OPERATING AGREEMENT



                                       OF



                      BLACK HAWK/JACOBS ENTERTAINMENT, LLC



                      A COLORADO LIMITED LIABILITY COMPANY



                        EFFECTIVE AS OF NOVEMBER 12, 1996



{PAGE}



     THIS OPERATING AGREEMENT made as of the 12th day of November, 1996 for

Black Hawk/Jacobs Entertainment, LLC (the "Company") by and among Black Hawk

Gaming & Development Company, Inc., a Colorado corporation ("Black Hawk"), and

BH Entertainment Ltd., an Ohio limited liability company ("Entertainment"), and

Diversified Opportunities Group Ltd., an Ohio limited liability company

("Diversified").



                                    RECITALS

                                    --------



     WHEREAS, concurrently herewith, Black Hawk and Diversified are entering

into an Amended and Restated Purchase Agreement (the "Purchase Agreement");



     WHEREAS, it is a condition to the closing of the transactions contemplated

by the Purchase Agreement that the parties hereto form the Company on the terms

and subject to the conditions hereinafter set forth;



     WHEREAS, the parties desire to form the Company as a limited liability

company under the laws of the State of Colorado to develop and manage a casino

project (the "Project") in the City of Black Hawk, County of Gilpin, State of

Colorado; and



     WHEREAS, the parties desire to enter into this Operating Agreement to

reflect certain agreements among them and to replace and supersede that certain

Joint Venture Agreement dated December 15, 1994, by and between Black Hawk and

Jacobs Investments, Inc.; Entertainment and Diversified being the assignees of

Jacobs Investments, Inc.



     NOW, THEREFORE, in consideration of the foregoing, of mutual promises of

the parties hereto, and of other good and valuable consideration, the receipt

and sufficiency of which are hereby acknowledged, the parties hereby mutually

agree as follows:



                                    ARTICLE I



                                   DEFINITIONS

                                   -----------



     The following terms used in this operating Agreement shall have the

following meanings (unless otherwise expressly provided herein):



     "Act" shall mean the Colorado Limited Liability Company Act.

      ---



     "Affiliate" means, with respect to any Person, (i) any Person directly or

      ---------

indirectly controlling, controlled by, or under common control with such Person,

(ii) any Person owning or controlling ten percent (10%) or more of the

outstanding voting interests of such Person, (iii) any officer, director, or

general partner of such Person, or (iv) any Person who is an officer, director,

general partner, trustee, or holder of ten percent (10%) or more of the voting

interests of any Person described in clauses (i) through (iii) of this sentence.

For purposes of this definition, the term "controls," "is controlled by," or "is

under common control with" shall mean the possession, direct or indirect, of the

power to direct or cause



{PAGE}



the direction of the management and policies of a Person or Entity, whether

through the ownership of voting securities, by contract or otherwise.



     "Annual Operating Plan" shall have the meaning ascribed in Section 5.11 of

      ---------------------

this Operating Agreement.



     "Appraisal" shall mean the following process for determining the fair

      ---------

market value of an interest in the Company: The fair market value of an interest

in the Company shall be the value agreed upon by the Members, or if an agreement

cannot be reached within thirty (30) days after such value is requested by any

Member (the "Determination Date"), then within twenty (20) business days

thereafter each Member shall select a reputable qualified appraiser, each such

appraiser having no less than ten (10) years experience in the gaming industry

and each being familiar with the prices then being paid for comparable

businesses. If either Member shall fail to designate its appraiser within said

twenty (20) business day period and thereafter shall fail to do so within three

(3) days after written notice by the other party requesting such designation,

then such appraiser shall be appointed by the office of the American Arbitration



Association. The two appraisers shall separately complete their appraisals

within thirty (30) days after the date that the later of them is designated. The

two appraisers shall then meet together with the Members or their

representatives, and at such meeting each appraiser shall present to the other a

sealed letter setting forth the appraiser's judgment as to the fair market value

of the interest in the Company and attempt to persuade all Members to reach

agreement as to the value. If all of the Members (or their representatives) do

not reach agreement, and if the higher amount set forth in either such letter

shall not exceed one hundred ten percent (110%) of the lower amount, then the

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC