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EXHIBIT 10.1




SECOND AMENDED AND RESTATED OPERATING AGREEMENT




OF




ISLE OF CAPRI BLACK HAWK L.L.C.




     This SECOND AMENDED AND RESTATED OPERATING AGREEMENT (the “Agreement”) is
made as of this 22nd day of April, 2003, by Casino America of Colorado, Inc.
(“Casino America of Colorado”) and Blackhawk Gold, Ltd. (“Blackhawk Gold”) and
those other persons, if any, who from time to time become parties to or are
otherwise bound by this Agreement as provided herein.



     The parties hereto are parties to an Operating Agreement, dated April 25,
1997 (the “Original Operating Agreement”), and an Amended and Restated
Operating Agreement, dated July 29, 1997 (the “First Amended Operating
Agreement”). The parties wish to amend and restate the First Amended Operating
Agreement, pursuant to this Agreement, which hereby supersedes and replaces
the Original Operating Agreement and the First Amended Operating Agreement in
their entirety. The parties therefore agree as follows:



ARTICLE 1: ORGANIZATION AND DEFINITIONS




1.1 Company Name. The business of the Company will be conducted under the name
“Isle of Capri Black Hawk L.L.C.” or any other name determined by the Company in
accordance with governing law.




1.2 Ownership. The Ownership Interests of the Members shall be adjusted from time to
time in accordance with the provisions of this Agreement. The Ownership
Interests of the Members shall at all times be maintained on Appendix I hereto, which shall be
amended chronologically from time to time as necessary. As of the date of this
Agreement, the Ownership Interests in the Company are as set forth below:




	 	 	 	 	 
	Member
	 	Ownership
Interest

	Blackhawk Gold, Ltd.

	 	 	43	%
	Casino America of Colorado, Inc.

	 	 	57	%







1.3 Colorado Office and Agent. The initial registered office of the Company in
Colorado is located at 1675 Broadway, Suite 1200, Denver, Colorado 8002, and
its initial registered agent at such address is CT Corporation. The Company
may subsequently change its registered office or registered agent in Colorado
in accordance with the Act. The Company’s principal place of business is 401
Main Street, Black Hawk, Colorado.




 









 








1.4 Term. The Company began on the date its Articles of Organization were
filed with the
Colorado Secretary of State and continues until December 31, 2096, or such
earlier date as a
Dissolution may occur.




1.5 Foreign Qualification. After formation of the Company under the Act, the
Company will apply for any required certificate of authority to do business in any
other state or jurisdiction where it conducts business, as appropriate.




1.6 Definitions. Terms used with initial capital letters will have the
meanings specified in Exhibit “A,” applicable to both singular and plural forms, for all purposes of
this Agreement.




ARTICLE 2: PURPOSES AND POWERS




2.1 Principal Purpose. The business and principal purpose of the Company
is to investigate, seek, acquire and engage in casino gaming in the Black
Hawk/Central City, Colorado and Cripple Creek, Colorado areas, and to engage in all activities
related thereto, including, without limitation, the operation of restaurants, gift shops and/or
hotels.




2.2 Powers. The Company has all of the powers granted to a limited liability
company under the Act, as well as all powers necessary or convenient to achieve its purposes
and to further its business.




ARTICLE 3: CAPITAL CONTRIBUTIONS




3.1 No Additional Capital Contributions. Except as agreed by the Members in
the Members Agreement, no Member shall be required to make an additional Capital
Contribution to the Company.




3.2 No Withdrawal. Except as specifically provided in this Agreement, no Member
will be entitled to withdraw all or any part of such Member’s capital from the Company
or, when such withdrawal of capital is permitted, to demand a distribution of property other than cash.




3.3 No Interest on Capital. No Member will be entitled to receive interest on such
Member’s Capital Contribution or Capital Account.




3.4 Loans by Members. The Company may borrow money from any Member or
Affiliate for Company purposes on such terms as the Company and such Member or Affiliate
may agree. Any such advance or loan will be treated as indebtedness of the Company, and
will not be treated as a Capital Contribution by a Member.




3.5 Capital Accounts. A Capital Account will be maintained for each Member. Each
Member’s Capital Account will be:





	(a)	 	Credited with (i) the capital contributions (net of liabilities secured
by such property that the Company takes subject to or assumes), (ii) the
Member’s allocable share of Profits and (iii) all other items properly
credited to the Member’s Capital Account; and




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	(b)	 	Charged with (i) the amount of cash distributed to the Member by the
Company, (ii) the Fair Market Value of property distributed to the Member
by the Company (net of liabilities secured by such property that the
Member takes subject to or assumes), (iii) the Member’s allocable share of
Losses and (iv) all other items properly charged to the Member’s Capital
Account.





     Any unrealized appreciation or depreciation with respect to any asset
distributed in kind will be allocated among the Members in accordance with the
provisions of Article 5 as though such asset had been sold for its Fair Market
Value on the date of Distribution, and each Member’s Capital Account will be
adjusted to reflect both the deemed realization of such appreciation or
depreciation and the Distribution of such property. In determining the Fair
Market Value of any asset of the Company for purposes of any Distribution, the
Company may obtain the written report of any one or more independent qualified
appraisers (or appraisal firms). If more than one appraisal report is obtained
by the Company, Fair Market Value will be determined as the average of such
appraised values. The Company will select each such appraiser (or appraisal
firm), and bear the cost of any such appraisal.



     The Capital Account of each Member shall be determined and maintained in
accordance with Code Section 704(b) and the regulations promulgated
thereunder.



3.6 Transfer. If all or any part of an Ownership Interest is transferred in
accordance with this Agreement, the Capital Account and Ownership Interest of the Transferor
(including a pro-rata share of Capital Contributions) that is attributable to the transferred
interest will carry over to the Transferee.




3.7 Certificates for Units Representing Ownership Interests. Ownership
Interests in the Company shall be represented by Units and a Person’s Ownership Interest shall
equal the number of Units owned by such Person divided by the total number of Units
issued and outstanding. The Units shall be represented by Certificates, which shall be in
such form as may be determined by the Managers. Certificates shall be signed by a majority of
the Managers. All Certificates shall be consecutively numbered or otherwise identified. The name
of the Person to whom the Units are issued, with the number of Units and the date of issue,
shall be entered on the books of the Company. All Certificates surrendered to the Company for
transfer shall be canceled and no new Certificate shall be issued until the former Certificate
for a like number of Units shall have been surrendered and canceled, except that in the case of a
lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the Company as the Managers may prescribe. Transfers of Units of the Company
shall be made
only on the books of the Company by the holder of record thereof or by his
legal representative,
who shall furnish proper evidence of authority to transfer, or by his attorney
thereunto authorized
by power of attorney duly executed and filed with the Company, and, on
surrender for
cancellation of the Certificate for such Units. The Person in whose name a Unit
or Units stands
on the books of the Company shall be deemed the owner thereof for all purposes
as regards the
Company.




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ARTICLE 4: MEMBERS AND MANAGERS




4.1 Management by Managers. Except as to matters expressly reserved to the
Members by
statute or by this Operating Agreement, the business and affairs of the Company
shall be
managed by the Managers set forth below, as such Managers may be changed from
time to time
as set forth herein. As of the date of this Agreement, the Managers of the
Company are John M.
Gallaway, whose address is 1642 Popps Ferry Road, Biloxi, Mississippi, Allan B.
Solomon, at
the same address, and H. Thomas Winn, whose address is 3040 Post Oak Boulevard,
Suite 675,
Houston, Texas. Each Member shall have the right to elect one Manager, except
that so long as
Casino America of Colorado or its Affiliates own a Majority In Interest of the
Company, Casino
America of Colorado or its Affiliates shall be entitled to elect a majority of
the Managers, which
initially shall be two Managers, and Blackhawk Gold shall be entitled to elect
one Manager.
Each Member shall have the right to remove, replace, fill a vacancy or
designate a temporary
replacement for the Manager or Managers elected by it.




     Managers shall hold office for a term of one year from election, or until
the next Annual Meeting of Members. Any action provided for in this Agreement
that may be taken by the Company may, except as otherwise provided in this
Agreement, only be taken with the consent of a majority of the Managers or by
the officers of the Company to the extent a majority of the Managers have
delegated authority with respect to such actions to such officers. Except as
provided in Section 4.9 below or as to any other matter the Members agree
shall require a unanimous vote, actions taken by Managers shall be by majority
vote at meetings duly called for purposes of taking action at which a quorum
is present. A quorum at any meeting of the Managers shall consist of a
majority of the Managers then appointed. The Managers may also act by
unanimous written consent in lieu of a meeting.



