EXHIBIT 3.1
THIRD
AMENDED AND RESTATED
JOINT VENTURE AGREEMENT
OF HOLLYWOOD CASINO SHREVEPORT
(FORMERLY KNOWN AS
THE "QUEEN OF NEW ORLEANS AT THE
HILTON JOINT VENTURE" AND "QNOV")
THIS THIRD AMENDED AND RESTATED JOINT VENTURE AGREEMENT is entered into as
of July 21, 1999, by and among Shreveport Paddlewheels, L.L.C. ("Paddlewheels"),
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HCS I, Inc. ("HCS I") and HCS II, Inc. ("HCS II"). Unless the context otherwise
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requires, terms which are capitalized and not otherwise defined shall have the
meanings set forth or cross-referenced in Article I of this Agreement.
PRELIMINARY STATEMENT
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▇. ▇▇▇▇▇▇ Hotels Corporation ("Hilton") and New Orleans Paddlewheels, Inc.
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("NOP") entered into a Basic Agreement, dated as of January 9, 1992, and Joint
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Venture Agreement dated May 20, 1992, collectively setting forth the agreement
of such parties to operate, as joint venturers under the name "Queen of New
Orleans at the Hilton Joint Venture" (the "Original JV"), a riverboat casino
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located in New Orleans, Louisiana.
B. On January 14, 1994, Hilton assigned its equity interest in the
Original JV to Hilton New Orleans Corporation ("HNOC").
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C. On September 14, 1998, NOP assigned a one percent (1%) interest of NOP
in the Original JV to Paddlewheels.
D. On September 15, 1998, HNOC transferred its total equity interest in
the Original JV to NOP.
E. On September 22, 1998, each of NOP and Paddlewheels transferred certain
of its equity interest in the Original JV to Sodak Louisiana, L.L.C., a
Louisiana limited liability company ("Sodak") and HWCC-Louisiana, Inc. ("HWCC";
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and this transaction being the "Reorganization").
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F. In connection with the Reorganization, Paddlewheels, Sodak and HWCC
entered into that certain Amended and Restated Joint Venture Agreement of QNOV
dated July 31, 1998 to be effective upon the Reorganization, as amended at the
time of the Reorganization on September 22, 1998 pursuant to that certain
September 1998 Amendment to the Amended and Restated Joint Venture Agreement of
QNOV (as amended, the "First Amended and Restated Agreement"). In the First
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Amended and Restated Agreement, the parties changed the name of the Original JV
from "Queen of New Orleans at the Hilton Joint Venture" to "QNOV".
G. Pursuant to the terms of that certain Membership Interest Purchase
Agreement dated March 31, 1999 among HWCC, Sodak Gaming, Inc., a South Dakota
corporation
and former owner of Sodak (the "Seller"), and Sodak, the Seller sold all of its
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membership interest in Sodak to HWCC on April 23, 1999 (the "Sodak Sale").
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H. Pursuant to that certain Agreement of Merger dated July 9, 1999,
Sodak merged with and into HWCC with HWCC as the survivor (the "Sodak Merger").
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I. Also on July 9, 1999, HWCC and Paddlewheels executed the Second
Amended and Restated Joint Venture Agreement (the "Second Amended and Restated
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Agreement") to (i) reflect the Sodak Sale and the Sodak Merger and (ii) change
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the name of the Venture from "QNOV" to "Hollywood Casino Shreveport".
J. On July 21, 1999, HWCC (i) contributed ninety-nine percent (99%) of
its JV Interest in the Venture to HCS I, Inc., a wholly owned subsidiary of
HWCC, and HCS I assumed certain obligations of HWCC, and (ii) contributed the
remaining one percent (1%) of its JV Interest to HCS II, Inc., a wholly owned
subsidiary of HWCC, both contributions of which were acknowledged and approved
by Paddlewheels (the "HWCC Contribution").
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K. HCS I, HCS II and Paddlewheels desire to amend and restate the Second
Amended and Restated Agreement to (i) reflect the contribution of HWCC's JV
Interests to HCS I and HCS II and (ii) to make certain amendments deemed
necessary and advisable in connection with the financing of the Venture.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Second Amended and Restated Joint Venture Agreement is
hereby amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. The following terms shall have the respective meanings
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indicated:
"Accountants" - shall mean independent certified public accountants of
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recognized national standing.
"Act" - shall mean the Louisiana Gaming Control Act, La. R.S. 27:1 et.
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seq., including the amendments thereto and regulations promulgated thereunder,
as may be in effect from time to time.
"Affected Venturer" shall have the meaning as defined in Section 11.2(a)
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below.
"Affiliate(s)" - shall mean with respect to any person or entity, any firm,
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corporation, partnership, limited liability company, association, trust or other
person or entity which, directly or indirectly, controls, is controlled by, or
is under common control with, the subject person or entity or such person or
entity owns directly or indirectly ten percent (10%) or more of any class of
equity securities of, or otherwise has a substantial
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beneficial interest in such entity. For purposes hereof, the term "control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of any such person or entity,
whether through the ownership of voting securities, by contract or otherwise.
Such term shall also include with respect to any person who is a spouse, child,
grandchild, sibling or parent of the owner of any Venturer, or any trust,
partnership or other entity beneficially owned by any of the foregoing,
individually or collectively.
"Agreement" - shall mean this Third Amended and Restated Joint Venture
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Agreement.
"Assignment Agreement" - shall mean that certain Amended and Restated
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Assignment of Joint Venture Interest dated September 22, 1998 among Sodak, HWCC,
NOP and Paddlewheels.
"Budget" - shall have the meaning as defined in Article VIII hereof.
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"Business Days" - shall mean any day during which federally chartered banks
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are not required to be closed under applicable federal or Louisiana law.
"Casino" - shall mean the premises of the Complex upon which gaming
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activities will be conducted pursuant to the Act.
"Claim" - shall have the meaning as defined in Section 7.4(b) below.
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"Code" - shall mean the Internal Revenue Code of 1986, as amended.
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"Commencement Date" - shall mean the opening date of the Project.
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"Complex" - shall mean, upon completion of the Project, collectively the
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Vessel, the Casino, the Hotel, and the land based facilities related thereto,
together with all related improvements, facilities and amenities used in
connection with the operation thereof.
"Complex Net Revenues" - shall have the same meaning as set forth in the
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Management Agreement.
"Contribution Date" - shall have the meaning as defined in Section 3.3(b)
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below.
"Debt Restriction" - shall have the same meaning as defined Section 6.1
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below.
"Defaulting Venturer" - shall have the meaning as defined in Section 13.1
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below.
"Election Notice" - shall have the meaning as defined in Section 10.3(b)
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below.
"First Amended and Restated Agreement" - shall have the meaning as defined
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in the recitals of this Agreement.
"First Option" - shall have the meaning as defined in Section 10.3(a).
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"First Option Notice" - shall have the meaning as defined in Section
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10.3(a).
"Gaming Authorities" - shall mean any State of Louisiana gaming regulatory
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authority authorized under the Act, including but not limited to, the Louisiana
Gaming Control Board and the Riverboat Gaming Enforcement Division of the
Louisiana State Police, and any other gaming regulatory authority with
jurisdiction over the Venture or any Venturer.
"HCC" - shall mean Hollywood Casino Corporation, a Delaware corporation.
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"HCS I" - shall have the meaning as defined in the preamble to this
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Agreement.
"HCS II" - shall have the meaning as defined in the preamble to this
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Agreement.
"Hilton" - shall have the meaning as defined in the recitals to this
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Agreement.
"HNOC" shall have the meaning as defined in the recitals to this Agreement.
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"HWCC" - shall have the meaning as defined in the recitals to this
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Agreement.
"HWCC Contribution" - shall have the meaning as defined in the recitals to
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this Agreement.
"Hotel" - shall mean a hotel, which will contain no less than 300 rooms to
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be owned by the Venture and located at the Venture Site in Shreveport,
Louisiana.
"Indemnitee" - shall have the meaning as defined in Section 7.4(a) below.
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"JV Interest" - shall mean a unit representing a Venturer's equity interest
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in the Venture.
"JV Value" - shall have the meaning as defined in Section 10.5(a)(i) below.
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"LGCB" - shall mean the State of Louisiana Gaming Control Board.
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"Liquidating Venturer" - shall have the meaning as defined in Article XII
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hereof.
"Loan and Settlement Agreement" - shall have the meaning as defined in
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Section 3.2(b) below.
"Loan Commitments" - shall mean collectively the financing commitments that
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the Venture intends to procure for construction, development and operation of
the Project upon terms acceptable to HCS I.
"Losses" - shall have the meaning as defined in Section 7.4(a) below.
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"Management Agreement" - shall mean the Management Services Agreement
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between the Venture and the Operator dated as of September 22, 1998, together
with such amendments thereto as the parties thereto may mutually agree.
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"Management Agreement Value" - shall have the same meaning as defined in
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Section 10.5(a)(i) below.
