FIRST AMENDMENT TO AMENDED AND RESTATED
PARTNERSHIP AGREEMENT OF TRADING COVE ASSOCIATES
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THIS FIRST AMENDMENT TO AMENDED AND RESTATED PARTNERSHIP AGREEMENT OF
TRADING COVE ASSOCIATES ("Amendment") effective as of the Effective Date, as
hereinafter defined, is made by and among (i) SUN COVE, LTD., a Connecticut
corporation ("Sun"), as the existing partner, (ii) XXXXXX SUITES, INC., a
Michigan corporation ("Xxxxxx"), RJH DEVELOPMENT CORP., a New York corporation
("RJH"), and LMW INVESTMENTS, INC., a Connecticut corporation ("LMW"), as the
withdrawing partners, and (iii) WATERFORD GAMING, L.L.C., a Delaware limited
liability company ("Waterford Gaming"), as the incoming partner.
RECITALS:
A. RJH, Xxxxxx, LMW and Leisure Resort Technology, Inc., a Connecticut
corporation ("Leisure"), as partners (collectively, the "Original Partners"),
were parties to a partnership agreement dated July 23, 1993, as amended by that
certain First Amendment to Partnership Agreement of Trading Cove Associates
dated effective March 24, 1 994 (as amended, the "Original Partnership
Agreement"), pursuant to which the Original Partners formed Trading Cove
Associates, a Connecticut general partnership (the "Partnership").
B. On September 21, 1994, the Original Partnership Agreement was amended
and restated by that certain Amended and Restated Partnership Agreement of
Trading Cove Associates (as amended and restated to date the "Partnership
Agreement") pursuant to which, among other things, Sun was admitted as a partner
of the Partnership.
C. On February 3, 1995, Leisure withdrew as a partner of the Partnership
and its interest was allocated, pro rata, to Xxxxxx, RJH and LMW.
D. RJH Development Corp. and Waterford Hotel Group, Inc. are parties to
that certain Agreement for Purchase and Sale of Partnership Interest dated
September 12, 1996, as assigned to Waterford Gaming pursuant to which Waterford
agreed to acquire the Partnership Interest of RJH in the Partnership and as of
the Effective Date hereof, Xxxxxx and LMW will each be assigning and
contributing its Partnership Interest in the Partnership to Waterford Gaming.
E. The parties desire to amend the Partnership Agreement in order to (i)
admit Waterford Gaming as a partner of the Partnership, (ii) acknowledge the
withdrawal of Xxxxxx, LMW and RJH and (iii) amend certain other portions of the
Partnership Agreement, all to be effective as of the Effective Date.
Accordingly, it is agreed as follows:
1. Capitalized Terms:
Each capitalized term used, but not defined, in this Amendment has the
meaning ascribed to such term in the Partnership Agreement.
2. Admission of Waterford Gaming and Withdrawal of RJH, Xxxxxx and LMW:
(a) Effective as of the Effective Date, RJH, Xxxxxx and LMW hereby
withdraw as Partners of the Partnership and the parties consent to the admission
of Waterford Gaming as a Partner of the Partnership and, effective as of the
Effective Date, Waterford Gaming is hereby admitted as a Partner of the
Partnership.
(b) Effective as of the Effective Date, Waterford Gaming (i) accepts
the assignment and admission as a Partner of the Partnership, (ii) assumes and
agrees to perform the obligations of the assignor Partners to the Partnership in
respect of the Partnership Interest assigned to it by the assignor Partners,
(iii) agrees to be bound by, and to perform the provisions of, the Partnership
Agreement in respect of the Partnership Interest assigned to it by the assignor
Partners, and (iv) shall have all of the rights and privileges of any of the
assignor Partners or of the Original Partners, or of RJH under the Partnership
Agreement.
