EXHIBIT 3.21
SECOND AMENDED AND RESTATED PARTNERSHIP
AGREEMENT OF XXXXX XXX XXXXX ASSOCIATES
SECOND AMENDED AND RESTATED PARTNERSHIP AGREEMENT made this 12th day
of April, 1996 by and between XXXXX ATLANTIC CITY ASSOCIATES, a New Jersey
general partnership having an address at Mississippi Avenue and Xxx Xxxxxxxxx,
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000 ("Xxxxx XX"), and XXXXX ATLANTIC CITY
CORPORATION, a corporation organized under the laws of the State of Delaware
having an address at 0000 Xxx Xxxxxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
("TACC"), as the continuing partners, and XXXXX CASINOS, INC., a New Jersey
corporation ("TCI") and THCR/LP CORPORATION, a New Jersey corporation
("THCR/LP"), as the withdrawing partners.
WITNESSETH:
WHEREAS, TCI and Xxxxxx X. Xxxxx ("Xxxxx"), as general partners, and
Xxxxx as limited partner, formed a partnership (the "Partnership") by entering
into an Agreement of Limited Partnership under the laws of the State of New
Jersey on June 20, 1988, and amended such agreement on August 10, 1988, August
8, 1990, and on December 11, 1990 and December 12, 1990 (the "December 1990
Amendments") (the Agreement of Limited Partnership, as so amended, is
hereinafter referred to as the "Original Agreement"); and
WHEREAS, in connection with the December 1990 Amendments, the partners
of the Partnership converted the Partnership from a limited partnership to a
general partnership and Xxxxx contributed all of the partnership interests in
the Partnership owned by him personally to TCI and TACC in exchange for capital
stock of TCI and TACC; and
WHEREAS, pursuant to a plan of reorganization, the Partnership
admitted THCR/LP as a partner and TCI, TACC and THCR/LP amended and restated in
its entirety the Original Agreement in an Amended and Restated Partnership
Agreement dated as of October 4, 1991, which set forth their respective rights
and obligations in connection with the Partnership (the "Prior Agreement"); and
WHEREAS, pursuant to a merger transaction, THCR/LP has contributed its
entire interest in the Partnership to Xxxxx Hotels & Casinos Resorts Holdings,
L.P. ("THCR Holdings") and such interest has been assigned to Xxxxx XX on
behalf, and at the direction, of THCR Holdings, and TCI has contributed its
entire interest in the Partnership to THCR Holdings and such interest has been
assigned to Xxxxx XX on behalf, and at the direction, of THCR Holdings, and
Xxxxx XX desires to be substituted as a general partner of the Partnership in
lieu of THCR/LP and TCI to the full extent of the interests so assigned; and
WHEREAS, TACC and Xxxxx XX desire to set forth their respective rights
and obligations as Partners of the Partnership;
NOW, THEREFORE, TACC and Xxxxx XX agree that the Prior Agreement is
hereby amended and restated in its entirety effective as of the date hereof and
that the Partnership is hereby continued as a general partnership on the terms
and conditions set forth herein, and further agree as follows:
1. DEFINITIONS.
1.1. CERTAIN DEFINITIONS.
In addition to the other terms defined elsewhere herein, the following
terms shall have the respective meanings set forth below:
"Accountants" means the national firm or firms of independent
certified public accountants selected by the Managing General Partner on behalf
of the Partnership to audit the books and records of the Partnership and to
prepare statements and reports in connection therewith, which initially shall be
Xxxxxx Xxxxxxxx LLP.
"Affiliate" means, with respect to any Person, any Person that
directly or indirectly through one or more intermediaries controls or is
controlled by or under common control with the specified Person.
"Bankruptcy" means, with respect to any Person, (i) the
commencement by such Person of any petition, case or proceeding seeking relief
under any provision or chapter of the federal bankruptcy code or any other
federal or state law relating to insolvency, bankruptcy or reorganization, (ii)
an adjudication that such Person is insolvent or bankrupt, (iii) the entry of an
order for relief under the federal bankruptcy code with respect to such Person,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Person, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing or (v) the filing of an answer by such Person admitting the allegations
of any such petition.
"Business Day" means a day other than a Saturday or Sunday or
other day on which banks are authorized or required by law to close in the City
of New York.
"Capital Account," when used with respect to a Partner, means an
amount equal to (a) the aggregate of (i) the initial amount credited to the
Capital Account of such Partner as reflected in Article 8 hereof, (ii) all other
voluntary capital contributions to the Partnership made or deemed to be made by
such Partner pursuant to this Agreement, (iii) all Net income and other items of
income credited to the account of such Partner pursuant to Article 9 and (iv)
any additional amount resulting from the
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acquisition of additional Partnership Interests, MINUS (b) the aggregate of (i)
all Net Losses and deductions charged to the account of such Partner pursuant to
Article 9 hereof, (ii) all distributions and (iii) any reduction in such amount
due to the transfer of a Partnership Interest. The Capital Accounts shall be
maintained in accordance with the regulations under Section 704(b) and (c) of
the Code. If a Partner is a Transferee, its Capital Account derived from the
transferor shall initially be deemed to be the product of (x) a fraction, the
numerator of which shall be the Percentage Interest transferred to such
Transferee and the denominator of which shall be the Percentage Interest
immediately prior to such transfer of the Partner making such transfer, and (y)
the Capital Account of the Partner making such transfer immediately prior to
such transfer. The Capital Account of a Partner transferring a Partnership
Interest to a Transferee shall be reduced by the amount of its Capital Account
which such Transferee is initially deemed to have acquired.
"Capital Contribution" means, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any Contributed Property
(net of liabilities to which such property is subject) set forth in Article 8,
as such Article 8 will be amended from time to time to reflect the amount of
money and the Gross Asset Value of any Contributed Property received by the
Partnership pursuant to any additional Capital Contribution.