"Marine Agreement" - shall mean the Marine Services Agreement dated as of
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September 22, 1998, between the Venture and Paddlewheels or an Affiliate
thereof.
"Master Agreement" - shall mean the Amended and Restated Master Agreement
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dated as of July 31, 1998 by and among Sodak, HWCC, NOP and Paddlewheels.
"Net Realized Value" - shall have the meaning as defined in Section 10.5
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below.
"NOP" - shall have the meaning as defined in the recitals to this
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Agreement.
"Notice of Subsequent Capital Contribution" - shall have the meaning as
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defined in Section 3.3(b) below.
"Offer Price" - shall have the meaning as defined in Section 10.3(a) below.
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"Offered JV Interest" - shall have the meaning as defined in Section
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10.3(a) below.
"Operator" - shall mean HWCC - Shreveport, Inc., a Louisiana corporation.
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"Optionor Venturer" - shall have the meaning as defined in Section 10.3(a)
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below.
"Original JV" - shall have the meaning as defined in the recitals of this
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Agreement.
"Paddlewheels" - shall have the meaning as defined in the preamble of this
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Agreement.
"Profits and Losses" - shall have the meaning as defined in Section 5.2(a)
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below.
"Project" - shall mean the planning, construction and operation of (i) the
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Vessel, (ii) landside improvements to facilitate the operation of the Complex
and (iii) the Hotel (collectively, the "Project"). The berth site for the
Vessel shall be located at the Venture Site.
"Purchase Price" - shall have the meaning as defined in Section 10.3(d)
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below.
"Regulations" - shall mean permanent, temporary, or proposed income tax
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regulations of the United States Department of Treasury promulgated under the
Code.
"Relative Ownership Ratio" - shall have the meaning as defined in Section
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5.1(b) below.
"Re-offer Notice" - shall have the meaning as defined in Section 10.3(f)
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below.
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"Re-offer Price" - shall have the meaning as defined in Section 10.3(f)
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below.
"Reorganization" shall have the meaning as defined in the recitals to this
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Agreement.
"Residual Ownership Ratio" - shall have the meaning as defined in Section
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3.2(d) below.
"Second Amended and Restated Agreement" - shall have the meaning as defined
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in the recitals to this Agreement.
"Second Option" - shall have the meaning as defined in Section 10.3(a)
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below.
"Second Option Notice" - shall have the meaning as defined in Section
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10.3(a) below.
"Secured Party Transferee" - shall have the meaning as defined in Section
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10.2(a) below.
"Seller" - shall have the meaning as defined in the recitals to this
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Agreement.
"Sodak" - shall have the meaning as defined in the recitals of this
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Agreement.
"Sodak Merger" - shall have the meaning as defined in the recitals of this
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Agreement.
"Sodak Sale" - shall have the meaning as defined in the recitals of this
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Agreement.
"Subsequent Capital Contribution" - shall have the meaning as defined in
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Section 3.3(a) below.
"Tax Matters Manager" - shall have the meaning as defined in Section 9.8
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below.
"Transfer" - shall have the meaning as defined in Section 10.1 below.
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"Unsuitable Venturer" - shall have the meaning as defined in Section 11.1
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below.
"Unsuitability Determination" - shall have the meaning as defined in
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Section 11.1 below.
"Venture" - shall have the meaning as defined in Section 2.1 below.
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"Venture Creditor" - shall have the meaning as defined in Section 10.2(b)
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below.
"Venture Site" - shall mean the berth site located at or adjacent to the
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▇▇▇▇▇▇'▇ valet parking site in Shreveport, Louisiana as more expressly described
in "Exhibit A" attached hereto.
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"Venturer(s)" - shall mean the partners of the Venture, namely,
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Paddlewheels, HCS I, HCS II, and such other entities which may hereafter become
Venturers and any person or entity admitted to the Venture as a partner pursuant
to the provisions of this Agreement, and any of the Venturers when the reference
is singular, and their respective successors in interest.
"Venturer Nonrecourse Debt" - shall have the meaning as defined in Section
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5.2(b) below.
"Vessel" - shall mean a riverboat gaming vessel having approximately 30,000
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square feet of net gaming space or such other amount of net gaming space as may
be permitted under applicable Louisiana law, which riverboat gaming vessel shall
be located at the Venture Site in Shreveport, Louisiana.
1.2 References. Except as otherwise specifically indicated, all
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references to Article, Section and Subsection numbers refer to Articles,
Sections and Subsections of this Agreement, and all references to Exhibits refer
to the Exhibits attached hereto. The words "herein", "hereof", "hereunder",
"hereinafter" and words of similar import refer to this Agreement as a whole and
not to any particular Section or Subsection hereof. For purpose of convenience,
the impersonal pronoun is sometimes used herein to refer to the Venturers.
ARTICLE II
FORMATION OF VENTURE
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2.1 Joint Venturers. The Venturers hereby agree to continue the
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Original JV as a Louisiana general partnership (the "Venture"), for the limited
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purposes and pursuant to the terms and conditions set forth herein.
2.2 Name. From and after July 9, 1999, the name of the Venture shall be
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"Hollywood Casino Shreveport."
2.3 Principal Office. The principal office of the Venture shall initially
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be located at Two Galleria Tower, Suite 2200, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, and it is the current intention of the Venture to relocate its principal
office in or near Shreveport, Louisiana or such other place as HCS I may, from
time to time, determine.
2.4 Partnership Act; Ownership. Except as otherwise expressly stated
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herein, the rights and obligations of the Venturers and the administration and
termination of the Venture shall be governed by this Agreement and the internal
laws (including partnership laws) of the State of Louisiana.
2.5 Purpose. The purpose of the Venture shall be to develop, construct,
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own and operate the Project, and the performance of all things necessary or
incidental to or in connection with the foregoing, in accordance with the terms
and conditions of this Agreement. The purposes of the Venture shall also
include the ownership of capital stock and membership, partnership or other
equity interests and securities. The purposes
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of the Venture shall not be modified in any manner, except in the manner set
forth in Article VII hereof.
2.6 No Individual Authority. Except as otherwise expressly provided in
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this Agreement, no Venturer, acting alone, shall have any authority to act for,
or undertake or assume any obligations or responsibility, in the name of or on
behalf of, the other Venturers or the Venture.
2.7 No Restrictions. Nothing contained in this Agreement shall be
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construed so as to limit, in any manner, a Venturer, or any Affiliate of such
Venturer, from owning, operating, financing, investing in, providing maritime
services to, or otherwise being affiliated with, any other venture or operation,
including any riverboat or gaming operation not owned or operated by the
Venture, wherever located.
2.8 Venturers Not Responsible for Other's Commitments. No Venturer shall
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be responsible or liable for any indebtedness or obligation of another Venturer
incurred either before or after the execution of this Agreement, nor shall the
Venture be responsible or liable for any such indebtedness or obligation of a
Venturer, except for (i) indebtedness or obligations expressly incurred or
assumed by a Venturer pursuant to the terms of this Agreement or (ii) otherwise
as expressly mutually agreed upon by the parties.
2.9 Term. The Venture shall continue until the first to occur of the
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following:
(a) the purchase by a Venturer of the JV Interests owned by all of
the other Venturers;
(b) the dissolution of the Venture as expressly provided in this
Agreement; or
(c) August 24, 2099.
ARTICLE III
CAPITAL CONTRIBUTIONS
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3.1 Transfers to Affiliates. Subject to the approval of the applicable
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Gaming Authorities, at any time or from time to time during the term hereof, (a)
HCS I or HCS II may transfer to HCC or an Affiliate thereof, and (b)
Paddlewheels may transfer to an Affiliate thereof, all or any portion of their
respective JV Interests. The parties hereby consent to any such transfer and
waive any right or claim they have, may have had, will have, or may in the
future have to participate in such transfer.
3.2 Capital Contributions and Ownership Ratios.
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(a) HWCC. Payments of $100,000 each made by Sodak and HWCC prior
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to the date hereof together with payments of an additional $2,400,000 each
made by Sodak and HWCC on July 31, 1998, were deposited into a bank account
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established by the Operator, for withdrawal from such bank account in
accordance with and for the purposes set forth in the Technical Services
Agreement that is attached to the Master Agreement as Exhibit G. Such
contributions shall be deemed to be initial capital contributions to the
Venture made by such parties. As a result of the Sodak Sale and the HWCC
Contribution, these initial capital contributions to the Venture have been
credited 99% to HCS I and 1% to HCS II.
(b) Paddlewheels. (i) Paddlewheels acknowledges and agrees that, as
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consideration for its ownership interest in, and rights to receive payments
from, the Venture from and after the date hereof in accordance with the
terms of this Agreement, Paddlewheels shall make a $1 million cash
contribution concurrent with the date the Venture receives initial funding
under any Loan Commitment, and (ii) Paddlewheels further acknowledges and
agrees that NOP's agreement in the Master Agreement to fulfill its
obligations pursuant to Section 1(E) of the Loan and Settlement Agreement
dated January 16, 1998, by and between Paddlewheels, HNOC, NOP, Sodak and
HWCC (the "Loan and Settlement Agreement") constitutes additional
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consideration for Paddlewheels' ownership interest in and rights to receive
payments from the Venture pursuant hereto.