3. Definitions:
All references in the Partnership Agreement to the term "Original Partners"
shall be deemed to mean Waterford Gaming; all references in Partnership
Agreement to the term "Original Partners Managing Partners" shall be deemed to
mean Waterford Gaming; all references in the Partnership Agreement to the term
"Designated Representatives of the Original Partners" shall be deemed to mean
Xxx Xxxxxx and Section 4.04(b) is amended accordingly; and all references in the
Partnership Agreement to the term "Majority of the Original Partners" shall be
deemed to mean Waterford Gaming. All references to the term "Majority of the
Remaining Original Partners" or "Remaining Original Partners" refer to Waterford
Gaming regardless of whether Waterford Gaming would also be a Disabled Party;
and all references to the Original Partners Group shall mean Waterford Gaming
and all references to the Tax Matters Partner shall mean Waterford Gaming and
Section 5.05 is hereby amended accordingly.
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4. Purposes:
Section 1.03 a.(ii) is hereby deleted; and except with respect to the
provisions of Section 4.05 c., and all references in the Partnership Agreement
to the term, "Alternative Facility" or "Alternative Facilities" and provisions
relating thereto are hereby deleted.
5. Deletion of Certain Provisions:
The following provisions are hereby deleted from the Partnership Agreement:
(i) Section 2.07 b;
(ii) Section 2.09 b (1), (2) and (3);
(iii) Section 4.01 (a)(4)
(iv) Section 4.02;
(v) Section 4.04 c.;
(vi) Section 4.05 d;
(vii) Section 4.09; and
(viii) Section 6.04.
6. Capital Contributions and Related Matters:
Section 2.03 shall be amended by adding, before the words "any Partner may,
but shall not be obligated to," the words "with the consent of the other
Partners."
7. Distribution of Excess Cash:
(a) The introductory sentence to Section 3.03 a. is hereby deleted
and replaced with the following:
"The Managing Partners shall, from time to time (but no less often
than monthly), determine whether the Partnership has Excess Cash, as
defined in Section 3.03 b. hereof, and whenever the Partnership has
Excess Cash, the Managing Partners shall cause the Excess Cash to be
paid:"
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(b) The last sentence of Section 3.03a is hereby deleted and the
words "other than Additional Reserves" are hereby deleted from clause (iii) of
Section 3.03 b.
(c) Section 3.03 d. is hereby added to the Partnership Agreement as
follows:
"d. Notwithstanding anything in Section 3.03 a. to the contrary, the
Partners acknowledge that the priority of distributions are subject to
that certain Omnibus Financing Agreement dated as of September 21,
1995 and as amended from time to time between the Partnership and Sun
International Hotels Limited."
8. Other Activities:
Section 4.05 c. is hereby amended by adding The following at the end of the
paragraph:
"In the event that the Partners determine to pursue additional
gaming activities pursuant to this Section 4.05 c., it is
acknowledged and agreed that such venture will not be pursued through
the Partnership, but will be pursued through a new entity, which
entity, unless otherwise agreed, shall be formed with (i) Sun or an
entity affiliated with Sun and (ii) the members of Waterford Gaming or
entities affiliated with the members of Waterford Gaming."
9. Management Services Fee:
Section 4.08 a. is hereby deleted and replaced with the following:
a. "Waterford Gaming, Xxxxxx, LMW and Sun (collectively,
"Management Agents") shall perform certain of the services that the
Partnership is required to provide pursuant to the Management
Agreements. The Management Agents shall perform supervisory duties
with respect to how management duties, responsibilities and functions
will be carried out with respect to the day-to-day operations of the
Facility in conformance with the Management Agreements and to the
extent directed by the Partnership. The Management Agents shall be
entitled to compensation therefor as set forth below. The existing
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Management Services Agreement dated February 6, 1995, by and between
the Partnership and Sun-Waterford, a Connecticut general partnership,
shall be terminated, and a new Management Services Agreement (which
will replace the terminated Management Services Agreement)
incorporating the terms set forth in this Section 4.08 a. shall be
executed by the Management Agents and the Partnership.