"Casino Control Act" means the New Jersey Casino Control Act and
the regulations thereunder.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Commission" means the New Jersey Casino Control Commission.
"Contributed Property" shall mean any property or asset, in such
form as may be permitted by the New Jersey Uniform Partnership Law, but
excluding cash, contributed or deemed contributed to the Partnership with
respect to the Partnership Interest held by each Partner.
"Depreciation" means, with respect to any asset of the
Partnership for any fiscal year or other period, the depreciation or
amortization, as the case may be, allowed or allowable for federal income tax
purposes in respect of such asset for such fiscal year or other period;
PROVIDED, HOWEVER, that if there is a difference between the Gross Asset Value
and the adjusted tax basis of such asset, Depreciation shall mean "book
depreciation, deple-
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tion or amortization" as determined under Section 1.704-1(b)(2)(iv)(g)(3) of the
Regulations.
"Entity" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
real estate investment trust, association or other entity.
"Fair Market Value" means (i) in the case of any security, its
current market price and (ii) in the case of any property or Indebtedness that
is not a security, the fair market value of such property or Indebtedness as
determined in good faith by the Managing General Partner.
"Gross Asset Value" means, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:
(a) the initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be (i) in the case of any asset described
in Article 8, the gross fair market value ascribed thereto in such Article and
(ii) in the case of any other asset hereafter contributed by a Partner, the
gross Fair Market Value of such asset at the time of its contribution;
(b) the Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross Fair Market Values:
(i) immediately prior to a Capital Contribution
(other than a DE MINIMIS Capital Contribution) to the Partnership by a new or
existing Partner as consideration for a Partnership Interest;
(ii) immediately prior to the distribution by the
Partnership to a Partner of more than a DE MINIMIS amount of Partnership
property as consideration for the redemption of a Partnership Interest;
(iii) immediately prior to the liquidation of the
Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations; and
(iv) upon any other event as to which the Managing
General Partner reasonably determines that an adjustment is necessary or
appropriate to reflect the relative economic interests of the Partners;
(c) the Gross Asset Values of Partnership assets
distributed to any Partner shall be the gross Fair Market Values of such assets
as of the date of distribution; and
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(d) 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 Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations; PROVIDED,
HOWEVER, that Gross Asset Values shall not be adjusted pursuant to this
paragraph to the extent that the Managing General Partner reasonably determines
that an adjustment pursuant to paragraph (b) above is necessary or appropriate
in connection with a transaction that would otherwise result in an adjustment
pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of
Partnership property shall require an adjustment to the Partners' Capital
Accounts; as for the manner in which such adjustments are allocated to the
Capital Accounts, see clause (c) of the definition of Net Income and Net Loss in
the case of adjustment by Depreciation, and clause (d) of said definition in all
other cases.
"Indebtedness" means any obligation, whether or not contingent,
(i) in respect of borrowed money or evidenced by bonds, notes, debentures or
similar instruments, (ii) representing the balance deferred and unpaid of the
purchase price of any property (including pursuant to capital leases), except
any such balance that constitutes an accrued expense or a trade payable, if and
to the extent any of the foregoing indebtedness would appear as a liability upon
a balance sheet prepared on a consolidated basis in accordance with GAAP, (iii)
to the extent not otherwise included, obligations under interest rate exchange,
currency exchange, swaps, futures or similar agreements, and (iv) guaranties
(other than endorsements for collection or deposit in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
reimbursement agreements in respect of letters of credit), of all or any part of
any Indebtedness of any third party.
"Net Income" or "Net Loss" means, for each fiscal year or other
applicable period, an amount equal to the Partnership's net income or loss for
such year or period as determined for federal income tax purposes by the
Accountants, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a) of the Code shall be included in taxable
income or loss), with the following adjustments: (a) by including as an item of
gross income any tax-exempt income received by the Partnership; (b) by treating
as a deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Part-
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nership (unless an election is made pursuant to Code Section 709(b)) or to
promote the sale of interests in the Partnership and by treating deductions for
any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
as expenditures described in Section 705(a)(2)(B) of the Code); (c) in lieu of
depreciation, depletion, amortization and other cost recovery deductions taken
into account in computing total income or loss, there shall be taken into
account Depreciation; (d) gain or loss resulting from any disposition of
Partnership 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 such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Regulation
Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such adjustment is to
be taken into account as additional Net Income or Net Loss pursuant to Section
9.1; and (f) excluding any items specially allocated pursuant to Section 9.2.
Once an item of income, gain, loss or deduction has been included in the initial
computation of Net Income or Net Loss and is subjected to the special allocation
rules in Section 9.2, Net Income and Net Loss shall be computed without regard
to such item.
"Nonrecourse Deductions" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in
Section 1.704-2(b)(3) of the Regulations.
"Partner" means each of TACC and Xxxxx XX or any Transferee
thereof that becomes substituted as a Partner in accordance herewith or any
Person who is a partner of the Partnership at the time of reference thereto.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth
in Section 1.704-2(i)(2) of the Regulations.
"Partnership Interest" means any interest of TACC or Xxxxx XX or
any Transferee in the Partnership, including the right of such Partner to
benefits to which it may be entitled under, and the obligations of such Partner
to comply with, all the terms and provisions of this Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
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"Percentage Interest" means, with respect to any Partner, the
percentage ownership interest of such Partner in such items of the Partnership
as to which the term "Percentage Interests" is applied in this Agreement,
initially 1% for TACC and 99% for Xxxxx XX, subject to appropriate adjustment in
accordance with the provisions hereof.
"Person" means any natural person or Entity.
"Pledge Agreements" means, collectively, the pledge agreement (1)
dated April 17, 1996 from Xxxxx XX, as pledgor, to First Bank National
Association, as trustee, and (2) dated April 17, 1996 from TACC, as pledgor, to
First Bank National Association, as trustee, in each case securing the Senior
Secured Notes due 2005 of Xxxxx Hotels & Casino Resorts Holdings, L.P. and Xxxxx
Hotels & Casino Resorts Funding, Inc., as joint obligors.