(c) Allocation of JV Interests. HCS I has been credited with 99/100
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of a JV Interest for each dollar contributed by HWCC and Sodak as described
in Section 3.2(a), HCS II has been credited with 1/100 of a JV Interest for
each dollar contributed by HWCC and Sodak as described in Section 3.2(a)
and each of HCS I and HCS II shall be credited with one additional JV
Interest for each dollar contributed as a Subsequent Capital Contribution
in accordance with Section 3.3 below. Paddlewheels shall be credited with
one JV Interest for each dollar contributed by such party pursuant to
Section 3.2(b)(i) above and shall be credited, as of the date the Venture
receives initial funding under any Loan Commitment, with an additional $1
million of JV Interests in consideration for NOP's obligations as described
under Section 3.2(b)(ii) above.
(d) Residual Ownership Ratios. In consideration for the capital
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contributions described in this Section 3.2 made by the Venturers, each
Venturer shall be deemed to have the following residual ownership ratio
(individually, a "Residual Ownership Ratio"):
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Residual
Ownership
Ratio
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Paddlewheels 10.0%
HCS I 89.1%
HCS II 0.9%
Paddlewheels' Residual Ownership Ratio shall not be subject to adjustment,
increase or diminution. The Residual Ownership Ratio of each Venturer (other
than
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Paddlewheels and any Affiliate thereof) shall be adjusted from time to time
as Subsequent Capital Contributions are made in accordance with this Article III
and shall be (x) the quotient equal to the number of outstanding JV Interests
held by such Venturer at such time, divided by the total number of outstanding
JV Interests held by all Venturers other than Paddlewheels at such time (y)
multiplied by 90.
3.3 Subsequent Capital Contributions.
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(a) The Venturers (except Paddlewheels and any Affiliate thereof)
from time to time may, but shall not be obligated to, make additional
capital contributions to the Venture ("Subsequent Capital Contributions")
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in cash as needed to meet the needs of the Venture. Paddlewheels and any
Affiliate thereof shall not be permitted or required to make Subsequent
Capital Contributions.
(b) HCS I shall authorize and approve Subsequent Capital
Contributions and shall give written notice (the "Notice of Subsequent
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Capital Contribution") to each Venturer (except Paddlewheels and any
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Affiliate thereof) of the decision of HCS I that Subsequent Capital
Contributions are necessary in connection with the Project. Such notices
will state (i) the total amount of additional capital required by the
Venture, (ii) the amount of additional capital that HCS I or any other
eligible Venturer is required to contribute, which shall be based on their
relative Subsequent Contribution Ownership Ratios as provided in Section
3.3(d) below, (iii) the use of proceeds of the requested Subsequent Capital
Contribution, including a reasonable itemization of such use, and (iv) the
date by which the contribution shall be made (the "Contribution Date"),
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which date shall not be less than 20 days after mailing of the Notice of
Subsequent Capital Contribution. In the event a Venturer elects not to
contribute its pro rata share of Subsequent Capital Contributions that is
authorized and approved by HCS I pursuant to this Section 3.3, then the
other contributing Venturers may elect to contribute such unpaid portion of
Subsequent Capital Contributions on a pro rata basis in accordance with
their Subsequent Contribution Ownership Ratio (which shall not include, for
purposes of calculating the foregoing, the JV Interests of the non-
contributing Venturer).
(c) Each Venturer that makes a Subsequent Capital Contribution
shall be credited with one additional JV Interest for each additional
dollar contributed by such party to the Venture.
(d) The allocation of any Subsequent Capital Contribution among the
contributing Venturers will be based on the "Subsequent Contribution
Ownership Ratio" for each contributing Venturer which shall be, for each
such contributing Venturer, (i) the quotient equal to the number of JV
Interests held by such contributing Venturer, divided by the total number
of outstanding JV Interests held by all Venturers (other than Paddlewheels
and any Affiliate thereof), (ii) multiplied by (100), immediately prior to
the issuance of the Notice of Subsequent Capital Contribution.
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3.4 No Right to Return of Contribution. Except as otherwise expressly
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provided in this Agreement, no Venturer shall have the right to withdraw or
receive any return of its initial or any Subsequent Capital Contribution. Under
circumstances requiring a return of any initial or Subsequent Capital
Contribution, no Venturer shall have the right to receive property other than
cash. No Venturer shall have any right to the withdrawal or to the return of any
initial or Subsequent Capital Contribution made by it to the Venture, except as
otherwise provided in this Agreement.
ARTICLE IV
LOANS
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The Venturers may be entitled, but are not obligated, to make loans to the
Venture from time to time, the terms and conditions of which (including, but not
limited to, any equity conversion provisions) shall be approved by HCS I, and
any such loans (prior to any applicable conversion thereof) shall not be treated
as Subsequent Capital Contributions to the Venture for any purpose hereunder,
nor entitle such Venturer to any increase in its share of the Profits and Losses
or cash distributions of the Venture, but the Venture shall be obligated to such
Venturer for the amount of any such loans pursuant to the terms thereof. All
scheduled principal and interest payments with respect to any loans from a
Venturer to the Venture pursuant to this Section shall be repaid prior to any
distributions to any Venturer pursuant to Section 5.1 below. No Venturer shall
be paid interest on any initial or Subsequent Capital Contribution to the
Venture.
ARTICLE V
DISTRIBUTIONS
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From time to time, but in no event less frequently than once each calendar
year, HCS I shall determine the amount of distributions of Profits and Losses
that shall be made to the Venturers (other than Paddlewheels and any Affiliate
thereof) pursuant to Section 5.1 below.
5.1 (a) Priority of Distributions. All distributions (other than
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distributions pursuant to Section 5.1(d) below) shall be made pro rata to
the Venturers (other than Paddlewheels and any Affiliate thereof) based on
their respective Relative Ownership Ratios (as defined in Section 5.1(b)
below), immediately prior to any such distribution.
(b) Definition of Relative Ownership Ratio. For purposes of this
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Agreement, the term "Relative Ownership Ratio" shall mean for each Venturer
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(except Paddlewheels and any Affiliate thereof) a percentage equal to (i)
the quotient equal to the number of JV Interests held by such Venturer,
divided by the total number of outstanding JV Interests held by all
Venturers (excluding JV Interests held by Paddlewheels and any Affiliate
thereof), (ii) multiplied by 100.
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(c) Withholding. If required by the Code or by state or local law,
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the Venture will withhold any required amount payable to a Venturer
pursuant to Article V for payment to the appropriate taxing authority. Each
Venturer agrees to timely file any agreement or return that is required by
any taxing authority in order to avoid any withholding obligation that
would otherwise be imposed on the Venture.
(d) Tax Distributions. The Venture shall distribute to each
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Venturer (excluding Paddlewheels and any Affiliate thereof) in the event
such persons are allocated any share of Venture taxable income from
operations (but not with respect to any other allocations of taxable income
or gain, including but not limited to, allocations of income and gains in
connection with a sale of assets by the Venture or a liquidation of the
Venture or in connection with any deemed capital contribution) pursuant to
the Code, Regulations or any formal action by the Internal Revenue Service
for each year, as additional equity distributions, amounts equal to the
amount by which (a) such Venturer's allocable share of Venture taxable
income multiplied by the highest marginal combined federal, state and local
income tax rate applicable to any Venturer that has been allocated a share
of Venture taxable income for such year exceeds (b) cash distributions
otherwise made to such Venturer with respect to such year, exclusive of any
amounts distributed to such Venturer to permit such Venturer to make
payments to Paddlewheels pursuant to the Assignment Agreement.
(e) Except as required in Sections 704(b) or (c) of the Code, all
items of income, gain, deduction, loss or credit shall be allocated among
the Venturers (other than Paddlewheels and any Affiliate thereof) pro rata
in accordance with their respective Relative Ownership Ratios.
5.2 Profits and Losses.
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(a) Profits and Losses. "Profits and Losses" means, for each
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Venture fiscal year or other fiscal period, an amount equal to the
Venture's taxable income or loss for such year or period, as 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)(1) of the Code shall be included in Profits or Losses).
(b) Allocation of Losses. All Losses shall be allocated to the
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Venturers (other than Paddlewheels and any Affiliate thereof) in proportion
to such Venturers' Relative Ownership Ratios; provided, however, that any
Losses (or portion thereof) attributable to a loan made or guaranteed by a
Venturer, or Venturer nonrecourse debt within the meaning of Regulation
Section 1.704-2(b)(4) ("Venturer Nonrecourse Debt"), shall be allocated to
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such Venturer in accordance with such Regulation.
