Exhibit 3.17
OPERATING AGREEMENT OF
▇▇▇▇▇ CASINO SERVICES, L.L.C.
THIS OPERATING AGREEMENT of ▇▇▇▇▇ CASINO SERVICES, L.L.C.
(the "LLC") dated as of the 8th day of July, 1996, by and among
▇▇▇▇▇ ATLANTIC CITY ASSOCIATES, a New Jersey partnership having
an address at Mississippi Avenue and ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ATLANTIC CITY CORPORATION, a
Delaware corporation, having an address at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, the parties hereto desire to enter into this
Operating Agreement to define and express all of the terms and
conditions of ▇▇▇▇▇ Casino Services, L.L.C., a New Jersey limited
liability company, and their respective rights and obligations
with respect thereof; and
WHEREAS, the parties hereto desire to be bound by this
Operating Agreement pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
1.1 Definitions As used in this Operating Agreement, the
following terms shall have the meanings set forth below:
"Accountants" means the national firm or firms of
independent certified public accountants selected by the Members
on behalf of the LLC to audit the books and records of the
Partnership and to prepare statements and reports in connection
therewith, which initially shall be ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
"Act" means the New Jersey Limited Liability Company Act,
N.J.S.A. 42:2B-1, et seq. as amended from time to time.
"Affiliate" means, with respect to any Person, any Person
that directly or indirectly through one or more intermediaries
controls or is controlled by or under common control with the
specified Person.
"Agreement" means this Operating Agreement, as the same from
time to time may be amended, modified, supplemented or restated.
"Bankruptcy" means, with respect to any Person, (i) the
commencement by such Person of any petition, case or proceeding
seeking relief under any provision or chapter of the federal
bankruptcy code or any other federal or state law relating to
insolvency, bankruptcy or reorganization, (ii) an adjudication
that such Person is insolvent or bankrupt, (iii) the entry of an
order for relief under the federal bankruptcy code with respect
to such Person, (iv) the filing of any such petition or the
commencement of any such case or proceeding against such Person,
unless such petition and the case or proceeding initiated thereby
are dismissed within ninety (90) days from the date of such
filing or (v) the filing of an answer by such Person admitting
the allegations of any such petition.
"Business Day" means a day other than a Saturday or Sunday
or other day on which banks are authorized or required by law to
close in the City of New York.
"Capital Account" when used with respect to a Member, means
an amount equal to (a) the aggregate of (i) the initial amount
credited to the Capital Account of such Member as reflected in
Section 3.2 hereof, (ii) all other voluntary capital
contributions to the LLC made or deemed to be made by such
Member, pursuant to this Agreement, (iii) all Net Income and
other items of income credited to the account of such Member
pursuant to Section 5 and (iv) any additional amount resulting
from the acquisition of additional LLC Interests, minus (b) the
aggregate of (i) all Net Losses and deductions charged to the
account of such Member pursuant to Section 5 hereof, (ii) all
distributions and (iii) any reduction in such amount due to the
transfer of an LLC Interest. The Capital Accounts shall be
maintained in accordance with the regulations under Section
704(b) and (c) of the Code. If a Member is a Transferee, its
Capital Account derived from the transferor shall initially be
deemed to be the product of (x) a fraction, the numerator of
which shall be the Percentage Interest transferred to such
Transferee and the denominator of which shall be the Percentage
Interest immediately prior to such transfer of the Member making
such transfer, and (y) the Capital Account of the Member making
such transfer immediately prior to such transfer. The Capital
Account of a Member transferring an LLC Interest to a Transferee
shall be reduced by the amount of its Capital Account which such
Transferee is initially deemed to have acquired.
"Capital Contribution" means, with respect to any Member,
the amount of money and the initial Gross Asset Value of any
Contributed Property (net of liabilities to which such property
is subject) set forth in Section 3.2, as such Section 3.2 will be
amended from time to time to reflect the amount of money and the
Gross Asset Value of any Contributed Property received by the LLC
pursuant to any additional Capital Contribution.
"Casino Control Act" means the New Jersey Casino Control Act
and the regulations thereunder.
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"Certificate" means the Certificate of Formation filed with
respect to the LLC in the office of the New Jersey Secretary of
State, as the same may be from time to time amended, modified or
supplemented in accordance with the provisions of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time, as interpreted by the applicable
regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a
reference to any corresponding provision of future law.
"Commission" means the New Jersey Casino Control Commission.
"Contributed Property" shall mean any property or asset, in
such form as may be permitted by the Act, but excluding cash,
contributed or deemed contributed to the LLC with respect to the
LLC Interest held by each Member.
"Depreciation" means, with respect to any asset of the LLC
for any fiscal year or other period, the depreciation or
amortization, as the case may be, allowed or allowable for
federal income tax purposes in respect of such asset for such
fiscal year or other period; provided, however, that if there is
a difference between the Gross Asset Value and the adjusted tax
basis of such asset, Depreciation shall mean "book depreciation,
depletion or amortization" as determined under Section
1.704-1(b)(2) (iv)(g)(3) of the Regulations.
"Distributions" means distributions of cash or other
property made by the LLC to the Members. The repayment of any
Members, loans made to the LLC and any payment of fees to a
Member or reimbursement of disbursements shall not be considered
Distributions.
"Fair Market Value" means (i) in the case of any security,
its current market price and (ii) in the case of any property or
Indebtedness that is not a security, the fair market value of
such property or Indebtedness as determined in good faith by the
Members.
"Gross Asset Value" means, with respect to any asset of the
LLC, such asset's adjusted basis for federal income tax purposes,
except as follows:
(a) the initial Gross Asset Value of any asset
contributed by a Member to the LLC shall be (i) in the case of
any asset described in Article 3.2, the gross fair market value
ascribed thereto in Article 3.2 and (ii) in the case of any other
asset hereafter contributed by a Member, the gross Fair Market
Value of such asset at the time of its contribution;
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(b) the Gross Asset Values of all LLC assets shall be
adjusted to equal their respective gross Fair Market Values:
(i) immediately prior to a Capital Contribution
(other than a de minimis Capital Contribution) to the LLC by a
new or existing Member as consideration for a LLC Interest;
(ii) immediately prior to the distribution by the
LLC to a Member of more than a de minimis amount of LLC property
as consideration for the redemption of a LLC Interest;
(iii)immediately prior to the liquidation of the
LLC within the meaning of Section 1.704-1(b)(2) (ii)(g) of the
Regulations; and
(iv) upon any other event as to which the Members
reasonably determine that an adjustment is necessary or
appropriate to reflect the relative economic interests of the
Members;
(c) the Gross Asset Values of LLC assets distributed
to any Member shall be the gross Fair Market Values of such
assets as of the date of distribution; and
(d) the Gross Asset Values of LLC assets shall be
increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Sections 734(b) or
743(b) of the Code, but only to the extent that such adjustments
are taken into account in determining Capital Accounts pursuant
to Section 1.704-1(b)(2)(iv)(m) of the Regulations; provided,
however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the Members reasonably
determine that an adjustment pursuant to paragraph (b) above is
necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this
paragraph (d).