"Regulations" shall mean the income tax regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Tax Amounts" with respect to any year means an amount no greater
than (a) the higher of (i) the product of (A) the taxable income of the
Partnership (computed as if the Partnership were an individual taxpayer) for
such year as determined in good faith by the Managing Partner and (B) the Tax
Percentage, and (ii) the product of (A) the alternative minimum taxable income
(computed as if the Partnership were an individual taxpayer) attributable to the
Partnership for such year as determined in good faith by the Managing Partner
and (B) the Tax Percentage, reduced by (b) to the extent not previously taken
into account, any income tax benefit attributable to the Partnership which could
be realized (without regard to the actual realization) by its Partners in the
current or any prior taxable year, or portion thereof, commencing on the date of
this Partnership Agreement (including any tax losses or tax credits), computed
at the applicable Tax Percentage for the year that such benefit is taken into
account for purposes of this computation. Any part of the Tax Amount not
distributed in respect of a tax period for which it is calculated shall be
available for distribution in subsequent tax periods.
"Tax Distribution" shall mean distributions by the Partnership
pursuant to Section 10.2 hereof.
"Tax Items" shall have the meaning set forth in Section 9.3(a).
"Tax Payment Loan" shall have the meaning set forth in Section
10.4(a) hereof.
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"Tax Percentage" means the highest, aggregate effective marginal
rate of Federal, state and local income tax or, when applicable, alternative
minimum tax, to which any Partner would be subject in the relevant year of
determination (as certified to the Managing General Partner by the Accountants);
PROVIDED, HOWEVER, that in no event shall the Tax Percentage be greater than the
sum of (x) the highest, aggregate effective marginal rate of Federal, state, and
local income tax, or when applicable, alternative minimum tax, to which the
Partnership would have been subject if it were a C corporation for Federal
income tax purposes, and (y) 5 percentage points. If any Partner is an S
corporation, partnership, or similar pass-through entity for Federal income tax
purposes, the Tax Percentage shall be computed based upon the tax rates
applicable to the ultimate shareholder or partner of such Partner, as the case
may be.
"Transferee" means each Person who pursuant to Article 11 hereof
or otherwise acquires a Partnership Interest from a Partner or a Transferee
thereof.
"Withholding Tax Act" shall have the meaning set forth in Section
10.4(a) hereof.
1.2. ACCOUNTING TERMS AND DETERMINATIONS. All references in
this Agreement to "generally accepted accounting principles" or "GAAP" shall
mean generally accepted accounting principles in effect in the United States of
America at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
furnished hereunder shall be prepared, in accordance with generally accepted
accounting principles, applied on a consistent basis.
2. NAME. The name of the Partnership is Xxxxx Xxx Xxxxx Associates.
3. PURPOSE. The character of the Partnership's business is (i) to
own and operate the Xxxxx Xxx Mahal Casino Resort in' Atlantic City, New Jersey
and conduct casino gaming, and (ii) to do all things necessary, incidental,
desirable or appropriate in connection with the foregoing.
4. PLACE OF BUSINESS. The principal place of business of the
Partnership in the State of New Jersey shall be 0000 Xxx Xxxxxxxxx, Xxxxxxxx
Xxxx, Xxx Xxxxxx 00000.
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5. PARTNERS. The name and place of residence of the General
Partners interested in the Partnership is as follows:
Xxxxx Atlantic City Associates Xxxxx Atlantic City Corporation
Mississippi Avenue and 1000 The Boardwalk
The Boardwalk Atlantic City, N.J. 08401
Xxxxxxxx Xxxx, X.X. 00000
6. MANAGING GENERAL PARTNER. All decisions affecting the business
and affairs of the Partnership, including, but not limited to the financing,
refinancing, sale, management or leasing of any Partnership property, or any
part thereof, the acquisition, development, financing, sale or leasing of other
property and all matters arising under this Agreement may be decided by either
Partner acting on behalf of the Partnership. Notwithstanding the foregoing,
Xxxxx XX shall have the rights of the Managing General Partner as set forth
herein.
7. TERM. The term for which the Partnership is to exist is to the
close of business on the 31st day of December, 2035, unless sooner terminated
pursuant to Section 13.1 hereof.
8. CAPITAL ACCOUNTS. The capital account as of the date of this
Agreement of each Partner is as follows:
Xxxxx XX $
TACC $
No interest shall be paid by the Partnership on balances in Capital Accounts nor
shall any other funds be distributed or distributable, except as provided in
this Agreement.
9. ALLOCATIONS AND OTHER TAX AND ACCOUNTING MATTERS.
The Net Income, Net Loss and/or other Partnership items shall be
allocated as follows:
9.1. ALLOCATIONS OF NET INCOME AND NET LOSS.
(a) NET INCOME. Except as otherwise provided herein, Net
Income for any fiscal year or other applicable shall be allocated in the
following order and priority:
(i) First, to the Partners, until the cumulative Net
Income allocated pursuant to this subparagraph (a)(i) for the current and all
prior periods equals the cumulative Net Loss allocated pursuant to subparagraph
(b)(ii) hereof for all prior periods, among the Partners in the reverse order
that such Net Loss was allocated to the Permitted Partners pursuant to
subparagraph (b)(ii) hereof.
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(ii) Thereafter, the balance of the Net Income, if any,
shall be allocated to the Partners in accordance with their respective
Percentage Interests.
(b) NET LOSS. Except as otherwise provided herein, Net
Loss of the Partnership for each fiscal year or other applicable period shall be
allocated to the Partners in accordance with their respective Percentage
Interests.