(c) Allocation of Profits. Subject to the special allocation
---------------------
provisions set forth in Section 5.2(d) below, all Profits and Losses shall
be allocated to the
12
Venturers (other than Paddlewheels and any Affiliate thereof) in
accordance with such Venturers' respective Relative Ownership Ratios.
(d) Special Allocation. In any period during which Paddlewheels
------------------
receives payment of any amount representing its share of Net Realized
Value, Paddlewheels shall be allocated taxable income or gain for such
period in an aggregate amount equal to such payment. Except as set forth in
the preceding sentence, no income, gains, Profits and Losses or tax credits
shall be allocated to Paddlewheels.
5.3 Transfer. If, after the date hereof, any JV Interest is transferred
--------
during any fiscal year of the Venture (whether by liquidation of a JV Interest,
transfer of all or part of a JV Interest or otherwise), the books of the Venture
will be deemed to be or will be closed as of the effective date of such
transfer. The Profits and Losses attributable to the period from the first day
of such fiscal year through the effective date of such transfer will be
allocated to the transferor, and the Profits and Losses attributable to the
period commencing on the effective date of such transfer will be allocated to
the transferee. In lieu of an interim closing of the books of the Venture and
with the agreement of the transferor and the transferee, the Venture may
allocate Profits and Losses for such fiscal year between the transferor and the
transferee based on a daily proration of items for such fiscal year or any other
reasonable method of allocation (including an allocation of extraordinary
Venture items, as determined by the Venture, based on when such items are
recognized for federal income tax purposes). This allocation provision is
subject to the provisions of Section 706(d) of the Code, relating to allocable
cash basis items.
5.4 Tax Credits. Any tax credit, and any tax credit recapture, will be
-----------
allocated to the Venturers (other than Paddlewheels and any Affiliate thereof)
in the same ratio that the federal income tax basis of the asset (to which such
tax credit relates) is allocated to the Venturers under the Regulations
promulgated under Section 46 of the Code, and if no basis is allocated, in the
same manner as Profits and Losses are allocated to the Venturers under Section
5.2 hereof.
5.5 Tax Information Notices. Each Venturer shall furnish the Tax Matters
-----------------------
Manager with such information (including information specified in Section
6230(e) of the Code) as the Tax Matters Manager may reasonably request to permit
the Tax Matters Manager to provide the Internal Revenue Service with sufficient
information to allow proper notice to the Venturers in accordance with Section
6223 of the Code. The Tax Matters Manager shall keep each Venturer informed of
those administrative and judicial proceedings for the adjustment of the Venture
level of Venture items required by Section 6223(g) of the Code and the
Regulations thereunder, and such other matters as the Tax Matters Manager, in
its sole discretion, deems appropriate.
5.6 Inconsistent Tax Treatment. Each Venturer shall notify the Tax
--------------------------
Matters Manager in the event its treatment of any Venture item on its federal
income tax return is inconsistent with the treatment of that item on any return
filed by or in any records of the Venture within thirty (30) days of the date
such Venturer's return is filed.
13
5.7 Tax Proceedings. The Tax Matters Manager, in its sole discretion,
---------------
shall direct and oversee all proceedings, disputes and other similar matters
between the Venture and the Internal Revenue Service. Any Venturer who intends
to file a petition under Section 6226, 6228, or other sections of the Code with
respect to any Venture item, or other tax matters involving the Venture shall
give reasonable notice to each of the Venturers of such intention and the nature
of the contemplated proceedings. In the case where the Tax Matters Manager, on
behalf of the Venture, intends to file such petition, the Tax Matters Manager,
in its sole discretion, shall choose the forum in which such petition will be
filed. If any Venturer desires to seek review of any court decision rendered as
a result of a proceeding instituted under this Section, such Venturer shall so
notify each of the Venturers, and shall request the Tax Matters Manager to so
act. The Tax Matters Manager may, in its sole discretion, choose to pursue or
forego settlement, review, litigation or any other proceedings in connection
with any such proceeding, dispute or other similar matter with the Internal
Revenue Service.
5.8 Tax Settlements. The Tax Matters Manager shall have the authority to
---------------
bind any other Venturer to a settlement agreement regarding any proceeding
dispute or other matter by and between the Venture and the Internal Revenue
Service upon the written concurrence of any such Venturer who would be bound by
such agreement.
5.9 Expenditures, Fees and Indemnification. The Tax Matters Manager may
--------------------------------------
engage such legal counsel, certified public accountants, or others (including,
without limitation, experts) on behalf of the Venture as it may determine to be
necessary and appropriate. Any other Venturer may engage other legal counsel,
certified public accountants, or others on such other Venturer's own behalf and
at such other Venturer's sole cost and expense. Any reasonable item of expense,
including but not limited to fees and expenses for legal counsel, certified
public accountants, and others (including, without limitation, experts) that the
Tax Matters Manager incurs on behalf of the Venture in connection with any
audit, assessment, litigation, or other proceeding regarding any Venture item,
shall constitute expenses of the Venture. In the event that the Venture does
not have adequate cash or other assets to pay such items of expense, the Tax
Matters Manager shall not be obligated to make Capital Contributions or loans to
fund such expenses except as otherwise provided herein, and the Tax Matters
Manager shall be free to resign as the "tax matters partner" of the Venture
pursuant to Section 5.10 hereof.
5.10 Resignation of Tax Matters Manager. The Tax Matters Manager may
resign as Tax Matters Manager of the Venture at any time upon the filing of a
signed statement with the Internal Revenue Service in accordance with Temp.
Treas. Reg. (S) 301.623(a)(7)-1T(i) (or any successor provision thereto). The
successor Tax Matters Manager shall be determined pursuant to Temp. Treas. Reg.
(S) 301.6231(a)(7)-1T (or any successor provision thereto).
5.11 Survival of Tax Matters Manager Provisions. The provisions of this
------------------------------------------
Article including without limitation the obligation to pay fees and expenses
shall survive the termination of the Venture or the termination of any
Venturer's interest in the Venture and shall remain binding on the Venture for a
period of time necessary to resolve with the Internal Revenue Service, the
Department of the Treasury or any state taxing authority
14
any and all matters regarding the federal or state income taxation of the
Venture for the applicable tax year(s).
ARTICLE VI
CASH PRIORITIES
---------------
6.1 Priority. The parties hereto agree and acknowledge that, subject to
--------
the payment subordination terms, restrictions and conditions set forth in any
credit facility or other applicable loan agreement or indenture entered into by
the Venture (a "Debt Restriction"), the Venture shall pay the following fees,
----------------
expenses and distributions in the following order of priority:
(i) First, the Venture shall pay the Operator the Basic
Management Fee (as defined in the Management Agreement), pursuant to
the terms and conditions of the Management Agreement.
(ii) Second, the Venture shall make equity distributions
pursuant to Section 5.1 above.
ARTICLE VII
MANAGEMENT AND OPERATION OF THE VENTURE
---------------------------------------
7.1 HCS I. The Venture shall be managed by HCS I, which shall oversee and
-----
supervise the operation of the Venture's business and make all decisions on
behalf of the Venture. HCS I shall have sole and exclusive control of the
business of the Venture and shall be authorized and empowered to determine all
questions relating to the conduct, operation and management of the business of
the Venture, and the determinations of HCS I shall be binding upon Venturers and
all other persons for all purposes.
7.2 Acts of HCS I; Minutes. Written records of the actions of HCS I, as
----------------------
the manager of the Venture, and all minutes of actions of the former "Management
Committee" of the Venture shall be kept with the other Venture records and shall
be available at any reasonable time for inspection by any Venturer.
7.3 Powers of HCS I. HCS I shall have all necessary powers to carry out
---------------
the purposes and conduct the business of the Venture. In addition to any other
rights and powers that HCS I may possess, HCS I, without the consent or approval
of any other Venturer shall have all specific rights and powers required or
appropriate to the management of the business of the Venture including, but not
limited to, approving the financing or refinancing of the Project or any portion
thereof and borrowing money in connection therewith (including executing and
delivering promissory notes, indentures, and other loan documents and
mortgaging, granting a security interest or otherwise encumbering all or any
portion of the real or immovable, personal or movable, tangible or corporeal,
intangible or incorporeal property of the Venture with any documents evidencing
such mortgage or security interest containing the usual and customary security
clauses, including without limitation a confession of judgment, waiver of
15
appraisal and pact de non alienando), approving the construction and development
plans and budgets, approving any future Project expansion, and approving any
sale of all or part of the Project, and only HCS I shall have these rights and
powers. Notwithstanding the foregoing, HCS I may delegate any or all such
rights and powers to any other person or entity in writing. As a result, the
parties hereto acknowledge that HCS I has delegated to Operator certain powers
pursuant to the terms and conditions of and expressly described in the
Management Agreement. Subject to the requirements of Section 7.5 below, all
decisions made for or on behalf of the Venture by HCS I consistent with the
above provisions shall be binding upon the Venture.