At all times, Gross Asset Values shall be adjusted by any
Depreciation taken into account with respect to the LLC's assets
for purposes of computing Net Income and Net Loss. Any
adjustment to the Gross Asset Values of LLC property shall
require an adjustment to the Members' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital
Accounts, see clause (c) of the definition of Net Income and Net
Loss in the case of adjustment by Depreciation, and clause (d) of
said definition in all other cases.
"Indebtedness" means any obligation, whether or not
contingent, (i) in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments, (ii)
representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases),
except any such balance that constitutes an accrued expense or a
trade payable, if and to the extent any of the foregoing
indebtedness would appear as a
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liability upon a balance sheet prepared on a consolidated basis
in accordance with GAAP, (iii) to the extent not otherwise
included, obligations under interest rate exchange, currency
exchange, swaps, futures or similar agreements, and (iv)
guaranties (other than endorsements for collection or deposit in
the ordinary course of business), direct or indirect, in any
manner (including, without limitation, reimbursement agreements
in respect of letters of credit), of all or any part of any
Indebtedness of any third party.
"LLC" means the limited liability company to which this
Agreement pertains, as such limited liability company may from
time to time be constituted.
"LLC Interest" means any interest of ▇▇▇▇▇ Atlantic City
Corporation or ▇▇▇▇▇ Atlantic City Associates or any Transferee
in the LLC, including the right of such Member to benefits to
which it may be entitled under, and the obligations of such
Member to comply with, all the terms and provisions of this
Agreement.
"LLC Percentage Interest" shall mean, as to each Member, the
percentage interests in the LLC allocated to such Member on the
books and records of the LLC. The initial LLC Percentage
Interest of each Member is set forth on Exhibit A attached
hereto.
"Losses from Dispositions" means all net losses recognized
by the LLC for federal income tax purposes resulting from the
sale or other disposition by the LLC of all or a substantial
portion of the Property.
"Losses from Operations" means all losses recognized by the
LLC for federal income tax purposes other than Losses from
Dispositions.
"Members" means any Person who is admitted to the LLC as a
Member pursuant to the provisions of this Agreement. The initial
Members of the LLC are named on Exhibit A attached hereto.
"Net Income" or "Net Loss" means, for each fiscal year or
other applicable period, an amount equal to the LLC's net income
or loss for such year or period as determined for federal income
tax purposes by the Accountants, determined in accordance with
Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a) of the Code shall be included in
taxable income or loss), with the following adjustments: (a) by
including as an item of gross income any tax-exempt income
received by the LLC; (b) by treating as a deductible expense any
expenditure of the LLC described in Section 705(a)(2)(B) of the
Code (including amounts paid or incurred to organize the LLC
(unless an election is made pursuant to Code Section 709(b)) or
to promote the sale of interests in the LLC and by treating
deductions for any losses incurred in connection with the sale or
exchange of LLC property
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disallowed pursuant to Section 267(a)(1) or Section 707(b) of the
Code as expenditures described in Section 705(a)(2)(B) of the
Code); (c) in lieu of depreciation, depletion, amortization and
other cost recovery deductions taken into account in computing
total income or loss, there shall be taken into account
Depreciation; (d) gain or loss resulting from any disposition of
LLC property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the
Gross Asset Value of such property rather than its adjusted tax
basis; (e) in the event of an adjustment of the Gross Asset Value
of any LLC asset which requires that the Capital Accounts of the
LLC be adjusted pursuant to Regulation Section
1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such adjustment
is to be taken into account as additional Net Income or Net Loss
pursuant to Section 9.1; and (f) excluding any items specially
allocated pursuant to Section 9.2. Once an item of income, gain,
loss or deduction has been included in the initial computation of
Net Income or Net Loss and is subjected to the special allocation
rules in Section 9.2, Net Income and Net Loss shall be computed
without regard to such item.
"Nonrecourse Deductions" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth
in Section 1.704-2(b)(3) of the Regulations.
"Partner Nonrecourse Debt" shall have the meaning set forth
in Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set
forth in Section 1.704-2(i)(2) of the Regulations.
"Person" means any individual, corporation, partnership
(general or limited), association, limited liability company,
trust, estate or other entity.
"Pledge Agreements" means, collectively, the pledge
agreement (1) dated April 17, 1996 from ▇▇▇▇▇ Atlantic City
Associates, as pledgor, to First Bank National Association, as
trustee, and (2) dated April 17, 1996 from ▇▇▇▇▇ Atlantic City
Corporation, as pledgor, to First Bank National Association, as
trustee, in each case securing the Senior Secured Notes due 2005
of ▇▇▇▇▇ Hotels & Casino Resorts Holdings, L.P. and ▇▇▇▇▇ Hotels
& Casino Resorts Funding, Inc., as joint obligors.
"Property" means any real property now or hereafter
purchased, owned or maintained by the LLC and any improvements or
appurtenances created thereon along with any tangible or
intangible personal property located thereon or attendant
thereto.
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"Regulations" shall mean the income tax regulations
promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of
succeeding regulations).
"State" means the State of New Jersey.
"Tax Amounts" with respect to any year means an amount no
greater than (a) the higher of (i) the product of (A) the taxable
income of the LLC (computed as if the LLC were an individual
taxpayer) for such year as determined in good faith by the
Members and (B) the Tax Percentage and (ii) the product of (A)
the alternative minimum taxable income (computed as if the LLC
were an individual taxpayer) attributable to the LLC for such
year as determined in good faith by the Members and (B) the Tax
Percentage, reduced by (b) to the extent not previously taken
into account, any income tax benefit attributable to the LLC
which could be realized (without regard to the actual
realization) by its Members in the current or any prior taxable
year, or portion thereof, commencing on the date of this
Agreement (including any tax losses or tax credits), computed at
the applicable Tax Percentage for the year that such benefit is
taken into account for purposes of this computation. Any part of
the Tax Amount not distributed in respect of a tax period for
which it is calculated shall be available for distribution in
subsequent tax periods.
"Tax Distribution" shall mean distributions by the LLC
pursuant to Section 6.2 hereof.
"Tax Items" shall have the meaning set forth in Section
5.4.
"Tax Payment Loan" shall have the meaning set forth in
Section 6.4(a) hereof.
"Tax Percentage" means the highest, aggregate effective
marginal rate of Federal, state and local income tax or, when
applicable, alternative minimum tax, to which any Member would be
subject in the relevant year of determination (as certified to
the Members by the Accountants); provided, however, that in no
event shall the Tax Percentage be greater than the sum of (x) the
highest, aggregate effective marginal rate of Federal, state, and
local income tax, or when applicable, alternative minimum tax, to
which the LLC would have been subject if it were either an
individual or a C corporation for Federal income tax purposes,
and (y) 5 percentage points. If any Member is an S corporation,
partnership, or similar pass-through entity for Federal income
tax purposes, the Tax Percentage shall be computed based upon the
tax rates applicable to the ultimate shareholder or partner of
such Member, as the case may be.
