Exhibit 3.19
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AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
of
BELLE OF SIOUX CITY, L.P.
by and among
IOWA GAMING COMPANY,
as General Partner,
and
ARGOSY OF IOWA, INC.
as Limited Partner
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..............................................................................1
1.1 Definitions...............................................................................................1
ARTICLE II THE PARTNERSHIP..........................................................................7
2.1 Continuation of the Partnership...........................................................................7
2.2 Partnership Name..........................................................................................7
2.3 Purposes..................................................................................................7
2.4 Partnership Powers........................................................................................7
ARTICLE III PRINCIPAL OFFICE.........................................................................8
ARTICLE IV TERM.....................................................................................8
ARTICLE V CAPITAL CONTRIBUTIONS....................................................................8
5.1 General Partner...........................................................................................8
5.2 Limited Partner...........................................................................................8
5.3 Additional Financing......................................................................................8
5.4 Additional Capital Contributions..........................................................................9
5.5 Interest..................................................................................................9
ARTICLE VI CAPITAL ACCOUNTS; ALLOCATIONS OF INCOME, PROFITS AND LOSSES..............................9
6.1 Capital Accounts..........................................................................................9
6.2 Withdrawal of Capital.....................................................................................9
6.3 Allocation of Profits and Losses..........................................................................9
6.4 Special Allocations......................................................................................10
6.5 Allocations in Case of Transfers or Admissions...........................................................11
6.6 Tax Allocations..........................................................................................12
ARTICLE VII ACCOUNTING AND TAX MATTERS..............................................................12
7.1 Fiscal and Tax Years.....................................................................................12
7.2 Accounting Method........................................................................................12
7.3 Tax Matters Partner......................................................................................12
7.4 Tax Elections............................................................................................13
7.5 Tax Returns..............................................................................................13
7.6 Partnership Classification...............................................................................13
ARTICLE VIII DISTRIBUTIONS...........................................................................13
8.1 Determination of Cash Flow...............................................................................13
8.2 Amounts and Time of Distribution.........................................................................14
ARTICLE IX MANAGEMENT OF THE PARTNERSHIP...........................................................14
9.1 Management; Management Agreement and Boat Lease..........................................................14
9.2 Limitation on Powers.....................................................................................14
9.3 Non-Participation in Management by Limited Partners......................................................14
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TABLE OF CONTENTS
(continued)
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9.4 Employees and Officers...................................................................................14
9.5 Authority of the General Partner.........................................................................14
9.6 Compliance with Commission Rules.........................................................................15
ARTICLE X LIMITATION OF LIABILITY; INDEMNIFICATION................................................15
10.1 Exoneration.............................................................................................15
10.2 Indemnification.........................................................................................15
10.3 Legal Expenses..........................................................................................15
ARTICLE XI REIMBURSEMENT OF GENERAL PARTNER........................................................15
11.1 Compensation and Expense Reimbursement of Partners......................................................15
ARTICLE XII FINANCIAL STATEMENTS....................................................................16
12.1 Audits..................................................................................................16
12.2 Financial Statements....................................................................................16
12.3 Partnership Books.......................................................................................16
ARTICLE XIII RESTRICTIONS ON TRANSFERS OF INTERESTS..................................................16
ARTICLE XIV NO WITHDRAWAL OR PARTITION BY A PARTNER.................................................17
ARTICLE XV DISSOLUTION.............................................................................17
15.1 Dissolution.............................................................................................17
ARTICLE XVI LIQUIDATION AND DISTRIBUTION............................................................17
16.1 Liquidating Partner.....................................................................................17
16.2 Winding Up..............................................................................................17
16.3 Distribution Following Liquidation......................................................................17
ARTICLE XVII NO PARTNERSHIP OPPORTUNITY AND AFFILIATE TRANSACTIONS...................................18
17.1 Other Business; Partnership Opportunity.................................................................18
17.2 Affiliate Transactions..................................................................................19
ARTICLE XVIII MISCELLANEOUS...........................................................................19
18.1 Governing Law...........................................................................................19
18.2 Events of Force Majeure.................................................................................19
18.3 Title to Assets; Partition..............................................................................19
18.4 Headings................................................................................................19
18.5 Entire Agreement, Amendments and Waivers................................................................19
18.6 Remedies................................................................................................20
18.7 Further Assurances......................................................................................20
18.8 Counterparts............................................................................................20
18.9 Notices.................................................................................................20
18.10 Confidentiality........................................................................................21
18.11 No Third-Party Beneficiary.............................................................................21
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TABLE OF CONTENTS
(continued)
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18.12 Severability...........................................................................................21
18.13 Successors and Assigns.................................................................................21
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EXHIBIT LIST
EXHIBIT
A Capital Contributions and Interests
iv
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (as
amended from time to time, this "AGREEMENT"), effective as of July 26, 2000, by
and between Iowa Gaming Company, an Iowa corporation (the "Company"), as its
General Partner and Argosy of Iowa, Inc., an Iowa corporation ("IOWA SUB"), as
its Limited Partner.
W I T N E S S E T H:
WHEREAS, the Company and Gamdev of Sioux City, Inc. f/k/a
Sioux City Riverboat Corp., Inc., an Iowa corporation ("GSC") entered into an
Agreement of Limited Partnership (the "ORIGINAL AGREEMENT") dated
December 1, 1994 to create the Partnership;
WHEREAS, GSC has sold all of its Interest in the Partnership
to Iowa Sub pursuant to the Partnership Interest Purchase and Sale Agreement
dated June 9, 2000 between the Company, Argosy Gaming Company, a Delaware
corporation, Iowa Sub, GSC and Gaming Development Group, Inc., an Illinois
corporation;
WHEREAS, the Company and Iowa Sub desire to amend and restate
the Original Agreement in its entirety, and desire to reflect herein, among
other things, (i) the admission of Iowa Sub as a Substitute Partner, as such
term was defined in the Original Agreement, and (ii) certain other amendments to
the Original Agreement to reflect the withdrawal of GSC from the Partnership.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following
terms shall have the meanings set forth below.
"ACT" means the Iowa Revised Uniform Limited Partnership Act,
as amended from time to time, and any successor statutes thereto.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean with respect to
any Partner, the deficit balance, if any, in the Partner's Capital Account as of
the end of the relevant taxable year, after giving effect to the following
adjustments: (i) credit to such Capital Account any amounts which the Partner is
obligated to restore pursuant to Treasury Regulation Section
1.704-a(b)(2)(ii)(c), or is deemed obligated to restore pursuant to the
penultimate sentence of Treasury Regulation Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (ii) debit to such Capital Account the items described in
Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital
Account Deficit is intended to comply with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"AFFILIATE" shall mean, with respect to any Partner (or with
respect to any other individual or Entity whose affiliates are relevant for
purposes of any of the provisions of this Agreement), any Entity which directly
or indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, any Partner or any such person or Entity.