7.4 Indemnification.
---------------
(a) To the fullest extent permitted by law, each Venturer
(including Paddlewheels and its Affiliates) (the "Indemnitee") shall be
----------
indemnified, held harmless and defended by the Venture from and against any
and all losses, claims, damages, liabilities, whether joint or several,
expenses (including legal fees and expenses), judgments, fines and other
amounts paid in settlement, incurred or suffered by such Indemnitee, as a
party or otherwise, in connection with any threatened, pending, or
completed claim, demand, action, suit or proceedings whether civil,
criminal, administrative or investigative, and whether formal or informal,
arising out of or in connection with the business or the operation of the
Venture and by reason of the Indemnitee's status with respect to the
Venture regardless of whether the Indemnitee continues to be a Venturer at
the time any such loss, claim, damage, liability or other expense is paid
or incurred (collectively, the "Losses" individually, a "Loss") if, with
----
respect to a claim for which an Indemnitee is seeking indemnification, (i)
the Indemnitee acted in good faith and in a manner it reasonable believed
to be in the best interests of the Venture and, with respect to any
criminal proceeding, had no reasonable cause to believe that its conduct
was unlawful, (ii) the Indemnitee's conduct did not constitute gross
negligence, willful misconduct or a material breach of the terms of this
Agreement and (iii) the Indemnitee's conduct did not constitute fraud or
breach of their fiduciary duty, if any, to the Venture. The termination of
any action, suit or proceeding by judgment, order, settlement or upon a
plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in the best interests of the
Venture.
(b) In the event that the Indemnitee is made a defendant in or
party to any action or proceeding, judicial or administrative, instituted
by any third party for the liability or the costs or expenses of which are
Losses (any such third party action or proceeding being referred to as a
"Claim"), the Indemnitee shall give the Venture prompt notice thereof. The
-----
failure to give such notice shall not affect any Indemnitee's ability to
seek indemnification from the Venture unless such failure has materially
and adversely affected the Venture's ability to defend successfully a
Claim. The Venture shall be entitled to contest and defend such Claim;
provided, that the Venture (i) has a reasonable basis for concluding that
such defense may be successful and (ii) diligently contests and defends
such Claim. Such contest and defense shall be conducted by attorneys
employed by the
16
Venture. The notifying party shall be entitled at any time, at its
own cost and expense, to participate in such contest and defense and to be
represented by attorneys of its or their own choosing. If the Indemnitee
elects to participate in such defense, the Indemnitee shall cooperate with
the Venture in the conduct of such defense. Neither the Indemnitee nor the
Venture may concede, settle or compromise any Claim without the consent of
the other party, which consents will not be unreasonably withheld.
(c) The Venture, HCS I and HCS II, individually and collectively,
waive any and all claims and rights of contribution against Paddlewheels or
any Affiliate thereof in connection with, arising out of or related to any
Claims.
7.5 Negative Consent. Neither the Venture nor any Venturer without the
----------------
prior written consent of Paddlewheels shall approve any action that (a) amends,
modifies or otherwise changes (i) the method of calculation of Net Realized
Value pursuant to Section 10.5 below or (ii) Paddlewheels' right to receive 10%
of Net Realized Value pursuant to Section 10.5 below, or (b) transfers, all or a
portion of, the JV Interests held by HCS I or HCS II to an Affiliate thereof
unless such applicable Affiliate consents in writing to be bound by the terms of
Sections 6.1 and 10.2 hereof.
7.6 Bank Accounts. The Venture shall maintain bank accounts in such banks
-------------
as HCS I may designate exclusively for the deposit and disbursement of all funds
of the Venture. All funds of the Venture shall be promptly deposited in such
accounts. HCS I from time to time shall authorize the signatories for such
accounts.
7.7 Reimbursement for Costs and Expenses. HCS I shall determine the
------------------------------------
amounts, if any, that the Venture will reimburse a Venturer (or any Affiliate
thereof) for costs and expenses incurred by such Venturer or Affiliate on behalf
and for the benefit of the Venture; provided, however, that no overhead or
general administrative expenses of a Venturer or its Affiliates shall be
allocated to the operation of the Venture, and no salaries, fees, commissions or
other compensation shall be paid by the Venture to a Venturer or its Affiliates
or to any officer or employee of a Venturer or its Affiliates for any services
rendered to the Venture, except as may be provided in the Management Agreement
and the Marine Agreement or as may be approved in advance by HCS I.
7.8 Fidelity Bonds and Insurance. To the extent determined by HCS I, the
----------------------------
Venture shall obtain fidelity bonds with reputable surety or insurance companies
covering all persons having access to the Venture's funds, indemnifying the
Venture against loss resulting from fraud, theft, dishonesty and other wrongful
acts of such persons. The Venture shall carry or cause to be carried on its
behalf in insurance companies acceptable to HCS I all property, liability and
workmen's compensation insurance as shall be required under applicable loans,
leases, agreements and other instruments and statutes or as may otherwise be
required by HCS I.
7.9 Cooperation. The Venturers agree to use their best efforts and
-----------
cooperate with each other in carrying out the transactions contemplated by this
Agreement, including the following, provided that the cost thereof shall be
borne by the Venture:
17
(a) filing all required applications with the Gaming Authorities
for receipt on maintaining of a gaming license under the Act, and
maintaining compliance by the Venture with directives of the Gaming
Authorities and the provisions of the Act;
(b) filing materials with, or participating in, all attendant
investigations instituted by, a gaming regulatory authority of a State
other than Louisiana to which a Venturer is subject;
(c) developing the design of the Complex and supervising the
construction thereof;
(d) filing all required applications for the Vessel license, liquor
licenses and any other licenses or permits required for the operation of
the Complex;
(e) filing all tax returns and other governmental filings on behalf
of the Venture;
(f) securing all required insurance covering the Complex and the
operation thereof; and
(g) executing and delivering any other agreements, instruments,
documents or consents necessary for the financing, construction,
development and operation of the Complex, including but not limited to, the
Loan Commitments, loan documents, the Hotel and Vessel construction
agreements and any dock site licensing or leasing agreements.
ARTICLE VIII
BUDGETS AND CONTRIBUTIONS
-------------------------
HCS I shall furnish to each of the Venturers prior to the commencement of
each fiscal year a budget (the "Budget(s)") covering in reasonable detail the
---------
budget for such ensuing fiscal year. Each Budget shall show the additional cash
requirements of the Venture for the ensuing fiscal year, which shall be the
aggregate of all estimated expenditures to be made by the Venture during such
year, plus appropriate reserves for general maintenance and cash contingencies,
over the sum of the anticipated borrowings from the Loan Commitments and the
estimated cash on hand at the beginning of the year. Within a reasonable time
after the end of each calendar quarter, the Venture will furnish to each of the
Venturers any updates or revisions to operating forecasts.
18
ARTICLE IX
BOOKS AND RECORDS;
AUDIT, TAXES, ETC.
------------------
9.1 Books; Statements. The Venture shall keep, or cause to be kept, books
-----------------
and accounts showing its assets and liabilities, operations, transactions and
financial condition. All financial statements shall present fairly the financial
position and results of the Venture and shall be prepared on an accrual basis in
accordance with generally accepted accounting principles consistently applied.
HCS I shall determine the methods to be used in the preparation of financial
statements and federal, state and municipal income and other tax returns for the
Venture in connection with all items of income and expense, including but not
limited to, valuation of assets, the methods of depreciation, elections, credits
and accounting procedures.
9.2 Reports and Statements. On and after the Commencement Date, the
----------------------
Venture shall furnish, or cause to be furnished, to each of the Venturers the
reports and statements required to be furnished by the Operator pursuant to the
terms and conditions of the Management Agreement.
9.3 Where Maintained. The books, accounts and records of the Venture
----------------
shall be at all times maintained at its principal office.
9.4 Audits. Any Venturer may, at its option and at its own expense,
------
conduct internal audits of the books, records and accounts of the Venture.
Audits may be conducted in a reasonable manner, at reasonable times during
normal business hours, that will not interfere or impair the day to day business
operations of the Venture and may be conducted by employees of any Venturer, or
of an Affiliate of any Venturer, or by independent auditors retained by a
Venturer at such Venturer's expense.
9.5 Objections to Statements. Each Venturer shall have the right to
------------------------
object to each report or statement provided to such Venturer pursuant to Section
9.2 hereof by giving notice in writing to HCS I within 45 days after such report
or statement is received by such Venturer, indicating in reasonable detail the
objections of such Venturer and the basis for such objections. The reports and
statements described in Section 9.2 and the contents thereof, in the absence of
fraud or willful misconduct by the other Venturers or by the Accountants
certifying the statements, shall be deemed conclusive and binding upon any
Venturer who fails to give such notice within such 45-day period. Settlement of
objections to any report or statement and disputes of any result of audits of
the Venture's books shall be resolved by HCS I.
9.6 Fiscal Year. The fiscal year of the Venture shall be the calendar
year.