     Meetings of the Managers shall be held no less often than quarterly (one
of which shall be in conjunction with the Annual Meeting of the Members) on
dates established therefor at each preceding Annual Meeting of the Managers.
Special meetings of the Managers shall be held from time to time as called by
any of the Managers on no less than five (5) days’ advance notice given in
writing by the Manager calling such meeting, which notice may be given by
facsimile, Federal Express or similar courier service, certified mail or
personal delivery. Notices of meetings shall be effective when sent, if sent by
facsimile, or upon receipt, if given by certified mail, overnight courier or
personal delivery, in each case at the address of each of the Managers on the
books and records of the Company. The Managers may participate in a meeting by
means of conference telephone or similar communications equipment by which all
the Managers participating in the meeting can hear each other at the same time.
Such participation will constitute presence in person at the meeting and waiver
of any required notice.



4.2 Member’s Representative. Each Member which is not an individual will
designate one
or more individuals to act as such Member’s duly authorized representative and
agent for
purposes of exercising such Member’s vote on any matter involving the Company
requiring the
approval or action of the Members. Each Member which is not an individual may
also designate
one or more individuals as an alternate in the event that the primary
representative is unavailable
to act for any reason. A Member may change any such designation at any time
upon similar




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notice. The representatives of a Member will cast the vote of each Member in
accordance with such Member’s Ownership Interest, as provided in this Article.




4.3 Majority Voting. All decisions reserved by the Act or this Operating
Agreement to the
Members will be made by the affirmative vote of Members owning more than 50% of
the
Ownership Interests held by all Members, without regard to quorum requirements,
unless the
unanimous vote (under Section 4.9) provisions apply or except as to any other
matter the
Members agree shall require a unanimous vote or as otherwise specifically
provided in this
Agreement. Any determination to be made by the Members will be made in each
Member’s sole
and absolute discretion.




4.4 No Resignation or Retirement. Each Member agrees not to voluntarily resign
or retire
as a Member in the Company. However, if such voluntary resignation or
retirement occurs in
contravention of this Agreement, the withdrawing Member will, without further
act, become a
Transferee of its Ownership Interest (with the limited rights of a Transferee
as set forth in
Section 13.6). Any Member who resigns or retires from the Company in
contravention of this
Agreement will be liable to the Company and the other Members for proven
monetary damages
(but any such action or proposed action to resign or retire will not be subject
to any equitable
action for injunctive relief or specific performance).




4.5 Powers. Each Manager is an agent of the Company for the purpose of
conducting its
business and affairs. The act of any Manager for the apparent carrying on in
the usual way of the
Company’s business or affairs binds the Company unless the Manager so acting
has, in fact, no
authority to act for the Company in the particular matter and the person with
whom such
Member is dealing has knowledge of such lack of authority. The act of any
Manager which is
not apparently for the carrying on in the usual way of the Company’s business
or affairs does not
bind the Company unless authorized in accordance with this Agreement. Each
Manager agrees
to act on behalf of the Company only in compliance with this Agreement, and
agrees that any act
in contravention of this Agreement renders such Manager liable to the Company
and other
Members for monetary damages and other relief.




4.6 Substitute Members. A Transferee may be admitted as a substitute Member
of the
Company only upon the affirmative written agreement of all of the Members
(excluding the
Transferor Member), effective upon a date specified (which must be on or after
the effective date
of the Transfer, as determined under Section 13.5).




4.7 Additional Members. Subject to Section 4.9, additional Members of the
Company may
be admitted incident to the contribution of money or other property to the
Company (or
otherwise) only upon the affirmative written agreement of all Members,
effective upon a date
specified by all the Members.




4.8 Officers. The Company, acting through the Managers, may appoint and
remove such
officers as it determines to be necessary or desirable to carry out the
day-to-day management of
the Company. The Company’s officers may include a president, one or more vice
presidents, a
secretary and a treasurer, as well as one or more assistant vice presidents,
secretaries and
treasurers. Such officers may also include a chief executive officer, chief
operating officer and
chief financial officer. Appointment as an officer or agent of the Company
will not, of itself,




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create any contract rights. The officers of the Company, acting in their
capacity as such, will be agents acting on behalf of the Company as principal.
No officer of the Company has the continuing exclusive authority to make
independent business decisions on behalf of the Company without the approval
of the Managers as set forth in this Article.




4.9 Unanimous Vote. The following actions by the Company will require the
affirmative vote of all the Managers and the Members, without regard to quorum
requirements:




(a) The admission of an additional Member under Section 4.7;




(b) Any non-pro-rata distribution, including the non-pro-rata distribution of
assets in kind in
Liquidation under Section 12.3;




(c) The amendment of this Agreement, except as provided in Section 14.1 of this
Agreement;




(d) The merger of the Company with any other business entity as provided by
governing law;
or




(e) The sale of substantially all of the Company’s assets.




ARTICLE 5: ALLOCATION OF PROFITS AND LOSSES




5.1 Profits and Losses. For each Fiscal Year, Profits or Losses of the Company
will be an
amount equal to the Company’s taxable income or taxable loss determined in
accordance with
federal income tax principles, adjusted to the extent the Managers determine
that such
adjustment is necessary to comply with the requirements of Section 704(b) of
the Code.




5.2 General Allocation Rule. Except as otherwise provided in (or until
changed pursuant
to) this Agreement, the Profits or Losses of the Company, including items of
income, gain, loss
and deduction for each Fiscal Year, will be allocated to the Members in
proportion to their
respective Ownership Interests as defined herein. For any Fiscal Year in which
there is a change
in Ownership Interests, allocations will be determined in accordance with
Section 706 of the
Code and the regulations thereunder to take into account the varying interests
of the Members in
the Company during such Fiscal Year, in the manner determined by the Managers.




5.3 Exception. Notwithstanding the general rule on allocation and for tax accounting
purposes only and not for financial statement purposes or any other provision
of this Operating
Agreement, no cash shall be distributed to any Member if the effect thereof
would be to create a
deficit in his Capital Account balance or increase the deficit in his Capital
Account below the
sum of (1) the amount (if any) which he is required to contribute to the
Company and (2) said
Member’s share of gain which the Company would recognize upon a sale of its
property for an
amount equal to the balance of the non-recourse debt encumbering it (the
“Company’s Minimum
Gain”), and such cash shall be retained by the Company and shall be distributed
to the Member
at the earliest time or times possible when such distributions will not cause
such a deficit or
increase such a deficit in the distributee’s Capital Account balance.
Notwithstanding the




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provisions of Section 5.2, the following allocations of net profits and net
losses and items thereof shall be made:





	 	(a)	 	If in any taxable year there is a net decrease in the amount of the
Company’s Minimum
Gain, each Member shall be allocated items of the Company’s net profits
for that year
(and, if necessary, subsequent years) equal to that Member’s share of the
net decrease in
the Company’s Minimum Gain (within the meaning of Treasury Regulation
Section
1.704-2(g)(2)). The items to be so allocated shall be determined in
accordance with
Treasury Regulation Section 1.704-2(j). This Section 5.3 is intended to
comply with the
Minimum Gain Chargeback requirement in Treasury Regulation Section
1.704-2 and
shall be interpreted consistently therewith.
	 
	 	(b)	 	If during any taxable year a Member unexpectedly receives any
adjustments, allocations
or distributions described in Treasury Regulation Section
1.704-l(b)(2)(ii)(d)(4), (5), or
(6), then items of net profits shall be specially allocated to each
Member in an amount
and manner sufficient to eliminate, to the extent required by Treasury
Regulation Section
1.704-(l)(b)(2)(ii)(d), the deficit in the Capital Account of such Member
as quickly as
possible, provided that an allocation pursuant to this Section 5.3(b)
shall be made only if
and to the extent that such Member has an adjusted Capital Account
deficit after all other
allocations provided for in this Article 5 have been tentatively made and
as if this Section
5.3(b) were not in this Agreement. This Section 5.3(b) is intended to
comply with the
Qualified Income Offset requirements in Treasury Regulation
Section 1.704-
l(b)(2)(ii)(d) and shall be interpreted consistently therewith.





