EXHIBIT 3.26
AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
LOUISIANA-I GAMING,
A LOUISIANA PARTNERSHIP IN COMMENDAM
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE REGULATORY
AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS AGREEMENT OF LIMITED
PARTNERSHIP OR THE LIMITED PARTNERSHIP INTERESTS PROVIDED FOR HEREIN. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE LIMITED PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), IN RELIANCE UPON THE
EXEMPTIONS SET FORTH IN SECTION 4(2) THEREOF AND IN RULE 506 OF REGULATION D
PROMULGATED THEREUNDER; THE ISSUER IS UNDER NO OBLIGATION TO REGISTER THE
LIMITED PARTNERSHIP INTERESTS UNDER THE 1933 ACT.
A LIMITED PARTNERSHIP INTEREST MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE 1933
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER THAT SUCH
REGISTRATION IS NOT REQUIRED. ADDITIONAL RESTRICTIONS ON THE TRANSFER OF
LIMITED PARTNERSHIP INTERESTS ARE CONTAINED IN SECTION 6 OF THIS AGREEMENT.
BASED UPON THE FOREGOING, A PURCHASER OF A LIMITED PARTNERSHIP INTEREST MUST BE
PREPARED TO BEAR THE ECONOMIC RISK OF INVESTMENT THEREIN FOR AN INDEFINITE
PERIOD OF TIME.
AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
LOUISIANA-I GAMING,
A LOUISIANA PARTNERSHIP IN COMMENDAM
THIS AMENDED AND RESTATED PARTNERSHIP AGREEMENT (this "Agreement") of
Louisiana-I Gaming, a Louisiana Partnership in Commendam (the "Partnership"), is
entered into as of ___________, 1993 by and among Louisiana Gaming Enterprises,
Inc., a Louisiana corporation (the "General Partner"), Boomtown, Inc., a
Delaware corporation ("Boomtown") as a limited partner, Eric Skrmetta
("Skrmetta"), as a limited partner and those other persons who have executed
this Agreement as limited partners (collectively with Boomtown, the partners in
commendam or "Limited Partners"). The General Partner and the Limited Partners
are referred to collectively as the "Partners" and each individually as a
"Partner."
WITNESSETH:
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WHEREAS, the original Partnership Agreement of Louisiana-I Gaming, a
Louisiana Partnership in Commendam, was entered into on April 20, 1993; and
WHEREAS, the parties hereto desire to amend and restate in their entirety
the Partnership Agreement of Louisiana-I Gaming, a Louisiana Partnership in
Commendam, to set forth their understandings with respect to the business
affairs of the Partnership and to provide for the admission of Eric Skrmetta as
a limited partner;
NOW, THEREFORE, in consideration of the mutual promises made herein, the
parties intending to be legally bound, hereby agree that the Partnership
Agreement is hereby amended and restated in its entirety to read as follows:
SECTION 1
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DEFINITIONS
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As used in this Agreement:
Act shall mean the Louisiana Partnership Law, Louisiana Civil Code Articles
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2801-2848.
Additional Capital Contribution shall mean any contribution to the capital
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of the Partnership (including the initial capital contribution of a person
admitted as an
additional Limited Partner pursuant to Section 3.3) made on a date subsequent to
the date of this Agreement. Each Additional Capital Contribution shall be
deemed to be made as of the close of business on the date thereof.
Authorized Transferee shall have the meaning set forth in Section
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6.1(a)(iv).
Bankruptcy shall mean, with respect to a Partner, the commencement of any
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bankruptcy or insolvency case or proceeding against such Partner which shall
continue and remain unstayed and in effect for a period of 60 consecutive days,
or the filing by such Partner of a petition, answer or consent seeking relief
under any applicable Federal or state bankruptcy, insolvency or similar law.
Capital Account shall mean, for each Partner, a separate account that is:
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(a) increased by (i) the amount of such Partner's Capital Contribution
and (ii) allocations of Profits to such Partner pursuant to Section 4.2;
(b) decreased by (i) the amount of cash distributed to such Partner by
the Partnership, (ii) the fair market value of any other property distributed to
such Partner by the Partnership (determined as of the date of distribution,
without regard to Section 7701(g) of the Code, and net of liabilities secured by
such property that the Partner assumes or to which the Partner's ownership of
the property is subject), and (iii) allocations of Losses to such Partner
pursuant to Section 4.2; and
(c) otherwise adjusted so as to conform to the requirements of
Sections 704(b) and (c) of the Code and the regulations issued thereunder.
Capital Contribution shall mean, for any Partner, the net amount of cash
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and the fair market value, without regard to Section 7701(g) of the Code, of any
other property (determined as of the date of contribution and net of liabilities
secured by such property that the Partnership assumes or to which the
Partnership's ownership of the property is subject) contributed by such Partner
to the capital of the Partnership. A Partner's Capital Contribution shall
include such Partner's Additional Capital Contributions.
Code shall mean the Internal Revenue Code of 1986, as amended.
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Dissolution of a Partner which is not a natural person shall mean that such
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Partner has terminated its existence (whether as a partnership, corporation or
other legal entity) and dissolved; provided, however, that a change in the
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membership of a Partner that is a partnership shall not constitute a
"Dissolution" of such Partner, so long as the business of the Partner is
continued in partnership form, regardless of whether such Partner is deemed
technically dissolved for partnership or tax law purposes.
Distributable Income shall have the meaning set forth in Section 4.1(a).
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Fiscal Year shall mean the period from January 1 through December 31 of
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each year (unless otherwise required by law).
Indemnified Person shall have the meaning set forth in section 8.2.
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Liquidating Partner shall mean the General Partner unless another person is
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selected pursuant to Section 7.2.
Majority-In-Interest of the Limited Partners shall mean a group of Limited
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Partners whose aggregate Percentage Interests are in excess of 50 percent of the
total Percentage Interests of all of the Limited Partners.
Minimum Gain of the Partnership shall, as provided in Treasury Regulation
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Section 1.704-2, mean the total amount of gain the Partnership would realize for
Federal income tax purposes if it disposed of all assets subject to nonrecourse
liability for no consideration other than full satisfaction thereof.
Nonrecourse Deduction shall mean an item of loss, expense or deduction
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(other than a Partner Nonrecourse Deduction) attributable to a nonrecourse
liability of the Partnership within the meaning of Treasury Regulation Section
1.704-2(b).
Partner Nonrecourse Deduction shall mean an item of loss, expense or
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deduction attributable to a nonrecourse liability of the Partnership for which a
Partner bears the economic risk of loss within the meaning of Treasury
Regulation Section 1.704-2(i).
Percentage Interest shall have the meaning set forth in Section 3.7.
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Profits and Losses of the Partnership shall mean items of income and gain
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(including items not subject to Federal income tax) and items of loss, expense
and deduction (including items not deductible, depreciable, amortizable or
otherwise excludable from income for Federal income tax purposes), respectively,
as determined under Federal income tax principles.
Project shall mean the proposed gaming facility which is described with
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particularity on Schedule B attached hereto.
Required License shall have the meaning set forth in Section 2.7.
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Substitute Partner shall have the meaning set forth in Section 6.1(a).
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Transfer shall have the meaning set forth in Section 6.1.
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Transferring Partner shill have the meaning set forth in Section 6.1(a)(i).
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Unreturned Capital Contribution shall mean, with respect to each Partner,
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the amount of such Partner's Capital Contribution reduced by the amount
distributed to such
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Partner pursuant to Section 4.1(a)(i). For purposes of the preceding sentence,
the "amount distributed" with regard to any distribution of property in kind
shall be equal to the fair market value of such property, without regard to
Section 7701(g) of the Code, determined as of the date of distribution and net
of liabilities secured by the property that the distributee Partner assumes or
to which the distributee Partner's ownership of the property is subject.
