EXHIBIT 10.9
AMENDMENT NUMBER ONE
TO
DEVELOPMENT
AGREEMENT
THIS AMENDMENT NUMBER ONE TO DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF GARY AND THE MAJESTIC STAR CASINO,
LLC (the “ Amendment ”), dated as of October 19,
2005, is entered into by and among the City of Gary, an Indiana
municipal corporation (the “ City ”), The
Majestic Star Casino, LLC, an Indiana limited liability company
(“ Majestic ”), and Trump Indiana, Inc., a
Delaware corporation (“ Trump ”).
W I T N E S S E T H
WHEREAS, Majestic and the City are parties to a
Development Agreement, dated as of March 26, 1996 (the “
Majestic Development Agreement ”), pursuant to which,
among other things, Majestic made certain commitments to the City
relative to certain economic development projects in the City and
Buffington Harbor, and agreed to pay the City certain additional
payments, as more specifically set forth in the Majestic
Development Agreement;
WHEREAS, Trump and the City are parties to a
Development Agreement, dated as of May 1 1996, as amended by that
certain Addendum to Development Agreement, dated as of July 12,
1996, and further amended by that certain Second Amendment to
Development Agreement, dated February, 2001 (collectively, the
“ Trump Development Agreement ”), pursuant to
which, among other things, Trump made certain commitments to the
City relative to certain economic development projects in the City
and Buffington Harbor, and agreed to pay the City certain
additional payments, as more specifically set forth in the Trump
Development Agreement;
WHEREAS, Gary New Century, LLC, a Delaware
limited liability company and an affiliate of Majestic (“
GNC ”), and the City are parties to a certain
Assignment of Purchase Agreement and Development Agreement, dated
as of August 25, 1999, as amended by that certain Addendum to
Assignment of Purchase Agreement and Development Agreement, dated
as of August 23, 2000 (collectively, the “ GNC Development
Agreement ”), pursuant to which GNC and the City made
certain commitments and agreements to each other related to the
development of the Lehigh Property (as defined in the GNC
Development Agreement), including certain GNC obligations relative
to conveyance of the outer harbor to the City, conveyance of a
portion of the inner harbor to the City and GNC’s commitment
to invest a minimum of $50,000,000 to development on the
property;
WHEREAS, in connection with the purchase by
Majestic from GNC of certain real property, Majestic has assumed
all of GNC’s obligations under the GNC Development
Agreement;
WHEREAS, Majestic proposes to acquire all of the
capital stock of Trump (the “ Acquisition ”),
after which Majestic, directly or indirectly, would operate both
the Majestic riverboat casino and the Trump riverboat casino
located at Buffington Harbor; and
WHEREAS, the parties to this Amendment desire to
make certain agreements and modifications related to the Majestic
Development Agreement, the Trump Development Agreement and the GNC
Development Agreement in light of the passage of time and change in
circumstances since the execution of the original
Agreements:
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend the Majestic Development
Agreement and the GNC Development Agreement, terminate the Trump
Development Agreement, and make certain other agreements and
covenants as follows:
1.
Definitions
. Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to
them in the Majestic Development Agreement.
2.
Effectiveness
. This Amendment shall only be
effective on and after the closing of the Acquisition and shall
terminate if and when the Majestic Development Agreement
terminates; provided, however, that Section 9 of this Amendment
shall terminate if and when the GNC Development Agreement
terminates.
3.
Other Business
. Section 1.02 of the Majestic
Development Agreement shall be amended by inserting the following
sentence at the end of the second paragraph of such
section:
Notwithstanding any other provision herein,
Section 1.02 shall not be applicable to the direct or indirect
ownership or operation by Developer, and the Developer shall not be
prohibited from directly or indirectly owning and operating, the
riverboat casino currently owned and operated by Trump.
4.
Additional Payments
. Section 2.05(a) of the Majestic
Development Agreement shall be amended and restated as
follows:
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(a)
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(i) It is
agreed that, except as provided for in subparagraph (ii) below,
each Developer shall pay the City an amount equal to 3% of its
respective adjusted gross receipts, as defined in I.C. 4-33-2-2
(“AGR”, for each month in which the applicable
Developer conducts Riverboat Gaming Operations (the “AGR
Commitment”). The AGR Commitment for a given month shall be
paid on the 10 th day of the following month. The City
and each Developer agree to reconcile the payments made by the
Developer toward its respective AGR Commitment with the actual AGR
within thirty (30) days of the close of each calendar quarter. Any
overpayment of the AGR Commitment for the preceding quarter shall
be applied toward the next installment(s) of the respective
Developer’s AGR Commitment due the City. The Developer agrees
to pay any underpayment of its respective AGR Commitment with the
next monthly installment due the City.
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(ii) It is
agreed that the combined total amount of the AGR Commitments paid
for both boats shall not be less than $6 Million Dollars. If, and
only if, the combined total of the AGR Commitments for both boats
exceed $6 Million Dollars, any amount in excess of $6 Million
Dollars shall be placed in a Lakefront Capital Improvement Fund
(Fund), to be established by Developer, a restricted use,
non-reverting fund from which any expenditure shall require the
approval of both the City, as represented by the Mayor, and
Developer, except as set forth in the following sentence. The
assets of the Fund may only be used to pay for, or reimburse the
costs of, environmental assessment and remediation, or fulfillment
of the City’s obligations under Section 6(b), (c), (d) or (e)
of the GNC Development Agreement, as amended, and a minimum of 50%
of the assets of the Fund towards site preparation, infrastructure
improvements and capital improvements, at the sole discretion of
Developer, on or for the benefit of the areas identified in Exhibit
G attached hereto. Any expenditure from the Fund shall not be
included in calculating the Minimum Investment for purposes of the
GNC Development Agreement, as amended.
(iii)
Notwithstanding anything herein to the contrary, the City and the
Developer shall review the provisions of the Majestic Development
Agreement every five (5) years from the date of this Amendment to
assess the viability of such agreement in light of the prevailing
economic and market conditions. Each of the City and the Developer
shall negotiate in good faith any modification or termination of
the Majestic Development Agreement in light of such
review.
Trump shall be
deemed a “Developer” for purposes of the amended and
restated Section 2.05(a) of the Majestic Development
Agreement.
5.
Financial Reporting
. Section 3.10 of the Majestic
Development Agreement shall be amended and restated as
follows:
Section 3.10 Financial Reporting
. Each Developer shall provide the
City, on a calendar year quarterly basis, accurate reports of the
data used to compute its AGR Commitment and demonstrating its
calculation of the monthly AGR Commitment payment for the prior
three months and year-to-date. Each such report shall be certified
to be accurate by a representative of the Developer who has
personal knowledge of the accuracy of the contents of the reports.
Each Developer shall maintain and keep, or shall cause to be
maintained and kept, full and accurate books and records within the
City or such other accessible location, of all business conducted
or transacted relative to the Project
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