     It is the intent of the Members that the allocations provided for in this
Operating Agreement have “substantial economic effect,” as that term is
defined in Section 704(b) of the Code. Notwithstanding anything in this
Section 5.3 to the contrary, nothing contained in this Section 5.3 shall serve
to restrict any distribution by the Company to any Member.



5.4 Tax Allocations. Subject to Section 5.6, items of income, gain, loss and
deduction of the
Company will be allocated for federal income tax purposes for each Fiscal Year,
as nearly as is
practicable, in accordance with the manner in which corresponding items of
Profits and Losses
were allocated among the Members for such Fiscal Year. To the extent
possible, principles
identical to those that apply to allocations for federal income tax purposes
will apply for state
and local income tax purposes.




5.5 Transfer. Except as otherwise provided in Section 5.2, if an Ownership Interest is
transferred during any Fiscal Year (whether by Transfer or liquidation of an
Ownership Interest,
or otherwise), the books of the Company will be closed as of the effective date
of Transfer. The
Profits or Losses attributed to the period from the first day of such Fiscal
Year through the
effective date of Transfer will be allocated to the Transferor, and the Profits
or Losses attributed
to the period commencing on the effective date of Transfer will be allocated to
the Transferee.
In lieu of an interim closing of the books of the Company and with the
agreement of the
Transferor and Transferee, the Company may agree to allocate Profits and Losses
for such Fiscal
Year between the Transferor and Transferee based on a daily proration of items
for such Fiscal
Year or any other reasonable method of allocation (including an allocation of
extraordinary





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Company items, as determined by the Company, based on when such items are
recognized for federal income tax purposes).




5.6 Contributed Property. All items of income, gain, loss and deduction with
respect to property contributed (or deemed contributed) to the Company will,
solely for tax purposes, be allocated among the Members as required by Section
704(c) of the Code so as to take into account the variation between the tax
basis of the property and its Fair Market Value at the time of contribution.
For example, if there is built-in gain with respect to contributed property,
upon the Company’s sale of that property the pre-contribution taxable gain (as
subsequently adjusted under the Section 704(c) Regulations during the period
such property was held by the Company) would be allocated to the contributing
Member (and such pre-contribution gain would not again create a Capital Account
adjustment since the property was credited to the Capital Account upon
contribution at its Fair Market Value). Except as limited by the following
sentence, the allocation of tax items with respect to Section 704(c) property
to Members not contributing such property will, to the extent possible, be
equal to the allocation of the corresponding book items made to such
noncontributing Members with respect to such property. If book allocations of
cost recovery deductions (such as depreciation or amortization) exceed the tax
allocations of those items so that the ceiling rule of the Section 704(c)
Regulations applies, any curative or remedial allocations of tax items will be
made as the Company may determine. All tax allocations made under this
provision will be made in accordance with Section 704(c) of the Code and the
Section 704(c) Regulations.




5.7 Tax Credits. Any tax credit, and any tax credit recapture, will be allocated
to the Members in the same ratio that the federal income tax basis of the asset
(to which such tax credit relates) is allocated to the Members under the
Section 46 Regulations, and if no basis is allocated, in the same manner as
Profits are allocated to the Members under Section 5.2.




ARTICLE 6: DISTRIBUTIONS




6.1 Pro-rata Distributions. The Company will make distributions to the Members
in proportion to their Ownership Interests. Any Net Sales Cash that is realized
incident to the Dissolution and Liquidation of the Company will be distributed
as provided in Article 12, with any Net Sales Cash that is realized other than
incident to the Dissolution and Liquidation of the Company to be distributed in
accordance with this Section 6.1.




6.2 Non-Pro-rata Distributions. Unless the Members otherwise unanimously agree,
the Members intend that all Distributions will be made to the Members in
proportion to their Ownership Interests. In the event any Distribution is not
made in proportion to their Ownership Interests without the unanimous consent
of the Members, any excess Distribution to a Member will be treated as an
advance or loan made by the Company to such Member, payable to the Company with
interest and on demand.




6.3 Payment. Any Distribution will be made to a Member only if such Person owns
an Ownership Interest on the date of Distribution, as reflected on the books of
the Company.





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6.4 Withholding. If required by the Code or by state or local law, the
Company will withhold any required amount from Distributions to a Member for payment to the
appropriate taxing authority. Any amount so withheld from a Member will be treated as a
Distribution by
the Company to such Person. Each Member agrees to timely file any agreement
that is required
by any taxing authority in order to avoid any withholding obligation that would
otherwise be
imposed on the Company.




6.5 Distributions and Limitation. Unless the Members unanimously agree
otherwise, the
Company will make distributions to its Members no later than forty five (45)
days after the end
of each fiscal quarter of (a) amounts necessary to pay income tax at a rate of
40% of taxable
income allocated to each Member for each fiscal quarter and (b) 100% of Excess
Cash Flow (as
defined below), determined on a fiscal quarter basis. Notwithstanding the
foregoing, the
distributions to Members shall not be in excess of that entitled to be made
pursuant to any
currently existing indenture or credit facility entered into by the Company,
provided that each
Member has agreed in writing to enter into such facility. As used herein,
“Excess Cash Flow”
means EBITDA less (i) management fees, (ii) capital expenditures approved by
the Managers
and actually paid, (iii) interest, (iv) tax distributions actually paid to
Members within forty five
(45) days after the end of each fiscal quarter, (v) scheduled principal
payments and (vi) required
offers to repurchase notes pursuant to any currently existing credit facility
entered into by the
Company.




ARTICLE 7: MEETINGS OF MEMBERS




7.1 Annual Meeting. Unless the Company determines (whether by vote or
otherwise) that
an annual meeting is not necessary or desirable, the annual meeting of the
Members will be held
on the second Tuesday of April in each year at 9:00 a.m. (local time) by Notice
to all Members.
The purpose of the annual meeting is to review the Company’s operations for the
preceding
Fiscal Year and to transact such business as may come before the meeting. The
failure to hold
any annual meeting has no adverse effect on the continuance of the Company.




7.2 Special Meetings. Special meetings of the Members, for any purpose or
purposes, may
be called by any Member or Members owning at least ten percent (10%) of the Ownership
Interests held by all Members by notice to all other Members.




7.3 Place. The Members calling the meeting may designate any place as the place of
meeting for any meeting of the Members. If no designation is made, or if a
special meeting is
otherwise called, the place of meeting will be the Company’s executive offices
in Colorado.




7.4 Notice. Notice of any annual meeting determined by resolution of the
Members or of any
special meeting must be given not less than 5 days nor more than 30 days before
the date of the
meeting. Such notice must state the place, day, and hour of the meeting and,
in the case of a
special meeting, the purpose for which the meeting is called.




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7.5 Waiver of Notice. Any Member may waive, in writing, any notice required to
be given
to such Member, whether before or after the time stated in such notice. Any
Member who signs
minutes of action (or written consent or agreement) will be deemed to have
waived any required
notice with respect to such action.




7.6 Record Date. For the purpose of determining Members entitled to notice of
or to vote at
any meeting of Members, the date on which notice of the meeting is first given
will be the record
date for the determination of Members. Any such determination of Members
entitled to vote at
any meeting of Members will apply to any adjournment of a meeting.




7.7 Quorum. A quorum at any meeting of Members shall consist of Members
owning at
least 50% of the Ownership Interests held by all Members. Any meeting at which
a quorum is
not present may adjourn the meeting to another place, day and hour without
further notice.




7.8 Manner of Acting. If a quorum is present, the affirmative vote of Members
as set forth
in Article 4 will be the act of the Company.




7.9 Proxies. At a meeting of the Members, a Member may vote in person or by
written
proxy given to another Member. Such proxy must be signed by the Member or by
a duly
authorized attorney-in-fact and filed with the Company before or at the time of
the meeting. No
proxy will be valid after eleven months from the date of its signing unless
otherwise provided in
the proxy. Attendance at the meeting by the Member giving the proxy will
revoke the proxy
during the period of attendance.




7.10 Meetings by Telephone. The Members may participate in a meeting by means of
conference telephone or similar communications equipment by which all Members
participating
in the meeting can hear each other at the same time. Such participation will
constitute presence
in person at the meeting and waiver of any required notice.