SECTION 2
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FORMATION OF LIMITED PARTNERSHIP
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2.1 Formation, Name and Principal Office. The Partners hereby enter into
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and form the Partnership for the limited purpose and scope set forth in this
Agreement. Except as otherwise provided herein, the Partnership shall be a
partnership in commendam governed by the Act. The name of the Partnership shall
be "Louisiana-I Gaming, a Louisiana Partnership in Commendam." The principal ad
registered office of the Partnership shall be c/o Smith, Martin & Schneider, 700
Camp Street, New Orleans, Louisiana 70130 or, upon written notice to the Limited
Partners, at such other place as may be designated by the General Partner.
2.2 Purpose and Scope of the Partnership. The purpose of the Partnership
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shall be to:
(i) lease or otherwise acquire property;
(ii) develop one or more of the following on the property, to the
extent allowed by and in conformance with applicable law: (a) a riverboat
gaming vessel; (b) a dockside gaming vessel; or (c) a land-based casino;
(iii) develop any facilities that are related to, necessary for the
operation of, or compatible with and enhance the gaming operation to be
conducted on the property, including parking areas, entertainment and lodging
facilities, food and beverage service, passenger ticketing facilities, docking
facilities, storage and maintenance facilities (including fueling facilities for
any riverboat vessel);
(iv) engage in any other lawful activities determined by the General
Partner to be necessary or advisable in furtherance of the foregoing.
2.3 Names and Addresses of the Partners. The name and address of each
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Partner shall be set forth on Schedule A.
2.4 Term of the Partnership. The Partnership commenced on April 20, 1993
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and shall continue for a period of 99 years thereafter, unless earlier dissolved
and terminated pursuant to Section 7.
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2.5 Required Documents.
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(a) Partnership Documents. The General Partner shall cause to be
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filed, recorded or amended, as necessary, a certificate of limited partnership
or partnership in commendam and any other documents required to be filed,
recorded or amended in connection with the formation or operation of the
Partnership pursuant to the laws of the State of Louisiana or any other
jurisdiction in which the Partnership's business is conducted.
(b) Other Documents. The Limited Partners shall execute and
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acknowledge as requested by the General Partner such documents as may be
necessary or desirable to (i) comply with legal requirements applicable to the
formation of the Partnership or the operation of the Partnership's business, or
(ii) otherwise give effect to the terms of this Agreement.
(c) Special Power of Attorney. Each Limited Partner hereby grants to
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the General Partner a special power of attorney irrevocably appointing the
General Partner as the Limited Partner's attorney-in-fact with power and
authority to execute and acknowledge, in the Limited Partner's name and on its
behalf, any document described in Section 2.5(b). Such special power of
attorney is coupled with an interest.
2.6 Title to Property. Title to all Partnership property shall be held in
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the name of the Partnership.
2.7 Required Licenses. Each Partner shall use its reasonable efforts to
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obtain and continue to hold all governmental licenses, permits and similar
authorizations that are necessary or advisable in connection with the business
of the Partnership, as determined by the General Partner in its reasonable
discretion ("Required Licenses").
SECTION 3
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CAPITALIZATION OF THE PARTNERSHIP
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3.1 Initial Capital Contribution. Each Partner shall make a contribution
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to the capital of the Partnership. The initial capital contribution of the
General Partner shall be $250,000 payable not later than the date on which the
Partnership commences to conduct gaming operations. The initial capital
contribution of Boomtown shall be $4,750,000 payable not later than the date on
which the Partnership commences to conduct gaming operations. Skrmetta's
initial Capital Contribution shall be $1,000 payable upon execution of this
Agreement. Each other Limited Partner's initial capital contribution shall be
in such amount as shall be agreed to by the General Partner and shall be set
forth on Schedule A.
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3.2 Additional Capital Contributions.
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(a) General. Except as otherwise specifically provided in this
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Section 3.2, no Partner shall be permitted or required to make an Additional
Capital Contribution.
(b) Mandatory Additional Contributions by the General Partner. The
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General Partner shall make any capital contribution required in connection with
the dissolution of the Partnership pursuant to Section 7.3(e). In addition, the
General Partner shall make any capital contributions necessary for it to
maintain, at all times during the term of the Partnership, a positive Capital
Account balance at least equal to the lesser of (i) one percent of the aggregate
positive Capital Account balances of the Partners or (ii) $500,000.
(c) Other Additional Contributions. Prior to completion of the
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Project, any Partner may contribute additional capital to the Partnership upon
the consent of the General Partner. Once the Project has been completed, if the
General Partner determines in its sole discretion that the Partnership needs
additional capital for any purpose, the General Partner may offer to the
Partners the opportunity to make Additional Capital Contributions; provided,
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that Skrmetta shall be entitled to make his pro rata share of any Additional
Capital Contributions (i.e., that portion which would preclude a change to
Skrmetta's Percentage Interest under section 3.7), using the proceeds of a loan
from the Partnership to Skrmetta, which loan shall be repaid solely out of
amounts otherwise distributable by the Partnership to Skrmetta, under this
Agreement.
3.3 Admission of Additional Limited Partners. Subject to its authority to
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approve Transfers of limited partnership interests under Section 6, the General
Partner may admit additional persons as Limited Partners only with the consent
of all the Limited Partners and only in compliance with applicable gaming laws.
3.4 Withdrawal and Return of Capital. Except as provided in Sections 4.1,
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6.2 and 7.3, (i) no Partner may withdraw any portion of its Capital Contribution
without the prior consent of the General Partner and a Majority-In-Interest of
the Limited Partners and (ii) no Partner shall be entitled to a return of such
Partner's Capital Contribution.
3.5 Loans to the Partnership. If the General Partner determines that the
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Partnership needs additional capital for any purpose, the General Partner may
offer to the Partners, pro rata in proportion to their respective Percentage
Interests, the opportunity to lend a specified amount of cash to the Partnership
at a rate of interest equal to the prime rate of interest quoted from time to
time by the Bank of America N.T.S.A. San Francisco main branch plus two percent
(but not to exceed the maximum rate permitted under applicable law). If any
Partner declines to lend its pro rata share of such amount to the Partnership,
the other Partners may elect to lend to the Partnership all or a portion of the
amount necessary to cover the resulting shortfall (in such
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proportions as the General Partner may determine in its sole discretion).
Notwithstanding the foregoing, the General Partner shall not raise capital
through Partner loans to the Partnership without first offering the Partners an
opportunity to contribute the needed capital through Additional Capital
Contributions pursuant to Section 3.2(c).
3.6 Limitation of Liability. Except as otherwise required by the Act or
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in connection with a claim against a Limited Partner for recovery of
distributions received by such Limited Partner in violation of this Agreement,
the liability of each Limited Partner for Partnership Losses shall not exceed
the value of such Limited Partner's interest in the Partnership. Any cash or
property that a Limited Partner is obligated to return to the Partnership shall
be returned immediately upon demand therefor by the General Partner. A Limited
Partner obligated to return property may, at its option, return cash equal to
the fair market value of the property (determined by the General Partner in its
reasonable discretion as of the date of such return). If, as a result of a
Limited Partner receiving a distribution of cash or property that it is required
to return, Losses which otherwise would have been allocated to the Limited
Partner were allocated to the General Partner (and such allocation has not been
reversed pursuant to Section 4.2(D)(iv)), tho Capital Accounts of the Partners
shall be adjusted to reflect the allocation of such Losses to the Limited
Partner.