"AGREEMENT" has the meaning set forth in the opening
paragraph.
"AFFECTED GAIN" has the meaning set forth in SECTION 6.4(G).
"CAPITAL ACCOUNT" means, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with the following
provisions:
(a) To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive share of
Profits and Partnership items of income and gain and the amount of any
Partnership liabilities assumed by such Partner or which are secured by any
Property distributed to such Partner.
(b) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Property distributed to such
Partner pursuant to any provision of this Agreement, such Partner's distributive
share of Losses and Partnership items of loss and deduction, and the amount of
any liabilities of such Partner assumed by the Partnership or which are secured
by any property contributed by such Partner to the Partnership.
(c) In the event all or a portion of a Partner's Interest is
transferred in accordance with the terms of this Agreement, the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to the
transferred Interest.
(d) In determining the amount of any liability for purposes of
the foregoing subparagraphs (i) and (ii), there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Regulations. In the event the General
Partner shall reasonably determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto are computed in
order to comply with such Regulations, the General Partner may make such
modification; provided that it is not likely to have a material effect on the
amount distributed to any Partner pursuant to ARTICLE XVI hereof upon the
dissolution of the Partnership.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the
aggregate amount of any money and the Gross Asset Value of any property (other
than money) contributed to the Partnership with respect to the Interest held by
such Partner, less any liabilities assumed by the Partner in connection with any
property or to which such property is subject.
"CASH FLOW", for any period, means the amount by which (i) the
gross cash receipts of the Partnership from any source for such period
(including, but not limited to, capital
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contributions, loans, receipts pursuant to casino operations or other
Partnership operations, proceeds of the sale of any Partnership property, the
net receipts derived from insurance payments, rents, damage recoveries,
condemnation proceeds and any and all other cash receipts from any source,
exceed (ii) (a) the aggregate of all cash disbursements for such period
(including, but not limited to, any management fees paid to the General
Partner or any successor manager, capital items, interest, loan repayments,
reasonably allocable expenses of the Manager directly related to the
Partnership's business which are reimbursed to the Manager pursuant to the
terms of the Management Agreement and Boat Lease and (b) amounts determined
by the General Partner to be reasonable and customary reserves in accordance
with Generally Accepted Accounting Principles for either future operating
expenses or capital items for the Partnership; provided that any reserves
over $250,000 in any year shall require the consent of the Limited Partner.
"CASINO" means the excursion boat gaming operations and
related restaurants, bars, entertainment, parking facilities and other
operations conducted at the Site.
"CERTIFICATE" means the Certificate of Registration filed with
the Secretary of State of Iowa in accordance with the Act, as such Certificate
may be amended from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law).
"COMMISSION" means the Iowa Racing and Gaming Commission.
"CONTROL" means the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority over
an Entity. In the case of a limited partnership, the sole general partner, all
of the general partners to the extent each has equal management control and
authority, or the managing general partner or managing general partners thereof
shall be deemed to have control of such partnership and, in the case of a trust,
any trustee thereof or any person having the right to select any such trustee
shall be deemed to have control of such trust.
"DEBT DOCUMENTS" means the documents evidencing any borrowings
of the Partnership.
"DEPRECIATION" means, for each fiscal year or other period, an
amount equal to the depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that,
if the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero (0), Depreciation shall be determined with reference to such beginning
Gross Asset Value using any reasonable method selected by the General Partner;
and, provided further, however, to
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the extent that pursuant to SECTION 6.6(B) of this Agreement the "remedial
allocation" method described in Regulations Section 1.704-3T is elected,
Depreciation shall be determined in a manner consistent with such method.
"EMPLOYEE COSTS" has the meaning set forth in SECTION 9.4.
"ENTITY" means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, limited liability company,
cooperative or association.
"EVENT OF FORCE MAJEURE" means the occurrence of circumstances
beyond a Partner's control, including, but not limited to, any act by any
governmental authority, act of war, strike, boycott, lockout, picketing, riot,
sabotage, civil commotion, insurrection, epidemic, disease, act of God, fire,
flood, accident, explosion, earthquake, storm, failure of public utilities or
common carriers, mechanical failure, embargo or prohibition imposed by any
governmental body or agency having authority over such Partner.
"FISCAL YEAR" means the Partnership accounting year ending on
December 31, except that in the final year of the Partnership, the Fiscal Year
shall end on the later of (a) the date of dissolution and liquidation, or (b)
the date of final distribution.
"GENERAL PARTNER" means any Person which (i) is referred to as
such in the first paragraph of this Agreement or has become a General Partner
pursuant to the terms of this Agreement and (ii) has not ceased to be a General
Partner pursuant to the terms of this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the Partnership;
(ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as determined by
the General Partner, as of the following times: (a) the acquisition of an
additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution within the meaning of
Regulations Section 1.704-1(b)(2)(iv)(f)(5); (b) the distribution by the
Partnership to a Partner of more than a de minimis amount of Partnership assets,
including money, as consideration for an Interest in the Partnership within the
meaning of Regulations Section 1.704-1(b)(2)(iv)(f)(5); and (c) the liquidation
of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses
(a) and (b) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;
(iii) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be the gross fair market value of such asset on
the date of distribution (taking into account Code Section 7701(g)); and
4
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and the definition
of "Capital Account" hereof; provided, however, that Gross Asset Values shall
not be adjusted pursuant to this subparagraph (iv) to the extent the General
Partner determines that an adjustment pursuant to the foregoing subparagraph
(ii) of this definition is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph (iv).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to any of the foregoing subparagraphs (i), (ii) or (iv) such
Gross Asset value shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Profits and Losses.
"INTEREST" means all of a Partner's economic rights and
interests in the Partnership in the Partner's capacity as a Partner, all as
provided in this Agreement, including, without limitation, any interest of such
Partner in the total capital, profits and losses of the Partnership.
"LICENSE" means a license from the Iowa Racing and Gaming
Commission to operate an excursion gambling boat on the Missouri River at Sioux
City, Iowa.
"LIMITED PARTNER" means any Person (i) the name of which is
set forth on EXHIBIT A attached hereto and designated as such or who is admitted
to and has become a limited partner of the Partnership pursuant to the terms of
this Agreement and (ii) holds an Interest. "Limited Partners" means all such
persons in the event that there is more than one Limited Partner at any time.