b. Pursuant to such new Management Services Agreement, the
Management Agents shall make available to the Partnership adequate
supervisory personnel who will provide consultation services to the
Partnership to assist the Partnership in the supervision of the
day-to- day operation of the Facility.
c. In consideration of the services rendered by the Management
Agents, the Partnership shall pay an annual on-going fee of 1% of the
gross revenues of the Facility, but not greater than 25% of the Excess
Cash plus the Organizational and Administrative Fee and the Marketing
and Casino Operations Fee, payable on a monthly basis (the "Management
Services Fee"), as follows:
(-A-) To Sun, LMW and Xxxxxx, the first $2,000,000 of the
annual Management Services Fee to allow for the expenses of the
Management Agents payable on a monthly basis; and
(-B-) All amounts of the annual Management Services Fee in
excess of $2,000,000, shall be distributed as follows:
(i) If the Facility's operating income plus depreciation,
amortization and other non-cash charges ("EBITDA") is equal
to or less than $200,000,000 in any fiscal year of the
Facility, then (-a-) 50% to Sun and (-b-) 50% to Waterford
Gaming;
(ii) If the Facility's EBITDA is greater than $200,000,000
but not more than
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$225,000,000 in any fiscal year of the Facility, then, (i)
50% to Sun, (ii) the first $500,000 of the remaining 50% to
Xxxxxx and LMW, and (iii) the balance, to Waterford Gaming;
or
(iii) If the Facility's EBITDA is greater than $225,000,000
in any fiscal year of the Facility, then, (i) 50% to Sun,
(ii) the first $1,000,000 of the remaining 50% to Xxxxxx and
LMW, and (iii) the balance, to Waterford Gaming.
10. Insolvency of a Partner:
Section 6.08 a is hereby deleted and the following shall be substituted:
"If a Partner shall become an Insolvent Partner, then such Partner shall
withdraw from the Partnership and such Partner's Partnership Interest shall
be converted into a Beneficial Interest, as defined below, to receive
distributions and other payments as it would have received otherwise, but
such Partner shall (i) not have any right to participate in the management
of, or the supervision of, the Partnership or the Facility, (ii) withdraw
as a Managing Partner, and (iii) not have any right to vote or consent on
any matters concerning the Partnership or this Agreement, except that no
amendment or waiver to the terms of this Agreement or any other agreement
to which such Partner was a party that would reduce the amount of
distributions or payments made to such Partner may be made without such
Partner's consent."
11. Regulatory Withdrawal:
Section 6.11 is hereby added to the Partnership Agreement as follows:
"6.11 Regulatory Withdrawal:
If any Partner, or any Person, as defined below, with a direct or indirect
beneficial interest in a Partner that the gaming regulatory authorities of
the United States or the State of Connecticut with jurisdiction over the
Facility or the Management Agreements (the "Regulatory Authorities")
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determine needs to be qualified in order to hold such interest (an
"Applicable Person"), is found not to be qualified by the Regulatory
Authorities and such finding is final and non-appealable (a "Disqualifying
Event"), the following provisions shall apply:
a. If the Disqualifying Event applies to a Partner, such Partner (the
"Disqualified Partner") shall automatically be deemed to have
withdrawn from the Partnership as a partner as of the date of the
Disqualifying Event. In such event, the Disqualified Partner's
Percentage Interest shall be deemed to have been automatically
assigned to the remaining Partner, or its designee. Under such
circumstances, the Disqualified Partner shall be deemed to have
received a fifty (50%) per cent Beneficial Interest in the
Partnership. As used herein, the term "Beneficial Interest" shall mean
a Partner's interest in Profits, Loss and Excess Cash and all fees
otherwise payable to such Disqualified Partner or any of its
Affiliates; and the term "Person" shall mean any natural person,
corporation, trust, partnership, limited partnership, limited
liability company or other form of entity; provided, however, the term
"Person" shall not include Leisure. The Disqualified Partner shall be
deemed to have appointed the remaining Partner, or its designee, with
full power of substitution, its true and lawful attorney-in-fact, in
its name and on its behalf, to execute any and all documents necessary
to effectuate the provisions of this Section 6.11 a. The foregoing
power of attorney is a special power of attorney, is coupled with an
interest, is irrevocable and shall survive the withdrawal of the
Partner as contemplated hereby. Each Partner shall take such actions
as are necessary to effectuate the foregoing. In the event the
Regulatory Authorities do not allow the Disqualified Partner to
continue to hold the Beneficial Interest described above, the
Disqualified Partner must sell its Beneficial Interest within 90 days
from notice from such Regulatory Agency that the Disqualified Partner
is not allowed to hold a Beneficial Interest in the Partnership;
provided, however, the other Partner shall have a right of first
refusal with respect to such sale which right must be
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exercised within ten (10) days after the delivery of a notice to the
other Partner of such proposed sale, which notice shall contain a copy
of the purchase offer. In the event that the Disqualified Partner does
not sell its interest within such 90 day period, the Beneficial
Interest of the Disqualified Partner will be transferred in trust to
the other Partner and the other Partner, as trustee, shall diligently
pursue the sale of such Beneficial Interest for the benefit of the
Disqualified Partner.