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"Transferee" means each Person who pursuant to Section 8
hereof or otherwise acquires LLC Interest from a Member or a
Transferee thereof.
"Withholding Tax Act" shall have the meaning set forth in
Section 6.4(a) hereof.
Accounting Terms and Determinations. All references in this
Agreement to "generally accepted accounting principles" or "GAAP"
shall mean generally accepted accounting principles in effect in
the United States of America at the time of application thereof.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in
accordance with generally accepted accounting principles, applied
on a consistent basis.
2. ORGANIZATION
2.1 Name. The name of the LLC shall be ▇▇▇▇▇ Casino
Services, L.L.C. and such name shall be used at all times in
connection with the business and affairs of the LLC. In the
event that the Members select an alternate name, then the LLC
shall file a Certificate of Registration of Alternate Name as
required by the Act.
2.2 Organization of the LLC. The LLC shall be organized
under the laws of the State. The LLC shall be organized on the
date of the filing of the Certificate. The Members shall execute
or cause to be executed and filed the Certificate and 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.
2.3 Purposes of the LLC. The purposes of the LLC are: (i)
to provide management, administrative and other similar and
related services with respect to the business and operations of
Affiliate of the Members, and (ii) to do all things necessary,
incidental, desirable or appropriate in connection with the
foregoing.
2.4 Registered Agent and Office. The registered office of
the LLC shall be Mississippi Avenue and The Boardwalk, Atlantic
City, New Jersey. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be the registered agent
of the LLC. 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 Members deem
advisable.
2.5 Term. The term of the LLC shall commence on the date
of the filing of the Certificate, and shall continue in existence
until terminated pursuant to the provisions of this Agreement.
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2.6 Title to LLC Property. All of the LLC's right, title
and interest in tangible property, intangible property, real
property, personal property and other assets acquired by the LLC
(the "Property") shall be held in the name of the LLC. Each
Member's LLC Interest shall be personal property for all
purposes.
3. ADMISSION OF MEMBERS; CAPITAL CONTRIBUTIONS
3.1 Agreement to Contribute. Each Member shall contribute
to the capital of the LLC at the time and in the manner as
hereinafter set forth in this Section 3.
3.2 Contributions of the Members.
Upon the execution of this Agreement, the Members shall
make initial cash capital contributions to the LLC as follows:
▇▇▇▇▇ Atlantic City Associates $990.00
▇▇▇▇▇ Atlantic City Corporation $ 10.00
3.3 Additional Contributions. No Member shall be required
to contribute any additional capital to the LLC other than as
provided in Section 3.2.
3.4 Distributions; Withdrawal of Capital. No Member shall
be entitled to any Distributions from the LLC or to withdraw any
part of its capital contribution except as specifically provided
for in this Agreement. No Member shall have the right to demand
or receive property other than cash in return for its capital
contribution or as a Distribution of income. No Member shall
have priority over any other Member either as to the return of
its capital contribution or as to any distributions except as
specifically provided for on this Agreement.
3.5 Treatment of Advances; Interest and Withdrawals.
(e) If any Member shall advance any funds to the LLC
other than as provided in this Article III, the amount of any
such advance shall not be an additional capital contribution of
such Member, but shall be a debt due from the LLC (the "Debt").
The Debt shall be repaid at a variable rate of interest rate
equal to the prime lending rate of CitiBank, N.A. and on such
terms as shall be agreed upon by all Members.
(f) No interest shall be paid on any capital
contributions. Except as otherwise provided herein, no Member
shall be entitled to withdraw any part of its capital
contributions.
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4. RIGHTS AND OBLIGATIONS OF MEMBERS
4.1 Management of Business. The management of the LLC and
all of its affairs shall be vested in the Members in proportion
to their Percentage Interest. A Member may appoint a
representative for the Member, by proxy or other written
document, to act for the Member in the management of the LLC,
which representative may be removed by such Member at any time,
with or without cause.
4.2 Outside Activities. Each Member may engage in any
other business, investment or profession including the investment
in, ownership of or operation of business activities whether or
not in direct or in indirect competition with the LLC. The LLC
and the other Members shall have no rights in or to any such
business, profession or investment or to the income or profits
derived therefrom.
4.3 Liabilities of Members. The Members shall have no
personal liability with respect to liabilities and obligations of
the LLC and shall not be required to make any contributions to
the capital of the LLC other than their capital contributions
provided for in Sections 3.2 and 3.3 hereof.
4.4 Other Compensation. No Member shall be entitled to any
fees, commissions or other compensation from the LLC for any
services rendered to or performed for the LLC.
4.5 Meetings of and Voting by Members.
(a) A meeting of the Members may be called at any time
by those Members holding at least fifty-one percent (51%) of the
LLC Percentage Interests then held by Members. Meetings of
Members shall be held at the LLC's principal place of business.
Not less than ten (10) nor more than thirty (30) days before each
meeting, the Member(s) calling the meeting shall give written
notice of the meeting to each Member entitled to vote at the
meeting. The notice shall state the time, place and purpose of
the meeting. Notwithstanding the foregoing provisions, each
Member who is entitled to notice waives notice if before or after
the meeting the Member signs a waiver of the notice which is
filed with the records of Members, meetings, or is present at the
meeting in person or by proxy. Unless this Agreement provides
otherwise, at a meeting of Members, the presence in person or by
proxy of Members holding not less than fifty-one percent (51%) of
the LLC Percentage Interests then held by Members constitutes a
quorum. A Member may vote either in person or by written proxy
signed by the Member or by its duly authorized attorney in fact.
(b) Wherever this Agreement requires the "written
consent", "approval" or "election" by the Members, the
affirmative vote of all of the Members shall be required to
approve the matter.
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(c) In lieu of holding a meeting, the Members may vote
or otherwise take action by a written instrument indicating the
consent of all of the Members.
5. Allocations and Other Tax and Accounting Matters. The Net
Income, Net Loss and/or other LLC items shall be allocated as
follows:
5.1. Allocations of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein,
Net Income for any fiscal year or other applicable period shall
be allocated in the following order and priority:
(i) First, to the Members, until the cumulative
Net Income allocated pursuant to this subparagraph (a)(i) for the
current and all prior periods equals the cumulative Net Loss
allocated pursuant to subparagraph (b) (ii) hereof for all prior
periods, among the Members in the reverse order that such Net
Loss was allocated to the Members pursuant to subparagraph
(b)(ii) hereof.
(ii) Thereafter, the balance of the Net Income, if
any, shall be allocated to the Members in accordance with their
respective Percentage Interests.
(b) Net Loss. Except as otherwise provided herein,
Net Loss of the LLC for each fiscal year or other applicable
period shall be allocated to the Members in accordance with their
respective Percentage Interests.
5.2 Special Allocations. Notwithstanding any provisions of
Section 5.1, the following special allocations shall be made, to
the least extent necessary to satisfy section 704(b) of the Code
and the Regulations promulgated thereunder, in the following
order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities).