7.11 Action Without a Meeting. Any action required or permitted to be taken at
a meeting of
Members under this Article 7 may be taken without a meeting if the action is
evidenced by one
or more written consents describing the action taken, signed by Members owning
total
Ownership Interests sufficient for the particular action as set forth in
Article 4. Action so taken
is effective when sufficient Members approving the action have signed the
consent, unless the
consent specifies a later effective date. Notice of the action must be provided
to all members.




ARTICLE 8: LIABILITY OF A MEMBER




8.1 Limited Liability. Unless otherwise provided in the Act, the Articles or
an agreement
signed by the Member to be subjected to any individual liability, no Member of
the Company is
individually liable for the debts or liabilities of the Company.




8.2 Liability to Company. Each Member is liable to the Company for any Capital
Contribution or Distribution that has been wrongfully or erroneously returned
or paid to such
Person in violation of the Act, the Articles or this Agreement.




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ARTICLE 9: INDEMNIFICATION




9.1 Indemnification. Except with respect to any actions or omissions
described in Section
14.10 and the last sentence of Sections 4.4 and 4.5, the Company will
indemnify, defend and
hold harmless any Person who was or is a party (or is threatened to be made a
party) to any
Proceeding by reason of the fact that such Person was a Member, or agent or
representative
thereof, a Manager, employee or agent of the Company to the fullest extent
permitted by the Act.
Any such indemnification will apply to any Liability actually and reasonably
incurred in
connection with the defense or settlement of the Proceeding.




9.2 Expense Advancement. With respect to the expenses actually and reasonably
incurred
by a Member or Manager who is a party to a Proceeding, the Company shall
provide funds to
such Person in advance of the final disposition of the Proceeding if the Person
furnishes the
Company with such Person’s written affirmation of a good-faith belief that such
Person has met
the standard of conduct described in the Act, and such Person agrees in writing
to repay the
advance if it is subsequently determined that such Person has not met such
standard of conduct.




9.3 Insurance. The indemnification provisions of this Article do not limit a
Member’s or
Manager’s right to recover under any insurance policy or other financial
arrangement by the
Company (including any self-insurance, trust fund, letter of credit, guaranty
or surety). If, with
respect to any Liability, any Member or Manager receives an insurance or other
indemnification
payment which, together with any indemnification payment made by the Company,
exceeds the
amount of such Liability, then such Member or Manager will immediately repay
such excess to
the Company.




ARTICLE 10: ACCOUNTING AND REPORTING




10.1 Fiscal Year. For income tax and accounting purposes, the Fiscal Year of
the Company
will end on the last Sunday in April of each year (unless otherwise required by the Code).




10.2 Accounting Method. For accounting purposes, the Company will use generally
accepted accounting principles.




10.3 Tax Elections. The Company will have the authority to make such tax
elections, and to
revoke any such election, as the Managers may from time to time determine.




10.4 Returns. The Company will cause the preparation and timely filing of all
tax returns
required to be filed by the Company pursuant to the Code, as well as all other
tax returns
required in each jurisdiction in which the Company does business.




10.5 Reports. The Company will furnish a Profit or Loss statement and a
balance sheet to
each Member within a reasonable time after the end of each fiscal quarter. The
Company books
will be closed at the end of each Fiscal Year and audited financial statements
prepared showing
the financial condition of the Company and its Profits or Loses from
operations. Copies of these
statements will be given to each Member. In addition, as soon as is practicable
after the close of




11









 








each Fiscal Year (and in any event within 90 days following the end of each
Fiscal Year), the Company will provide each Member with all necessary tax
reporting information.




10.6 Books and Records. The records of the Company will be kept at the
Company’s
business office in Colorado, and will be available for inspection and coping by
any Member at
such Person’s expense, during ordinary business hours.




10.7 Information. Any Member has the right to inspect and copy the Company
books and
records as provided in Section 10.6 and to have a formal accounting of Company
affairs
whenever circumstances render it just and reasonable. In addition, subject
to reasonable
standards as established by the Company from time to time, and upon reasonable
demand for any
purpose reasonably related to the Member’s interest as a Member, any Member has
the right to
obtain from the Company correct and complete information relating to the state
of the
Company’s business and financial condition.




10.8 Banking. The Company may establish one or more bank or financial accounts
and safe
deposit boxes. The Company may authorize one or more individuals to sign
checks on and
withdraw funds from such bank or financial accounts and to have access to such
safe deposit
boxes, and may place such limitations and restrictions on such authority as the
Company deems
advisable.




10.9 Tax Matters Partner. Until further action by the Company, Casino America of
Colorado is designated as the tax matters partner under Section 6231(a)(7) of
the Code. The tax
matters partner will be responsible for notifying all Members of ongoing
proceedings, both
administrative and judicial, and will represent the Company throughout any such
proceeding.
The Members will furnish the tax matters partner with such information as it
may reasonably
request to provide the Internal Revenue Service with sufficient information to
allow proper
notice to the Members. If an administrative proceeding with respect to a
partnership item under
the Code has begun, and the tax matters partner so requests, each Member will
notify the tax
matters partner of its treatment of any partnership item on its federal income
tax return, if any,
which is inconsistent with the treatment of that item on the partnership return
for the Company.
Any settlement agreement with the Internal Revenue Service will be binding upon
the Members
only as provided in the Code. The tax matters partner will not bind any other
Member to any
extension of the statute of limitations or to a settlement agreement without
such Member’s
written consent. Any Member who enters into a settlement agreement with
respect to any
partnership item will notify the other Members of such settlement agreement and
its terms within
30 days from the date of settlement If the tax matters partner does not file
a petition for
readjustment of the partnership items in the Tax Court, Federal District Court
or Claims Court
within the 90-day period following a notice of a final partnership
administrative adjustment, any
notice partner or 5-percent group (as such terms are defined in the Code) may
institute such
action within the following 60 days. The tax matters partner will timely
notify the other
Members in writing of its decision. Any notice partner or 5-percent group will
notify any other
Member of its filing of any petition for readjustment.





12









 








10.10 No Partnership. The classification of the Company as a partnership will
apply only for federal (and, as appropriate, state and local) income tax
purposes. This characterization, solely, for tax purposes, does not create or
imply a general partnership between the Members for state law or any other
purpose. Instead, the Members acknowledge the status of the Company as a
limited liability company formed under the Act.




ARTICLE 11: DISSOLUTION OF THE COMPANY




11.1 Dissolution. Dissolution of the Company will occur only upon the
happening of any of
the following events:





	(a)	 	An event of Withdrawal (as defined in Section 11.2) of a Member, unless
there is at least
one remaining Member (including any Transferee admitted as a substitute
Member);
	 
	(b)	 	By unanimous agreement of the Members; or
	 
	(c)	 	December 31,2096.





11.2 Events of Withdrawal. An event of Withdrawal of a Member occurs when any
of the
following occurs:





	(a)	 	With respect to any Member, upon the Transfer of all of such Member’s
Ownership
Interest not approved by a majority of the Members (which Transfer is
treated as a
resignation);
	 
	(b)	 	With respect to any Member, upon the voluntary withdrawal (including any
resignation
or retirement in contravention of Section 4.4) of the Member by notice to
all other
Members;
	 
	(c)	 	With respect to any Member that is a corporation, upon filing of articles
of dissolution of
the corporation;
	 
	(d)	 	With respect to any Member that is a partnership or a limited liability
company, upon
dissolution of such entity;
	 
	(e)	 	With respect to any Member who is an individual, upon either the death or
retirement of
the individual, or upon such Person’s insanity or the entry by a court of
competent
jurisdiction of an order adjudicating the individual to be incompetent to
manage such
individual’s person or estate;
	 
	(f)	 	With respect to any Member that is a trust, upon termination of the trust;
	 
	(g)	 	With respect to any Member that is an estate, upon final distribution of
the estate’s
Ownership Interest;
	 
	(h)	 	Any other event which terminates the continued membership of a
Member in the Company;




13









 






	(i)	 	With respect to any Member, the bankruptcy of the Member, so long
as there is one or more remaining Members.





     Within 30 days following the happening of any event of Withdrawal with
respect to a Member, such Member must give notice of the date and the nature of
such event to the Company. Any Member failing to give such notice will be
liable in damages for the consequences of such failure as otherwise provided in
this Agreement. Upon the occurrence of an event of Withdrawal with respect to a
Member, such Member will cease to have voting rights under Article 4, and such
Member’s Ownership Interest will be deemed transferred to such Member’s
Transferee or other successor in interest (which Person, unless already a
Member in such capacity, will have only the limited rights of a Transferee as
set forth in Section 13.6, unless and until admitted as a substitute Member).