b. If the Disqualifying Event applies to an Applicable Person (the
"Disqualified Party"), the Partner in which such Disqualified Party
holds an interest, either directly or indirectly, shall cause such
Disqualified Party to withdraw or be removed from such Partner as of
the date of the Disqualifying Event. If the Partner in which the
Disqualified Party holds such interest (either directly or indirectly)
fails to act in a timely manner under this subparagraph 6.11 b. so
that the withdrawal or revocation of the Partnership's license or
other authority to manage the Facility is effective, the Partner in
which the Affected Party holds or held its interest shall be deemed a
Disqualified Partner and the provisions of Section 6.11 a. hereof
shall immediately apply.
c. In the event that any Regulatory Authority takes any action that
materially and adversely affects the Partnership or the Facility
(an "Administrative Action") as a result of a preliminary
determination that a Partner or an Applicable Person is not qualified,
the Partner subject to such preliminary determination shall take all
reasonable actions to cause such Administrative Action to be stayed or
otherwise result in the Partnership or the Facility no longer being
materially and adversely affected pending a final and non-appealable
determination.
d. Notwithstanding anything in Section 6.11 (a) or (b) to the contrary,
provided the Beneficial Interest has not been sold by the other
Partner pursuant to Section 6.11 (a) above, in the event subsequent
to the date on which the Disqualifying Event occurs or
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the date on which the Beneficial Interest of a Disqualified Partner is
assigned to the other Partner pursuant to Section 6.11 (a) the
Disqualified Partner is able to cure the Disqualifying Event, such
that such Disqualified Partner becomes qualified by the Regulatory
Authorities, such Disqualified Partner shall be reinstated as a
Partner of the Partnership with the interest such Partner had prior to
the Disqualifying Event.
e. No amendment or waiver to the terms of this Agreement or any other
agreement to which the Disqualified Partner was a party that would
reduce the amount of distributions or payments to such Disqualified
Partner may be made without the Disqualified Partner's consent so
long as the Disqualified Partner has any interest in the Beneficial
Interest, including while such interest is held by the other Partner
in trust.
12. Notice:
Paragraph 9.01 is amended by deleting the notice provisions for the
Partnership or the Original Partners and replacing it with the following:
"If to the Partnership or Waterford Gaming:
LMW Investments, Inc.
000 Xxxxxxxx Xxxxxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx Suites, Inc.
32605 West 0 0 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Del X. Xxxxxx
Telecopy No.: (000) 000-0000
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With a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000"
13. Exhibit A
Exhibit A to the Partnership Agreement is replaced with the Exhibit A
attached hereto.
14. Effective Date: The Effective Date of this Agreement shall be the date
on which:
(a) Waterford shall have successfully completed a debt offering to
finance the transactions referred to in Recital D hereof; and
(b) Waterford owns the entire Original Partners' Percentage Interest
in the Partnership and by itself is the Original Partner within the meaning
of the Original Partnership Agreement as then amended and in effect.