If there is a net decrease in Partnership Minimum Gain for any
LLC fiscal year (except as a result of conversion or refinancing
of LLC Indebtedness, certain capital contributions or revaluation
of the LLC property as further outlined in Regulation Sections
1.704-2(d)(4), (f)(2) or (f)(3)), each Member shall be specially
allocated items of LLC income and gain for such year (and, if
necessary, subsequent years) in an amount equal to that Member's
share of the net decrease in Partnership Minimum Gain. The items
to be so allocated shall be determined in accordance with
Regulation Section 1.704-2(f)(6). This paragraph (a) is intended
to comply with the minimum gain chargeback requirement in said
section of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to those paragraph (a) shall be
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made in proportion to the respective amounts required to be
allocated to each partner pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse
Debt. If there is a net decrease in Minimum Gain Attributable to
Partner Nonrecourse Debt during any fiscal year (other than due
to the conversion, refinancing or other change in the debt
instrument causing it to become partially or wholly nonrecourse,
certain capital contributions, or certain revaluations of
Partnership property (as further outlined in Regulation Section
1.704-2(i)(4)), each Member shall be specially allocated items of
LLC income and gain for such year (and, if necessary, subsequent
years) in an amount equal to the Member's share of the net
decrease in the Minimum Gain Attributable to Member Nonrecourse
Debt. The items to be so allocated shall be determined in
accordance with Regulation Section 1.704-2(i)(4) and (j)(2).
This paragraph (b) is intended to comply with the minimum gain
chargeback requirement with respect to Member Nonrecourse Debt
contained in said section of the Regulations and shall be
interpreted consistently therewith. Allocations pursuant to this
paragraph (b) shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant hereto.
(c) Nonrecourse Deductions. Nonrecourse Deductions
for any fiscal year or other applicable period shall be allocated
to the Members in accordance with their respective Percentage
Interests.
(d) Partner Nonrecourse Deductions. Partner
Nonrecourse Deductions for any fiscal year or other applicable
period shall be specially allocated to the Members that bears the
economic risk of loss for the debt (i.e., the Partner Nonrecourse
Debt) in respect of which such Partner Nonrecourse Deductions are
attributable (as determined under Regulation Section
1.704-2(b)(4) and (i)(1)).
(e) Additional Allocations. Notwithstanding the
foregoing, if, upon final dissolution and termination of the LLC
and after taking into account all allocations of Net Income and
Net Loss (and other Tax Items) under this Section 5, the
distributions to be made in accordance with the positive Capital
Account balances would result in a distribution that would be
different from a distribution under Section 5 hereof, then gross
items of income and gain (and other Tax Items) for the taxable
year of the final dissolution and termination (and, to the extent
permitted under Section 761(c) of the Code, gross items of income
and gain (and other Tax Items) for the immediately preceding
taxable year) shall be allocated to the Members to increase or
decrease their Capital Account balances, as the case may be, so
that the final distribution will occur in the same manner as a
distribution under Section 6.3 hereof.
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5.4 Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c)
hereof, items of income, gain, loss, deduction and credit to be
allocated for income tax purposes (collectively, "Tax Items")
shall be allocated among the Members on the same basis as their
respective book items.
(b) Sections 1245/1250 Recapture. If any portion of
gain from the sale of property is treated as gain which is
ordinary income by virtue of the application of Code Sections
1245 or 1250 ("Affected Gain"), except to the extent that the tax
treatment of such sale is governed by Section 704(c) of the Code
as provided under Section 5.3(c) hereof, then (i) such Affected
Gain, to the extent attributable to depreciation or amortization
allowed or allowable for any taxable period subsequent to the
date hereof, shall be allocated among the Members in the same
proportion that the depreciation and amortization deductions
giving rise to the Affected Gain were allocated and (ii) other
Tax Items of gain of the same character that would have been
recognized, but for the application of Code Sections 1245 and/or
1250, shall be allocated away from those Members who are
allocated Affected Gain pursuant to clause (i) so that, to the
extent possible, the other Partners are allocated the same
amount, and type, of capital gain that would have been allocated
to them had Code Sections 1245 and/or 1250 not applied. For
purposes hereof, in order to determine the proportionate
allocations of depreciation and amortization deductions for each
fiscal year or other applicable period, such deductions shall be
deemed allocated on the same basis as Net Income or Net Loss for
such respective period.
(c) Allocations Respecting Section 704(c). Property
contributed to the LLC shall be subject to Section 704(c) of the
Code and Regulation Section 1.704-3 so that notwithstanding
Section 5.4(b) hereof, taxable gain and loss from disposition of
such property contributed to the LLC that is subject to Section
704(c) of the Code shall be allocated on a property by property
basis in accordance with the Regulations promulgated thereunder.
5.5 Books of Account. At all times during the continuance
of the LLC, the Members shall maintain or cause to be maintained
full, true, complete and correct books of account in accordance
with GAAP, using the calendar year as the fiscal and taxable year
of the LLC. In addition, the LLC shall keep all records required
to be kept pursuant to the Act.
5.6 Tax Certifications.
(a) The LLC shall deliver to each Member, from time to
time as necessary to implement timely the provisions of this
Agreement, certificates executed by its chief financial officer
and the Accountants indicating the respective calculations with
respect
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to, and the amounts of, a Member's share of Tax Distributions and
the amount of any repayments to the LLC called for thereunder,
together with supporting schedules in reasonable detail all as of
each pertinent date and delivered at least 15 business days prior
to the date payment is due.
(b) The certificates delivered pursuant to paragraph
(a) thereof shall be deemed approved by all parties and the LLC
shall act upon such certificate as provided in this Agreement
unless within five business days of delivery of such certificate
a Member objects to the contents of any certificate by written
notice in detail sufficient to state the basis for the objection.
The Member shall negotiate in good faith to resolve such
objection.
6. Distributions.
6.1 General. Distributions of cash or property may be made
in accordance herewith at such times as the Members deem
appropriate in the order provided in this Section 6, subject to
the limitations, if any, set forth in the agreements governing
the LLC's Indebtedness.
6.2 Distributions for Taxes.
(a) The LLC shall distribute to each Member in one or
more payments, including payments described in paragraph (b) from
time to time during each year, but in no event later than March 1
of the year immediately following such year, an aggregate cash
sum equal to the product of (i) Tax Amounts in respect of the
taxable year, or portion thereof, for which such distribution is
being made and (ii) the Member's Percentage Interest. In
addition, the LLC shall make additional pro rata distributions as
are necessary to reflect adjustments, as determined in good faith
by the Members, to any item affecting Tax Amounts, as reflected
on the LLC's tax return, as it may be amended from time to time,
or as a result of a concluded tax audit.