9.2. SPECIAL ALLOCATIONS. Notwithstanding any provisions of
Section 9.1, the following special allocations shall be made, to the least
extent necessary to satisfy section 704(b) of the Code and the Regulations
promulgated thereunder, in the following order:
(a) MINIMUM GAIN CHARGEBACK (NONRECOURSE LIABILITIES). If
there is a net decrease in Partnership Minimum Gain for any Partnership fiscal
year (except as a result of conversion or refinancing of Partnership
Indebtedness, certain capital contributions or revaluation of the Partnership
property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or
(f)(3)), each Partner shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to that Partner's share of the net decrease in Partnership Minimum Gain. The
items to be so allocated shall be determined in accordance with Regulation
Section 1.704-2(f)(6). This paragraph (a) is intended to comply with the
minimum gain charge-back requirement in said section of the Regulations and
shall be interpreted consistently therewith. Allocations pursuant to those
paragraph (a) shall be made in proportion to the respective amounts required to
be allocated to each partner pursuant hereto.
(b) MINIMUM GAIN ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT.
If there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse
Debt during any fiscal year (other than due to the conversion, refinancing or
other change in the debt instrument causing it to become partially or wholly
nonrecourse, certain capital contributions, or certain revaluations of
Partnership property (as further outlined in Regulation Section 1.704-2(i)(4)),
each Partner shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to the
Partner's share of the net decrease in the Minimum Gain Attributable to Partner
Nonrecourse Debt. The items to be so allocated shall be determined in
accordance with Regulation Section 1.704-2(i)(4) and (j)(2). This paragraph (b)
is intended to comply with the minimum gain chargeback requirement with respect
to Partner Nonrecourse Debt contained in said section of the Regulations and
shall be interpreted consistently therewith. Allocations pursuant to this
paragraph (b) shall be made in proportion to the respective amounts required to
be allocated to each Partner pursuant hereto.
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(c) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
fiscal year or other applicable period shall be allocated to the Partners in
accordance with their respective Percentage Interests.
(d) PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse
Deductions for any fiscal year or other applicable period shall be specially
allocated to the Partner that bears the economic risk of loss for the debt
(i.e., the Partner Nonrecourse Debt) in respect of which such Partner
Nonrecourse Deductions are attributable (as determined under Regulation Section
1.704-2(b)(4) and (i)(1)).
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing,
if, upon final dissolution and termination of the Partnership and after taking
into account all allocations of Net Income and Net Loss (and other Tax Items)
under this Section 9, the distributions to be made in accordance with the
positive Capital Account balances would result in a distribution that would be
different from a distribution under Section 10.3 hereof, then gross items of
income and gain (and other Tax Items) for the taxable year of the final
dissolution and termination (and, to the extent permitted under Section 761(c)
of the Code, gross items of income and gain (and other Tax Items) for the
immediately preceding taxable year) shall be allocated to the Partners to
increase or decrease their Capital Account balances, as the case may be, so that
the final distribution will occur in the same manner as a distribution under
Section 10.3 hereof.
9.3. TAX ALLOCATIONS.
(a) GENERALLY. Subject to paragraphs (b) and (c) hereof,
items of income, gain, loss, deduction and credit to be allocated for income tax
purposes (collectively, "TAX ITEMS") shall be allocated among the Partners on
the same basis as their respective book items.
(b) SECTIONS 1245/1250 RECAPTURE. If any portion of 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"), except to
the extent that the tax treatment of such sale is governed by Section 704(c) of
the Code as provided under Section 9.3(c) hereof, then (i) such Affected Gain,
to the extent attributable to depreciation or amortization allowed or allowable
for any taxable period subsequent to the date hereof, 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 (ii) other Tax
Items of 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
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to clause (i) 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 hereof, 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 Net Income or Net Loss
for such respective period.
(c) ALLOCATIONS RESPECTING SECTION 704(C). Property
contributed to the Partnership shall be subject to Section 704(c) of the Code
and Regulation Section 1.704-3 so that notwithstanding Section 9.2 hereof,
taxable gain and loss from disposition of such property contributed to the
Partnership that is subject to Section 704(c) of the Code shall be allocated on
a property by property basis in accordance with the Regulations promulgated
thereunder. Notwithstanding the foregoing, tax depreciation and amortization
with respect to property contributed pursuant to the Contribution Agreement
among Xxxxx, TCI, THCR/LP and the Partnership, dated as of the date hereof,
shall be allocated on an aggregate basis for the purposes of complying with the
requirements of Section 704(c) of the Code, taking into account, for any
particular taxable year for which such allocation is made, the aggregate amount
of depreciation and amortization allowable with respect to the aggregate basis
of all such properties determined as of the date of contribution (and not taking
into account (i) any increase in the basis of such properties resulting from
improvements thereon made subsequent to the date of contribution or (ii) any
additional basis resulting from any new property purchased by any of THCR
Holdings, the Partnership or Xxxxx XX in a taxable transaction subsequent to the
date of contribution; provided, however, that the Managing General Partner shall
not specially allocate any Tax Items (other than items of depreciation and
amortization referred to in this Section 9.3(c)) to cure for the effect of the
ceiling rule set forth in Regulation Section 1.704-3(b).
9.4. BOOKS OF ACCOUNT. At all times during the continuance of
the Partnership, the Managing General Partner shall maintain or cause to be
maintained full, true, complete and correct books of account in accordance with
GAAP, using the calendar year as the fiscal and taxable year of the Partnership.
In addition, the Partnership shall keep all records required to be kept pursuant
to the New Jersey Uniform Partnership Law.
9.5 TAX CERTIFICATIONS.
(a) The Partnership shall deliver to each Partner, from
time to time as necessary to implement timely the provisions of this Agreement,
certificates executed by its chief financial officer and the Accountants
indicating the respective calculations with respect to, and the amounts of, a
Partner's share
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of Tax Distributions and the amount of any repayments to the Partnership called
for thereunder, together with supporting schedules in reasonable detail all as
of each pertinent date and delivered at least 15 business days prior to the date
payment is due.