11.3 Bankruptcy. Notwithstanding anything else to the contrary contained
herein or in Section 7-80-801(l)(c) of the Act, the bankruptcy of a Member
will not dissolve the Company. The bankruptcy of a Member will be deemed to
occur when such Person: (a) files a voluntary petition in bankruptcy, (b) is
adjudged a bankrupt or insolvent, or has entered against such Person an order
for relief in any bankruptcy or insolvency proceeding, (c) files a petition or
answer seeking for such Person any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute,
law or regulation, (d) files an answer or other pleading admitting or failing
to contest the material allegations of a petition filed against such Person in
any proceeding of this nature, or (e) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of all or any substantial
part of such Person’s properties. In addition, the bankruptcy of a Member will
be deemed to occur if any proceeding filed against a Member seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation is not
dismissed within 120 days or if the appointment without the Member’s consent
(or acquiescence of a trustee, receiver or liquidator of the Member or of all
or any substantial part of such Person’s properties) is not vacated or stayed
within 90 days (or if after the expiration of any stay, if the appointment is
not vacated within 90 days).




ARTICLE 12: LIQUIDATION




12.1 Liquidation. Upon Dissolution of the Company, the Company will
immediately proceed to wind up its affairs and liquidate. The Managers will
appoint a liquidating trustee. The winding up and Liquidation of the Company
will be accomplished in a businesslike manner as determined by the liquidating
trustee and this Article 12. A reasonable time will be allowed for the orderly
Liquidation of the Company and the discharge of liabilities to creditors so as
to enable the Company to provide for any losses attendant upon Liquidation.
Any gain or loss on disposition of any Company assets in Liquidation will be
allocated to Members and credited or charged to Capital Accounts in accordance
with the provisions of Articles 3 and 5. Any liquidating trustee is entitled
to reasonable compensation for services actually performed, and may contract
for such assistance in the liquidation process as such Person deems necessary.
Until the filing of articles of dissolution as provided in Section 12.6, the
liquidating trustee may settle and close the Company’s business, prosecute and
defend suits, dispose of its property,




14









 









discharge or make provision for its liabilities, and make distributions in
accordance with the priorities set forth in Section 12.2.




12.2 Priority of Payment. The assets of the Company will be distributed in
Liquidation of
the Company in the following order:





	(a)	 	First, to non-Member creditors of the Company in order of priority as
provided by law in
payment of unpaid liabilities of the Company to the extent required by
law or under
agreements with such creditors;
	 
	(b)	 	Second, to the setting of any reserves which the Members reasonably deem
necessary for
any anticipated, contingent or unforeseen liabilities or obligations of
the Company arising out of or in connection with the conduct of the Company’s business. At
the expiration of
such period as the Members reasonably deem advisable, the balance thereof
shall be
distributed in accordance with this Section 12.2;
	 
	(c)	 	Third, to any Member for any other loans or debts owing to such Member by
the
Company;
	 
	(d)	 	Fourth, to all Members in proportion to their Capital Account balances to
the extent
allowable under Section 5.3 until their Capital Account balances are
reduced to zero; and
	 
	(e)	 	Fifth, the balance, if any, to all Members in proportion to their
Ownership Interest
percentages under Section 5.2.





12.3 Distribution to Members. Distributions in Liquidation due to the Members
may be
made by either or a combination of the following methods: selling the Company
assets and
distributing the net proceeds, or by distributing the Company assets to the
Members at their net
Fair Market Value in kind. Any liquidating Distribution in kind to the Members
may be made
either by a pro-rata Distribution of undivided interests or, upon the
affirmative Vote of all
Members, by non pro-rata Distribution of specific assets at Fair Market Value
on the effective date of Distribution. Any Distribution in kind may be made subject to, or
require assumption of, liabilities to which such property may be subject, but in the case of any non
pro-rata Distribution only upon the express written agreement of the Member receiving the
Distribution. Each Member hereby agrees to save and hold harmless the other Members from such
Member’s share of any and all such liabilities which are taken subject to or assumed.
Appropriate and customary prorations and adjustments shall be made incident to any Distribution in kind.
The Members will look solely to the assets of the Company for the return of their Capital
Contributions, and if the assets of the Company remaining after the payment or discharge of the debts and
liabilities of the Company are insufficient to return such contributions, they will have no
recourse against any
other Member.




12.4 No Restoration Obligation. Except as otherwise specifically provided in
Article 8,
nothing contained in this Agreement imposes on any Member an obligation to make
a Capital
Contribution in order to restore a deficit Capital Account upon Liquidation of
the Company.
Furthermore, each Member will look solely to the assets of the Company for the
return of such
Member’s Capital Contribution and Capital Account.




15









 








12.5 Liquidating Reports. A report will be submitted with each liquidating
distribution to
Members, showing the collections, disbursements and distributions during the
period which is
subsequent to any previous report. A final report, showing
cumulative collections,
disbursements and distributions, will be submitted upon completion of the
liquidation process.




12.6 Articles of Dissolution. Upon Dissolution of the Company and the
completion of the winding up of its business, the Company will file articles of dissolution (to
cancel its Articles of
Organization) with the Colorado Secretary of State pursuant to the Act. At
such time, the
Company will also file an application for withdrawal of its certificate of
authority in any
jurisdiction where it is then qualified to do business.




ARTICLE 13: TRANSFER RESTRICTIONS




13.1 General Restriction. No Member may Transfer all or any part of its
Ownership Interest
in any manner whatsoever except: (a) to a Permitted Transferee as set forth in
Section 13.3 or (b)
after full compliance with the right of first refusal set forth in Section
13.4, and in either case
only if the requirements of Section 13.5 have also been satisfied. Any other
Transfer of all or
any part of an Ownership Interest is null and void, and of no effect. Any
Member who makes a
Transfer of all of such Member’s Ownership Interest will be treated as
resigning from the
Company on the effective date of such Transfer. Any Member who makes a
Transfer of part
(but not all) of such Member’s Ownership Interest will continue as a Member
(with respect to the
interest retained), and such partial Transfer will not constitute an event of
Withdrawal of such
Member. The rights and obligations of any resigning Member or of any
Transferee of an Ownership Interest will be governed by the other provisions of this Agreement.




13.2 No Member Rights. No Member has the right or power to confer upon any
Transferee
the attributes of a Member in the Company. The Transferee of all or any part of
an Ownership
Interest by operation of law does not, by virtue of such Transfer, succeed to
any rights as a
Member in the Company.




13.3 Permitted Transferee. Subject to the requirements set forth in Section
13.5, a Person
may Transfer all or any part of such Person’s Ownership Interest:





	(a)	 	To an Affiliate of such Person;
	 
	(b)	 	To another Member;
	 
	(c)	 	To the Company;
	 
	(d)	 	To a Person approved by all the Members;
	 
	(e)	 	To another Person as part of a merger, reorganization, consolidation or
sale of all or
substantially all of the assets of a Person that controls any Member; or




16









 












	(f)	 	In the form of a pledge or the granting of a security interest to another
Person or a foreclosure or sale in lieu of foreclosure in connection with
the granting of any such pledge or security interest as described in
Section 13.7.





