Exhibit 10.4


 


FIFTH AMENDMENT


TO


OPERATING AGREEMENT


OF


DETROIT ENTERTAINMENT, L.L.C.,


a Michigan limited liability company


 


                THIS FIFTH
AMENDMENT TO OPERATING AGREMENT (“Fifth Amendment”) is made and entered into as
of October 31, 2003, by and between Circus Circus Michigan, Inc., a Michigan
corporation (“Circus”) and Atwater Casino Group, L.L.C., a Michigan limited
liability company (“ACG”) with reference to the following:


 


                A.            Circus and ACG are parties to an
Operating Agreement of Detroit Entertainment, L.L.C. dated as of October 7,
1997, as amended (“Operating Agreement”) in connection with the formation,
governance and operation of Detroit Entertainment, L.L.C., a Michigan limited
liability company (the “Company”).


 


                B.            The parties desire to amend the Operating
Agreement of the Company to reflect changes agreed to by the parties regarding
the Temporary Casino, permanent casino, and the construction and costs thereof,
and distributions to Members.


 


                NOW, THEREFORE,
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:


 


                1.             Project Cost.  Consistent with the Revised Development
Agreement dated as of August 2, 2002 (“Revised Development Agreement”), the
Temporary Casino located at 2901 Grand River Avenue, in Detroit, Michigan,
shall be expanded into the permanent hotel/casino and related facilities
referred to as the Project in the Operating Agreement.  The parties acknowledge that as of October
31, 2003, the Project Cost shall be deemed to be $339,191,803.67.  The Members shall review the Project Cost on
July 31 and January 31 of each year until the Completion of Construction of the
Project.  As provided in Section
4.04(a), Circus shall contribute to the capital of the Company an amount equal
to twenty percent (20%) of the Project Cost, as determined each July 31 and
January 31, but not to exceed twenty percent (20%) of the first Seven Hundred
Million and No/100 Dollars ($700,000,000.00) of Project Cost.


 


                2.             Project Financing.  Upon resolution of the Lac Vieux Desert Band
of Lac Superior Chippewa Indians v. the City of Detroit, et al., in United
States District Court for the Western District of Michigan, Case Number 02-1893
and 02-1996 and all related proceedings (“Lac Vieux Case”) allowing the Company
to proceed with completion of the permanent casino Project and specifically
ensuring that the Company may continue to operate its casino pursuant to the
Revised Development Agreement without having to participate in a casino
development 


 


 


 

















 


 


selection process or its equivalent, Circus shall use its good faith
best efforts to secure financing for eighty percent (80%) of the approved
Project Budget (which budget shall include the Project Cost to date and the
amount required to complete the permanent casino Project, but which Project
Budget shall not exceed $700,000,000.00), as provided in 4.04(b) of the
Operating Agreement.


 


                3.             Management Fees.  A Management Fee will not commence to accrue
or to be paid until Completion of Construction of the permanent casino Project,
as provided in Section 4.05(d) of the Operating Agreement.


 


                4.             Distributions.


 


                                (a)           Until Completion of Construction of
the permanent casino Project, the Management Committee shall review on a
quarterly basis the cash flow of the Company and, consistent with prudent
business practices, shall determine the amount, if any, of funds available for
designation and distribution as Distributable Cash.


 


                                (b)           In determining Distributable Cash,
the Management Committee shall set aside, as a reserve to be used by the
Company, an amount sufficient to pay, as the same are projected to become due
during the upcoming quarter, (i) principal and interest expense to be paid
under any credit facilities, (ii) capital expenditures, (iii) Revised
Development Agreement/Indemnity Agreement payments to the City of Detroit, (iv)
working capital and similar reserves, (v) sinking fund payments to retire the
approximately $50,000,000.00 in Economic Development Revenue Bonds (Waterfront
Reclamation and Casino Development Project) issued by the Economic Development
Corporation of the City of Detroit due May 2009, and (vi) Tax Distributions as
determined by the Management Committee.


 


                                (c)           Notwithstanding the foregoing, it is
expressly agreed and understood that no distributions will be made (except Tax
Distributions) should the Company face a “reselection” of its current casino
development or otherwise face being subjected to a procedure or extraordinary
event which substantially impairs its ability to continue to operate its casino
pursuant to the Revised Development Agreement.


 


                5.             Defined Terms.  Except as otherwise expressly set forth
herein, any defined term used in this Fifth Amendment shall have the same
meaning set forth in the Operating Agreement.


 


                6.             Entire Amendment.  Except as amended or modified hereby, the
Operating Agreement shall remain unmodified and in full force and effect.


 


                7.             Counterparts.  This Fifth Amendment may be executed in
counterparts, each of which when executed and delivered by all parties and
named signatories below, shall have the force and effect of the original, but
all such counterparts shall constitute one and the same instrument.


 


 


 


2

















 


 


                IN WITNESS WHEREOF,
the undersigned have executed this Fifth Amendment as of the date first set
forth above.


 


	
  Circus
  Circus Michigan, Inc.

  	
   

  	
  Atwater Casino Group, L.L.C.

  
	
  a Michigan corporation

  	
   

  	
  a Michigan limited
  liability company, Member

  
	
   

  	
   

  	
   

  
	
  /s/ GLENN SCHAEFFER

  	
   

  	
  By: 

  	
  Atwater Entertainment Associates, L.L.C.

  	 

	
  By: Glenn Schaeffer

  	
   

  	
   

  	
  a Michigan limited liability company, Member

  	 

	
  Its: President

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  /s/ VIVIAN CARPENTER

  	 

	
   

  	
   

  	
   

  	
  By: Vivian Carpenter

  	 

	
   

  	
   

  	
   

  	
  Its: Manager

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  Z.R.X., L.L.C.,

  	 

	
   

  	
   

  	
   

  	
  a Michigan limited liability company, Member

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  By:

  	
  Z.L.M. Corporation,

  	 

	
   

  	
   

  	
   

  	
   

  	
  a Michigan corporation

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  /s/ TOM CELANI

  	 

	
   

  	
   

  	
   

  	
   

  	
  By: Tom Celani

  	 

	
   

  	
   

  	
   

  	
   

  	
  Its:  Member

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  /s/ MARIAN ILITCH

  	 

	
   

  	
   

  	
   

  	
   

  	
  By: Marian Ilitch

  	 

	
   

  	
   

  	
   

  	
   

  	
  Its:  Member

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

							



 


 


 


 


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