3.7 Percentage Interest.
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(a) Upon execution of this Agreement by the Partners, the percentage
interests ("Percentage Interests") of the Partners shall be as follows:
General Partner 5%
Boomtown 87.5%
Skrmetta 7.5%
Except as specifically provided in (b) below, the Percentage Interests
of the Partners shall not subsequently be adjusted.
(b) If, after completion of the Project, there is an Additional
Capital Contribution, the Percentage Interests of the Partners shall immediately
thereafter be adjusted so that the Percentage Interest of each Partner is equal
to the ratio that (A) the sum of such Partner's share of the Additional Capital
Contributions made on such date and the fair market value of such Partner's
interest in the Partnership (determined as of the time immediately prior to such
Additional Capital Contributions) bears to (B) the sum of all Additional Capital
Contributions made on such date and the aggregate fair market value of the
Partners' interests in Partnership (determined as of the time immediately prior
to such Additional capital Contributions).
3.8 Interest on Capital. No Partner shall be entitled to interest on such
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Partner's Capital Contribution.
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SECTION 4
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DISTRIBUTIONS, PROFITS AND LOSSES
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4.1 Distributions.
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(a) Except as otherwise required pursuant to Section 4.1(b) or (c) or
applicable law, the Partnership shall make distributions of cash or property
from time to time at the discretion of the General Partner; provided, however,
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that, subject to the foregoing limitations, the Partnership shall make quarterly
distributions of Distributable Income as follows:
(i) Within 45 days after the end of each of the first three
quarters of each Fiscal Year, 75 percent of the Partnership's Distributable
Income for such quarter shall be distributed to the Partners in proportion to
their respective Percentage Interests; and
(ii) Within 60 days after the end of the final quarter of each
Fiscal Year, 100 percent of any previously undistributed Distributable Income
for such Fiscal Year shall be distributed to the Partners in proportion to their
respective Percentage Interests.
For purposes of this Section 4.1(a), "Distributable Income" for any period
shall mean:
(i) the sum of the Partnership's (A) net income, (B)
depreciation and amortization charges, and (C) provision for income taxes or
similar governmental fees; reduced by
(ii) the sum of the Partnership's (A) capital expenditures in
the normal course of operation, (B) scheduled principal repayments on
indebtedness, and (C) income taxes or similar governmental fees actually paid
(all of the foregoing items in this sentence to be determined with regard to
amounts accrued or incurred in accordance with generally accepted accounting
principles consistently applied); and further reduced by
(iii) 50 percent of the aggregate deficit in Distributable
Income, if any, for all prior periods (provided, however, that the reduction
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required under this clause (iii) shall not be applied for purposes of
determining the historic Distributable Income for any prior period).
(b) Notwithstanding Section 4.1(a), cash or property of the
Partnership available for distribution upon the dissolution of the Partnership
(including cash or property received upon the sale or other disposition of
assets in anticipation of or in connection with such dissolution) shall be
distributed in accordance with the provision of Section 7.3.
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(c) No distribution shall be made to a Limited Partner pursuant to
Section 4.1(a) if and to the extent that, upon a hypothetical liquidation of the
Partnership in accordance with the provisions of Section 7.3 immediately
subsequent to such distribution, the Limited Partner would have a deficit
Capital Account balance.
4.2 Allocations of Partnership Profits and Losses.
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(a) Except as otherwise provided in this Section 4.2, Profits and
Losses of the Partnership shall be allocated among the Partners as follows:
(i) Profits of the Partnership shall be allocated:
(A) First, to the Partners in proportion to their
respective negative Capital Account balances until no Partner has a negative
Capital Account balance;
(B) Next, to the Partners in proportion to their respective
Unreturned Capital Contributions until the Capital Account balance of each
Partner is not less than such Partner's Unreturned Capital Contribution; and
(C) Finally, to the Partners in proportion to their
respective Percentage Interests.
(ii) Next, Losses of the Partnership shall be allocated:
(A) First, to the Partners in proportion to the amounts by
which the Capital Account balance of each Partner exceeds such Partner's
Unreturned Capital Contribution until the Capital Account balance of each
Partner does not exceed such Partner's Unreturned Capital Contribution;
(B) Next, to the Partners in proportion to their respective
Unreturned Capital Contributions until the Capital Account balance of each
Partner does not exceed zero; and
(C) Finally, to the Partners in proportion to their
respective Percentage Interests.
(iii) Notwithstanding the foregoing provisions of this Section
4.2(a):
(A) Nonrecourse Deductions shall be allocated among the
Partners in proportion to their respective Percentage Interests;
(B) In accordance with the provisions of Treasury
Regulation Section 1.704-2(i), each item of Partner Nonrecourse Deduction shall
be
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allocated among the Partners in proportion to the economic risk of loss that the
Partners bear with respect to the nonrecourse liability of the Partnership to
which such item of Partner Nonrecourse Deduction is attributable; and
(C) Solely for purposes of determining the amounts to be
allocated among the Partners under Section 4.2(a)(i) and (ii), the Capital
Account balances of the Partners shall not reflect any reduction thereof caused
by (1) the allocation to the Partners' Capital Accounts of Nonrecourse
Deductions or Partner Nonrecourse Deductions under this Section 4.2(a)(iii), or
(2) any distributions that, notwithstanding the provisions of Section 4.5, are
allocable to increases in the Partnership's Minimum Gain under Treasury
Regulation Section 1.704-2(h) (except to the extent that such Nonrecourse
Deductions, Partner Nonrecourse Deductions or distributions have been offset by
operation of the minimum gain chargeback provisions of Section 4.2(b)(iii)).
(b) Allocation Adjustments Required to Comply With Section 704(b) of
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the Code.
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(i) Limitations on Allocation of Losses. Notwithstanding the
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provisions of Section 4.2(a)(ii), there shall be no allocation of Losses to any
Limited Partner which would create or increase a deficit balance in such Limited
Partner's Capital Account unless such allocation would be treated as valid under
Section 704(b) of the Code. Any Losses that cannot be allocated to a Limited
Partner pursuant to the preceding sentence shall be reallocated to the General
Partner.
(ii) Qualified Income Offset. Notwithstanding the provisions of
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section 4.2(a)(i), if in any Fiscal Year a Limited Partner receives (or is
reasonably expected to receive) a distribution, or an allocation or adjustment
to such Limited Partner's Capital Account, that creates or increases (or is
reasonably expected to create or increase) a deficit balance in such Limited
Partner's Capital Account, there shall be allocated to the Limited Partner such
items of Partnership income or gain as are necessary to satisfy the requirements
of a "qualified income offset" within the meaning of Treasury Regulation Section
1.704-1(b).
(iii) Minimum Gain Chargeback. Notwithstanding the provisions of
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Section 4.2(a), this Section 4.2(b)(iii) hereby incorporates by reference the
"minimum gain chargeback" provisions of Treasury Regulation Section 1.704-2. In
general, upon a reduction of the Partnership's Minimum Gain, the preceding
sentence shall require that items of income and gain be allocated among the
Partners in a manner that reverses prior allocations of Nonrecourse and Partner
Nonrecourse Deductions as well as reductions in the Partners' Capital Account
balances resulting from distributions that, notwithstanding Section 4.5, are
allocable to increases in the Partnership's Minimum Gain. Subject to the
provisions of Section 704 of the Code and the regulations thereunder, if the
General Partner determines at any time that operation of such "minimum gain
chargeback" provisions likely will not achieve such a reversal by the
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conclusion of the liquidation of the Partnership, the General Partner shall
adjust the allocation provisions of this Section 4.2 as necessary to accomplish
that result.
(iv) Allocations Subsequent to Certain Allocation Adjustments.