9.7 Tax Returns. HCS I shall cause the Accountants to prepare and file
all state and federal tax returns on a timely basis. HCS I shall cause the
Venture's Accountants to prepare and submit to HCS I on or before August 15 of
each year for its approval all federal and state income tax returns of the
Venture. If HCS I shall
19
disapprove the Venture's tax returns as submitted by the Accountants, HCS I may
direct the Accountants to revise the tax returns and resubmit them to HCS I for
its approval. A statement of the allocation of Profits and Losses shown on the
annual income tax returns prepared by the Accountants shall be transmitted and
delivered to each Venturer within ten days of the receipt thereof by the
Venture.
9.8 Tax Information Submitted; Notices Sent. HCS I shall be the "tax
---------------------------------------
matters partner" as defined in Section 6231(a)(7) of the Code (the "Tax Matters
-----------
Manager"). The Tax Matters Manager shall perform all duties and functions within
-------
the contemplation of Sections 6223, 6224, 6226, 6228 and 6230 of the Code in
connection with any administrative proceeding by the Internal Revenue Service
(or any taxing authority) or ensuing judicial proceeding by the Internal Revenue
Service (or any taxing authority) or ensuing judicial proceeding regarding a tax
return of the Venture. The Tax Matters Manager shall determine whether the
Venture should make any available tax election and, except for fraud or bad
faith in the making or failure to make such election, shall not be held
responsible or liable for the making of or failure to make such election. The
Tax Matters Manager shall consult with the Venturers concerning, and shall keep
the Venturers apprised of, matters within the scope of responsibility of the Tax
Matters Manager.
ARTICLE X
ASSIGNMENT BY ANY VENTURER OF ITS JV INTERESTS
----------------------------------------------
10.1 Restriction on Transfer.
-----------------------
(a) Except as expressly permitted in Section 3.1 above, 10.2 below
and, in any case, subject to the other provisions of this Article X and
Article XI, no Venturer shall sell, assign, transfer, convey, pledge,
hypothecate or otherwise dispose of all or any part of its JV Interests,
whether for consideration or not, and no purchaser or other transferee
thereof for value or otherwise shall have any rights in the Venture or,
have any rights as a Venturer with respect to all or any part of such JV
Interests attempted to be sold, assigned, transferred, conveyed, pledged,
hypothecated or otherwise disposed of, and any such attempted sale,
assignment, transfer, conveyance, pledge, hypothecation or other
disposition (a "Transfer") of all or any part of a Venturer's JV Interests
--------
shall be entirely null and void, unless all of the applicable provisions of
this Article X have been satisfied.
(b) The appropriate Venture records shall be noted to prevent the
Transfer of a Venturer's JV Interests otherwise than in accordance with
this Article X.
10.2 Certain Permitted Transfers.
---------------------------
(a) Subject to the other provisions of this Article X and this
Agreement, the Act or as otherwise agreed to by HCS I, the Transfer of all
or any part of the JV Interests of a Venturer shall be permitted in each of
the following
20
limited circumstances: (i) where such Transfer is performed pursuant to the
requirements of Sections 10.3 and 10.4 hereof; (ii) where a Venturer
collaterally assigns, grants a security interest in, pledges, hypothecates
or otherwise encumbers its JV Interests in connection with financing the
Venture; or (iii) any Transfer resulting from the exercise by a secured
party of any rights granted to it in connection with a collateral
assignment, security interest, pledge or other encumbrance permitted under
clause (ii), including any Transfer to the secured party, its nominee or
any third party in a foreclosure sale (the recipient in any such Transfer
being hereinafter referred to as a "Secured Party Transferee"). In the
------------------------
event of a Transfer in accordance with Section 3.1 above by a Venturer to
one of its Affiliates, the transferee of the Venturer's JV Interests shall
assume in writing all of the obligations and liabilities of the Venturer
under this Agreement and succeed to all of the rights, obligations, and
privileges of the Venturer under this Agreement, the Marine Agreement and
the Assignment Agreement (only with respect to the Venture's obligations to
make payments of 1% of "Complex Net Revenues" (as defined in the Assignment
Agreement) to Paddlewheels or any Affiliate thereof pursuant to the
Assignment Agreement).
(b) The Venture agrees to provide to any holder of a security
interest in a Venturer's JV Interests (a "Venture Creditor") a copy of any
----------------
notice of default hereunder by such Venturer, and to accept performance by
any such Venture Creditor of any obligations under this Agreement in place
of such Venturer after any default by such Venturer in the performance of
its obligations under this Agreement, provided that a Venture Creditor
shall not be obligated to cure any such default by a Venturer. Subject to
any required approval by the applicable Gaming Authorities, the Venturers
each hereby consent to any Secured Party Transferee becoming a partner in
the Venture, and any such Secured Party Transferee shall be admitted as a
partner in the Venture without the need for any further approvals or
consents of the Venturers upon presentation to the Venture of the written
instrument by which such Secured Party and the Venturer's Transferees
acquired title to a Venturer's JV Interest. Each Venturer agrees that the
Venture shall have no liability for wrongfully admitting a Secured Party
Transferee as a Venturer of the Venture if the Venture and such other
Venturers rely in good faith upon the actions and requests of the Secured
Party Transferee.
10.3 Rights of First Refusal Arising from Desired Transfer.
-----------------------------------------------------
(a) Grant of Options. Subject to any express agreement by the
----------------
Venturers, if any Venturer (the "Optionor Venturer") desires to Transfer
-----------------
any or all of the JV Interests owned by it (other than pursuant to a
Transfer permitted under Section 3.1 or Section 10.2), such Venturer shall
give notice in writing (the "First Option Notice") to the Venture and the
-------------------
other Venturers setting forth such desire, the portion of the JV Interests
(the "Offered JV Interests") sought to be transferred, the price (the
--------------------
"Offer Price") at which the Optionor Venturer proposes to make such
-----------
transfer and the name of the proposed transferee. Upon receipt of the First
Option Notice, the Venture shall have the irrevocable right and option (the
"First Option") to purchase all or a portion of the Offered JV Interests.
------------
In the
21
event that the Venture does not exercise the First Option with respect to
all of the Offered JV Interests within the time period specified in Section
10.3(b), such Optionor Venturer shall give notice in writing (the "Second
------
Option Notice"), within five days of its receipt of the earlier of the
-------------
Election Notice described in Section 10.3(b) or expiration of the 30-day
period following the date of the First Option Notice (or 20-day period if
Paddlewheels or any Affiliate thereof is an Optionor Venturer), to each of
the other Venturers setting forth the same information as in the First
Option Notice and the number of Offered JV Interests to be purchased by the
Venture. Upon the giving of the Second Option Notice, each other Venturer
shall have the irrevocable right and option (the "Second Option") to
-------------
collectively purchase all of the remaining Offered JV Interests.
(b) Exercise of First Option. The Venture may exercise the First
------------------------
Option by delivering to the Optionor Venturer written notice (the "Election
--------
Notice") of its election to exercise all or part of the First Option within
------
30 days after the date that the Venture receives the First Option Notice;
provided that if the Optionor Venturer is Paddlewheels or any Affiliate
thereof the Venture shall exercise such First Option within 20 days of the
date the Venture receives the First Option Notice.
(c) Exercise of Second Option. If the Venture does not exercise its
-------------------------
option to purchase all of the Offered JV Interests, each of the other
Venturers shall, pursuant to the Second Option, have the right to
collectively purchase all of the remaining Offered JV Interests. If the
other Venturers exercising the Second Option elect to purchase more JV
Interests than are subject to the Second Option, each participating
Venturer will be entitled to purchase up to its pro rata share, based on
the respective Relative Ownership Ratio of the participating Venturer, of
the remaining Offered JV Interests. Each participating Venturer may
exercise the Second Option by delivering to the Optionor Venturer written
notice of its election to exercise the Second Option within the 10-day
period immediately following the date of the Second Option Notice. If any
participating Venturer should elect to purchase less than its pro rata
share of the remaining Offered JV Interests, the Optionor Venturer shall
give oral or written notice of the number of remaining Offered JV Interests
available to each other eligible Venturer, each of whom shall have five
business days after receipt of such notice to elect to purchase all of such
remaining JV Interests. If the participating Venturers elect to purchase
more of the remaining Offered JV Interests than are available, each
Venturer participating in such re-offer shall have the right to purchase
its pro rata share (based on the respective Relative Ownership Ratio of
such Venturers participating in the re-offer, which shall be calculated by
excluding the JV Interests of such non-participating Venturer) of such
remaining Offered JV Interests. If, after such re-offer, the participating
Venturers shall fail to purchase all of the Offered JV Interests, the
Second Option shall expire.