(b) In addition to the certificates required by
Section 5.5, the LLC shall furnish the Members with such
information as they shall reasonably request from time to time
respecting estimates of the LLC's taxable income or loss (and
items thereof) for any fiscal year or portion thereof. If, in
any year, any Member shall be required to make federal, state or
local estimated income tax payments under applicable law and
regulations, then, at least thirty (30) days prior to the date
(the "Estimated Payment Date") upon which any such payments are
due, the LLC shall deliver to each Member the certificates
required by Section 5.5, indicating the amount (the "Estimated
Payment") of the tax in respect of the respective Tax Amounts due
on the Estimated Payment Date, and not later than fifteen (15)
days prior to such Estimated Payment Date, the LLC shall pay to
such Member an amount equal to such Estimated Payment. The
amount of each Estimated Payment received by such
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Member shall be treated as a non-interest bearing advance against
the amounts distributable in respect of such Member's pro rata
share of Tax Amounts to such Member for such year. If the
aggregate amount of the Estimated Payments received by a Member
for any year shall exceed the distribution to which such Member
actually is entitled under paragraph (a) above, such Member shall
forthwith repay such excess to the LLC on or before the date set
forth in paragraph (a) above, unless such excess shall have been
paid to taxing authorities in which event such excess shall be
applied to reduce the amount otherwise distributable pursuant to
this Section 6.2 in respect of the LLC's next succeeding fiscal
year or years. Each Member shall seek, to the extent entitled
thereto, and contribute to the LLC any refund of taxes paid by
such Member out of amounts distributed pursuant to this Section
10.2 promptly after receipt of such refund.
6.3 Other Distributions. After payments and distributions,
if any, of the amounts set forth in Section 6.2 above, the LLC
may distribute, in the discretion of the Members, cash or other
property, valued at its Fair Market Value, to the Partners pro
rata.
6.4 Withholding Payments Required by Law.
(a) Unless treated as a Tax Payment Loan (as
hereinafter defined), any amount paid by the LLC for or with
respect to any Member on account of any withholding tax or other
tax payable with respect to the income, profits or distributions
of the LLC to the Code, the Regulations, or any state or local
statute, regulation or ordinance requiring such payment (a
"Withholding Tax Act") shall be treated as a distribution to such
Partner for all purposes of this Agreement, consistent with the
character or source of the income, profits or cash which gave
rise to the payment or withholding obligation. To the extent
that the amount required to be remitted by the LLC under the
Withholding Tax Act exceeds the amount then otherwise
distributable to such Member, unless and to the extent that funds
shall have been provided by such Partner pursuant to the last
sentence of this Section 6.4(a), the excess shall constitute a
loan from the LLC to such Member (a "Tax Payment Loan") which
shall be payable upon demand and shall bear interest, from the
date that the LLC makes the payment to the relevant taxing
authority, at the rate announced from time to time by Citibank,
N.A. (or any successor thereto) as its "prime rate", compounded
monthly (but in no event higher that the highest interest rate
permitted by applicable law). So long as any Tax Payment Loan to
any Member or the interest thereon remains unpaid, the LLC shall
make future distributions due to such Member under this Agreement
by applying the amount of any such distributions first to the
payment of any unpaid interest on such Tax Payment Loan and then
to the repayment of the principal thereof, and no such future
distributions shall be paid to such Member until all of such
principal and interest has been paid in full. If the amount
required to be remitted by the
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LLC under the Withholding Tax Act exceeds the amount then
otherwise distributable to a Member, the LLC shall notify such
Member at least five (5) Business Days in advance of the date
upon which the LLC would be required to make a Tax Payment Loan
under this Section 10.4(a) (the "Tax Payment Loan Date") and
provide such Member the opportunity to pay to the LLC, on or
before the Tax Payment Loan Date, all or a portion of such
deficit.
(b) The Members shall have the authority to take all
actions necessary to enable the LLC to comply with the provision
of any Withholding Tax Act applicable to the LLC and to carry out
the provisions of this Section 6.4. Nothing in this Section 10.4
shall create any obligation on the Members to advance funds to
the LLC or to borrow funds from third parties in order to make
any payments on account of any liability of the LLC under a
Withholding Tax Act.
(c) In the event that a Tax Payment Loan is not paid
by a Member within thirty (30) days after written demand therefor
is made by the Members, the Members may cause all distributions
that would otherwise be made to such Member to be retained by the
LLC, up to the amount necessary to repay such Tax Payment Loan,
including all accrued and unpaid interest thereon, and such
retained distributions shall be applied against, first, the
accrued interest on and, second, the principal of, such Tax
Payment Loan.
6.5 Non-Recourse. Notwithstanding any other provisions of
this Agreement, the obligations to make distributions
contemplated hereby shall be limited to the assets of the LLC and
shall be non-recourse with respect to the Members and any of
their assets.
7. Books and Records.
7.1 Complete Books. At all times during the continuance of
the LLC, the LLC shall keep or cause to be kept full and complete
books of account in which shall be entered fully and accurately
each transaction of the LLC, including the Capital Accounts of
the Members.
7.2 Method of Recordkeeping. All of the LLC's books of
account shall at all times be maintained at the principal office
of the LLC and shall be open to the inspection and examination of
the Members or their representatives during reasonable hours.
All books and records of the LLC shall be kept on an accrual
basis of accounting with an annual accounting period ending
December 31, except for the final accounting period which shall
end on the date of the final dissolution or termination of the
LLC. All references in this Agreement to a "fiscal year" are to
such an annual accounting period.
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7.3 Tax Information. The LLC shall be treated as a
partnership for federal and state income tax and franchise tax
purposes; accordingly, the LLC shall cause to be prepared and
filed on or before the due date annually a United States
Partnership Return of Income and any necessary state income and
franchise tax returns on a partnership basis. Such returns shall
be submitted to the Members for review no later than the tenth
Business Day prior to the date on which such return is due, as
such date may be extended as the result of any extension
obtained. Each Partner shall notify the other Members upon
receipt of any notice of any tax examination by any federal,
state or local authority pertaining to the LLC or the other
Members. No settlement of any tax issue concerning or having an
effect upon the LLC shall be made by any Member except upon the
approval of the tax matters partner, designated pursuant to
Section 14.12.
8. WITHDRAWAL OF MEMBERS; TRANSFER OF LLC INTERESTS
8.1 Death, Incompetency, Bankruptcy, Dissolution or
Withdrawal of a Member.
(a) Upon the death, legal incompetency, or bankruptcy
of an individual Member (including a substituted Member), such
Member's legally authorized personal representative shall have
all of the rights of a Member solely for the purpose of settling
or managing its estate, and shall have such power as the
decedent, incompetent, bankrupt or insolvent Member possessed to
make an assignment of interest in the LLC in accordance with the
terms hereof. No such representative shall be admitted as a
Member in the LLC except in compliance with the provisions of
this Article VIII.
(b) Upon the bankruptcy, dissolution or other
cessation to exist as a legal entity of any Member which is not
an individual, the authorized representative of such entity (and,
in the case of a terminated trust, the actual remaindermen) shall
have all the rights of a Member for the purpose of effecting an
orderly winding up and disposition of the business of such entity
and such power as such entity possessed to make an assignment of
its interest in the LLC in accordance with the terms thereof. No
such representative shall be admitted as a Member in the LLC
except in compliance with the provisions of this Article VIII.
