September 27, 1995
2 of 2
▇▇▇▇▇▇▇▇▇▇ HARBOR RIVERBOATS, L.L.C.
Exhibit "D"
CONTRACTORS
================================================================================
CONTRACTOR AMOUNT STATUS
---------------------------------- ---------- -----------------------------
Demolition $0 Work complete, signed
proposal
Congress Enterprises, Inc.
--------------------------------------------------------------------------------
Signage 0 work complete, signed
proposal
Corsair Graphics Sign Company
--------------------------------------------------------------------------------
Security 1,200/wk Ongoing 62,400/yr
▇▇▇▇▇ Security
--------------------------------------------------------------------------------
Demolition 2,000,000 In progress, contract issued
National Wrecking Company
--------------------------------------------------------------------------------
Electrical 82,700 In progress, contract issued
▇▇▇▇▇ Electric Company, Inc.
--------------------------------------------------------------------------------
Landscape Clean-up 10,350 Work complete
▇▇▇▇▇▇▇▇ Nursery, Inc.
--------------------------------------------------------------------------------
Harbor Construction 3,240,000 Awaiting finalization
--------------------------------------------------------------------------------
TOTAL 5,334,250
================================================================================
September 27, 1995
Exhibit "E"
Improvements Budget
Lehigh Spur Relocation and New Grade Crossing 670,000
Parking(cars & ultra high lot) w/Shelters for Trams 5,820,000
New Road Work 836,200
Underpass Restoration 588,500
Track Signalization 189,600
Demolition 2,086,280
Temporary Building 5,800,000
Porte Cochere 635,000
Overhead Railroad Crossing 3,000,000
Substation/Generator 1,830,000
Exterior Signage/Landscaping 2,000,000
USX Power Lines 1,000,000
Barge/Walkway 7,000,000
Sewer/Water 1,828,000
Land/Boat Connections 270,000
UPS/CCTV 150,000
Insurance 455,500
General Conditions 3,200,000
Harbor 3,240,041
Site Fencing 211,000
Environmental Remediation 500,000
SUBTOTAL 41,310,121
Consultants 3,018,775
FF&E 5,000,000
Operating Reserve 4,000,000
Administration/Legal/Insurance 750,000
SUBTOTAL 12,768,775
Contingency (10%) 5,407,890
Less: Amounts Expended since 9-27-95 759,965
IMPROVEMENTS BUDGET 58,726,821
BDC Costs 1,083,027
▇▇▇▇▇ Costs 21,823,018
SUBTOTAL 22,906,045
PROJECT TOTAL 81,632,866
SCHEDULE OF DISBURSEMENTS (CONTINUED)
WORK & LEGAL &
CK# DATE LAND HARBOR PROF
---------- --------- -------
5027 2/8/95 CITY OF ▇▇▇▇ & WOODEN 10,000 10,000
5037 3/1/95 CITY OF ▇▇▇▇ & WOODEN 15,000 15,000
5054 4/5/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 10,324 10,324
5055 4/5/95 CITY OF ▇▇▇▇ & WOODEN 20,000 20,000
5056 4/13/95 FBA ENVIRONMENTAL 4,200 4,200
DM 5/23/95 BURKE, MURPHY, ▇▇▇▇▇▇▇▇ 500,000 500,000
DM/FT 6/22/95 CHICAGO TITLE 13,000,000 13,000,000
DM 6/22/95 CHICAGO TITLE 29,767 29,767
DM/FT 7/11/95 FLUOR ▇▇▇▇▇▇▇ 300,000 300,000
DM/FT 7/24/95 BURKE, MURPHY, ▇▇▇▇▇▇▇▇ 200,000 200,000
5093 7/1/95 SHEFSKY&FROELICH 2,227 2,227
5094 7/1/95 SHEFSKY&FROELICH 2,380 2,380
5098 7/5/95 LEHIGH PORTLAND 66,463 66,463
5108 7/19/95 CORSAIR GRAPHICS 1,430 1,430
5109 7/19/95 FBA ENVIRONMENTAL 27,240 27,240
5112 7/19/95 SHEFSKY&FROELICH 33,379 33,379