15. Additional Cooperation
Sun covenants that it shall cooperate with Waterford Gaming in obtaining
any approvals required for Waterford Gaming to participate as a Partner of the
Partnership or a manager of the Facility, including, without limitation, all
licensing approvals and tribal authority approvals.
16. Continuation of Partnership Agreement:
The Partnership Agreement, as amended by this Amendment, shall continue in
full force and effect and is hereby ratified, confirmed and approved.
17. Counterparts
This Amendment may be executed in any number of counterparts, each of which
shall, for all purposes, constitute an original and all of which, taken
together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this First Amendment
effective as of the date and year as provided above.
SUN COVE, LTD., a Connecticut corporation
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Its: President
----------------------------
Date: "SUN"
----------------
INCOMING PARTNER
WATERFORD GAMING, L.L.C., a Delaware
limited liability company
By: Xxxxxx Suites, Inc.
Its: Member
By:
---------------------------------
Its: Executive Vice President
----------------------------
Date:
----------------
By: LMW INVESTMENTS, INC.,
a Connecticut corporation
Its: Member
By:
---------------------------------
Its:
----------------------------
Date: "WATERFORD GAMING"
----------------
[Signatures continued
on next page]
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IN WITNESS WHEREOF, the undersigned have executed this First Amendment
effective as of the date and year as provided above.
SUN COVE, LTD., a Connecticut corporation
By:
---------------------------------
Its:
----------------------------
Date: "SUN"
----------------
INCOMING PARTNER
WATERFORD GAMING, L.L.C., a Delaware
limited liability company
By: Xxxxxx Suites, Inc.
Its: Member
By: /s/ Del X. Xxxxxx
---------------------------------
Its: Executive Vice President
----------------------------
Date: 10/22/96
----------------
By: LMW INVESTMENTS, INC.,
a Connecticut corporation
Its: Member
By:
---------------------------------
Its:
----------------------------
Date: "WATERFORD GAMING"
----------------
[Signatures continued
on next page]
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IN WITNESS WHEREOF, the undersigned have executed this First Amendment
effective as of the date and year as provided above.
SUN COVE, LTD., a Connecticut corporation
By:
---------------------------------
Its:
----------------------------
Date: "SUN"
----------------
INCOMING PARTNER
WATERFORD GAMING, L.L.C., a Delaware
limited liability company
By: Xxxxxx Suites, Inc.
Its: Member
By:
---------------------------------
Its:
----------------------------
Date:
----------------
By: LMW INVESTMENTS, INC.,
a Connecticut corporation
Its: Member
By: /s/ Xxx Xxxxxx
---------------------------------
Its: President
----------------------------
Date: "WATERFORD GAMING"
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[Signatures continued
from preceding page]
WITHDRAWING PARTNERS:
RJH DEVELOPMENT CORP., a New York
corporation
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Its: President
----------------------------
Date: "RJH"
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XXXXXX SUITES, INC., a Michigan corporation
By:
---------------------------------
Its:
----------------------------
Date: "XXXXXX"
----------------
LMW INVESTMENTS, INC., a Connecticut
corporation
By: /s/ Xxx Xxxxxx
---------------------------------
Its: President
----------------------------
Date: "LMW"
----------------
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[Signatures continued
from preceding page]
WITHDRAWING PARTNERS:
RJH DEVELOPMENT CORP., a New York
corporation
By:
---------------------------------
Its:
----------------------------
Date: "RJH"
----------------
XXXXXX SUITES, INC., a Michigan corporation
By: /s/ Del X. Xxxxxx
---------------------------------
Its: EXECUTIVE VICE PRESIDENT
----------------------------
Date: 10/22/96 "XXXXXX"
----------------
LMW INVESTMENTS, INC., a Connecticut
corporation
By:
---------------------------------
Its:
----------------------------
Date: "LMW"
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