13.4 Right of First Refusal. Prior to any proposed Transfer of all or any
part of an
Ownership Interest, other than to a Permitted Transferee pursuant to Section
13.3, the Transferor
must obtain a Third Party Offer. For purposes of this Section 13.4, a Transfer
of an Ownership
Interest of a Member shall be deemed to occur upon any change in control of
such Member other
than to a Permitted Transferee pursuant to Section 13.3. The Third Party
Offer must not be
subject to unstated conditions or contingencies or be part of a larger
transaction such that the
price for the Ownership Interest stated in such Third Party Offer does not
accurately reflect the
Fair Market Value (reduced by the amount of associated liabilities) of such
Ownership Interest.
The Third Party Offer must contain a description of all of the consideration,
material terms and
conditions of the proposed Transfer. The Transferor will give notice of the
Third Party Offer to
the Company and all the Members exclusive of Transferees who have not been
admitted as
substitute Members pursuant to Section 4.6 (the “Other Members”) other than the
Transferor,
together with a written offer to sell the Ownership Interest (which is the
subject of the Third
Party Offer) to the Company and the other Members on the same price and terms
as the Third
Party Offer as provided herein. The Company may accept such offer by the
Transferor, in whole
but not in part, by giving notice to the Transferor within 30 days after notice
of such offer.
Unless otherwise agreed, the closing of such sale will be held at the Company’s
registered office
in Colorado on a date to be specified by the Company which is not later than 60
days after the
date of the Company’s notice of acceptance. At the closing, the Company will
deliver the
consideration in accordance with the terms of the Third Party Offer, and the
Transferor will by
appropriate documents assign to the Company the Ownership Interest to be sold,
free and clear
of all liens, claims and encumbrances. Subject to Section 13.5, if the Company
has not accepted
the Third Party Offer and closed the purchase in accordance with this Section
13.4, the Other
Members shall have the right, on a pro rata basis in accordance with the ratio
of their Percentage
Ownership Interests, to purchase, in whole but not in part, the Ownership
Interest of the
Transferor in accordance with the terms of the Third Party Offer by written
notice to the
Transferor within 30 days after the expiration of the thirty-day period for the
Company’s
acceptance. If all of the other Members reject the offer or if the offer is not
closed in accordance
with this Section 13.4, the Transferor will be free for a period of 60 days
after the last day for
such acceptance to sell all, but not less than all, of such Ownership Interest
so offered, but only
to the Third Party for a price and on terms no more favorable to the Third
Party than the Third
Party Offer. If such Ownership Interest is not so sold within such 60-day
period (or within any
extensions of such period agreed to in writing by the Company), all rights to
sell such Ownership
Interest pursuant to such Third Party Offer (without making another offer to
the Company
pursuant to this Section 13.4) will terminate and the provisions of this
Article will continue to
apply to any proposed future Transfer.




13.5 General Conditions on Transfers. No Transfer of an Ownership Interest
after the date
of this Agreement will be effective unless all of the conditions set forth
below are satisfied:





	(a)	 	Unless waived by the Company, the Transferor signs and delivers to the
Company an undertaking in form and substance satisfactory to the Company
to pay all reasonable




17









 






	 	 	expenses incurred by the Company in connection with the Transfer
(including, but not limited to, reasonable fees of counsel and
accountants and the costs to be incurred with any additional accounting
required in connection with the Transfer, and the cost and fees
attributable to preparing, filing and recording such amendments to the
organizational documents or filings as may be required by law);
	 
	(b)	 	Such transfer does not require the registration of such transferred
interest pursuant to any
applicable federal or state securities laws, and the Transferor delivers
to the Company an opinion of counsel for the Transferor satisfactory in form and substance
to the Company
to the effect that the Transfer of the Ownership Interest is in
compliance with the
applicable federal and state securities laws, and a statement of the
Transferee in form and
substance satisfactory to the Company making appropriate representations
and warranties
in respect to compliance with the applicable federal and state securities
laws and as to
any other matter reasonably required by the Company;
	 
	(c)	 	The Company receives an opinion from its counsel that (i) the Transfer
does not cause the Company to lose its classification as a partnership for federal or
state income tax
purposes, and (ii) the Transfer, together with all other Transfers within
the preceding
twelve months, does not cause a termination of the Company for federal or
state income
tax purposes;
	 
	(d)	 	The Transferor signs and delivers to the Company a copy of the assignment
of the
Ownership Interest to the Transferee, together with the Certificates for
Units representing
such Ownership Interest, duly executed for assignment;
	 
	(e)	 	The Transferee signs and delivers to the Company its agreement to be
bound by this
Agreement;
	 
	(f)	 	Such Transfer does not cause the Company to become a “Publicly Traded
Partnership,”
as such term is defined in Sections 469(k)(2) or 7704(b) of the Code;
	 
	(g)	 	Such Transfer does not subject the Company to regulation under the
Investment
Company Act of 1940, the Investment Advisers Act of 1940 or the Employee
Retirement
Income Security Act of 1974, each as amended;
	 
	(h)	 	Such Transfer is in compliance with the Colorado Limited Gaming Act;
	 
	(i)	 	Such Transfer is not made to any Person who lacks the legal
right, power or capacity to own such Interest; and
	 
	(j)	 	The Transfer is in compliance with the other provisions of this
Article.





     Except as the Company and the Transferee may otherwise agree, the
Transfer of an Ownership Interest will be effective as of 12:01 a.m. (Mountain
Time) on the first day of the month following



18









 





     Notwithstanding anything to the contrary expressed or implied in this
Agreement, the sale, assignment, transfer, pledge or other disposition of any
direct or indirect interest in the Company is subject to the laws of the State
of Colorado and the requirements, limitations and decisions of the Colorado
Division of Gaming and the Colorado Limited Gaming Control Commission.



13.6 Rights of Transferees. Any Transferee of an Ownership Interest will on
the effective
date of the Transfer, have only those rights of an assignee as specified in the
Act and this
Agreement unless and until such Transferee is admitted as a substitute Member.
This provision
limiting the rights of a Transferee will not apply if such Transferee is
already a Member;
provided that, any Member who resigns or retires from the Company in
contravention of Section
4.4 will have only the rights of an assignee as specified in the Act and this
Agreement. Any
Transferee of all or any part of an Ownership Interest who is not admitted as a
substitute
Member in accordance with this Agreement has no right (a) to participate or
interfere in the
management or administration of the Company’s business or affairs, (b) to vote
or agree on any
matter affecting the Company or any Member, (c) to require any information on
account of
Company transactions, or (d) to inspect the Company’s books and records. The
only right of a
Transferee of all or any part of an Ownership Interest who is not admitted as a
substitute
Member in accordance with this Agreement is to receive the allocations and
Distributions to
which the Transferor was entitled (to the extent of the Ownership Interest
transferred) and to
receive required tax reporting information. However, each Transferee of all or
any part of an
Ownership Interest (including both immediate and remote Transferees) will be
subject to all of
the obligations, restrictions and other terms contained in the Agreement as if
such Transferee
were a Member. To the extent of any Ownership Interest transferred, the
Transferee or Member
does not possess any right or power as a Member and may not exercise any such
right or power
directly or indirectly on behalf of the Transferee. The Members acknowledge
that these
provisions may differ from the rights of an assignee as set forth in the Act,
and the Members
agree that they intend, to that extent, to vary those provisions by this Agreement.




13.7 Security Interest. The pledge or granting of a security interest, lien or other
encumbrance in or against all or any part of a Member’s Ownership Interest does
not cause the
Member to cease to be a Member or constitute an event of Withdrawal. Upon
foreclosure or sale
in lieu of foreclosure of any such secured interest, the secured party will be
entitled to receive the
allocations and Distributions as to which a security interest has been granted
by such Member.
In no event will any secured party be entitled to exercise any rights under
this Agreement, and
such secured party may look only to such Member for the enforcement of any of
its rights as a
creditor. In no event will the Company have any liability or obligation to any
Person by reason
of the Company’s payment of a Distribution to any secured party as long as the
Company makes
such payment in reliance upon written instructions from the Member to whom such
Distributions
would be payable. Any secured party will be entitled, with respect to the
security interest
granted, only if, the Distributions to which the assigning Member would be
entitled under this
Agreement, and only if, as and when such Distribution is made by the Company.
Neither the
Company nor any Member will owe any fiduciary duty of any nature to a secured
party.
Reference to any secured party includes any assignee or successor-in-interest
of such Person.




19









 








13.8 Regulatory Compliance Restrictions. Notwithstanding anything to the
contrary in this Agreement or elsewhere, the following provisions shall apply.




     The Company shall not issue any voting securities or other voting
interests, except in accordance with the provisions of the Colorado Limited
Gaming Act and the regulations promulgated thereunder. The issuance of any
voting securities or other voting interests shall be deemed not to be issued
and outstanding until (a) the Company shall cease to be subject to the
jurisdiction of the Colorado Limited Gaming Control Commission, or (b) the
Colorado Limited Gaming Control Commission shall, by affirmative action,
validate said issuance or waive any defect in issuance.



     No voting securities or other voting interests issued by the Company and
no interests, claim or charge therein or thereto shall be transferred in any
manner whatsoever except in accordance with the provisions of the Colorado
Limited Gaming Act and the regulations promulgated thereunder. Any transfer in
violation thereof shall be void until (a) the Company shall cease to be
subject to the jurisdiction of the Colorado Limited Gaming Control Commission,
or (b) the Colorado Limited Gaming Control Commission shall, by affirmative
action, validate said transfer or waive any defect in said transfer.