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Any allocations of items of Profits or Losses pursuant to Section 4.2(b)(i) or
(ii) shall be taken into account in computing subsequent allocations pursuant to
Section 4.2(a) so that the net amount of any items so allocated and all other
items allocated to each Partner pursuant to Section 4.2(a) shall, to the extent
possible, be equal to the net amount that would have been allocated to each
Partner pursuant to the provisions of Section 4.2(a) without application of
Section 4.2(b)(i) or (ii).
(c) Book - Tax Accounting Disparities. If Partnership property is
---------------------------------
reflected in the Capital Accounts of the Partners at a book value that differs
from the adjusted tax basis of such property (whether because such property was
contributed to the Partnership by a Partner or because of a revaluation of the
Partners' Capital Accounts under Treasury Regulation Section 1.704-1(b)),
allocations of depreciation, amortization, income, gain or loss with respect to
such property shall be made among the Partners in a manner which takes such
difference into account in accordance with Code Section 704(c) and Treasury
Regulation Section 1.704-1(b).
(d) Minimum Allocation to General Partner. Notwithstanding anything
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in this Agreement to the contrary, but subject to the provisions of Section
4.2(b)(ii) and (iii), the General Partner shall be allocated pro rata at least
one percent of each item of Partnership income, gain, loss, expense or
deduction.
(e) Special Allocations in Connection with Certain Transactions.
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Subject to the provisions of Section 4.2(b), if the Partnership is entitled to a
tax deduction in connection with the acquisition or receipt by the General
Partner of an interest in the Partnership, then the deduction shall be allocated
entirely to such Partner. Any amount that such Partner is required to include
in income for Federal income tax purposes in connection with the acquisition or
receipt of such interest shall be treated as a contribution to the capital of
the Partnership by such Partner.
(f) Allocation in Event of Transfer. If an interest in the
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Partnership is Transferred in accordance with Section 6, there shall be
allocated to the Transferring Partner during the Fiscal Year of Transfer the
product of (i) the Partnership's Profits or Losses allocable to such Transferred
interest for such Fiscal Year and (ii) a fraction, the numerator of which is the
number of days such Partner held the Transferred interest during such Fiscal
Year and the denominator of which is the total number of days in such Fiscal
Year. All remaining Partnership Profits and Losses allocable to such
Transferred interest for such Fiscal Year shall be allocated to the Substitute
Partner acquiring such interest. Such allocations shall be made without regard
to the date, amount or recipient of any distributions which may have been made
with respect to such Transferred interest. As of the date of such Transfer, the
Substitute Partner shall succeed to the Capital Account and Capital Contribution
of the Transferring Partner to the extent attributable to the Transferred
interest.
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(g) Adjustment to Capital Accounts for Distributions of Property. If
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property distributed in kind is reelected in the Capital Accounts of the
Partners at a book value that differs from the fair market value of such
property on the date of distribution, the difference shall be treated as Profit
or Loss on the sale of the property and shall be allocated among the Partners in
accordance with the provisions of this Section 4.2.
(h) Tax Credits and Similar Items. Any tax credits or similar items
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not allocable pursuant to Section 4.2(a) through (g) shall be allocated to the
Partners in proportion to their respective Percentage Interests; provided,
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however, that at least one percent of each such item shall be allocated to the
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General Partner.
4.3 Modification to Preserve Underlying Economic Objectives. If, in the
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opinion of counsel to the Partnership, there is a change in the Federal income
tax law (including the Code as well as the regulations, rulings, and
administrative practices thereunder) which makes it necessary or prudent to
modify the allocation provisions of this Section 4 in order to preserve the
underlying economic objectives of the Partners as reflected in this Agreement,
the General Partner shall make the minimum modification necessary to achieve
such purpose.
4.4 Withholding Taxes and Fees. The Partnership shall withhold taxes and
--------------------------
similar governmental fees from distributions to, and allocations among, the
Partners to the extent required by law (as determined by the General Partner in
its sole discretion). Any amount so withheld by the Partnership with regard to
a Partner shall be treated for purposes of this Agreement as an amount actually
distributed to such Partner. An amount shall be considered withheld by the
Partnership if remitted to a governmental agency without regard to whether such
remittance occurs at the same time as the distribution or allocation to which it
relates. To the extent operation of the foregoing provisions of this Section
4.4 would create or increase a deficit balance in a Limited Partner's Capital
Account (excluding for this purpose any portion of such deficit attributable to
the Partner's share of the Partnership's Minimum Gain as determined under
Treasury Regulation Section 1.704-2), the amount of the deemed distribution
shall instead be treated as a distribution received in violation of this
Agreement and subject to the provisions of Section 3.6.
4.5 Nonallocation of Distributions to Increases In Minimum Gain. To the
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extend permitted under Treasury Regulation Section 1.704-2(h), distributions to
Partners shall not be allocable to increases in the Partnership's Minimum Gain.
In general, and except as provided in such regulation, the preceding sentence is
intended to insure that reductions in a Partner's Capital Account balance
resulting from distributions of money or other property to that Partner are not
revered by the minimum gain chargeback provisions of Section 4.2(b)(iii).
4.6 Allocation of Liabilities. Solely for purposes of determining the
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Partners' respective shares of the nonrecourse liabilities of the Partnership
within the meaning of Treasury Regulation Section 1.752-3(a)(3), each Partner's
interest in Partnership Profits shall be equal to such Partner's Percentage
Interest.
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SECTION 5
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ADMINISTRATIVE PROVISIONS
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5.1 Power of Limited Partners.
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(a) No Management by Limited Partners. Except as specifically
---------------------------------
required under the Act or permitted under this Agreement, the Limited Partners
shall not take part in the management or control of, and shall not bind or act
for, the Partnership.
(b) Majority-In-Interest Approval for Certain Actions. The approval
-------------------------------------------------
of a Majority-In-Interest of the Limited Partners shall be required in order for
the General Partner to:
(i) liquidate substantially all of the Partnership's assets; or
(ii) otherwise discontinue the Partnership's business.
5.2 Management by the General Partner. The General Partner shall devote
---------------------------------
such time and attention, and shall diligently perform those duties, as are
reasonably necessary to manage effectively the Partnership's affairs.
Subject to the provisions of the Act and this Agreement, the General
Partner shall have the power to perform acts necessary or appropriate for the
efficient management of the Partnership including, without limitation, the right
to:
(a) Acquire, manage, develop, hold, lease, improve, control, operate,
and sell or otherwise dispose of property, on behalf of the Partnership;
(b) Borrow money on behalf of the Partnership or encumber Partnership
property solely for the purpose of obtaining financing for the Partnership's
business, and to extend or modify any obligations of the Partnership;
(c) Employ or retain any qualified person to perform services or
provide advice for the benefit of the Partnership and pay reasonable
compensation therefor;
(d) Compromise, arbitrate or otherwise adjust claims in favor of or
against the Partnership, and commence or defend litigation with respect to the
Partnership or any assets of the Partnership, at the Partnership expense;
(e) Cause the Partnership to maintain, at the Partnership's expense,
insurance coverage reasonably satisfactory to the General Partner with regard to
any circumstance or condition which may affect the Partnership or the liability
of the General Partner in its capacity as such;
-13-
(f) Open, conduct business regarding, draw checks or other payment
orders upon, and close cash, checking, custodial or similar accounts with banks
or brokers on behalf of the Partnership and pay the customary fees and charges
applicable to transactions in respect of all such accounts;
(g) Cause the Partnership to enter into, make and perform such
contracts, agreements and other undertakings, and to do such other acts, as it
may deem necessary or advisable for, or as may be incidental to, the conduct of
the business of the Partnership, including, without limitation, contracts,
agreements, undertakings and transactions with any Partner or with any other
person or entity related to any Partner, provided, however, that transactions
-------- -------
with such persons and entities for the account of the Partnership shall be on
terms no less favorable to the Partnership than are generally afforded to
unrelated third parties in comparable transactions; and
(h) Assume and exercise all powers and responsibilities granted a
general partner by the laws of the State of Louisiana.