"LIQUIDATING PARTNER" has the meaning set forth in SECTION
16.1.
"MANAGEMENT AND BOAT LEASE AGREEMENT" means that certain
Management and Boat Lease Agreement by and between the Partnership and the
General Partner dated as of December 1, 1994, as amended from time to time in
accordance with the terms thereof.
"PARTNER" means each of the General Partner and the Limited
Partner, any permitted successor to either of them, any transferee permitted
under this Agreement and any other person who shall be admitted to the
Partnership as a Partner in accordance with this Agreement. "Partners" means all
such persons.
"PARTNER MINIMUM GAIN" has the same meaning as "partner
nonrecourse debt minimum gain" set forth in Regulations Section 1.704-2(i)(2).
"PARTNER NONRECOURSE DEBT" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i). The amount of Partner Nonrecourse Deductions
with respect to a Partner Nonrecourse Debt for a Fiscal Year equals the excess,
if any, of the net increase, if any, in the
5
amount of Partner Minimum Gain attributable to such Partner Nonrecourse Debt
during that Fiscal Year over the aggregate amount of any distributions during
that Fiscal Year to the Partner that bears the economic risk of loss for such
Partner Nonrecourse Debt to the extent such distributions are from the
proceeds of such Partner Nonrecourse Debt and are allocable to an increase in
Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i).
"PARTNERSHIP" means the limited partnership governed by this
Agreement.
"PARTNERSHIP OPPORTUNITY" means a business or other
opportunity which relates to the Partnership's line of business and in which the
Partnership has or would have an interest or a reasonable expectancy, which
shall specifically include any riverboat or land-based gaming activity.
"PERCENTAGE INTEREST" means the percentage for each Partner as
set forth in EXHIBIT A, as the same may be adjusted from time to time in
accordance with this Agreement.
"PROFITS AND LOSSES" means, for each fiscal year or other
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Profits or Losses pursuant to this definition shall be
subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to subparagraph (ii) or (iv) to the definition of
Gross Asset Value hereof, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of Property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period, computed in accordance with the definition of Depreciation herein;
6
(vi) Partnership items of income, gain, loss and deduction
that are specially allocated pursuant to SECTION 6.4 hereof shall not be taken
into account; and
(vii) If any Partnership asset is distributed in kind, the
Partnership shall be deemed to have realized Profit or Loss thereon in the same
manner as if the Partnership had sold such asset for an amount equal to its fair
market value (as determined by the General Partner) on the date of distribution.
"REGULATIONS" means the Income Tax Regulations, including
Temporary Regulations, promulgated pursuant to the Code as such regulations may
be amended from time to time (including corresponding provisions of succeeding
regulations).
"REGULATORY ALLOCATIONS" has the meaning set forth in
SECTION 6.4(f).
"SITE" means the certain real property located on or near the
Missouri River and leased or purchased by the Partnership in connection with the
operation of a casino and related activities, along with any additional or
replacement property designated or sought by the Partnership for such
operations, whether leased or purchased from the City or any other person or
Entity.
"TAX MATTERS PARTNER" shall have the same meaning as ascribed
to such term in Section 6231(a)(7) of the Code and the Regulations.
"TRANSFER" means, with respect to any Partner, a sale,
conveyance, assignment, pledge, hypothecation, gift, encumbrance or other
transfer or disposition of an Interest or any part thereof or any interest
therein, or any action or attempt to effect the same.
ARTICLE II
THE PARTNERSHIP
2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto hereby agree to
continue the Partnership as a limited partnership pursuant to this Agreement and
the Act. Any previous agreement for governance of the Partnership is hereby
superceded in its entirety.
2.2 PARTNERSHIP NAME. The name of the Partnership is Belle of Sioux City,
L.P. The Partnership shall execute and file all such documents and take all such
other actions as may be necessary to register such name in the State of Iowa and
any other appropriate jurisdictions, whether state or local. The Partnership may
also do business and own assets in or under any other name as the General
Partner may determine and the General Partner shall execute, publish and/or file
all assumed or fictitious names or other certificates as may be required by law.
2.3 PURPOSES. The purpose of the Partnership is to (a) deploy and operate a
riverboat or dockside gaming casino at or from the Site; (b) operate the Casino
at or from the Site; and (c) do any and all things necessary thereto or
associated with the Casino.
2.4 PARTNERSHIP POWERS. The Partnership shall have all powers permitted by
law to a limited partnership, including, without limitation, the power to do any
act or thing and enter into
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any contract incidental to, or necessary, proper or advisable for, the
operation of the Casino or the accomplishment or attainment of any purpose of
the Partnership specified in this Agreement.
ARTICLE III
PRINCIPAL OFFICE
The principal office of the Partnership shall be maintained at
000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxx 00000 or such other location or locations as
the General Partner from time to time may select.
ARTICLE IV
TERM
The term of the Partnership commenced on the date on which the
Certificate was filed in the office of the Secretary of State of Iowa in
accordance with the Act and shall continue until December 31, 2014, unless (a)
extended by written agreement of the Partners or (b) earlier terminated pursuant
to ARTICLE XV.
ARTICLE V
CAPITAL CONTRIBUTIONS
5.1 GENERAL PARTNER. The name, address, Capital Contribution and Percentage
Interest of the General Partner is set forth on EXHIBIT A attached hereto.
5.2 LIMITED PARTNER. The name, address, Capital Contribution and Percentage
Interest of the Limited Partner is set forth on EXHIBIT A attached hereto.
5.3 ADDITIONAL FINANCING.
(a) The General Partner shall either (i) make a loan to the Partnership
or (ii) cause the Partnership to enter into a borrowing transaction to obtain
from a third party, such amount as the General Partner shall determine to be
necessary for working capital; provided, however, that in no event shall the
General Partner be obligated to loan more than $1,000,000 to the Partnership
pursuant to this SUBSECTION 5.3(a).
(b) In the event that the General Partner determines that additional
financing is required by the Partnership for any other reason, the General
Partner shall either (i) make a loan or loans to the Partnership or (ii) use
reasonable efforts to cause the Partnership to enter into a borrowing
transaction to obtain such amounts from third party financing. In no event shall
the General Partner be obligated to make such a loan or loans to the Partnership
pursuant to this SUBSECTION 5.3(b) in excess of $250,000.