(b) The certificates delivered pursuant to paragraph (a)
thereof shall be deemed approved by all parties and the Partnership shall act
upon such certificate as provided in this Agreement unless within five business
days of delivery of such certificate a Partner objects to the contents of any
certificate by written notice in detail sufficient to state the basis for the
objection. The Partners shall negotiate in good faith to resolve such
objection.
10. DISTRIBUTIONS.
10.1. GENERAL. Distributions of cash or property may be made
in accordance herewith at such times as the Managing General Partner deems
appropriate in the order provided in this Article 10, subject to the
limitations, if any, set forth in the agreements governing the Partnership's
Indebtedness.
10.2. DISTRIBUTIONS FOR TAXES.
(a) The Partnership shall distribute to each Partner in one
or more payments, including payments described in paragraph (b) from time to
time during each year, but in no event later than March 1 of the year
immediately following such year, an aggregate cash sum equal to the product of
(i) Tax Amounts in respect of the taxable year, or portion thereof, for which
such distribution is being made and (ii) the Partner's Percentage Interest. In
addition, the Partnership shall make additional pro rata distributions as are
necessary to reflect adjustments, as determined in good faith by the Managing
General Partner, to any item affecting Tax Amounts, as reflected on the
Partnership's tax return, as it may be amended from time to time, or as a result
of a concluded tax audit.
(b) In addition to the certificates required by Section
9.5, the Partnership shall furnish the Partners with such information as they
shall reasonably request from time to time respecting estimates of the
Partnership's taxable income or loss (and items thereof) for any fiscal year or
portion thereof. If, in any year, any Partner shall be required to make
federal, state or local estimated income tax payments under applicable law and
regulations, then, at least thirty (30) days prior to the date (the "Estimated
Payment Date") upon which any such payments are due, the Partnership shall
deliver to each Partner the certificates required by Section 9.5, indicating the
amount (the "Estimated Payment") of the tax in respect of the respective Tax
Amounts due on the Estimated Payment Date, and not later than fifteen (15) days
prior to
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such Estimated Payment Date, the Partnership shall pay to such Partner an amount
equal to such Estimated Payment. The amount of each Estimated Payment received
by such Partner shall be treated as a non-interest bearing advance against the
amounts distributable in respect of such Partner's pro rata share of Tax Amounts
to such Partner for such year. If the aggregate amount of the Estimated
Payments received by a Partner for any year shall exceed the distribution to
which such Partner actually is entitled under paragraph (a) above, such Partner
shall forthwith repay such excess to the Partnership on or before the date set
forth in paragraph (a) above, unless such excess shall have been paid to taxing
authorities in which event such excess shall be applied to reduce the amount
otherwise distributable pursuant to this Section 10.2 in respect of the
Partnership's next succeeding fiscal year or years. Each Partner shall seek, to
the extent entitled thereto, and contribute to the Partnership any refund of
taxes paid by such Partner out of amounts distributed pursuant to this Section
10.2 promptly after receipt of such refund.
10.3. OTHER DISTRIBUTIONS. After payments and distributions,
if any, of the amounts set forth in Section 10.2 above, the Partnership may
distribute, in the discretion of the Managing General Partner, cash or other
property, valued at its Fair Market Value, to the Partners, PRO RATA in
accordance with their Percentage Interests.
10.4. WITHHOLDING PAYMENTS REQUIRED BY LAW.
(a) Unless treated as a Tax Payment Loan (as hereinafter
defined), any amount paid by the Partnership for or with respect to any Partner
on account of any withholding tax or other tax payable with respect to the
income, profits or distributions of the Partnership to the Code, the
Regulations, or any state or local statute, regulation or ordinance requiring
such payment (a "Withholding Tax Act") shall be treated as a distribution to
such Partner for all purposes of this Agreement, consistent with the character
or source of the income, profits or cash which gave rise to the payment or
withholding obligation. To the extent that the amount required to be remitted
by the Partnership under the Withholding Tax Act exceeds the amount then
otherwise distributable to such Partner, unless and to the extent that funds
shall have been provided by such Partner pursuant to the last sentence of this
Section 10.4(a), the excess shall constitute a loan from the Partnership to such
Partner (a "Tax Payment Loan") which shall be payable upon demand and shall bear
interest, from the date that the Partnership makes the payment to the relevant
taxing authority, at the rate announced from time to time by Citibank, N.A. (or
any successor thereto) as its "prime rate", compounded monthly (but in no event
higher that the highest interest rate permitted by applicable law). So long as
any Tax Payment Loan to any Partner or the interest thereon remains unpaid, the
Partnership shall make future
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distributions due to such Partner under this Agreement by applying the amount of
any such distributions first to the payment of any unpaid interest on such Tax
Payment Loan and then to the repayment of the principal thereof, and no such
future distributions shall be paid to such Partner until all of such principal
and interest has been paid in full. If the amount required to be remitted by
the Partnership under the Withholding Tax Act exceeds the amount then otherwise
distributable to a Partner, the Partnership shall notify such Partner at least
five (5) Business Days in advance of the date upon which the Partnership would
be required to make a Tax Payment Loan under this Section 10.4(a) (the "Tax
Payment Loan Date") and provide such Partner the opportunity to pay to the
Partnership, on or before the Tax Payment Loan Date, all or a portion of such
deficit.
(b) The Managing General Partner shall have the authority
to take all actions necessary to enable the Partnership to comply with the
provision of any Withholding Tax Act applicable to the Partnership and to carry
out the provisions of this Section 10.4. Nothing in this Section 10.4 shall
create any obligation on the Managing General Partner to advance funds to the
Partnership or to borrow funds from third parties in order to make any payments
on account of any liability of the Partnership under a Withholding Tax Act.
(c) In the event that a Tax Payment Loan is not paid by a
Partner within thirty (30) days after written demand therefor is made by the
Managing General Partner, the Managing General Partner may cause all
distributions that would otherwise be made to such Partner to be retained by the
Partnership, up to the amount necessary to repay such Tax Payment Loan,
including all accrued and unpaid interest thereon, and such retained
distributions shall be applied against, FIRST, the accrued interest on and,
SECOND, the principal of, such Tax Payment Loan.