(d) Purchase Price. The purchase price (the "Purchase Price") for
-------------- --------------
the Offered JV Interests at which the Optionor Venturer shall be obligated
to sell the Offered JV Interests pursuant to the First Option or the Second
Option shall be
22
equal to the price set forth in the applicable third party offer. No
Venturer shall voluntarily transfer any JV Interests for any consideration
other than for cash. The Venture and Venturers who exercise the First
Option and Second Option shall tender payment in cash for the Offered JV
Interests to be purchased by them on the date of closing of such purchase,
which shall occur no later than the earlier of the tenth day immediately
after the expiration of the 10-day period following the date of the Second
Option Notice or the 75th day immediately following the date of the First
Option Notice.
(e) Sale of Offered JV Interests. If the First Option Notice and
----------------------------
the Second Option Notice shall be duly given, and if the Venture and the
applicable Venturers shall not collectively exercise their options to
purchase all of the Offered JV Interests, then the Optionor Venturer shall
be free to sell all of its Offered JV Interests to any third party
transferee on the same material terms as were described in the First Option
Notice on and after the 30th day immediately following the date the
applicable transferee, if required, obtains a license from the applicable
Gaming Authorities. In such instance, the Venture's and applicable
Venturers' election to purchase any of the Offered JV Interests shall be
null and void and of no further legal effect .
(f) Re-Offers. If the proposed purchase price of a transferee for
---------
the Offered JV Interests is less than the applicable price as set forth in
the First Option Notice, the Optionor Venturer shall not transfer the
Offered JV Interests to such transferee unless the Optionor Venturer shall
first re-offer the Offered JV Interests at such lesser price to the Venture
and each of the other Venturers by giving written notice (the "Re-offer
--------
Notice") thereof, stating the Optionor Venturer's intention to make such
------
transfer at such lower price (the "Re-offer Price"). The Venture and each
--------------
of the other Venturers shall then have the irrevocable and exclusive option
to purchase all of the Offered JV Interests at the Re-offer Price,
exercisable in the same order of priority, proportions and manner as
provided in Sections 10.3(b), (c) and (d) hereof; provided the 30-day and
20-day periods referenced in Section 10.3(b) shall each be reduced to a 10-
day period.
(g) Limitation. Notwithstanding the terms and conditions of this
----------
Section 10.3, Paddlewheels and any Affiliate thereof, individually or
collectively, shall not have the right, in any manner, to acquire from any
Venturer all or a portion of such other Venturer's JV Interests except as
expressly provided elsewhere in this Agreement. Any such acquisition of JV
Interests by Paddlewheels or any Affiliate thereof shall be null and void,
and of no legal effect. In the event HCS I and any other Venturer (other
than Paddlewheels and any Affiliate thereof) have the right to purchase all
of Paddlewheels' JV Interest, then in addition to such rights, HCS I and
such other Venturers and the Venture shall have the right to purchase all
of Paddlewheels' rights to receive payments pursuant to the Marine
Agreement for an additional purchase price equal to the appraised value of
Paddlewheels' right to receive future fees pursuant thereto.
23
10.4 Involuntary Transfers. In the event a creditor of the Venture
---------------------
commences foreclosure against and acquires the assets of the Venture, then
Paddlewheels' right to receive payments pursuant to the Marine Agreement and
Section 10.5 below shall immediately terminate, and the Venture and the other
Venturers shall have no further obligations to make such payments to
Paddlewheels.
10.5 Special Purchase Rights. If, at any time after the opening of the
-----------------------
Project, (i) the Venture sells all or substantially all of its assets to a
person that is not an Affiliate of HCS I, HCS II, Operator, HCC or any other
Venturer (other than Paddlewheels and any Affiliate thereof), or (ii) HCS I, HCS
II, the Operator, HCC and such other Venturer collectively sell all of their JV
Interests to a person that is not an Affiliate of HCS I, HCS II, the Operator,
HCC or such Venturer, then the Venture or HCS I, HCS II, the Operator, HCC and
such other Venturer shall pay Paddlewheels an amount equal to 10% of the Net
Realized Value of such applicable sale received by the Venture, HCS I, HCS II,
the Operator, HCC and such other Venturer, together with an additional amount
representing the appraised value of Paddlewheels' right to future fees that
would otherwise continue to be payable under the Marine Agreement. Upon payment
of such Net Realized Value to Paddlewheels pursuant to this Section 10.5, the
Venture shall not be obligated to make any payments to Paddlewheels pursuant to
the Marine Agreement, and all of the JV Interests held by Paddlewheels and all
of its Affiliates shall terminate, expire and be of no legal effect. For
purposes of this section, the term "Net Realized Value" shall mean the gross
------------------------
sales proceeds from the applicable sale less (x) transaction costs (including,
but not limited to, accountants' and attorneys' fees), and amounts used to repay
debt and to establish reserves for debt payments, replacements and contingencies
(provided that Net Realized Value shall later be increased to the extent that
any portion of such reserves are paid to the Venture subsequent to the initial
determination of Net Realized Value), and (y) any amounts paid by the Venture to
HCS I, HCS II, Paddlewheels, the Operator, HCC, any other Venturer, or any
Affiliate thereof representing a return of each Venturer's initial Capital
Contributions and any Subsequent Capital Contributions. The parties hereto
agree and acknowledge that if any sale referred to in this Section 10.5 is made
to an Affiliate of the Venture, HCS I, HCS II, the Operator, HCC or any other
Venturer (other than Paddlewheels or any Affiliate thereof), then Paddlewheels
shall not be entitled to receive any payments pursuant to this Section 10.5.
ARTICLE XI
MANDATORY TRANSFERS
-------------------
11.1 Unsuitability in Louisiana. If the Gaming Authorities make a
--------------------------
determination that any Venturer or any Affiliate of such Venturer (the
"Unsuitable Venturer") is unsuitable to hold a license to perform or conduct
--------------------
gaming activities (an "Unsuitability Determination"), after the commencement of
---------------------------
gaming operations of the Complex, the Unsuitable Venturer shall immediately give
to the other Venturers (except Paddlewheels and any Affiliate thereof), upon
submitting written notice, a right to purchase all of the Unsuitable Venturers'
JV Interests. In the event such other Venturers elect not to purchase all of
the Unsuitable Venturer's JV Interests within a 30-day period following the date
the Unsuitable Venturers' written notice, the Venture shall purchase
24
all of the remaining Unsuitable Venturer's JV Interests within a 30-day period
following the termination date of the foregoing 30-day period. The purchase
price for the JV Interests purchased pursuant to this Section 11.1 shall be
equal to the lesser of (i) an amount agreed upon by the purchasing and selling
party or parties, and if no such agreement is made, the fair market value as
determined by an appraiser mutually acceptable to the selling and purchasing
party, or (ii) an amount approved by the LGCB. Notwithstanding the foregoing, if
the Unsuitable Venturer receives an offer to purchase such Unsuitable Venturer's
JV Interests from a third person, at any time during either the Venturers' 30-
day election period or Venture's 30-day election period pursuant to this Section
11.1, then the provisions set forth in Sections 10.3 and 10.4 shall govern.
Each Venturer shall independently comply with all federal, state and local
gaming regulations and any jurisdiction to which any Venturer is or becomes
subject to during the term of the license issued by the LGCB to the Venture,
including submitting to and cooperating in any investigation required by such
jurisdiction by virtue of the Venturer's JV Interests in the Venture. Each
Venturer shall bear all of its own costs which it incurs in connection with such
compliance.
11.2 Unsuitability in Other Jurisdictions.
------------------------------------
(a) Buy/Sell. If (i) a Gaming Authority of a State other than
--------
Louisiana makes an Unsuitability Determination as to any Venturer or an
Affiliate of such Venturer and (ii) any other Venturer (the "Affected
--------
Venturer") reasonably determines that the affiliation of the Affected
--------
Venturer with such Unsuitable Venturers threatens any gaming permit,
approval or other entitlement that the Affected Venturer or any Affiliate
of the Affected Venturer holds or has applied for because of such
Unsuitability Determination, then the Affected Venturer shall give a notice
of such determination to such Unsuitable Venturers. Within 20 days after
such notice is given, the Unsuitable Venturers receiving such notice shall
give a notice (a "Buy/Sell Notice") to the Affected Venturer and to the
Affected Venturer's Accountants of its election to either sell all (but not
less that all) of the Unsuitable Venturers' JV Interests to the Affected
Venturer or to buy all (but not less that all) of the JV Interests of the
Affected Venturer, in either case at a purchase price mutually agreed upon
by such parties or at the fair market value of such JV Interests as
determined by an appraiser mutually acceptable to such parties.
(b) Suitability Determination. Without limiting reasonableness to
-------------------------
such circumstances, a determination made by the Affected Venturer referred
to in Section 11.2(a) hereof shall be deemed to be reasonable if based
upon: (i) any written communication from a gaming regulatory authority of
the applicable state; or (ii) written evidence that, if true, the Affected
Venturer's participation in the Venture would violate any law, rule or
regulation administered by any gaming regulatory authority, so long as such
evidence is not induced in bad faith by its recipient.