     If the Colorado Limited Gaming Control Commission at any time determines
that a holder of voting securities or other voting interests of this Company
is unsuitable to hold such securities or other voting interests, then the
Company may, within sixty (60) days after the findings of unsuitability,
purchase such voting securities or other voting interests of such unsuitable
Person at the lesser of (i) the cash equivalent of such Person’s investment in
the Company, or (ii) the current market price as of the date of the finding of
unsuitability, unless such voting securities or other voting interests are
transferred to a suitable person (as determined by the Commission) within
sixty (60) days after the finding of unsuitability. Until such voting
securities or other voting interests are owned by Persons found by the
Commission to be suitable to own them, (a) the Company shall not be required
or permitted to pay any dividend or interest with regard to the voting
securities or other voting interests, (b) the holder of such voting securities
or other voting interests shall not be entitled to vote on any matter as the
holder of the voting securities shall not for any purposes be included in the
voting securities or other voting interests of the Company entitled to vote,
and (c) the Company shall not pay any remuneration in any form to the holder
of the voting securities or other voting interests except in exchange for such
voting securities or other voting interests as provided in this paragraph.



ARTICLE 14: GENERAL PROVISIONS




14.1 Amendment. This Agreement may be amended by the unanimous written
agreement of the Members. Any amendment will become effective upon such
approval, unless otherwise provided. Notice of any proposed amendment must be
given at least 5 days in advance of the meeting at which the amendment will be
considered (unless the approval is evidenced by duly signed minutes of action).
Any duly adopted amendment to this Agreement is binding upon, and inures to the
benefit of, each Person who holds an Ownership Interest at the time of such
amendment. Notwithstanding any other provision of this Agreement, with respect
to any Transferee not admitted as a substitute Member, no amendment to Section
5.2 (relating to the




20









 








general allocation rule for allocation of Profits or Losses), Section 6.1
(relating to pro-rata Distributions), Section 12.2 (relating to Distributions
in Liquidation) and Section 14.1 (relating to amendment of this Agreement)
will be effective, nor will such Person be required to make any Capital
Contribution, without such Person’s written consent. Non-Material amendments
relating to this Agreement or that are necessary for compliance with
applicable law may be made by the Managers.




14.2 Unregistered Interests. Each Member (a) acknowledges that the Ownership
Interests
are being offered and sold without registration under The Securities Act of
1933, as amended, or
under similar provisions of state law, (b) represents and warrants that such
Person is an
accredited investor as defined for federal securities laws purposes, (c)
represents and warrants
that it is acquiring an Ownership Interest for such Person’s own account, for
investment, and
with no view to the distribution of the Ownership Interest, and (d) agrees not
to Transfer, or to
attempt to Transfer, all or any part of its Ownership Interest without
registration under the
Securities Act of 1933, as amended, and any applicable state securities laws,
unless the Transfer
is exempt from such registration requirements.




14.3 Waiver of Partition Right. Each Member waives and renounces any right
that such
Person may have prior to Dissolution and Liquidation to institute or maintain
any action for
partition with respect to any real property owned by the Company.




14.4 Waivers Generally. No course of dealing will be deemed to amend or
discharge any
provision of this Agreement. No delay in the exercise of any right will
operate as a waiver of
such right. No single or partial exercise of any right will preclude its
further exercise. A waiver
of any right on any one occasion will not be construed as a bar to, or waiver
of, any such right on
any other occasion.




14.5 Equitable Relief. If any Person proposes to Transfer all or any part of
such Person’s
Ownership Interest in violation of the terms of this Agreement, the Company or
any Member
may apply to any court of competent jurisdiction for an injunctive order
prohibiting such
proposed Transfer except upon compliance with the terms of this Agreement, and
the Company
or any Member may institute and maintain any action or proceeding against the
Person proposing
to make such Transfer to compel the specific performance of this Agreement.
Any attempted
Transfer in violation of this Agreement is null and void, and of no force and
effect. The Person
against whom such action or proceeding is brought waives the claim or defense
that an adequate
remedy at law exists, and such Person will not urge in any such action or
proceeding the claim or
defense that such remedy at law exists.




14.6 Remedies for Breach. The rights and remedies of the Members set forth in this
Agreement are neither mutually exclusive nor exclusive of any right or remedy
provided by law,
in equity or otherwise. The Members agree that all legal remedies (such as
monetary damages)
as well as all equitable remedies (such as specific performance) will be
available for any breach or threatened breach of any provision of this Agreement.





21










 





14.7 Original. This Agreement is signed in two original documents that are to
be delivered to
each initial Member. A photocopy of this Agreement, as signed, will be
delivered to each
substitute or additional Member, and each such photocopy will be deemed to be
an original
document.




14.8 Notices. Any notices (including any communication or delivery) required
or permitted under this Agreement will be in writing and will be addressed to the Members at
their respective addresses, as set forth on the Register of Members maintained by the Company.
All notices may be made by mail, personal delivery, courier service or facsimile machine, and
will be effective upon delivery. Any Member may change such Person’s address by notice to the
Company and each other Member.




14.9 Costs. If the Company or any Member retains counsel for the purpose of
enforcing or preventing the breach or any threatened breach of any provision of this
Agreement or for any other remedy relating to it, then the prevailing party will be entitled to be
reimbursed by the non- prevailing party for all costs and expenses so incurred (including reasonable
attorneys’ fees, costs of bonds, and fees and expenses for expert witnesses) unless the
arbitrator or other trier of fact determined otherwise in the interest of fairness.




14.10 Indemnification. Each Member hereby indemnifies and agrees to hold
harmless the Company and each other Member from any liability, cost or expense arising from
or related to any act or failure to act of such Member which is in violation of this Agreement.




14.11 Partial Invalidity. Wherever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law.
However, if for any reason any one or more of the provisions of this Agreement are held to be
invalid, illegal or unenforceable in any respect, such action will not affect any other provision
of this Agreement.
In such event, this Agreement will be construed as if such invalid, illegal or
unenforceable provision had never been contained in it.




14.12 Entire Agreement. This Agreement, together with the Members Agreement,
contains the entire agreement and understanding of the Members with respect to its
subject matter, and it supersedes all prior written and oral agreements. No amendment of this
Agreement will be effective for any purpose unless it is made in accordance with Section 14.1.




14.13 Benefit. The contribution obligations of each Member will inure solely
to the benefit of the other Members and the Company, without conferring on any other Person any rights of
enforcement or other rights.




14.14 Binding Effect. This Agreement is binding upon, and inures to the benefit of, the
Members and their permitted successors and assigns; provided that, any Transferee will have
only the rights specified in Section 13.6 unless admitted as a substitute
Member in accordance with this Agreement.




14.15 Further Assurances. Each Member agrees, without further consideration,
to sign and deliver such other documents of further assurance as may reasonably be
necessary to effectuate the provisions of this Agreement.




22









 








14.16 Headings. Article and section titles have been inserted for convenience
of reference only. They are not intended to affect the meaning or interpretation of this Agreement.




14.17 Terms. Terms used with initial capital letters will have the meanings specified,
applicable to both singular and plural forms, for all purposes of this
Agreement. All pronouns (and any variation) will be deemed to refer to the masculine, feminine or
neuter, as the identity of the Person may require. The singular or plural include the other, as the
context requires or permits. The word include (and any variation) is used in an illustrative
sense rather than a limiting sense.




14.18 Governing Law; Conflicts. This Agreement will be governed by, and
construed in accordance with, the laws of the State of Colorado (except to the extent
preempted by any federal law or the gaming laws of any state or governmental agency having
jurisdiction over the affairs of any Member). Any conflict or apparent conflict between this
Agreement and the Act will be resolved in favor of this Agreement except as otherwise required by the
Act. The Members have entered into a Members Agreement, dated as of the date of this
Agreement, which Members Agreement contains certain provisions as to the affairs of the Company
and the conduct of its business and which, for purposes of the Act, shall be
considered, together with this Agreement, as an “operating agreement” of the Company.




14.19 Effectiveness. This Agreement shall automatically, without further
action by any of the parties, become effective and enforceable according to its terms, and shall
supersede and replace the First Amended Operating Agreement immediately upon execution hereof.