5114 7/26/95 CLERK OF LK SUPERIOR CRT 8,735 8,735
5115 7/26/95 LEHIGH PORTLAND 65,909 65,909
5117 7/26/95 ▇▇▇▇▇, ▇'▇▇▇▇▇▇ 48,713 48,713
DM/FT 8/15/95 LEHIGH PORTLAND&TII 2,546,417 2,546,417
DM/FT 8/18/95 LEHIGH PORTLAND&TII 600,000 600,000
DM/FT 8/29/95 LEHIGH PORTLAND&TII 2,613,542 2,613,542
5122 8/2/95 GOV'T CONTRACTING/CONG 75,000 75,000
992 8/17/95 FLUOR ▇▇▇▇▇▇▇ 162,913 162,913
996 8/18/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 1,169 1,169
1007 8/18/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 1,433 1,433
1016 9/5/95 SHEFSKY&FROELICH 63,868 63,868
1017 9/5/95 CONGRESS ENTERPRISES 129,320 129,320
1018 9/5/95 LEHIGH PORTLAND 93,641 93,641
1025 9/5/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 1,433 1,433
1037 9/13/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 2,866 2,866
1044 9/22/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 5,314 5,314
1047 9/22/95 ▇▇▇▇▇▇▇▇ NURSERY INC 10,350 10,350
1056 9/22/95 ▇▇▇▇▇, ▇'▇▇▇▇▇▇ 46,170 46,170
DM/FT 10/6/95 LEHIGH PORTLAND&TII 300,000 300,000
1064 10/12/95 ▇▇▇▇▇▇▇ ▇▇▇▇▇ SECURITY 1,433 1,433
1073 10/13/95 LEHIGH PORTLAND 103,893 103,893
VARIOUS ▇▇▇▇▇, ▇'▇▇▇▇▇▇/TRAVEL 5,012 5,012
---------- ---------- --------- -------
21,109,542 13,779,395 7,093,073 237,073
SCHEDULE OF DISBURSEMENTS (CONTINUED)
WORK & LEGAL &
CK# DATE LAND HARBOR PROF
---------- --------- -------
INTEREST 7/1-10/30/95 529,570
LEGAL ▇▇▇▇▇
▇▇▇▇▇▇ 183,906
----------
21,823,018
INTEREST EXPENSE CALCULATION
BEGINNING ENDING
BALANCE EXP INT BALANCE
6/1/95 13,589,291 13,589,291
7/1/95 13,589,291 756,476 105,317 14,451,084
8/1/95 14,451,084 6,000,474 111,996 20,563,554
9/1/95 20,563,554 352,963 154,227 21,070,744
10/1/95 21,070,744 410,338 158,031 21,639,112
21,109,542 529,570
Exhibit "G"
BDC COSTS
Before September 27, 1995
Check
Number Date
PAID
Various ▇▇▇▇▇▇-▇▇▇▇▇▇ 18,483
01188 06/26/95 ▇▇▇▇ Associates 1,607
01296 07/28/95 ▇▇▇▇ Associates 20,846
01217 08/10/95 ▇▇▇▇ Associates 13,600
1002 09/12/95 ▇▇▇▇ Associates 3,445
Various Various ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 34,161
Various 03/03/95 ▇▇▇▇▇ ▇▇▇▇▇▇ 1,119
01199 07/06/95 Lehigh Portland Cement 66,463
01220 08/10/95 Lehigh Portland Cement 65,909
087 08/17/95 Lehigh Portland Cement 93,641
1003 09/12/95 Lehigh Portland Cement 103,893
01090 01/18/95 ▇▇▇ ▇▇▇▇▇▇▇▇▇ Realty 10,000
01100 02/06/95 ▇▇▇ ▇▇▇▇▇▇▇▇▇ Realty 10,000
01110 02/13/95 ▇▇▇ ▇▇▇▇▇▇▇▇▇ Realty 5,000
Various Various ▇▇▇▇▇▇▇ ▇▇▇▇▇ 42,565
Various Various ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Assoc. 70,535
1090 02/06/95 Wooden-Condemnation 10,000
1093 03/02/95 Wooden-Land Appraisal 15,000
Sub-Total 586,267
ACCRUED
Wire 09/28/95 Lehigh Portland Cement 300,000
▇▇▇▇▇, ▇'▇▇▇▇▇▇ 48,712
Sub-Total 348,712
After September 27, 1995
Wire 10/20/95 Lehigh Portland Cement 99,500
1013 10/13/95 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Chtd. 2,731
1014 10/13/95 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,734
1011 09/29/95 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,674
1012 10/13/95 Design Workshop 5,000
1015 10/16/95 ▇▇▇▇▇ ▇'▇▇▇▇▇▇ 3,799
1017 10/25/95 ▇▇▇▇ & Associates 8,500
Sub-Total 127,939
Interest Thru 10/30/95 20,110
01:12PM
10/27/95 Total 1,083,027
Interest Rate
9.00%