5.3 Restrictions on Powers of the General Partner. The General Partner
---------------------------------------------
shall not do any act in contravention of this Agreement or, subject to the
provisions of Section 5.4, any act which is detrimental to the business of the
Partnership. The General Partner shall have fiduciary responsibility for the
safekeeping and use of all funds and assets of the Partnership. The General
Partner shall not use, or permit another to use, such funds or assets in any
manner except for the exclusive benefit of the Partnership.
5.4 Competing Ventures. The Limited Partners understand that the General
------------------
Partner may have other business activities which may take the major part of the
General Partner's total time devoted to business matters. Accordingly, the
General Partner shall not be bound to devote all of the General Partner's
business time to the affairs of the Partnership, but shall devote such time and
attention to the Partnership's business as may be required in order to assure
that the Partnership's business is conducted in a diligent and proper manner.
During the continuance of this Agreement, Boomtown and the General Partner
and/or their respective affiliated entities may (i) engage in any activity
whether or not in direct competition with the Partnership for such Partner's own
profit and advantage without the consent of any other Partner or the
Partnership, or (ii) possess an interest in any other business venture of any
nature or description independently or with others. Neither the Partnership nor
any Partner shall have any right by virtue of this Agreement in and to any
Partner's separate business venture or to the income or profits derived
therefrom.
5.5 Disclosures. Each Partner shall furnish any data with respect to
-----------
itself reasonably required in connection with financing or operation of the
Partnership's business.
5.6 Reimbursement to the General Partner. The General Partner shall be
------------------------------------
reimbursed for amounts paid to third parties for, or on behalf of, the
Partnership
-14-
(including, without limitation, amounts paid in connection with the formation of
the Partnership).
5.7 Compensation. Partners and affiliates of Partners shall be entitled
------------
to receive fair market value compensation (as determined by the General Partner
in its reasonable discretion and in accordance with the provisions of Section
5.2(g)) for services provided to, or for the benefit of, the Partnership.
5.8 Tax Matters Partner.
-------------------
(a) General. The General Partner is hereby designated the "tax
-------
matters partner" of the Partnership within the meaning of Section 6231(a)(7) of
the Code. Except as specifically provided in the Code and the regulations
issued thereunder, the General Partner in its sole discretion shall have
exclusive authority to act for or on behalf of the Partnership with regard to
tax matters, including, without limitation, the authority to make (or decline to
make) any available tax elections.
(b) Notice of Inconsistent Treatment of Partnership Item. No Partner
----------------------------------------------------
shall file a notice with the Internal Revenue Service under Section 6222(b) of
the Code in connection with such Partner's intention to treat an item on such
Partner's Federal income tax return in a manner which is inconsistent with the
treatment of such item on the Partnership's Federal income tax return unless
such Partner has, not less than 30 days prior to the filing of such notice,
provided the General Partner with a copy of the notice and thereafter in a
timely manner provides such other information related thereto as the General
Partner shall reasonably request.
(c) Notice of Settlement Agreement. Any Limited Partner entering into
------------------------------
a settlement agreement with the Secretary of the Treasury which concerns a
Partnership item shall notify the General Partner of such settlement agreement
and its terms within 60 days from the date thereof.
5.9 Books, Records and Annual Financial Statements.
----------------------------------------------
(a) The Partnership shall maintain or cause to be maintained true and
proper books, records, reports, and accounts in which shall be entered, on the
accrual basis, all transactions of the Partnership. Such books, records,
reports and accounts shall be located at the principal place of business of the
Partnership and shall be available to any Partner for inspection and copying
during reasonable business hours.
(b) The Partnership shall cause to be delivered to each Partner within
90 days after the expiration of each Fiscal Year an annual report containing all
Partnership information necessary for preparation of the Federal, state and
local income tax returns of such Partner. Upon election by the General Partner
or written request from a Limited Partner that is a "10-percent owner" of the
Partnership within the meaning of Section 6654(d)(1)(E) of the Code, the
Partnership shall make reasonable efforts (as determined by the General Partner
in its sole discretion) to provide interim
-15-
Partnership financial information necessary for such Partner, or its constituent
partners or shareholders, to compute its or their quarterly Federal estimated
tax liability.
SECTION 6
---------
TRANSFER OF A PARTNERSHIP INTEREST; WITHDRAWALS
-----------------------------------------------
6.1 Transfers. No sale, transfer, assignment or other disposition (a
---------
"Transfer") of a Partner's interest in violation of this Agreement shall be
valid or effective.
(a) Limited Partners -- Voluntary Transfers. The Transfer of a
---------------------------------------
Limited Partner's interest in the Partnership to another person (a "Substitute
Partner") shall be valid and effective if the following conditions are
satisfied:
(i) Execution of Documents. The Limited Partner whose interest is
----------------------
Transferred (the "Transferring Partner") and the Substitute Partner shall
properly execute documents or instruments which the General Partner reasonably
determines to be necessary or desirable to effect such Transfer, including
written acceptance, ratification and approval of all of the terms and conditions
of this Agreement and any amendments hereto.
(ii) Compliance With Applicable Laws and Rules. The Transfer of
-----------------------------------------
the interest shall not at the time of the Transfer and will not thereafter, to
the reasonable satisfaction of the General Partner, violate any applicable law
or governmental rule, including, without limitation, any Federal or state
securities or gaming law or rule (based upon the presumption, for this purpose,
that the business operations of the Partnership shall not be changed to
accommodate the Transfer of a Limited Partner's interest in the Partnership).
(iii) Tax Effects. The Transfer of the interest shall not, to the
-----------
reasonable satisfaction of the General Partner, cause the Partnership to (A)
terminate within the meaning of Section 708 of the Code; (B) qualify as a
"publicly traded partnership" within the meaning of Section 469(k), 512(c)(2) or
7704 of the Code; or (C) be classified for Federal income tax purposes as an
association taxable as a corporation.
(iv) Consent of the General Partner. The prior written consent of
------------------------------
the General Partner to such Transfer shall be obtained by the Transferring
Partner, the granting or denial of which shall be in the General Partner's sole
discretion. Notwithstanding the preceding sentence, the General Partner shall
be deemed to have consented to the Transfer of all or a portion of Skrmetta's
limited partnership interest to one or more Authorized Transferees; provided,
--------
however, that the General Partner shall not be deemed to have consented to any
- -------
Transfer that would result in Skrmetta's limited partnership interest being held
by more than four separate persons.
-16-
As used herein, "Authorized Transferee" means (i) any shareholder of
one or more of the corporate entities, if any, of which Skrmetta is comprised,
(ii) any immediate family member of such a shareholder, (iii) any of Raphael,
Eric, Dennis or Barbara Skrmetta or an immediate family member thereof, or (iv)
any corporation, trust or other entity wholly owned by any or all of Raphael,
Eric, Dennis or Barbara Skrmetta. For purposes of the preceding sentence, the
"immediate family" of an individual shall include and be limited to such
individual's parents, siblings, spouse, children, grandchildren and great
grandchildren.
Notwithstanding the foregoing provisions of this Section 6.1(a)(iv),
no person (including, without limitation, an Authorized Transferee) shall be
admitted to the Partnership without the prior written consent of the General
Partner, the granting or denial of which shall be in the General Partner's sole
discretion.