10.5. NON-RECOURSE. Notwithstanding any other provisions of
this Agreement, the obligations to make distributions contemplated hereby shall
be limited to the assets of the Partnership and shall be non-recourse with
respect to the Partners and any of their assets.
11. TRANSFERS AND WITHDRAWAL.
11.1. SALE AND TRANSFER OF PARTNERSHIP INTERESTS. No
Partnership Interest or any portion thereof may be sold or otherwise
transferred, whether by gift, pledge, by operation of law or otherwise,
including any transfer upon liquidation and dissolution (but excluding all
transfers upon or by reason of death), unless (x) the transfer and the
Transferee are approved in advance by all the Partners, except with respect to
any transfer resulting from exercise of any rights under the Pledge Agreements,
(y) the trans-
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fer and the Transferee are approved by the Commission and (z) the Transferee
becomes a party to this Agreement and assumes all of the obligations hereunder
of its transferor and agrees to be bound by the terms and conditions hereof in
the same manner as its transferor in each case to the extent of the Partnership
Interest transferred. Each Transferee shall have all rights hereunder as given
to the original party hereto or subsequent transferee thereof. The foregoing
notwithstanding, no transfer of a Partnership Interest (other than a transfer
upon the exercise of any rights under the Pledge Agreements) shall be effective
if, in the opinion of counsel to the Partnership, such transfer, would cause the
Partnership to be treated as a "publicly-traded partnership" under the Code.
12. BOOKS AND RECORDS.
12.1. COMPLETE BOOKS. At all times during the continuance of
the Partnership, the Partnership shall keep or cause to be kept full and
complete books of account in which shall be entered fully and accurately each
transaction of the Partnership, including the Capital Accounts of the Partners.
12.2. METHOD OF RECORDKEEPING. All of the Partnership's
books of account shall at all times be maintained at the principal office of the
Partnership and shall be open to the inspection and examination of the Partners
or their representatives during reasonable hours. All books and records of the
Partnership shall be kept on an accrual basis of accounting with an annual
accounting period ending December 31, except for the final accounting period
which shall end on the date of the final dissolution or termination of the
Partnership. All references in this Agreement to a "fiscal year" are to such an
annual accounting period.
12.3. TAX INFORMATION. The Partnership shall be treated as a
Partnership for federal and state income tax and franchise tax purposes;
accordingly, the Managing General Partner shall cause the Accountants to prepare
and file on or before the due date (as such date may be extended as the result
of any extension obtained) annually a United States Partnership Return of Income
and any necessary state income and franchise tax returns on a partnership basis.
Such returns (or drafts of such returns) shall be submitted to the Partners for
review no later than March 31st of each year. Each Partner shall notify the
other Partners upon receipt of any notice of any tax examination by any federal,
state or local authority pertaining to the Partnership or the other Partners.
No settlement of any tax issue concerning or having an effect upon the
Partnership shall be made by any Partner except upon the approval of the Tax
Matters Partner, designated pursuant to Section 14.12.
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13. DISSOLUTION, LIQUIDATION AND WINDING-UP.
13.1. ACCOUNTING. In the event of the dissolution,
liquidation and winding-up of the Partnership, a proper accounting shall be made
of the Capital Account of each Partner and of the Net Income or Net Loss of the
Partnership from the date of the last previous accounting to the date of
dissolution.
13.2. DISTRIBUTION ON DISSOLUTION. In the event of the
dissolution and liquidation of the Partnership for any reason, the assets of the
Partnership shall be liquidated for distribution in the following rank and
order:
(a) Payment of creditors of the Partnership, other than
creditors who are Partners;
(b) Payment of creditors of the Partnership who are
Partners;
(c) Establishment of reserves to provide for contingent
liabilities, if any; and
(d) To the-Partners in accordance with the positive
balances in their Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods.
13.3. TIMING REQUIREMENTS.
(a) In the event that the Partnership is "liquidated"
within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and
all distributions to the Partners pursuant to Section 13.2(d) hereof shall be
made no later than the later to occur of (i) the last day of the taxable year of
the Partnership in which such liquidation occurs or (ii) ninety (90) days after
the date of such liquidation.
(b) Notwithstanding the provisions of Section 13.2 hereof
which require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Partners determine that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Partners may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership.
13.4. DISSOLUTION. The Partnership shall be dissolved upon
the occurrence of any of the following events:
(a) the dissolution, liquidation, termination, withdrawal,
death, insanity, retirement or bankruptcy of a Partner
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or other event causing dissolution under the New Jersey Uniform Partnership Law;
(b) the election to dissolve the Partnership made in
writing by the Partners;
(c) the sale or other disposition of all or substantially
all of the assets of the Partnership unless the Partners elect to continue the
Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of any other consideration to be received in
exchange for the assets of the Partnership (which activities shall be deemed to
be part of the winding-up of the affairs of the Partnership); or
(d) the entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the New Jersey Uniform Partnership
Law, which decree is final and not subject to appeal.
Following an event causing a dissolution of the Partnership, the
Partnership shall be wound-up and terminated unless the business of the
Partnership is continued by the Partnership in reconstituted form pursuant to
Section 13.5.
13.5. CONTINUATION OF THE PARTNERSHIP. Upon the Bankruptcy,
dissolution, liquidation, withdrawal, death, retirement or insanity of any
Partner, or any other event of dissolution under the New Jersey Uniform
Partnership Law, within 90 days thereafter, all of the remaining Partners may
elect to reconstitute the Partnership and continue its business.
14. MISCELLANEOUS.
14.1. AMENDMENTS. This Agreement may be amended, modified or
cancelled, and the terms and conditions hereof may be waived, only by a written
instrument signed by each of its Partners.
14.2. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed as original, but all of which
together shall constitute one and the same instrument.