8.2 Restriction on Transfer. No Member may assign or
otherwise transfer all or any part of its LLC Interest or grant
or create any participation in such Member's right to receive
Distributions or returns of capital. Any transaction by a Member
in violation of the provisions of this Section 8.2 shall, as
between such Member on one hand and the LLC and the other Members
on the other hand, be null and void and shall cause the
termination of the LLC.
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8.3 Effective Date of Transfers. For financial and tax
reporting purposes, every voluntary sale, assignment or other
transfer (as distinguished from the original issuance) of any LLC
Interest or portion thereof shall be deemed to have occurred as
of the close of business on the day of the month in which such
event shall have in fact occurred, and every involuntary sale,
assignment or permitted transfer (whether by gift, bequest,
inheritance,
operation of law or any other method) of any interest of a Member
in the LLC shall be deemed to have occurred, and shall have no
prior effect, as of the close of business on the day of the
calendar month in which the LLC shall have received evidence of
such transfer.
8.4 Conditions Applicable to Transfers. Notwithstanding
anything to the contrary contained in this Agreement:
(a) Any sale, assignment or transfer, whether direct
or indirect, of any LLC Interest shall be made in full compliance
with (i) all applicable statutes, law, ordinances, rules and
regulations of all Federal, state and local governmental bodies,
agencies and subdivisions having jurisdiction over the Property
and (ii) the contracts, deeds of trust, mortgages, certificates,
easement agreements, insurance policies, service agreements and
any other agreements affecting the Property, so that the
operation of the Property can continue without interruption and
without violation of any applicable law or any such instruments.
(b) No change in ownership of the LLC Interest of any
Member shall be binding upon the LLC or any other Member unless
and until (i) true copies of instruments of transfer executed and
delivered pursuant to or in connection with such transfer shall
have been delivered to all Members; (ii) the transferee shall
have delivered to all Members an executed and acknowledged
assumption agreement pursuant to which the transferee assumes all
of the obligation of the transferor hereunder, and agrees to be
bound by all of the provisions of this Agreement (including,
without limitation, if pursuant to the provisions of this
Agreement, the transferee is to become, as a result of such
transfer, a Member of the LLC, an acknowledgment thereof); (iii)
the Members shall have consented thereto; and (iv) the transferee
shall have executed, acknowledged and delivered any instruments
required under the Act to effect such transfer.
8.5 Transferees by Operation of Law. If, notwithstanding
the provisions of this Article VII, any Person acquires all or
any part of the LLC Interest of a Member in violation of this
Article VII by operation of law or judicial proceeding, the
holder(s) of said LLC Interest shall be entitled to receive only
the share of income, gain, deductions, credits, and losses and
the return of contributions to which said Member would otherwise
be entitled, and said Person shall have no right to participate
in the management of the LLC and vote on matters coming before
the LLC.
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8.6 Admission of Additional Members. Except as hereinabove
provided, no additional Members may be admitted to the LLC
without the prior unanimous consent of all the Members.
9. DISSOLUTION, LIQUIDATION AND TERMINATION
9.1 Dissolution.
(a) Except as herein otherwise expressly provided, the
LLC shall be dissolved upon the occurrence of any of the
following events:
(i) The divesting by the LLC of all or
substantially all of its assets and any property, real or
personal, that it may receive resulting from a sale, exchange or
other disposition thereof;
The agreement of the Members;
(ii) The elapse of 30 years from the date of this
Agreement; or
(iii)The withdrawal, bankruptcy, death or
dissolution of any Member.
(iv) Any other event, which, under the Act, would
cause the dissolution of a limited liability company.
(b) Dissolution shall be effective on the date of the
event giving rise to the dissolution, but the LLC shall not
terminate until the assets thereof have been distributed in
accordance with the provisions hereinafter set forth.
9.2 Liquidation Trustee.
(a) Upon dissolution of the LLC, the liquidating
trustee (who shall be selected by the Members) shall proceed
diligently to wind up the affairs of the LLC and distribute its
assets in the following order of priority:
(i) To the payment of the debts and liabilities
of the LLC (other than those to Members) and the expenses of
liquidation;
(ii) To the setting up of such reserves as the
liquidating trustee may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the LLC
arising out of or in connection with the LLC; provided that any
such reserve shall be paid over by the liquidating trustee to a
Person (if an individual, not a Member or one in the employ of
any Member), as escrowee, to be held by such Person (or
designated
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successor) for the purpose of disbursing such reserves in payment
of any of the aforementioned contingencies and, at the expiration
of such period as the liquidating trustee shall deem advisable,
to distribute the balance thereafter remaining in the manner
hereinafter provided;
(iii) To the repayment of any advances that may
have been made by any of the Members to the LLC, but if the
amount available for such repayment shall be insufficient, then
pro rata in accordance with the amounts of such advances; and
(iv) To the Members as provided in Sections 5.2
and 5.3.
(b) Pending such distribution, the liquidating trustee
shall continue to exploit the rights and properties of the LLC
consistent with the liquidation thereof, exercising in connection
therewith all the power and authority of the Members as herein
set forth.
9.3 Accounting on Dissolution. Upon dissolution of the
LLC, the liquidating trustee shall cause the LLC's accountant to
make a full and proper accounting of the assets, liabilities, and
operation of the LLC, as of and through the last day of the month
in which the dissolution occurs.
9.4 Distribution in Kind. No Member shall have the right
to demand and receive property other than cash. The liquidating
trustee shall, in any event, have the power to sell the LLC's
assets for cash in order to provide for payment of liabilities
and establish a reserve as aforesaid or otherwise. All saleable
assets of the LLC may be sold in connection with any liquidation
at public or private sale at such price and upon such terms as
the liquidating trustee, in its sole discretion, may deem
advisable. Any Member and any Person in which any Member is in
any way interested may purchase assets at such sale.
Distributions of LLC assets may be made in cash or in kind, in
the sole and absolute discretion of the liquidating trustee.
10. GENERAL
10.1 Casino Control Commission Regulation. Notwithstanding
anything to the contrary contained in this Agreement:
(a) This Agreement will be deemed to include all
provisions required by the New Jersey Casino Control Act and the
regulations thereunder and to the extent that anything contained
in this Agreement is inconsistent with the Casino Control Act,
the provisions of the Casino Control Act shall govern. All
provisions of the Casino Control Act, to the extent required by
law, to be included in this Agreement, or incorporated herein by
references if fully restated in this Agreement.
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(b) If the continued holding of an LLC Interest by any
Member will disqualify the LLC to continue as the owner and
operator of a casino license in the State of New Jersey under the
provisions of the Casino Control Act, such Member shall enter
into such escrow, trust or similar arrangement as may be required
by the New Jersey Commission under the circumstances. It is the
intent of this Section 10.1 to set forth procedures to permit the
LLC to continue, on an uninterrupted basis, as the owner and
operator of a casino license under the provisions of the Casino
Control Act.
