EXHIBIT 10(jjj)
SECOND AMENDMENT TO OPERATING AGREEMENT OF
DETROIT ENTERTAINMENT, L.L.C.
A MICHIGAN LIMITED LIABILITY COMPANY
THIS SECOND AMENDMENT TO OPERATING AGREEMENT (the "Second Amendment") is made
and entered into as of the Closing Date, by and between CIRCUS CIRCUS MICHIGAN,
INC. a Michigan corporation ("Circus") and ATWATER CASINO GROUP, L.L.C., a
Michigan limited liability company ("ACG"), with reference to the following:
A. Pursuant to that certain Operating Agreement of Detroit Entertainment,
L.L.C., dated as of October 7, 1997 (the "Operating Agreement"), Circus and ACG
formed Detroit Entertainment, L.L.C., a Michigan limited liability company (the
"Company").
X. Xxxxxxx Entertainment Associates, L.L.C. ("AEA") and Z.R.X., L.L.C.
("ZRX") are the constituent members of ACG.
C. Circus is a subsidiary of Mandalay Resort Group (formerly known as Circus
Circus Enterprises, Inc.) ("Mandalay").
D. In connection with the initial formation of the Company, Circus acquired
a 45% Membership Interest in the Company.
E. Certain members of AEA, the "Qualifiers With Problems ("QWPs"), have
requested that Circus purchase the membership interests of the QWPs, with such
transaction being structured so that (i) the ownership interest of AEA in ACG
shall be appropriately reduced, (ii) the Membership Interest of ACG in the
Company shall be appropriately reduced and (iii) the ownership interest of
Circus in the Company shall be appropriately increased.
F. As a consequence of such transactions, the parties desire to amend the
Operating Agreement of the Company to reflect the changes, among others, in each
Member's respective Membership Interest.
H. As a material part of the inducement to Circus to purchase the ownership
interests of the Disqualified Members, Circus has required, and ACG, AEA and ZRX
have agreed, that the parties shall enter into this Second Amendment.
NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. AMENDMENTS TO OPERATING AGREEMENT . The Operating Agreement shall
be amended as follows:
a. Section 4.05(a) should be amended in its entirety to read as
follows:
"(a) PREDEVELOPMENT ADVANCES. Any Project Costs incurred
after May 1, 1997 and prior to the Closing Date as defined
in the Agreement dated September 9, 1999, and Approved by
the Management Committee, shall be borne 45% by Circus and
55% by ACG, and thereafter until Initial Licensing such
Project Costs shall be borne 53.5302% by Circus and
46.4698% by ACG. Upon Initial Licensing, all such costs
and expenses Approved by the Management Committee and borne
by the Members shall be included in the Project Budget and
shall be promptly reimbursed to the respective Members;
provided, however, the qualifier investigation fees and all
legal fees incurred by the Selling Members as defined in
the Agreement dated September 9, 1999 between the Selling
Members and Circus Circus Michigan, Inc. shall not be
Project Costs and shall not be directly or indirectly paid
by and/or reimbursed by the Company."
b. Section 6.01 of the Operating Agreement should be amended in
its entirety to read as follows:
"6.01 SHARING RATIOS
The Members shall have the following Sharing Ratios in the
Company as of the Closing Date:
ACG 46.4698%
Circus 53.5302%"
3. DEFINED TERMS . Except as otherwise expressly set forth herein,
any defined term used in this Second Amendment shall have the same meaning as
set forth in the Operating Agreement.
4. ENTIRE AMENDMENT. Except as amended or modified hereby, the
Operating Agreement shall remain unmodified and in full force and effect.
5. CONSENT TO FURTHER AMENDMENTS. The Operating Agreement is being
amended with the sole purpose of accommodating the transfers of interests being
made by certain AEA members in AEA by allowing such sale to be reflected as a
sale as if such persons owned a direct interest in the Company. As a result,
ACG's ownership percentage in the Company is being reduced accordingly but such
reduction is not intended to affect or diminish ZRX's economic or beneficial
rights in the Company. Accordingly, Circus agrees to take such actions that are
reasonably requested by ACG and/or ZRX and/or AEA to protect and preserve ACG's,
ZRX's, and AEA's rights in the Company, if and to the extent such rights are
adversely affected by the subject transaction scheduled to close on the Closing
Date including, but not limited to, agreeing to amend the Company's Operating
Agreement to make any necessary additional adjustments as appropriate to
accomplish this objective.
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6. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which when executed and delivered by all parties named as signatories
below, shall have the force and effect of the original, but all such
counterparts shall constitute one and the same instrument.
For purposes hereof, Qualifier Investigation Fees shall not include amounts
billed by the MGCB prior to September 9, 1999. Qualifier Investigation Fees
billed by the MGCB after September 9, 1999 shall include only amounts billed by
the MGCB if (1) such amounts are related to the investigation of a Selling
Member and (2) such amounts are billed to DELLC and are separately identified on
such bills as relating to a Selling Member. In all events, the provisions of
Section 4.03 of the DELLC Operating Agreement shall remain in full force and
effect.
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IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as the
date first set forth above.
DETROIT ENTERTAINMENT, L.L.C. MANAGEMENT COMMITTEE:
By: XXXXXX XXXXXX
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Xxxxxx Xxxxxx, appointee of Z.R.X., L.L.C.
By: XXXXXX XXXXXX
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Xxxxxx Xxxxxx, appointee of Z.R.X., L.L.C.
By: Z.L.M. Corporation, appointee of Z.RX, L.L.C.
By: XXXXXX XXXXXX
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Xxxxxx Xxxxxx, Secretary and Treasurer
Z.L.M. Corporation
By: XXXXXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx, appointee of
Atwater Entertainment Associates, L.L.C.
By: XX. XXXXXX XXXXXX
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Xx. Xxxxxx Xxxxxx, appointee of
Atwater Entertainment Associates, L.L.C.
By: XXXXXXXX X. XXXX
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Xxxxxxxx X. Xxxx, appointee of
Atwater Entertainment Associates, L.L.C.
By: XXXXX X. XXXXX
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Xxxxx X. Xxxxx, appointee of
Circus Circus Michigan, Inc.
By: XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, appointee of
Circus Circus Michigan, Inc.
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By: XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, appointee of
Circus Circus Michigan, Inc.
By: XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx, appointee of
Circus Circus Michigan, Inc.
By: XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx, appointee of
Circus Circus Michigan, Inc.
By: XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx, appointee of
Circus Circus Michigan, Inc.
JOINDER
ATWATER ENTERTAINMENT ASSOCIATES, L.L.C., a Michigan limited liability company
and Z.R.X., L.L.C., a Michigan limited liability company, hereby join in the
execution of the foregoing Second Amendment, solely for the purposes of
acknowledging that they have read, understand and agree to be bound by, the
terms, covenants and provisions of the foregoing Second Amendment.
ATWATER ENTERTAINMENT ASSOCIATES, Z.R.X, L.L.C.,
ENTERTAINMENT L.L.C., a Michigan limited a Michigan limited
liability company liability company
By: XXXXXX XXXXXXXXX By: XXXXXX XXXXXX
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Xxxxxx Xxxxxxxxx, Manager Xxxxxx Xxxxxx, President
By: XXXXXX XXXXXX
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Xxxxxx Xxxxxx, Member
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