14.3. FURTHER ASSURANCES. Each of the Partners hereby agrees
to execute and deliver all such other and additional instruments and documents
and to do such other acts and things as may be necessary to more fully
effectuate this Partnership, carry on the Partnership's business and effectuate
this Agreement.
14.4. VARIATIONS OF PRONOUNS. All pronouns and all
variations thereof shall be deemed to refer to the masculine,
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feminine or neuter, singular or plural, as the identity of the Person may
require.
14.5. NON-WAIVER. No delay on the part of any party in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
waiver, express or implied, by any Partner of any right hereunder or of any
failure to perform or breach hereof by any other Partner constitute or be deemed
a waiver of any other right hereunder or of any other failure to perform or
breach hereof by the same or any other Partner, whether or a similar or
dissimilar nature thereof.
14.6. SURVIVAL OF RIGHTS, DUTIES AND OBLIGATIONS.
Termination of the Partnership for any cause shall not release any party from
any liability which at the time of termination had already accrued to any other
party or which thereafter may accrue in respect of any act or omission prior to
such termination.
14.7. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
14.8. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey regardless of
the laws that might otherwise under applicable principles of conflict of laws
thereof.
14.9. CASINO CONTROL COMMISSION REGULATION. Notwithstanding
anything to the contrary contained herein:
(i) this Agreement will be deemed to include all
provisions required by the Casino Control Act and to the extent that anything
contained herein is inconsistent therewith, the provisions of the Casino Control
Act shall govern. All provisions of the Casino Control Act, to the extent
required by law to be included in this Agreement, are incorporated herein by
reference as if fully restated in this Agreement.
(ii) All securities (as such term is defined in the
Casino Control Act) of the Partnership are held subject to the condition that,
as of the date the Commission serves notice of its determination of
disqualification of a holder thereof, such holder shall (a) not receive any
dividends or interest upon any such securities; (b) not exercise, directly or
through any trustee or nominee, any voting right conferred by such securities;
and (c) not receive any remuneration in any form from the Partnership for
services rendered or otherwise.
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(iii) If the continued holding of a Partnership
Interest by any Partner will disqualify the Partnership to continue as the owner
and operator of a casino licensed in the State of New Jersey under the
provisions of the Casino Control Act, such Partner shall enter into such escrow,
trust or similar arrangement as may be required by the Commission under the
circumstances. It is the intent of this Section 13.9 to set forth procedures to
permit the Partnership to continue, on an uninterrupted basis, as the owner and
operator of a casino licensed under the provisions of the Casino Control Act.
(iv)(a) All transfers (as defined by the Casino
Control Act) of securities (as defined by the Casino Control Act), shares and
other interests in the Partnership shall be subject to the right of prior
approval by the Commission; and (b) the Partnership shall have the absolute
right to repurchase at the market price or purchase price, whichever is the
lesser, any security, share or other interest in the Partnership in the event
that the Commission disapproves a transfer in accordance with the provisions of
the Casino Control Act.
(v) Each Partner hereby agrees to cooperate
reasonably and promptly with the others in obtaining any and all licenses,
permits or approvals required by any governmental authority or deemed expedient
by the Partners in connection with the Casino Control Act.
(vi) Each Partner shall have the right to offer to
acquire any Partnership Interest required to be disposed of pursuant to this
Section 13.9 on the same basis as other potential purchasers, subject to the
Casino Control Act.
14.10. CERTIFICATE OF INTEREST. Notwithstanding anything to
the contrary contained in this Agreement:
(i) The interest of each Partner in the Partnership
shall be evidenced by a Certificate of Interest. The Certificates of Interest
in the Partnership, together with a Certificate Transfer Ledger, shall be
maintained at the principal office of the Partnership. Each such Certificate
shall be serially numbered and shall be issued by, or at the written direction
of, each of the General Partners to the lawful holder of an interest in the
Partnership upon payment by the issuee of the full amount of the capital
contributions then due with respect to its interest in the Partnership
represented by such Certificate. All Certificates shall be executed in the name
of the Partnership by each of the General Partners or their designee(s). Each
Certificate shall state on its face the name of the registered holder thereof
and the then interest in the Partnership held by the issuee; and shall bear, on
both sides thereof, a statement of the restrictions imposed by Section 105 of
the Casino Control Act.
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(ii) Certificates of Interest in the Partnership may
be transferred by the lawful holders thereof only in connection with the
transfer of all or part of the interest of such holder in the Partnership, and
only in accordance with the provisions of this Agreement. All such transfers
shall be effected by duly executed and acknowledged instruments of assignment,
each of which shall be fully recorded on the Certificate Transfer Ledger. No
effect shall be given to any purported assignment of a Certificate, or transfer
of the interest in the Partnership evidenced thereby, unless such assignment and
transfer shall be in compliance with the terms and provisions of this Agreement,
and any attempted assignment or transfer in contravention hereof shall be
ineffectual.
(iii) In the event that a Certificate of Interest
shall be lost, stolen, destroyed or mutilated, the Partnership may cause a
replacement Certificate to be issued upon such terms and conditions as shall be
fixed by the Partners, including, without limitation, provision for indemnity
and the posting of a bond or other adequate security as security therefor. No
replacement Certificate shall be issued to any person unless such person has
surrendered the Certificate to be replaced, or has complied with the terms of
this subsection.
(iv) The Certificate Transfer Ledger, containing the
names and addresses of all Partners and the interest of each Partner in the
Partnership, shall be open to the inspection of the Partners at the principal
office of the Partnership during usual business hours upon request of any
Partner. Such Ledger shall, in addition, be available for inspection by the
Commission or the Division of Gaming Enforcement of the State of New Jersey and
each of their respective authorized agents at all reasonable times without
notice.