(c) If any such financing is provided by the General Partner or an
affiliate of the General Partner pursuant to SECTION 5.3(a) or (b), the interest
rate thereon shall not exceed the lesser of (i) the long-term cost of capital of
the General Partner and its parent corporation or (ii) the "prime" rate
announced by Xxxxx Fargo Bank, NA, plus three percent (3%). Any such loans shall
be repaid with interest prior to any distributions of Cash Flow (any partial
payments being applied first to accrued and unpaid interest and then to
outstanding principal).
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5.4 ADDITIONAL CAPITAL CONTRIBUTIONS. No Partner shall make any additional
contribution of capital to the Partnership without the prior written consent of
the other Partner. If so approved, the amount of any Partner's additional
capital contribution shall be the amount of money and the Gross Asset Value of
any other property contributed to the Partnership by the Partner.
5.5 INTEREST. No Partner shall be entitled to receive any interest on such
Partner's capital contribution.
ARTICLE VI
CAPITAL ACCOUNTS; ALLOCATIONS OF INCOME, PROFITS AND LOSSES
6.1 CAPITAL ACCOUNTS. The General Partner shall establish and maintain a
Capital Account for each Partner in accordance with the provisions set forth in
the definition thereof. The initial balances of the Partners' respective Capital
Accounts reflecting the capital contributions made as of the date hereof
pursuant to ARTICLE V are set forth on EXHIBIT A attached hereto.
6.2 WITHDRAWAL OF CAPITAL. Except as expressly provided by this Agreement,
no Partner shall have the right to withdraw, reduce or demand the return of its
capital contribution or to otherwise withdraw any capital, whether cash or
property, from the Partnership.
6.3 ALLOCATION OF PROFITS AND LOSSES.
(a) Profits and Losses shall be allocated to the Partners in the
following manner:
(i) Profits shall be allocated as follows:
(A) first, to the Partners, pro rata in proportion to and to the
extent of the excess of the cumulative losses allocated to
each such Partner over the cumulative losses allocated to
such Partner pursuant to this SECTION 6.3(a)(i)(A); and
(B) thereafter, any remaining Profits shall be allocated to the
Partners in accordance with their respective Interests.
(ii) Losses shall be allocated as follows:
(A) first, to the Partners pro rata and in proportion to and to
the extent of the cumulative Profits allocated to each such
Partner under SECTION 6.3(a)(i)(B); and
(B) Thereafter, any remaining Losses shall be allocated to the
General Partner.
(b) The allocation of Profits and Losses in paragraph (a) is
intended to have substantial economic effect within the meaning of Treas.
Reg. Section 1.704-1(b)(2) or be in
9
accordance with the Partners' interests in the Partnership within the
meaning of Treas. Reg. Section 1.704-1(b)(3). If subsequent events
(including, but not limited to, nonrecourse borrowing by the Partnership)
cause, in the reasonable opinion of the General Partner, the paragraph
(a) allocations to have neither substantial economic effect nor be in
accordance with the Partners' interests in the Partnership, the General
Partner may (i) allocate the income, gain, loss, deduction and credit of the
Partnership so that such allocations are in accordance with the Partners'
interests in the Partnership; or (ii) make such other modifications to this
Agreement (including, but not limited to, the addition of a minimum gain
chargeback, and other special allocation provisions specified in Treas.
Reg. Sections 1.704-2 or 1.704-1(b)) that are necessary to cause such
allocations to have substantial economic effect within the meaning of Treas.
Reg. Section 1.704-1(b)(2).
6.4 SPECIAL ALLOCATIONS.
(a) PARTNER MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this ARTICLE VI, if there is a net decrease in Partner Minimum Gain
attributable to Partner Nonrecourse Debt during any Fiscal Year, determined in
accordance with Regulations Section 1.704-2(i)(3), each Partner who has a share
of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be
allocated Partnership items of income and gain for such Fiscal Year (and, if
necessary, subsequent Fiscal Years) equal to such Partner's share of the net
decrease in Partner Minimum Gain. This SECTION 6.4(a) is intended to comply with
Regulations Section 1.704-2(i) and shall be applied and interpreted consistently
therewith.
(b) PARTNER NONRECOURSE DEDUCTIONS. Any Partner Nonrecourse Deductions
for any Fiscal Year or other period shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i) and 1.704-2(k).
(c) CASH FLOW DISTRIBUTIONS. To the extent permitted by Regulations
Sections 1.704-2(h) and 1.704-2(i)(6), the Partners shall endeavor to treat
distributions of Cash Flow as having been made from the proceeds of a Partner
Nonrecourse Debt only to the extent that such distributions would not cause or
increase an Adjusted Capital Account Deficit for any Partner.
(d) QUALIFIED INCOME OFFSET. In the event that a Partner receives any
adjustments, allocations or distributions described in Regulations Section
1.704-1(b)(2)(ii) (d)(4), (5) and (6), then items of Partnership income and gain
shall be specially allocated to the Partners in an amount and manner sufficient
to eliminate, to the extent required by such regulations, any Adjusted Capital
Account Deficit created by such adjustments, allocations or distributions as
quickly as possible; provided, however, that an allocation pursuant to this
SECTION 6.4(d) shall be made only if and to the extent that such Partner would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this ARTICLE VI have been tentatively made as if this SECTION 6.4(d) were
not in the Agreement.
(e) To the extent that an adjustment to the adjusted tax basis of any
asset of the Partnership, pursuant to Code Sections 734(b) or 743(b), is
required to be taken into account in determining Capital Accounts or adjustments
thereto under Regulations Section 1.704-
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1(b)(2)(iv)(m), the amount of such adjustment to the Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis) and such gain or loss
shall be specially allocated among the Partners in a manner consistent with
the manner in which their Capital Accounts are required to be adjusted
pursuant to such Section of the Regulations.
(f) CURATIVE ALLOCATIONS. The allocations provided for in SECTIONS
6.4(a), (b), (d) and (e) above (collectively, the "REGULATORY ALLOCATIONS"), may
not be consistent with the manner in which the Partners intend to divide
Profits, Losses and similar items. In such case, to the extent possible, other
items of Partnership income, gain, loss or deduction will be reallocated among
the Partners (in the same Fiscal Year, and to the extent necessary, subsequent
Fiscal Years) in a manner consistent with Regulations Sections 1.704-1(b) and
1.704-2 so as to prevent the Regulatory Allocations from distorting the manner
in which Profits, Losses and other items are intended to be allocated among the
Partners pursuant to SECTION 6.3. Notwithstanding the preceding sentence,
Regulatory Allocations relating to Partner Nonrecourse Deductions shall not be
taken into account except to the extent that there has been a decrease in
Partner Minimum Gain attributable to Partner Nonrecourse Debt. Any allocations
under this SECTION 6.4(f) shall take into account the effect of future
Regulatory Allocations which are likely to offset other Regulatory Allocations
that are or would be the subject of any allocation under this SECTION 6.4(f),
such that the overall allocation of Profits, Losses and items of Partnership
income, gain, loss or deduction are allocated in accordance with the way in
which the Partnership intends to divide Profits, Losses and similar items.