23









 








         IN WITNESS WHEREOF, the Members have signed this Second Amended and
Restated Operating Agreement of Isle of Capri Black Hawk, L.L.C. as of the
date first set forth above.



	 	 	 
	

	 	CASINO AMERICA OF COLORADO, INC.,
	

	 	a Colorado corporation
	 
	 	 
	

	 	By:  -s- Allan B. Solomon
	

	 	Name: Allan B. Solomon
	

	 	Title: Executive Vice President
	 
	 	 
	

	 	BLACKHAWK GOLD, LTD.,
	

	 	a Nevada corporation
	 
	 	 
	

	 	By:  -s- H. THOMAS WINN
	

	 	Name:  H. THOMAS WINN
	

	 	Title:   PRESIDENT







24









 






APPENDIX I




Ownership Interests




	 	 	 	 	 	 	 
	 	 	Date
	 	Ownership Interests

	1.

	 	April 25, 1997
	 	Casino America of Colorado, Inc.

Blackhawk Gold, Ltd.
	 	51.6%

48.4%
	 
	 	 	 	 	 	 
	2.

	 	July, 1997
	 	Casino America of Colorado, Inc.

Blackhawk Gold, Ltd.
	 	55% 
45%
	 
	 	 	 	 	 	 
	3.

	 	August, 1997
	 	Casino America of Colorado, Inc.

Blackhawk Gold, Ltd.
	 	59.20%

40.80%
	 
	 	 	 	 	 	 
	4.

	 	April, 2003
	 	Casino America of Colorado, Inc.

Blackhawk Gold, Ltd.
	 	57.00%

43.00%
	 
	 	 	 	 	 	 
	5.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	6.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	7.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	8.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	9.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	10.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 







 









 






EXHIBIT “A”




Definitions




	 	 	 
	Act:

	 	The Colorado Limited Liability Company
Act, as amended from time to time.
	 
	 	 
	Affiliate:

	 	An “Affiliate” of a Person means a
Person directly or indirectly
controlling, controlled by or under
common control with such Person. For
this purpose and for purposes of the use
of the term “control” in this Agreement,
control means the possession, direct or
indirect, of the power to direct or
cause the direction of the management
and policies of a Person, whether
through the ownership of voting
securities, by contract or otherwise.
	 
	 	 
	Agreement:

	 	This Second Amended and Restated
Operating Agreement, as amended from
time to time.
	 
	 	 
	Articles:

	 	The Articles of Organization of the
Company as filed under the Act, as
amended from time to time.
	 
	 	 
	Blackhawk Gold:

	 	Blackhawk Gold, Ltd., a Nevada
corporation, and its Permitted
Transferees (provided that any
Transferee will become a substitute
Member only in accordance with the
Agreement).
	 
	 	 
	Capital Account:

	 	The capital account maintained for each
Member under Section 3.5.
	 
	 	 
	Capital Contribution:

	 	Any contribution by a
Member to the Company.
	 
	 	 
	Capital Transaction:

	 	Any sale, exchange, condemnation
(including any eminent domain or similar
transaction), casualty, financing,
refinancing or other disposition with
respect to any real or personal property
owned by the Company which is not in the
ordinary course of business.
	 
	 	 
	Casino America of Colorado:

	 	Casino America of Colorado, Inc., a
Colorado corporation, and its Permitted
Transferees (provided that any
Transferee will become a substitute
Member only in accordance with the
Agreement).
	 
	 	 
	Code:

	 	The Internal Revenue Code of 1986, as
amended from time to time (including
corresponding provisions of subsequent
revenue laws).
	 
	 	 
	Company:

	 	Isle of Capri Black Hawk, L.L.C., as formed under the Articles
and as operating under this Agreement.
	 
	 	 







A-1









 






	 	 	 
	Dissolution:

	 	The dissolution of the Company as
provided in Section 11.1.
	 
	 	 
	Distribution:

	 	A distribution of money or other
property made by the Company with
respect to an Ownership Interest.
	 
	 	 
	Fair Market Value:

	 	As to any property, the price at which a
willing seller would sell and a willing
buyer would buy such property having
full knowledge of the relevant facts, in
an arm’s-length transaction without time
constraints, and without being under any
compulsion to buy or sell, or the value
otherwise agreed by the Members to be
the Fair Market Value.
	 
	 	 
	Fiscal Year:

	 	The fiscal and taxable year of the
Company as determined under this
Agreement, including both 12-month and
short taxable years.
	 
	 	 
	Initial Ownership:

	 	The relative Ownership Interest of the
Members existing upon the execution of
this Agreement entitling the holders
thereof to all the benefits of ownership
in the Company, but which Ownership
Interests may be changed from time to
time as set forth in this Agreement.
	 
	 	 
	Liability:

	 	The obligation to pay any judgment,
settlement, penalty, fine or reasonable
expense (including attorneys’ fees)
incurred with respect to any Proceeding.
	 
	 	 
	Liquidation:

	 	The process of terminating the Company
and winding up its business under
Article 12 after its Dissolution.
	 
	 	 
	Losses:

	 	The Company’s net loss (including
deductions) for any Fiscal Year,
determined under Section 5.1.
	 
	 	 
	Majority In Interest:

	 	More than 50% of the Ownership
Interests.
	 
	 	 
	Member:

	 	A person who is an initial Member of the
Company, or who is subsequently admitted
as a substitute or an additional Member
as provided in this Agreement.
	 
	 	 
	Members Agreement:

	 	The Amended and Restated Members
Agreement, of even date with this
Agreement, between the Company,
Blackhawk Gold, Casino America of
Colorado, Isle of Capri Casinos, Inc.,
and Nevada Gold & Casinos, Inc.
	 
	 	 
	Net Sales Cash:

	 	Cash receipts of the Company from a
Capital Transaction, less payment of
fees or expenses related to the Capital
Transaction.
	 
	 	 
	Notice: 

	 	Written notice (including any
communication or delivery), actually
given pursuant to Section 14.8.







A-2









 






	 	 	 
	Ownership Interest:

	 	With respect to each Person owning an
interest is the Company, all of the
interests of such Person in the Company
(including, without limitation, an
interest in Profits and Losses of the
Company, a Capital Account interest, and
all other rights and obligations of such
Person under this Agreement), expressed
as a percentage (carried to the nearest
one-thousandth of a percent, if other
than an even percentage), as initially
set forth in Section 1.2 and as
subsequently changed in accordance with
this Agreement.
	 
	 	 
	Permitted Transferee:

	 	A person described in Section 13.3 to
whom an Ownership Interest may be
transferred without compliance with a
right of first refusal.
	 
	 	 
	Person:

	 	An individual, corporation, trust,
partnership, limited liability company,
limited liability association,
unincorporated organization, association
or other entity.
	 
	 	 
	Proceeding:

	 	Any threatened, pending or completed
claim, action, suit or proceeding,
whether formal or informal, and whether
civil, administrative, investigative or
criminal.
	 
	 	 
	Profits:

	 	The Company’s net profit (including
income and gains) for any Fiscal Year,
determined under Section 5.1.
	 
	 	 
	Profits Interest:

	 	Each Member’s (or Transferee’s)
percentage interest (carried to the
nearest one-thousandth of a percent, if
other than an even percentage), in the
Profits of the Company, determined under
Section 5.2.
	 
	 	 
	Regulations:

	 	The Treasury Regulations (including
temporary regulations) promulgated under
the Code, as amended from time to time
(including corresponding provisions of
succeeding regulations).
	 
	 	 
	Third Party:

	 	With respect to any Member, a Person
other than an Affiliate.
	 
	 	 
	Third Party Offer:

	 	A bona  fide, non-collusive, binding,
arm’s-length written offer from a Third
Party stated in terms of U.S. dollars.
	 
	 	 
	Transfer:

	 	A sale, exchange, assignment or other
disposition of Ownership Interest,
whether voluntary or by operation of
law.
	 
	 	 
	Transferee:

	 	A person to whom an Ownership Interest
is transferred in compliance with this
Agreement.
	 
	 	 
	Transferor:

	 	A person who transfers an Ownership
Interest in compliance with this
Agreement.
	 
	 	 







A-3









 






	 	 	 
	Withdrawal:

	 	The occurrence of an event with respect
to a Member which terminates membership
in the Company, as provided in Section
11.2.







A-4