14.11. HEADINGS. The descriptive headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
14.12. TAX MATTERS PARTNER. Xxxxx XX shall be the "tax
matters partner" under the Code and all applicable tax laws and shall, in its
sole discretion, make or revoke all tax elections, resolve allocations issues
and handle all tax audits, controversies and proceedings. TACC and Xxxxx XX
agree that Xxxxx XX, acting through the Partnership, shall have the authority to
handle and resolve all tax controversies involving Xxxxx XX, TACC and/or the
Partnership in such manner as Xxxxx XX in its sole discretion determines,
provided that the Partnership shall bear all accounting and legal expenses
incurred in connection therewith. Notwithstanding the foregoing, Xxxxx shall
have the right to control the resolution of tax matters affecting or relating to
the Partnership in respect to periods ending on or prior to the date hereof,
including
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requiring the Partnership to adjust the tax basis of assets held by the
Partnership in connection with the resolution of such tax matters to the extent
such basis adjustments shall not reduce Xxxxx Hotels & Casino Resorts, Inc.'s
share of federal income tax depreciation and cost recovery deductions in respect
of assets held by the Partnership as of the date hereof and contributions of any
interest in the Partnership to Xxxxx XX.
14.13. INDEMNIFICATION. The Partnership shall indemnify and
hold harmless each Partner, its Affiliates, and all officers, directors,
employees and agents (individually, an "Agent") of such Partner, and its
affiliates (individually, an "Indemnitee") from and against any and all losses,
claims, demands, costs, damages, liabilities, joint and several, expenses of any
nature (including reasonable attorneys' fees and disbursements) , judgments,
fines, settlements, and other amounts arising from any and all claims, demands,
actions, suits, or proceedings, civil, criminal, administrative or
investigative, brought or threatened in which the Indemnitee may be involved, or
threatened to be involved, as a party or otherwise, arising out of or incidental
to the business of the Partnership or their status as an Agent including without
limitation liabilities under the Federal and state securities laws, regardless
of whether the Indemnitee continues to be a Partner, an Affiliate of a Partner,
or an Agent of a Partner or of an Affiliate of a Partner at the time any such
liability or expense is paid or incurred, so long as such indemnified person
acted in good faith on behalf of the Partnership, TACC or Xxxxx XX and in a
manner reasonably believed by such person to be in or not opposed to the best
interests of the Partnership, TACC or Xxxxx XX but only if such course of
conduct does not constitute gross negligence or willful misconduct; provided
that such indemnification or agreement to hold harmless shall be recoverable
only out of assets of the Partnership and not from the Partners and; provided,
further that no indemnification shall be made to or on behalf of an Indemnitee
if a judgment or other final adjudication adverse to the Indemnitee establishes
that his or its acts or omissions (i) in the case of an Indemnitee who is or was
a director of TACC or the Xxxxx XX managing general partner, were in breach of
his duty of loyalty to TACC or the Xxxxx XX managing general partner, as the
case may be, or were not in good faith or involved a knowing violation of law,
or resulted in receipt by the Indemnitee of an improper personal benefit or (ii)
in the case of all other Indemnitees, constituted gross negligence or willful
misconduct. Termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendre or its equivalent shall not itself
create a presumption that such Indemnitee did not meet the applicable standard
of conduct for indemnification. Indemnity shall be paid in advance of the final
disposition of the proceeding to an Indemnitee provided that the Indemnitee
undertakes to repay the Partnership if it shall ultimately be determined that he
or it is not entitled to indemnification as provided by this Section 14.13. The
indemnification
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provided by this Section 14.13 shall be in addition to any other rights to which
an Indemnitee may be entitled under any agreement, as a matter of law or equity,
or otherwise, both as to action in the Indemnitee's capacity as a Partner, an
Affiliate of a Partner, or as an officer, director, employee or agent of a
Partner or Affiliate of a Partner and as to any action in another capacity, and
shall continue as to an Indemnitee who has ceased to serve in such capacity and
shall inure to the benefit of the heirs, successors, assigns and administrators
of the Indemnitee. No Indemnitee shall be denied indemnification in whole or in
part under this Section 14.13 by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
such interest was fully disclosed and the transaction was approved by Funding.
Any indemnification or advance under this Section 14.13 to an
Indemnitee shall be made promptly and in any event within thirty (30) days upon
the written request of the individual seeking indemnification. The right to
indemnification or advances as granted under this Section 14.13 shall be
enforceable by any such individual seeking indemnification in any court of
competent jurisdiction, if the Partnership denies such request, in whole or in
part, or if no disposition thereof is made within thirty (30) days. Such
person's costs and expenses incurred in connection with successfully
establishing his right to indemnification or advances, in whole or in part, in
any such action shall also be indemnified by the Partnership. It shall be a
defense to any such action that there has been a judgment or other final
adjudication adverse to the claimant which established that his acts or
omissions did not meet the standard of conduct required by the first paragraph
of this Section 14.13, but the burden of proving such defense shall be on the
Partnership. Neither the failure of the Partnership to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct, nor the fact that there has been an actual determination by
the Partnership that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
The Partnership shall have the power to purchase and maintain
insurance, and to furnish similar protection (including but not limited to
providing a trust fund, letter of credit, self-insurance or indemnification
contract), on behalf of any individual to whom indemnification or advances may
be paid hereunder, against any expenses, fees or liabilities for which
indemnification or advances may be paid hereunder.
14.14. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives
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and permitted assigns, including any pledgee upon the foreclosure of any pledge
of a Partner's Partnership Interest in the Partnership.
Partners:
XXXXX ATLANTIC CITY ASSOCIATES
By: XXXXX HOTELS & CASINO RESORTS
HOLDINGS, L.P., general partner
By: XXXXX HOTELS & CASINO RESORTS, INC.,
general partner
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Xxxxxxxx X. Xxxxx
President
XXXXX ATLANTIC CITY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxx X. Xxxxx
Vice President
WITHDRAWING PARTNERS: THCR/LP CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
President
XXXXX CASINOS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Xxxxxx X. Xxxxx
President
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