(g) If any portion of taxable gain from the sale of property is treated
as gain which is ordinary income by virtue of the application of Code Sections
1245 or 1250 ("AFFECTED GAIN"), then (A) Partnership items of income and gain in
an amount equal to such Affected Gain shall be allocated among the Partners in
the same proportion that the depreciation and amortization deductions giving
rise to the Affected Gain were allocated and (B) other Partnership items of
income or gain of the same character that would have been recognized, but for
the application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to Clause (A) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes of this SECTION 6.4(g), in order to
determine the proportionate allocations of depreciation and amortization
deductions for each Fiscal Year or other applicable period, such deductions
shall be deemed allocated on the same basis as for Profits and Losses and other
Partnership items of income, gain, loss and deduction for such respective
period.
6.5 ALLOCATIONS IN CASE OF TRANSFERS OR ADMISSIONS. Profits and Losses
allocable to any Interest that has been transferred during a Fiscal Year shall
be allocated among the persons who are the holders of such Interest during such
year in accordance with Code Section 706 using any convention permitted by law
and selected by the General Partner. In the event Partners are admitted to the
Partnership pursuant to this Agreement on different dates, the Profits or Losses
allocated to the Partners for each Fiscal Year during which Partners are so
admitted shall be allocated among the Partners in proportion to their respective
Percentage Interests during such Fiscal Year in accordance with Code Section 706
using any convention permitted by law and selected by the General Partner.
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6.6 TAX ALLOCATIONS.
(a) Except as provided otherwise in this ARTICLE VI, all items of
Partnership income, gain, loss, deduction and any other allocations not
otherwise provided for shall, for tax purposes, be divided among the Partners in
the same proportions as they share Profits and Losses, as the case may be, for
the Fiscal Year.
(b) Section 704(c) Compliance. For federal income tax purposes,
Partnership items of income, gain, loss, deduction and credit shall be allocated
among the Partners in the manner which takes into account the difference between
the adjusted basis to the Partnership of the interest in the property that each
Partner is deemed to have contributed to the Partnership and the Gross Asset
Value of such interest in such property at the time the property was
contributed, in accordance with, and to the full extent required by, Code
Section 704(c) and Regulations Sections 1.704-1(b)(1)(vi), (d)(3), 1.704-3 and
1.704-3T, as the case may be.
In the event any Gross Asset Value is adjusted pursuant to the definition of
Gross Asset Value set forth in ARTICLE I hereof, subsequent allocations of
Profits and Losses with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Section 704(c) of
the Code and the Regulations thereunder. For this purpose, each Partner shall be
treated as contributing assets having an adjusted basis equal to the product of
the adjusted basis of all Partnership assets on the date of such adjustment
multiplied by such Partner's Percentage Interest on such date, and no additional
variation shall be treated as occurring as a result of any scheduled cash
capital contribution made pursuant to SECTION 5.1 hereof. Any elections or other
decisions relating to allocations under this SECTION 6.6(b) including the
selection of any allocation method permitted under Regulations Section 1.704-3
or Regulations Section 1.704-3T shall be made by the General Partner in any
manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to SECTION 6.6(b) are solely for purposes of federal, state
and local income taxes and shall not affect, or in any way be taken into account
in computing, any Capital Account balance or share of Profits, Losses, other
items or distributions pursuant to any provision of this Agreement.
ARTICLE VII
ACCOUNTING AND TAX MATTERS
7.1 FISCAL AND TAX YEARS. The Partnership's Fiscal Year and tax year shall
end on December 31.
7.2 ACCOUNTING METHOD. The books of the Partnership (both tax and
financial) shall be kept on an accrual
basis.
7.3 TAX MATTERS PARTNER. The General Partner shall be the Tax Matters
Partner; provided, however, (i) in exercising its authority as Tax Matters
Partner, the General Partner shall be limited by the provisions of this
Agreement affecting tax aspects of the Partnership; (ii) the Tax Matters Partner
shall consult in good faith with the Limited Partner regarding the filing of a
Code Section 6227(b) administrative adjustment request with respect to the
Partnership before filing such request, it being understood, however, that the
provisions hereof shall not be construed to limit the ability of any Partner to
file an administrative adjustment request on its
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own behalf pursuant to Code Section 6227(a); (iii) the Tax Matters Partner
shall consult in good faith with the Limited Partner regarding the filing of
a petition for judicial review of an administrative adjustment request under
Code Section 6228, or a petition for judicial review of a final partnership
administrative judgment under Code Section 6226 relating to the Partnership
before filing such petition; (iv) the Tax Matters Partner shall give prompt
notice to the Limited Partner of the receipt of any written notice that the
Internal Revenue Service or any state or local taxing authority intends to
examine Partnership income tax returns for any year, the receipt of written
notice of the beginning of an administrative proceeding at the Partnership
level relating to the Partnership under Code Section 6223, the receipt of
written notice of the final partnership administrative adjustment relating to
the Partnership pursuant to Code Section 6223, and the receipt of any request
from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Partnership;
and (v) the Tax Matters Partner shall promptly notify the Limited Partner if
the Tax Matters Partner does not intend to file for judicial review with
respect to the Partnership.
7.4 TAX ELECTIONS. All elections required or permitted to be made by the
Partnership under any applicable tax law shall be made by the General Partner in
its sole discretion; provided, however, if requested by a transferee, the
General Partner shall file an election on behalf of the Partnership pursuant to
Code Section 754 to adjust the basis of the Partnership property in the case of
a transfer of an Interest made in accordance with the provisions of this
Agreement. The transferee of any Interest shall bear any costs associated with
the Code Section 754 election and adjustment to the basis of Partnership
property.
7.5 TAX RETURNS. The General Partner shall prepare and file, or cause to be
prepared and filed, all state and federal tax returns on a timely basis. A
statement of the allocation of Profits or Losses and other items of income,
gain, loss and deduction of the Partnership shown on the annual income tax
returns prepared by the General Partner (or the accountants which it shall
designate) shall be transmitted and delivered to the Partners within ten (10)
days of the preparation or receipt thereof by the Partnership. The General
Partner shall be responsible for preparing and filing all federal and state tax
returns for the Partnership and furnishing copies thereof to the Partners,
together with required Partnership schedules showing allocations of Partnership
items of income, gain, loss, deduction and credit for federal income tax
purpose, within the period of time prescribed by law. Each Partner must report
consistently with such tax returns prepared for the Partnership pursuant to this
Agreement.