(b) Limited Partners -- Involuntary Transfers. A person may become
-----------------------------------------
the assignee of all or a portion of a Limited Partner's interest in the Profits
and Losses of the Partnership upon (i) the death, Bankruptcy, incapacity, or
Dissolution of such Limited Partner; (ii) foreclosure against that portion of
such Limited Partner's interest in the Partnership which was pledged as security
for an obligation; or (iii) a transfer to such Limited Partner's spouse pursuant
to a divorce decree or settlement. In the event a person becomes the assignee
of an interest in the Profits and Losses of the Partnership under the preceding
sentence, the General Partner shall, in its sole discretion, (i) admit such
assignee to the Partnership as a Substitute Partner (provided, however, that the
-------- -------
requirements of Section 6.1(a)(ii) and (iii) shall in all events be satisfied)
or (ii) redeem such assignee's interest by treating such assignee as a
withdrawing Limited Partner under the rules set forth in Section 6.2.
(c) Transfers by the General Partner. The General Partner shall not
--------------------------------
Transfer its interest in the Partnership in violation of applicable law or
without the prior written consent of all the Limited Partners; provided,
--------
however, that the General Partner shall not be required to obtain such consent
- -------
for a Transfer which consists solely of an assignment of all or a portion of the
General Partner's interest in the allocations and distributions of the
Partnership.
6.2 Withdrawal of a Limited Partner. A Limited Partner shall not withdraw
-------------------------------
from the Partnership without the written consent of the General Partner, the
granting or denial of which shall be in the General Partner's sole discretion.
A Limited Partner permitted to withdraw from the Partnership pursuant to this
Section 6.2 shall receive the amount of cash and/or property (as determined in
the reasonable discretion of the General Partner) that such Limited Partner
would have received if, on the effective date of such withdrawal, the
Partnership had been dissolved and liquidated pursuant to Section 7.3. Upon the
withdrawal of a Limited Partner from the Partnership, such Limited Partner's
Percentage Interest shall be allocated among the remaining Partners in
proportion to the remaining Partners' respective Percentage Interests as in
effect immediately prior to the withdrawal.
-17-
6.3 Mandatory Transfer of a Partner's Interest. The following provisions
------------------------------------------
shall apply to Skrmetta's Partnership interest.
(a) Failure by Skrmetta to Obtain or Hold a Required License. If
--------------------------------------------------------
Skrmetta (i) fails to obtain a Required License, or (ii) loses or has revoked a
Required License and fails to reacquire such license within the shorter of a
reasonable period of time or such period as is required by applicable law, then
Skrmetta shall use its reasonable efforts to, within such aforementioned time
period, sell or otherwise Transfer (in a transaction that satisfies the
requirements of Section 6.1(a)) its interest in the Partnership to a person that
holds all Required Licenses.
If Skrmetta fails to obtain or reacquire a Required License or to sell
or otherwise Transfer its Partnership interest in accordance with the terms of
the preceding paragraph (including, without limitation, the time period
described therein) or Skrmetta's failure to hold all Required Licenses
--
materially impairs the ability of the Partnership to conduct its business (as
determined by the General Partner in its reasonable discretion), then the
Partnership shall have an immediate and continuing right to redeem Skrmetta's
Partnership interest for fair market value on the date of redemption (as
determined by agreement among the Partners or, if any Partner declares that no
agreement can be reached, by arbitration in accordance with the provisions of
Section 9.8).
(b) Failure by the General Partner or Boomtown to Obtain or Hold a
--------------------------------------------------------------
Required License. If the General Partner or Boomtown fails to obtain or
- ----------------
reacquire a Required License within the shorter of a reasonable period of time
or such period as is required by applicable law and the failure materially
impairs the ability of the Partnership to conduct its business, then such
Partner shall use its reasonable efforts to sell or otherwise Transfer its
interest in the Partnership, for a price and on such other terms as are
reasonably acceptable to such Partner, to a person that holds all Required
Licenses. If such Partner is the General Partner, the consent of all the
Limited Partners shall be required for the sale or other Transfer of its
interest to occur.
If a Partner required to sell or otherwise Transfer its Partnership
interest under the terms of the preceding paragraph fails to effect such sale or
other Transfer within the applicable time period, the Partnership shall
immediately attempt to sell its business assets for a price and on such other
terms as are acceptable in the reasonable discretion of the General Partner. If
no such sale is effected within a reasonable period of time, the Partnership
shall be dissolved and liquidated in accordance with the provisions of Section
7.
SECTION 7
---------
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP
----------------------------------------------
7.1 Dissolving Events. The Partnership shall be dissolved upon the
-----------------
occurrence of any of the following events:
-18-
(a) Expiration of the Partnership term;
(b) Issuance of an order by a court of competent jurisdiction
requiring the dissolution of the Partnership;
(c) Permanent cessation of the Partnership's business;
(d) Consent of the General Partner and a Majority-in-Interest of the
Limited Partners to dissolve;
(e) The withdrawal, retirement, Bankruptcy, Dissolution, death or
incapacity of the General Partner, unless the remaining Partners elect to
continue the Partnership pursuant to section 7.2;
(f) Failure by the Partnership to sell its business assets in
accordance with the provisions of Section 6.3(b); and
(g) Any other event which results in dissolution of the Partnership
under the Act.
7.2 Special Meeting to Dissolve or Continue the Partnership. Upon the
-------------------------------------------------------
withdrawal, retirement, Bankruptcy, Dissolution, death or incapacity of the
General Partner, the two Limited Partners having the largest Capital Account
balances shall, in accordance with the provisions of the Act, notify the
remaining Limited Partners of a special meeting of the Limited Partners to be
held not less than 10 nor more than 60 days after the date of such event. At
that meeting the Limited Partners may by unanimous vote elect to continue the
business of the Partnership and agree to the appointment of a new General
Partner. If the Limited Partners do not elect to continue the business of the
Partnership and to appoint a new General Partner, a Liquidating Partner shall be
elected by a Majority-In-Interest of the Limited Partners; the Liquidating
Partner shall then cause the Partnership to be liquidated in accordance with the
provisions of Section 7.3.
Written consent of a Partner to continuation of the Partnership and the
election of a new General Partner or to dissolution of the Partnership and the
election of a Liquidating Partner shall be counted as a vote at such special
meeting.
7.3 Winding Up of the Partnership.
-----------------------------
(a) Upon dissolution of the Partnership, the Liquidating Partner shall
promptly wind up the affairs of the Partnership in accordance with the
provisions of this Section 7.3. The Partnership shall engage in no further
business except as may be necessary, in the reasonable discretion of the
Liquidating Partner, to preserve the value of the Partnership's assets during
the period of dissolution and liquidation.
-19-
(b) Distributions to the Partners in liquidation may be made in cash
or in kind, or partly in cash and partly in kind, as determined by the
Liquidating Partner. Distributions in kind shall be valued at fair market value
as reasonably determined by the Liquidating Partner and shall be subject to such
conditions and restrictions as may be necessary or advisable in the reasonable
discretion of the Liquidating Partner to preserve the value of the property so
distributed.
(c) The Profits and Losses of the Partnership during the period of
dissolution and liquidation shall be allocated among the Partners in accordance
with the provisions of Section 4.2. If any property is distributed in kind, the
Capital Accounts of the Partners shall be adjusted in accordance with the
provisions of Section 4.2(g).
(d) The assets of the Partnership (including, without limitation,
proceeds from the sale or other disposition of any assets during the period of
dissolution and liquidation) shall be applied as follows:
(i) First, to repay any indebtedness of the Partnership, whether
to third parties or the Partners, in the order of priority required by law;
(ii) Next, to any reserves which the Liquidating Partner
reasonably deems necessary for contingent or unforeseen liabilities or
obligations of the Partnership (which reserves when they become unnecessary
shall be distributed in the remaining priorities set forth in this Section
7.3(d)); and
(iii) Next, to the Partners in proportion to their respective
positive Capital Account balances (after taking into account all adjustments to
the Partners' Capital Accounts required under Section 7.3(c)).