(c)(i) All transfers (as defined by the Casino Control
Act) of securities (as defined by the Casino Control Act), shares
or other interest in the LLC shall be subject to the right of
prior approval by the Commission; and (ii) the LLC shall have the
absolute right to repurchase at the market price or purchase
price, whichever is the lesser, any security, share or other
interest in the LLC in the event that the Commission disapproves
a transfer in accordance with the provisions of the Casino
Control Act.
(d) Each Member hereby agrees to cooperate reasonably
and promptly with the others in obtaining any and all licenses,
permits or approvals required by any governmental authority or
deemed expedient by the Members in connection with the Casino
Control Act.
(e) Each Member shall have the right to offer to
acquire any LLC Interest required to be disposed of pursuant to
this Section 10.1 on the same basis as other potential
purchasers, subject to the Casino Control Act.
10.2 Certificate of Interest. Notwithstanding anything to
the contract contained in this Agreement:
(a) The Interest of each Member in the LLC shall be
evidenced by a Certificate of Interest in the form attached
hereto as Exhibit B. The Certificate of Interest in the LLC,
together with a Certificate Transfer Ledger, shall be maintained
at the principal office of the LLC. Each such Certificate of
Interest shall be serially numbered and shall be issued by, or at
the written direction of, each of the Members to the lawful
holder of an interest in the LLC, upon payment by the issuee of
the full amount of the capital contributions then due with
respect its interest in the LLC represented by such Certificate
of Interest. All Certificates of Interest shall be executed in
the name of the LLC by each of the Members or their designee(s).
Each Certificate of Interest shall state on its face the name of
the registered holder thereof and the then interest in the LLC
held by the issue; shall bear, on both sides thereof, a statement
of the restrictions imposed by Section 105 of the Casino Control
Act.
(b) Certificates of Interest in the LLC may be
transferred by the lawful holders thereof only in connection with
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the pledge or transfer of all or part of the interest of such
holder in the LLC, and only in accordance with the provisions of
this Agreement. All such transfers shall be effected by duly
executed and acknowledged instruments of assignment, each of
which shall be duly recorded on the Certificate of Transfer
Ledger. No effect shall be given to any purported assignment of
a Certificate of Interest, or transfer of the Interest in the LLC
evidenced thereby, unless such assignment and transfer shall be
in compliance with the terms and provisions of this Agreement,
and any attempted assignment or transfer in contravention hereof
shall ineffectual.
(c) In the event that a Certificate of Interest shall
be lost, stolen, destroyed or mutilated, the LLC may cause a
replacement Certificate of Interest to be issued upon such terms
and conditions as shall be fixed by the Members, including,
without limitation, provision for indemnity in the posting of a
bond or other adequate security as security therefore. No
replacement Certificate of Interest shall be issued to any Person
unless such Person has surrendered the Certificate of Interest to
be replaced, or has complied with the terms of this Section 10.2.
(d) The Certificate Transfer Ledger containing the
names and addresses of all Members and the Interest of each
Member at the LLC shall be opened to the inspection of the
Members of the principal office of the LLC during usual business
hours upon request of any Member. Such Ledger shall, in
addition, be available for inspection by the Commission or the
Division of Gaming Enforcement of the State of New Jersey and
each of their respective authorized agents at all reasonable
times without notice.
10.3 Notices. Any notice or consent required or provided
for by any provision of this Agreement shall be in writing and
shall be deemed to have been duly and properly given or served
for any purpose only if delivered personally with receipt
acknowledged or sent by registered or certified mail, return
receipt requested, postage and charges prepaid and addressed to
such address of the Members set forth in Exhibit A to this
Agreement.
A Member may change its address for the purpose of this
Section 10.3 by notice to the LLC at its principal office in the
manner herein provided for. Any such notice, consent or other
communication shall be deemed to have been given the day it was
(a) received by the LLC or (b) personally delivered with receipt
acknowledged.
10.4 Further Assurances. Each of the parties hereto agrees
to execute, acknowledge, deliver, file, record and publish such
further certificates, instruments, agreements and other
documents, and to take all such further action as may be required
by law or deemed by the Members to be necessary or useful in
furtherance of
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the LLC's purposes and the objectives and intentions underlying
this Agreement and not inconsistent with the terms hereof.
10.5 Prohibition Against Partition. Each Member hereby
permanently waives and relinquishes any and all rights it may
have to cause all or any part of the property of the LLC to be
partitioned, it being the intention of the Members to prohibit
any Member from bringing a suit for partition against the other
Members, or any of them.
10.6 Waiver. No consent or waiver, express or implied, by
any Member to or of any breach or default by any other Member in
the performance by any other Member of its obligations hereunder
shall be deemed or construed to be a consent to or waiver of any
other breach or default in the performance by such other Member
of the same or any other obligation of such Member hereunder.
Failure on the part of a Member to complain of any act or failure
to act of any other Member or to declare such other Member in
default, irrespective of how long such failure continues, shall
not constitute a wavier by such Member of its rights hereunder.
10.7 Severability. If any provision of this Agreement or
the application thereof to any person or circumstances 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.
10.8 Additional Remedies. The rights and remedies of any
Member hereunder shall not be mutually exclusive. The respective
rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy, but nothing
herein contained is intended to, nor shall it limit or affect,
any other rights in equity or any rights at law or by statute or
otherwise of any party aggrieved as against the other for breach
or threatened breach of any provision hereof, it being the
intention of this Section 10.8 to make clear the agreement of the
parties hereto that their respective rights and obligations
hereunder shall be enforceable in equity as well as at law or
otherwise.
10.9 Choice of Law. This Agreement and all matters relating
to the LLC shall be governed and construed in accordance with the
law of the State of New Jersey.
10.10 Entire Agreement. This instrument incorporates the
entire agreement among the parties hereto, regardless of anything
to the contrary contained in the Certificate or other instrument,
memorandum or notice purporting to summarize the terms hereof,
whether or not the same shall be recorded or published.
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10.11 Amendments. This Agreement may not be modified or
amended except as otherwise provided herein and with the consent
of all of the Members.
10.12 Gender and Number. Unless the context otherwise
requires, when used herein, the singular includes the plural and
vice versa, and the masculine includes the feminine and neuter
and vice versa.
10.13 Headings. The descriptive headings contained in this
Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
10.14 Tax Matters Partner. ▇▇▇▇▇ Atlantic City Associates
shall be the "Tax Matters Partner" under the Code and all
applicable tax laws and shall, in its sole discretion, make or
revoke all tax elections, resolve allocations issues and handle
all tax audits, controversies and proceedings. ▇▇▇▇▇ Atlantic
City Corporation and Atlantic City Associates agree that ▇▇▇▇▇
Atlantic City Associates, acting through the LLC, shall have the
authority to handle and resolve all tax controversies involving
▇▇▇▇▇ Atlantic City Associates, ▇▇▇▇▇ Atlantic City Corporation
and/or the LLC in such manner as ▇▇▇▇▇ Atlantic City Associates
in its sole discretion determines, provided that the LLC shall
bear all accounting and legal expenses incurred in connection
therewith.