7.6 PARTNERSHIP CLASSIFICATION. Each Partner acknowledges that this
Agreement creates a partnership for federal and state income tax purposes, and
hereby agrees not to elect to be excluded from the application of Subchapter K
of Chapter 1 of Subtitle A of the Code or any similar state statute.
ARTICLE VIII
DISTRIBUTIONS
8.1 DETERMINATION OF CASH FLOW. Within ninety (90) days after the end of
each calendar quarter other than the calendar quarter ending on December 31 of
each year, and one hundred twenty (120) days after the end of the calendar
quarter ending on December 31 of each year, the General Partner shall prepare
and deliver to each Partner a statement of Cash Flow.
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8.2 AMOUNTS AND TIME OF DISTRIBUTION. Cash Flow shall be distributed by the
General Partner to the Partners, pro rata in accordance with their respective
Interests, at such time and in such amounts as the General Partner shall
determine, but the Cash Flow for each Fiscal Year of the Partnership shall be
distributed not less frequently than annually, within one hundred twenty (120)
days following the end of the Partnership's Fiscal Year. The General Partner
may, in its sole and absolute discretion, distribute Cash Flow more frequently.
ARTICLE IX
MANAGEMENT OF THE PARTNERSHIP
9.1 MANAGEMENT. Subject to any express limitations contained in this
Agreement, the Partnership shall be managed exclusively by the General Partner
and the General Partner shall be responsible for the management of the
Partnership's business and shall have full, exclusive and complete power and
discretion, without the need for consent or approval of any other Partner, to
make all decisions and to do all things which it deems necessary or desirable on
behalf of the Partnership, including all the powers permitted to a General
Partner under the Act.
9.2 LIMITATION ON POWERS. No Partner shall: (a) use the Partnership name or
assets in any way except for the transaction of legitimate Partnership business
or do any act in contravention of this Agreement; or (b) do any act which would
make it impossible to carry on the business of the Partnership.
9.3 NON-PARTICIPATION IN MANAGEMENT BY LIMITED PARTNERS. Except as
otherwise specifically provided in this Agreement, no Limited Partner shall
participate in the control or management of the business of the Partnership nor
act for and on behalf of the Partnership in any manner whatsoever.
9.4 EMPLOYEES AND OFFICERS. The Partnership shall have such agents and
employees as the General Partner may deem appropriate and such employees may be
designated by the General Partner as officers of the Partnership. Any management
employee or any officer of the Partnership may be and remain an employee of the
General Partner or an Affiliate of the General Partner. In such event, the
General Partner or its Affiliate shall be responsible for all compensation and
benefits ("EMPLOYEE COSTS") of such employee or officer, except that the
Partnership shall reimburse the General Partner or its Affiliate a percentage of
such Employee Costs determined by the General Partner in good faith. Such
percentage is intended to represent the estimated percentage of the applicable
employees' time which is devoted to services for the Partnership. The General
Partner may fill any employee or officer vacancy or remove any employees or
officers of the Partnership with or without cause.
9.5 AUTHORITY OF THE GENERAL PARTNER. Except for such matters which by this
Agreement specifically require approval by the Limited Partner, the General
Partner shall manage the business and affairs of the Partnership and shall have
the exclusive power and authority to make any and all decisions and to take any
and all actions which the General Partner deems necessary or desirable to
conduct the business of the Partnership. The General Partner shall have all
powers, statutory or otherwise, possessed by or permitted to a general partner
under the laws of the State of Iowa.
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9.6 COMPLIANCE WITH COMMISSION RULES. Each Partner agrees to comply with
the laws of the State of Iowa and the rules of the Commission. Each Partner
agrees to provide the other Partner notice of any noncompliance with the laws of
the State of Iowa or the rules of the Commission, and work diligently and in
good faith to bring such activities into compliance.
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
10.1 EXONERATION. The General Partner shall not have any liability to the
Partnership or any Partner for any loss, damage, cost or expense, including,
without limitation, any special, indirect, consequential or punitive damages of
the Partnership or any Partner arising or allegedly arising out of the General
Partner's management of the Partnership or the General Partner's acts or
omissions in connection with its management of the Partnership; provided that
this provision shall not apply if such loss, damage, cost or expense arises out
of (i) an act of fraud, embezzlement or other serious criminal activity by the
General Partner or (ii) willful misconduct by the General Partner.
10.2 INDEMNIFICATION. The Partnership shall indemnify, and shall hold the
General Partner and each of its officers, employees or Affiliates harmless
against, to the full extent permitted by law, any loss, damage, cost or expense
(including court costs and reasonable attorneys' fees) which the General Partner
or any such officer, employee or Affiliate may sustain or incur by reason of any
claim, demand, suit or recovery by any person or Entity (other than such
Partner, officer, employee or an Affiliate of such Partner) arising or allegedly
arising out of the business of the Partnership and, in the case of the General
Partner, including the General Partner's management of the Partnership or the
General Partner's acts or omissions in connection with its management of the
Partnership and actions taken by the General Partner as Tax Matters Partner;
provided that the General Partner or such officer, employee or Affiliate of the
General Partner shall not be entitled to indemnification hereunder if such loss,
damage, cost or expense arises out of (i) an act of fraud, embezzlement or
serious criminal activity by the party seeking indemnification or (ii) willful
misconduct by the party seeking indemnification.
10.3 LEGAL EXPENSES. Expenses incurred by the General Partner or any of its
Affiliates in defending any action, suit or proceeding of the nature described
in SECTION 10.2 hereof shall be paid by the Partnership in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the General Partner or such Affiliate to repay such amount if it
shall ultimately be determined that such Partner or such Affiliate is not
entitled to be indemnified by the Partnership as authorized in SECTION 10.2
hereof.
ARTICLE XI
REIMBURSEMENT OF GENERAL PARTNER
11.1 COMPENSATION AND EXPENSE REIMBURSEMENT OF PARTNERS.
(a) Other than pursuant to the Management and Boat Lease Agreement or
as provided in this SECTION 11.1, no payment will be required by the Partnership
for the services of the General Partner, any other Partner or any member,
employee, agent or partner of any Partner or an Affiliate thereof.