(e) If, after allocation of all Profits and Losses of the Partnership
pursuant to Section 7.3(c), the Capital Account balance of the General Partner
is less than zero, the General Partner shall, prior to application and
distribution of the Partnership's assets pursuant to Section 7.3(d), contribute
to the capital of the Partnership sufficient cash and/or property to increase
the General Partner's Capital Account balance to zero.
SECTION 8
---------
LIABILITY AND INDEMNIFICATION OF THE GENERAL PARTNER
----------------------------------------------------
8.1 Liability. Except as otherwise specifically provided in this
---------
Agreement, the General Partner (and its affiliates) shall not be personally
liable for the return of any contributions made to the capital of the
Partnership by the Limited Partners. In the absence of fraud, gross negligence,
material breach of fiduciary duty, or willful misconduct by the General Partner,
the General Partner (and its affiliates) shall not be liable to the Partnership
or the Limited Partners for any act or omission concerning the Partnership's
business.
-20-
8.2 Indemnification. In the absence of fraud, gross negligence, material
---------------
breach of fiduciary duty, or willful misconduct on the part an Indemnified
Person, the Partnership shall indemnify and hold each Indemnified Person
harmless from and against any loss, expense, damage or injury suffered or
sustained by any of them by reason of any acts, omissions, or alleged acts or
omissions arising out of any activity performed on behalf of the Partnership.
This indemnification shall include, but not be limited to: (i) payment of
reasonable attorneys' fees and other expenses incurred in settling any claim or
threatened action, or incurred in any finally-adjudicated legal proceeding, and
(ii) the removal of any liens affecting the property of an Indemnified Person
(which liens shall be deemed a debt of the Partnership to such Indemnified
Person to be repaid in full before any distributions are made to the Partners
pursuant to this Agreement). As used herein, "Indemnified Person" means the
General Partner, any business entity of which the General Partner is an officer,
director, partner or shareholder, or any employee or agent thereof. The total
obligation of the Partnership to all Indemnified Person under this section 8.2
shall be limited to the assets of the Partnership (excluding, solely for
purposes of this sentence, any obligation of the General Partner to restore a
deficit balance in its Capital Account pursuant to Section 7.3(e)).
SECTION 9
---------
GENERAL PROVISIONS
------------------
9.1 Special Meetings. Subject to the provisions of the Act, the General
----------------
Partner may call a special meeting of all Partners at any reasonable time on not
less than 10 nor more than 60 days written notice.
9.2 Entire Agreement. This Agreement, the Subscription Agreement between
----------------
Skrmetta and the Partnership, and the Cancellation Agreement between Skrmetta
and Boomtown, both of even date herewith contain the entire understanding among
the Partners and supersede any prior written or oral agreement between them
respecting the Partnership. There are no representations, agreements,
arrangements, or understandings, oral or written, among the Partners relating to
the Partnership which are not fully expressed in this Agreement, the
Subscription Agreement between Skrmetta and the Partnership, or the Cancellation
Agreement between Skrmetta and Boomtown, both of even date herewith.
9.3 Amendments.
----------
(a) General. This Agreement is subject to amendment only with the
-------
written consent of the General Partner and a Majority-In-Interest of the Limited
Partners; provided, however, that there shall be no amendment to this Agreement
-------- -------
which reduces a Limited Partner's interests in the Profits, distributions or
capital of the Partnership without the consent of such Limited Partner.
(b) Amendments to Comply with Gaming or Similar Laws. Notwithstanding
------------------------------------------------
the provisions of Section 9.3(a), the Partners hereby agree in advance
-21-
that this Agreement shall be amended as necessary to comply with the
requirements of any gaming or similar law or governmental rule that regulates or
otherwise pertains to the business of the Partnership.
9.4 Governing Law. All questions with respect to the interpretation of
-------------
this Agreement and the rights and liabilities of the Partners shall be governed
by the laws of the State of Louisiana as they are applied to contracts entered
into between residents of Louisiana.
9.5 Severability. In the event any one or more of the provisions of this
------------
Agreement are determined to be invalid or unenforceable, such provision or
provisions shall be deemed severable from the remainder of this Agreement and
shall not cause the invalidity or unenforceability of the remainder of this
Agreement.
9.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts and when so executed, all of such counterparts shall constitute a
single instrument binding upon all parties notwithstanding the fact that all
parties are not signatory to the original or to the same counterpart.
9.7 Survival of Rights. Subject to the restrictions against unauthorized
------------------
assignment or transfer set forth in this Agreement, the provisions of this
Agreement shall inure to the benefit of and be binding upon each Partner and
such Partner's heirs, devises, legatees, personal representatives, successors,
and assigns.
9.8 Arbitration and Attorneys' Fees. Any controversy or claim arising out
-------------------------------
of or relating to this Agreement, the Partnership, or the Partners' respective
rights and duties shall be settled by arbitration in the State of Nevada. Such
arbitration shall be in accordance with the rules of the American Arbitration
Association, and judgment upon the award may be entered in any court of
competent jurisdiction. The prevailing Partner or Partners in such arbitration
and any ensuing legal action shall be reimbursed by the Partner or Partners who
do not prevail for their reasonable attorney's, accountant's and expert's fees
and the costs of such actions.
9.9 Notices. Any notice shall be in writing and shall be deemed duly
-------
given when personally delivered to the Partner to whom it is directed, or in
lieu of such personal service, when deposited in the United States mail,
registered or certified mail, postage prepaid, to the address set forth on
Schedule A for such Partner, or to any other address of which the General
Partner is notified by such Partner in writing. Notice also shall be deemed
duly given when actually received by the Partner to whom it is directed via
telecopy, electronic transfer, telex or telegram.
9.10 Consents. All consents, agreements and approvals provided for or
--------
permitted by this Agreement shall be in writing and signed copies thereof shall
be retained with the books of the Partnership.
-22-
9.11 No Partition. Except as otherwise permitted by this Agreement, no
------------
Partner shall have the right, and each Partner does hereby agree that it shall
not seek, to cause a partition of the Partnership's property whether by court
action or otherwise.
9.12 Representation by Limited Partners. Each Limited Partner hereby
----------------------------------
represents that, with respect to its limited partnership interest in the
Partnership: (i) it is acquiring or has acquired such interest for purposes of
investment only, for its own account (or a trust account if such Limited Partner
is a trustee), and not with a view to resell or distribute the same or any part
thereof; and (ii) no other person has any interest in such limited partnership
interest or in the rights of such Limited Partner under this Agreement other
than a spouse having a community property or similar interest under applicable
state law. Each Limited Partner also warrants to the Partnership and the other
Partners that it has the business and financial knowledge and experience
necessary to purchase a limited partnership interest in the Partnership in the
amount of its capital contributions to the Partnership on the terms contemplated
herein and that it has the ability to bear the risks of such investment
(including the risk of sustaining a complete loss of all such capital
contributions) without the need for the investor protections provided by the
registration requirements of the Securities Act of 1933, as amended.
9.13 Valuation. If (i) the fair market value of any asset or other item of
---------
property (including, without limitation, a limited partnership interest in the
Partnership) is required to be determined under the terms of this Agreement or
any other agreement or arrangement to which the Partnership is subject, and (ii)
no standard for determining such fair market value is provided for under the
applicable provision of this Agreement or such other agreement or arrangement,
then the fair market value of the asset or other item of property shall be
determined by the General Partner in its reasonable discretion.