10.15 Indemnification. The LLC shall indemnify and hold
harmless each Member, its Affiliates, and all officers,
directors, employees and agents (individually, an "Agent") of
such Member, and its affiliates (individually, an "Indemnitee")
from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature
(including reasonable attorneys' fees and disbursements),
judgments, fines, settlements, and other amounts arising from any
and all claims, demands, actions, suits, or proceedings, civil,
criminal, administrative or investigative, brought or threatened
in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise, arising out of or incidental
to the business of the LLC or their status as an Agent including
without limitation liabilities under the Federal and state
securities laws, regardless of whether the Indemnitee continues
to be a Member, an Affiliate of a Member, or an Agent of a Member
or of an Affiliate of a Member at the time any such liability or
expense is paid or incurred, so long as such indemnified person
acted in good faith on behalf of the LLC, ▇▇▇▇▇ Atlantic City
Corporation or ▇▇▇▇▇ Atlantic City Associates and in a manner
reasonably believed by such person to be in or not opposed to the
best interests of the LLC, ▇▇▇▇▇ Atlantic City Corporation or
▇▇▇▇▇ Atlantic City Associates but only if such course of conduct
does not constitute gross negligence or willful misconduct;
provided that such indemnification or agreement to hold harmless
shall be recoverable only out of assets of the LLC and not from
the Members and; provided, further that no indemnification shall
be
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made to or on behalf of an Indemnitee if a judgment or other
final adjudication adverse to the Indemnitee establishes that his
or its acts or omissions (i) in the case of an Indemnitee who is
or was a director of ▇▇▇▇▇ Atlantic City Corporation or the ▇▇▇▇▇
Atlantic City Associates managing general partner, were in breach
of his duty of loyalty to ▇▇▇▇▇ Atlantic City Corporation or the
▇▇▇▇▇ Atlantic City Associates managing general partner, as the
case may be, or were not in good faith or involved a knowing
violation of law, or resulted in receipt by the Indemnitee of an
improper personal benefit or (ii) in the case of all other
Indemnitees, constituted gross negligence or willful misconduct.
Termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendre or its equivalent
shall not itself create a presumption that such Indemnitee did
not meet the applicable standard of conduct for indemnification.
Indemnity shall be paid in advance of the final disposition of
the proceeding to an Indemnitee provided that the Indemnitee
undertakes to repay the LLC if it shall ultimately be determined
that he or it is not entitled to indemnification as provided by
this Section 10.15. The indemnification provided by this Section
10.15 shall be in addition to any other rights to which an
Indemnitee may be entitled under any agreement, as a matter of
law or equity, or otherwise, both as to action in the
Indemnitee's capacity as a Member, an Affiliate of a Member, or
as an officer, director, employee or agent of a Partner or
Affiliate of a Partner and as to any action in another capacity,
and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee. No
Indemnitee shall be denied indemnification in whole or in part
under this Section 10.15 by reason of the fact that the
Indemnitee had an interest in the transaction with respect to
which the indemnification applies if such interest was fully
disclosed and the transaction was approved by the Members.
Any indemnification or advance under this Section 10.15
to an Indemnitee shall be made promptly and in any event within
thirty (30) days upon the written request of the individual
seeking indemnification. The right to indemnification or
advances as granted under this Section 10.15 shall be enforceable
by any such individual seeking indemnification in any court of
competent jurisdiction, if the LLC denies such request, in whole
or in part, or if no disposition thereof is made within thirty
(30) days. Such person's costs and expenses incurred in
connection with successfully establishing his right to
indemnification or advances, in whole or in part, in any such
action shall also be indemnified by the LLC. It shall be a
defense to any such action that there has been a judgment or
other final adjudication adverse to the claimant which
established that his acts or omissions did not meet the standard
of conduct required by the first paragraph of this Section 10.15,
but the burden of proving such defense shall be on the LLC.
Neither the failure of the LLC to have made a determination prior
to the commencement of such action that indemnification of the
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claimant is proper in the circumstances because he has met the
applicable standard of conduct, nor the fact that there has been
an actual determination by the LLC that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the
applicable standard of conduct.
The LLC shall have the power to purchase and maintain
insurance, and to furnish similar protection (including but not
limited to providing a trust fund, letter of credit,
self-insurance or indemnification contract), on behalf of any
individual to whom indemnification or advances may be paid
hereunder, against any expenses, fees or liabilities for which
indemnification or advances may be paid hereunder.
(i) Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties and their
heirs, executors, administrators, successors, legal
representatives and permitted assigns, including any pledgee upon
the foreclosure of any pledge of a Member's Partnership Interest
in the LLC.
10.16 Execution. This Agreement may be executed in any
number of counterparts, and each such counterpart will, for all
purposes, be deemed an original instrument, but all such
counterparts together will constitute but one and the same
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Operating Agreement of ▇▇▇▇▇ Casino Services, L.L.C. as of the
day and year first above written.
MEMBERS:
▇▇▇▇▇ ATLANTIC CITY ASSOCIATES
By: ▇▇▇▇▇ Hotels & Casino Resorts
Holdings, L.P., general partner
By: ▇▇▇▇▇ Hotels & Casino
Resorts, Inc., general
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇ ATLANTIC CITY CORPORATION
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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EXHIBIT A TO ▇▇▇▇▇ CASINO SERVICES, L.L.C.
OPERATING AGREEMENT
Name, Address and Initial Cash Capital
Taxpayer I.D. Number Contributions
-------------------- --------------------
▇▇▇▇▇ Atlantic City Associates $990.00
99% L.L.C. Percentage Interest
▇▇▇▇▇ Atlantic City Corporation $ 10.00
1% L.L.C. Percentage Interest
EXHIBIT B
THIS CERTIFICATE AND THE INTERESTS REPRESENTED HEREBY
ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER AND ALL OF
THE PROVISIONS OF THE OPERATING AGREEMENT OF ▇▇▇▇▇
CASINO SERVICES, L.L.C., DATED AS OF JULY ____, 1996,
AND ANY AMENDMENTS THERETO. THE INTERESTS REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND MAY NOT BE TRANSFERRED UNLESS SO
REGISTERED OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION.
THIS SECURITY IS SUBJECT TO THE RESTRICTIONS IMPOSED BY
N.J.S.A. 5:12-105 AND THE NEW JERSEY CASINO CONTROL
ACT, N.J.S.A. 5:12-1 ET SEQ.
No. ______ ___% Interest
▇▇▇▇▇ Casino Services, L.L.C.
A Limited Liability Company
under the laws of the State of New Jersey
CERTIFICATE OF INTEREST
This certifies that ______________ is the sole owner of
a _____________ (___%) percent membership interest in ▇▇▇▇▇
Casino Services, L.L.C. (the "LLC"), transferable only as set
forth and provided for in the Operating Agreement of the LLC
dated as of July ____, 1996.
IN WITNESS WHEREOF, each Member of the LLC has caused
this Certificate to be signed this ____ day of ___________, 1996.
▇▇▇▇▇ ATLANTIC CITY ASSOCIATES
By:___________________________
▇▇▇▇▇ ATLANTIC CITY CORPORATION
By:___________________________