15
(b) The General Partner and its Affiliates shall be reimbursed by the
Partnership for (i) the reasonable out-of-pocket expenses directly related to
the Partnership's business and incurred by the General Partner or its Affiliate
on behalf of, and reasonably allocable to, the Partnership, including any legal,
accounting, travel and other similar expenses reasonably incurred by the General
Partner or its Affiliates in connection with the operation of the business of
the Partnership, (ii) Employee Costs, as provided in SECTION 9.4 hereof, and
(iii) services provided by the General Partner and its Affiliates to the
Partnership in the operation of its business. Such services which may be
provided by the General Partner and its Affiliates pursuant to this SECTION
11.1(b) shall include, but not be limited to, accounting services, management
information services, security services and public relation services.
(c) Any reimbursement or other consideration to be paid by the
Partnership to the General Partner pursuant to the terms of this Agreement shall
not be in lieu of, and the Partnership shall be directly liable for, expenses
incurred by the Partnership, or by the General Partner on behalf of the
Partnership, for services rendered to the Partnership by unaffiliated third
parties. Any such reimbursement or other consideration shall be at the General
Partner's or such Affiliate's cost, without markup, and shall not include any
allocation of overhead or profit.
ARTICLE XII
FINANCIAL STATEMENTS
12.1 AUDITS. The General Partner shall cause the Partnership, each year, at
the Partnership's expense, to have its books, records and financial statements
audited, and the General Partner shall use its best efforts to cause the
Partnership to have such audit completed within ninety (90) days after the end
of each fiscal year.
12.2 FINANCIAL STATEMENTS. The General Partner shall use its best efforts
to cause the Partnership to prepare and deliver to the Limited Partner an
unaudited balance sheet and an unaudited operating statement as of the end of
each quarter and an operating budget and cash flow projections for the
Partnership for each fiscal year of the Partnership. Such operating statements
shall compare the results of operations with the budgets for the then current
fiscal year. The General Partner shall use its best efforts to cause the
Partnership to deliver (i) the quarterly balance sheet and operating statements
to the Limited Partner within sixty (60) days after the end of each quarter.
12.3 PARTNERSHIP BOOKS. Proper and complete books of account of the
Partnership shall be kept at the Partnership's principal place of business and
shall be open to inspection by any Partner at reasonable times during business
hours. Without limiting the foregoing, all federal, state and local tax returns
of the Partnership shall be open to inspection by either Partner at reasonable
times during business hours.
ARTICLE XIII
RESTRICTIONS ON TRANSFERS OF INTERESTS
No Partner may Transfer all or any portion of its rights or
Interest in the Partnership or withdraw or retire from the Partnership without
the consent of the other Partner
16
and any such attempted Transfer, withdrawal or retirement without the consent
of the other Partner shall be null and void.
ARTICLE XIV
NO WITHDRAWAL OR PARTITION BY A PARTNER
Each Partner agrees (a) to be bound by the terms, conditions
and provisions of this Agreement; (b) not to withdraw as a Partner until the end
of the term of the Partnership (except in connection with a Transfer permitted
under this Agreement); and (c) not to take any action or fail to take any action
that would cause dissolution or termination of the Partnership except as
permitted pursuant to SECTION 15.1.
ARTICLE XV
DISSOLUTION
15.1 DISSOLUTION. Upon the occurrence of any of the following events, the
Partnership shall be dissolved and the business of the Partnership shall be
wound up in accordance with the provisions of ARTICLE XVI:
(a) Unanimous decision of all Partners to dissolve the Partnership;
(b) December 31, 2014 (except as such date may be extended under this
Agreement); and
(c) Any Partner or any direct or indirect owner of a Partner becoming
ineligible to hold a License.
ARTICLE XVI
LIQUIDATION AND DISTRIBUTION
16.1 LIQUIDATING PARTNER. Upon dissolution of the Partnership pursuant to
SECTIONS 15.1, the General Partner shall be, or there is no General Partner,
then such person as shall be designated by the Limited Partner shall be, the
liquidating Partner (the "LIQUIDATING PARTNER").
16.2 WINDING UP. The Liquidating Partner shall cause the Partnership to
cease to engage in further business, except to the extent necessary to perform
existing contracts, and shall wind up the affairs of the Partnership and
liquidate its assets. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Partnership and the discharge of liabilities to
creditors so as to enable the Partners to minimize the losses normally attendant
on a liquidation. During the course of liquidation, the provisions of this
Agreement shall continue to bind the Partners and apply to the activities of the
Partnership, except as expressly provided herein to the contrary.
16.3 DISTRIBUTION FOLLOWING LIQUIDATION. Upon the completion of winding up
and liquidation of the Partnership pursuant to SECTION 16.2 above, the
Liquidating Partner shall distribute the proceeds of the Partnership in the
following order of priority:
17
(a) To the payment of all debts and liabilities of the Partnership
other than:
(i) loans or advances that may have been made by any Partner
to the Partnership; and
(ii) debts secured by liens on property sold pursuant to the
liquidation subject thereto; provided that neither the Partnership nor
any of the Partners is personally liable on, or is released from
liability on, such debts;
(b) To the payment of all expenses of liquidation;
(c) To the setting up of any reserves which the Liquidating Partner may
deem necessary for any contingent or unforeseen liabilities or obligations of
the Partnership or of the Partners arising out of or in connection with the
Partnership. Said reserves may be paid over by the Liquidating Partner to a bank
or trust company acceptable to the Liquidating Partner to be held by it for the
purpose of disbursing such reserves in payment of any of the aforementioned
liabilities or obligations and, at the expiration of such period as the
Liquidating Partner shall deem advisable, distributing the balance, if any,
thereafter remaining, in the manner hereinafter provided;
(d) To the repayment of any loans that may have been made by the
Partners to the Partnership, in accordance with the order of priority
established in any applicable Debt Documents or, if no priority is established,
then pro rata, in accordance with the amounts outstanding thereunder; and
(e) The balance, if any, to the Partners, in accordance with their
respective positive Capital Accounts, after giving effect to all contributions,
distributions, and allocations for all periods.
ARTICLE XVII
NO PARTNERSHIP OPPORTUNITY AND AFFILIATE TRANSACTIONS
17.1 OTHER BUSINESS; PARTNERSHIP OPPORTUNITY.
(a) No business opportunities other than those actually exploited by
the Partnership pursuant to SECTION 2.3 shall be deemed the property of the
Partnership and any Partner or its Affiliates may engage in or possess an
interest in any other business venture, independently or with others, of any
nature or description; and neither the other Partners nor the Partnership shall
have any rights by virtue of this Agreement in and to such other business
ventures or to the income or profits derived therefrom.