9.14 Mutual Selection. Each Partner hereby specifically consents to and
----------------
endorses the selection of all other Partners admitted to the Partnership
pursuant to the terms of this Agreement.
-23-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
GENERAL PARTNER: LIMITED PARTNERS:
LOUISIANA GAMING ENTERPRISES, BOOMTOWN, INC., a Delaware
INC., a Louisiana corporation corporation
__________________________________________________________________
By: Robert F. List By: Robert F. List
Title: Senior Vice-President Title:
ERIC SKRMETTA
________________________________
By: Eric Skrmetta
Title: Limited Partner
-24-
SCHEDULE A
Name and Address Capital Contribution Percentage Interest
Louisiana Gaming Enterprises, Inc. 5%
700 Camp Street
New Orleans, LA 70130
Boomtown, Inc. 87.5%
P.O. Box 399
Verdi, NV 89439
Eric Skrmetta 7.5%
501 Destrehan Avenue
Harvey, LA 70058
REGISTERED ADDRESS OF PARTNERSHIP:
2439 Manhattan Blvd., Suite 105
Harvey, LA 70058
-25-
- ------------------------------------------------------------------------------------------------------------
W. Fox McKeithen NOTICE OF CHANGE OF REGISTERED OFFICE
AND/OR CHANGE OF REGISTERED AGENT
Secretary of State (R.S. 12.104 & 12.236)
-----------------------------------------------------------------------------------
Domestic Corporation Return to: Corporations Division
(Business or Non-Profit) P.O. Box 94125
Enclose $20.00 filing fee Baton Rouge, LA 70804-3125
Make remittance payable to Phone (504) 925-4704
Secretary of State
Do not send cash
- ------------------------------------------------------------------------------------------------------------
Corporation Name LOUISIANA-I GAMING, A LOUISIANA PARTNERSHIP IN COMMENDAM
--------------------------------------------------------
D/B/A BOOMTOWN CASINO WESTBANK
- ------------------------------
CHANGE OF LOCATION OF REGISTERED OFFICE
Notice is hereby given that the Board of Directors of the above named
corporation has authorized a change in the location of the corporation's
registered office. The new registered office is located at:
4132 PETERS ROAD, HARVEY, LOUISIANA 70058
------------------------------------------
------------------------------------------
To be signed by one (1) officer or two (2) directors
JASON A. RABALAIS, VICE PRESIDENT & GENERAL MANAGER
CHANGE OF REGISTERED AGENT(S)
Notice is hereby given that the Board of Directors of the above named
corporation has authorized the change of the corporation's registered agent(s).
The name(s) and address(es) of the new registered agent(s) is/are as follows:
MR. JASON A. RABALAIS, 4132 PETERS ROAD, HARVEY LOUISIANA 70058
----------------------------------------------------------------
-------------------------
President, Vice President or Secretary
JASON A. RABALAIS, VICE PRESIDENT & GENERAL MANAGER
AGENT AFFIDAVIT AND ACKNOWLEDGEMENT OF ACCEPTANCE
I hereby acknowledge and accept the appointment of registered agent(s) for and
on behalf of the above named corporation.
JASON A. RABALAIS
-------------------------------
-------------------------------
Registered Agent(s)
Sworn to and subscribed before me this _________ day of __ , 19__ .
---------------------------
Notary
-26-
LOUISIANA-I GAMING,
A LOUISIANA PARTNERSHIP IN COMMENDAM
4132 PETERS ROAD
HARVEY, LA 70058
June 4, 1996
Mr. Fox McKeithen
LA Secretary of State
P.O. Box 94125
Baton Rouge, LA 70004-9125
Re: Notice of Change of Registered Office
Louisiana-I Gaming, a Louisiana Partnership in Commendam
Dear Mr. McKeithen:
Please be advised the Registered Office of Louisiana-I Gaming, a Louisiana
Partnership in Commendam has been changed. The new address is:
4132 Peters Road
Harvey, LA 70058
Sincerely,
Louisiana-I Gaming, a Louisiana Partnership in
Commendam
By: Louisiana Gaming Enterprises, Inc.
General Partner
By:___________________________________
Robert F. List
Secretary/Treasurer
-27-
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1 DEFINITIONS....................................................... 1
SECTION 2 FORMATION OF LIMITED PARTNERSHIP.................................. 4
2.1 Formation, Name and Principal Office.............................. 4
2.2 Purpose and Scope of the Partnership.............................. 4
2.3 Names and Addresses of the Partners............................... 4
2.4 Term of the Partnership........................................... 4
2.5 Required Documents................................................ 5
2.6 Title to Property................................................. 5
2.7 Required Licenses................................................. 5
SECTION 3 CAPITALIZATION OF THE PARTNERSHIP................................. 5
3.1 Initial Capital Contribution...................................... 5
3.2 Additional Capital Contributions.................................. 6
3.3 Admission of Additional Limited Partners.......................... 6
3.4 Withdrawal and Return of Capital.................................. 6
3.5 Loans to the Partnership.......................................... 6
3.6 Limitation of Liability........................................... 7
3.7 Percentage Interest............................................... 7
3.8 Interest on Capital............................................... 7
SECTION 4 DISTRIBUTIONS, PROFITS AND LOSSES................................. 8
4.1 Distributions..................................................... 8
4.2 Allocations of Partnership Profits and Losses..................... 9
4.3 Modification to Preserve Underlying Economic
Objectives........................................................ 12
4.4 Withholding Taxes and Fees........................................ 12
4.5 Nonallocation of Distributions to Increases In
Minimum Gain...................................................... 12
4.6 Allocation of Liabilities......................................... 12
SECTION 5 ADMINISTRATIVE PROVISIONS......................................... 13
5.1 Power of Limited Partners......................................... 13
5.2 Management by the General Partner................................. 13
5.3 Restrictions on Powers of the General Partner..................... 14
5.4 Competing Ventures................................................ 14
5.5 Disclosures....................................................... 14
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5.6 Reimbursement to the General Partner.............................. 14
5.7 Compensation...................................................... 15
5.8 Tax Matters Partner............................................... 15
5.9 Books, Records and Annual Financial Statements.................... 15
SECTION 6 TRANSFER OF A PARTNERSHIP INTEREST;
WITHDRAWALS....................................................... 16
6.1 Transfers......................................................... 16
6.2 Withdrawal of a Limited Partner................................... 17
6.3 Mandatory Transfer of a Partner's Interest........................ 18
SECTION 7 DISSOLUTION AND LIQUIDATION OF THE
PARTNERSHIP....................................................... 18
7.1 Dissolving Events................................................. 18
7.2 Special Meeting to Dissolve or Continue the
Partnership....................................................... 19
7.3 Winding Up of the Partnership..................................... 19
SECTION 8 LIABILITY AND INDEMNIFICATION OF THE
GENERAL PARTNER................................................... 20
8.1 Liability......................................................... 20
8.2 Indemnification................................................... 21
SECTION 9 GENERAL PROVISIONS................................................ 21
9.1 Special Meetings.................................................. 21
9.2 Entire Agreement.................................................. 21
9.3 Amendments........................................................ 21
9.4 Governing Law..................................................... 22
9.5 Severability...................................................... 22
9.6 Counterparts...................................................... 22
9.7 Survival of Rights................................................ 22
9.8 Arbitration and Attorneys' Fees................................... 22
9.9 Notices........................................................... 22
9.10 Consents.......................................................... 22
9.11 No Partition...................................................... 23
9.12 Representation by Limited Partners................................ 23
9.13 Valuation......................................................... 23
9.14 Mutual Selection.................................................. 23
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