(b) No Partner or any Affiliate of a Partner shall have any duty to
communicate or offer to the Partnership or to any Partner or Affiliate of a
Partner any Partnership Opportunity, and no Partner or Affiliate of a Partner
shall be liable to the Partnership for breach of any fiduciary duty or duty of
loyalty to the Partnership or its Partners by reason of the fact that it pursues
or acquires a Partnership Opportunity for itself or directs a Partnership
Opportunity to another person or entity.
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17.2 AFFILIATE TRANSACTIONS. The parties hereto acknowledge and agree that
in the course of the General Partner performing its services as General Partner
hereunder and its services as Manager under the Management and Boat Lease
Agreement, the General Partner and its Affiliates may from time to time engage
in transactions with the Partnership. The General Partner agrees that it shall
act in good faith with respect to such transactions and the terms of such
transactions shall be fair and equitable. In determining whether a particular
transaction with the Partnership is in accordance with the terms of this
paragraph, all aspects of such transaction and all facts and circumstances
surrounding such transaction taken together (and if such transaction is one of a
series of related transactions, including transactions pursuant to any
pre-established contract or arrangement, then all of such related transactions,
and the terms of such contract or arrangement) shall be taken into account.
ARTICLE XVIII
MISCELLANEOUS
18.1 GOVERNING LAW. This Agreement shall be construed and interpreted, and
the rights of the parties shall be determined, in accordance with the laws of
the State of Iowa except with respect to matters of law concerning the internal
affairs of any corporation, partnership or other entity which is a party to or
the subject of this Agreement and as to those matters the law of the
jurisdiction of incorporation or formation of such entity shall govern. The
Partners agree and acknowledge that all terms and provisions hereof are subject
to applicable law, including the statutes of the State of Iowa with respect to
gaming and any rules and regulations promulgated by the Commission.
18.2 EVENTS OF FORCE MAJEURE. Any Partner whose performance under this
Agreement is prevented by an Event of Force Majeure shall give prompt notice of
the Event of Force Majeure to the other Partner and shall thereafter use its
best efforts to minimize the duration and consequences of, and to eliminate, any
such Event of Force Majeure. No Partner shall have any liability to the
Partnership or any Partner for a breach of this Agreement resulting from an
Event of Force Majeure.
18.3 TITLE TO ASSETS; PARTITION. No real or other property of the
Partnership shall be deemed owned by any Partner individually, but shall be
owned by and title shall be vested solely in the Partnership. The Interest of
each Partner shall constitute personal property. Each Partner hereby irrevocably
waives, for the term of the Partnership, any and all right it may have to
maintain an action for partition with respect to its undivided interest in the
property or assets (real or personal) of the Partnership or to compel the sale
thereof under any statute, common law or other means not provided for in this
Agreement.
18.4 HEADINGS. The table of contents and the headings of the several
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
18.5 ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement, together
with all exhibits hereto and thereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. There are no other
19
agreements among the parties in connection with the subject matter hereof
except as specifically set forth herein or contemplated hereby. Any
supplement, modification or waiver of this Agreement shall be in writing and
agreed to by all Partners. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
18.6 REMEDIES. The parties hereto acknowledge that the rights granted
hereunder are unique and that irreparable damage would result if this Agreement
is not specifically enforced and that, therefore, the rights and obligations of
the parties under this Agreement may be enforced by a decree of specific
enforcement issued by a court of competent jurisdiction and appropriate
equitable relief may be applied for and granted in connection therewith. Such
remedies shall, however, not be exclusive and shall be in addition to any other
remedies which any party may have under this Agreement or otherwise.
18.7 FURTHER ASSURANCES. Each of the parties hereto shall, at any time and
from time to time after becoming a Partner, upon request of the other parties,
take such further action and execute, acknowledge and deliver all such
instruments of further assurance as may be necessary to carry out the provisions
of this Agreement.
18.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18.9 NOTICES.
(a) All notices required or permitted to be given hereunder shall be
given by registered mail, in person (in writing), by telecopy or by telex and
addressed as follows:
To Iowa Sub:
Argosy of Iowa, Inc.
c/o Argosy Gaming Company
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer or Chief Financial Officer
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
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to the Company:
Iowa Gaming Company
c/o Argosy Gaming Company
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer or Chief Financial Officer
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
(b) Either Partner may from time to time change its address for the
purpose of notices to that Partner by a similar notice specifying a new address,
but no such change shall be deemed to have been given until it is actually
received by the Partner sought to be charged with its contents.
(c) All notices and other communications required or permitted under
this Agreement which are addressed as provided in this Section if delivered
personally or by air courier, shall be effective upon delivery; and, if
delivered by mail, shall be effective upon deposit in the United States mail,
postage prepaid.
18.10 CONFIDENTIALITY. The Limited Partner agrees that no press release,
notice to any third party or other publicity regarding the Partnership and its
operations shall be made except by or with the approval of the General Partner
and as approved by the General Partner's SEC counsel.
18.11 NO THIRD-PARTY BENEFICIARY. This Agreement is being entered into
solely for the benefit of the parties hereto, and the parties do not intend that
any other person shall be a third-party beneficiary of the representations,
warranties, agreements or covenants made by any Partner contained in this
Agreement.
18.12 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein shall,
for any reason, be held invalid or unenforceable in any respect, such invalidity
or unenforceability shall not affect any other provision of this Agreement or
any other such instrument.
18.13 SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer and
assignment herein contained, the terms and provisions of this Agreement shall be
binding upon, and inure to the benefit of, the successors, assigns, personal
representatives, estates, heirs and legatees of the respective Partners.
[SIGNATURE PAGE TO FOLLOW]
21
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
IOWA GAMING COMPANY, the General Partner
By: /s/ X.X. Xxxxxxxxxxx
-------------------------------------------
Title: Vice President
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ARGOSY OF IOWA, INC., a Limited Partner
By: /s/ X.X. Xxxxxxxxxxx
-------------------------------------------
Title: Vice President
-------------------------------------------
EXHIBIT A
CAPITAL CONTRIBUTIONS AND INTERESTS
CAPITAL PARTNERSHIP
GENERAL PARTNER CONTRIBUTIONS INTEREST
--------------- ------------- -----------
Iowa Gaming Company [Intentionally Omitted] 70%
LIMITED PARTNER
----------------
Argosy of Iowa, Inc. [Intentionally Omitted] 30%
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TOTAL 100%
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