25
11.3 Closing of Inter-Venturer Transfers. The closing of any Transfer of
-----------------------------------
the JV Interests of a Venturer to another Venturer under this Article XI shall
take place at the principal office of the Venture or such other place as may be
agreed upon by the Venturers on the first Business Day that is at least ten days
after the date on which the purchase price is determined pursuant to the
applicable provisions set forth in Article XI, or such other date as may be
agreed by the Venturers.
11.4 Limitation of Transfers. Except for Transfers effected pursuant to
-----------------------
any of Sections 11.1 and 11.2, no Transfer shall be made of any JV Interests if
(a) such Transfer, in the opinion of the Venture's legal counsel, would result
in the Venture being treated as an association taxable as a corporation for
federal or state tax purposes, (b) such Transfer, when considered with all other
Transfers of JV Interests within the previous 12 months, would result in the
Venture's being considered to have terminated within the meaning of Code Section
708, (c) such Transfer is effectuated through an "established securities market"
or a "secondary market (or the substantial equivalent thereof)" within the
meaning of Code Section 7704, (d) such Transfer would otherwise result in the
Venture's being classified as a "publicly traded venture" within the meaning of
Code Section 7704(b), (e) in the opinion of the Venture's legal counsel such
Transfer requires the registration of such JV Interests pursuant to any federal
or state securities law, (f) such Transfer would otherwise violate any
applicable federal or state securities laws (including any investor suitability
standards), (g) such Transfer would subject the Venture or any of the Venturers
to regulation under the Investment Company Act of 1940, the Investment Advisers
Act of 1940 or the Employee Retirement Income Security Act of 1974, each as
amended, (h) such Transfer would violate the gaming laws or regulations of any
State; (i) such Transfer is made to any person who lacks the legal right, power
or capacity to own such JV Interests, or (j) the Venture does not receive
written instruments (including, without limitation, true copies of any transfer
instruments and the transferee's consent to be bound by this Agreement) that are
in form and substance satisfactory to HCS I in its sole and absolute discretion.
Notwithstanding Sections 10.2, 10.3 and 10.4 above, no Transfer of any JV
Interests shall be made if such Transfer would (v) result in the termination of
the Venture under Louisiana law or otherwise, (w) result in a default under any
instrument evidencing or securing indebtedness of the Venture unless such
Transfer is otherwise consented to by, or such default is waived by, the
applicable lender, (x) with respect to any agreements or comments to which any
party is bound, require a prepayment of, or result in any adverse change in the
terms of, any other instrument evidencing or securing indebtedness of the
Venture, (y) result in, or jeopardize the revocation, suspension or denial of
the gaming license issued by the Gaming Authorities to the Venture permitting
gaming activities pursuant to the Act, or (z) result in, or jeopardize the
revocation, suspension or denial of any gaming license, or application for a
gaming license, of any Venturer or any of its Affiliates in any jurisdiction in
which such Venturer or its Affiliates are so licensed or have applied for a
gaming license. The Venturers acknowledge that adequate legal remedies are not
likely to exist for any breach of this Section 11.4 and, accordingly, that the
Venture and any aggrieved Venturer or Venture Creditor shall have the right to
secure injunctive relief in the event of any actual or threatened breach of a
Venturer's obligations under this Section 11.4.
26
11.5 Ineligible Transferees. Notwithstanding any provision of this
----------------------
Agreement to the contrary, no Transfer of any JV Interests may be made under any
circumstances to any person who: (a) has not been determined suitable or
otherwise approved or exempted from such determination by the Gaming
Authorities; or (b) is subject to an unsuitability determination by any
regulatory authority of any other state; or (c) has been convicted of a felony
offense.
11.6 Limitation. (a) Notwithstanding the terms and conditions contained in
----------
this Article XI, neither Paddlewheels nor any Affiliate thereof, individually or
collectively, shall have the right to acquire any JV Interests unless expressly
provided elsewhere in this Agreement. Any such acquisition of JV Interests by
Paddlewheels or any such Affiliate shall be null and void, and of no legal
effect. In the event HCS I or any other Venturer (other than Paddlewheels and
any Affiliate thereof) has the right to purchase Paddlewheels' JV Interests
pursuant to this Article XI, then HCS I and such other Venturer shall have the
right to purchase all of Paddlewheels' rights to receive payments pursuant to
the Marine Agreement for a purchase price equal to the appraised value of
Paddlewheels' right to receive future fees pursuant thereto.
ARTICLE XII
DISSOLUTION UPON CERTAIN EVENTS
-------------------------------
Upon the occurrence of any event enumerated in Section 2.9 herein, then,
unless such occurrence shall by law cause the Venture not to be dissolved, the
Venturers in accordance with the provisions of Article XIV hereof, shall wind up
the affairs of the Venture unless HCS I elects within 60 days after such
dissolution event to continue the Venture. If, upon dissolution of the Venture
for any reason described in this Article XII, the business of the Venture is
continued without liquidation and without the winding up of the affairs of the
Venture pursuant to the terms hereof, title to the property of the Venture shall
be vested in the Venturer continuing the business. Upon such dissolution, each
non-consenting Venturer, or any legal representative of such Venturer, shall
have the right to an accounting of its JV Interests as against the Venture
continuing the business, and such Venturer shall have the right to have the
value of its interest as of the date of dissolution ascertained or have any
right as a creditor or otherwise with respect to the value of its JV Interests.
ARTICLE XIII
DEFAULTS AND TERMINATION
------------------------
13.1 Defaults. Upon the occurrence of any of the following events (the
--------
affected Venturer being herein called the "Defaulting Venturer"):
-------------------
(a) if the Defaulting Venturer shall fail in any other material
respect to perform its obligations and agreements hereunder, and such
default shall continue for 30 days after receipt of a notice of default
with respect thereto (provided that if either the event or condition
causing the default shall be such that it could not
27
reasonably be cured within 30 days, then no default shall be deemed to have
occurred hereunder if within such 30-day period the Defaulting Venturer
shall have commenced the curing of such default and shall thereafter
proceed with all reasonable diligence to complete the same);
(b) if the Defaulting Venturer shall be dissolved (except as
permitted in Article X);
(c) if the Gaming Authorities provide notice to the effect that the
Defaulting Venturer no longer satisfies the criteria for licensure under
the Act, or that the gaming license of the Venture or the other Venturers
shall be in jeopardy of being revoked, denied or suspended as a result of
the continued participation of the Defaulting Venturer in the Venture, and
the Defaulting Venturer has exhausted all administrative remedies;
(d) if the Defaulting Venturer shall file a voluntary petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief for
itself under the present or any future federal bankruptcy, or state
insolvency or other relief for debtors, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver, conservator or
liquidator of such Defaulting Venturer or of all, or any substantial part
of its properties or its interest in the Venture (the term "acquiesce"
includes but is not limited to the failure to file a petition or motion to
vacate or discharge any order, judgment or decree providing for such
appointment within 10 days after the appointment) ;
(e) if a court of competent jurisdiction shall enter an order,
judgment or decree approving a petition filed against the Defaulting
Venturer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present
or any future federal bankruptcy act, or any other present or future
applicable federal, state or other statute or law relating to bankruptcy,
insolvency or other relief for debtors, and such Defaulting Venturer shall
acquiesce in the entry of such order, judgment or decree (the term
"acquiesce" includes but is not limited to the failure to file a petition
or motion to vacate or discharge such order, judgment or decree within 10
days after the entry of the order, judgment or decree), or such order,
judgment or decree shall remain unvacated and unstayed for an aggregate of
60 days (whether or not consecutive) from the date of entry thereof, or any
trustee, receiver, conservator or liquidator of such Defaulting Venturer or
of all or any substantial part of its property or its interest in the
Venture shall be appointed without the consent or acquiescence of such
Defaulting Venturer and such appointment shall remain unvacated and
unstayed for an aggregate of 60 days (whether or not consecutive);
(f) if the Defaulting Venturer shall admit in writing its inability
to pay its debts as they mature;
28
(g) if the Defaulting Venturer shall give written notice to any
governmental body of insolvency or pending insolvency, or suspension or
pending suspension of operations; or
(h) if the Defaulting Venturer shall make an assignment for the
benefit of creditors or take any other similar action for the protection or
benefit of creditors;
then in any such event, the other Venturer(s) (if such Venturers are HCS I, HCS
II or an Affiliate thereof or a successor thereto) (the "Non-defaulting
--------------
Venturer(s)") shall have the right to dissolve the Venture by giving the
-----------
Defaulting Venturer written notice thereof, unless HCS I, HCS II or such
Affiliate or successor elects to continue the Venture. If the Nondefaulting
Venturer(s) elect to continue the business of the Venture, then the
Nondefaulting Venturer(s) shall have the right to acquire all of the JV
Interests of the Defaulting Venturer at a purchase price equal to the lesser of
book value or liquidation value of the Defaulting Venturer's JV Interests,
provided that Paddlewheels or any Affiliate thereof shall not have the right, in
any manner, to acquire JV Interests pursuant to this Section 13.1.
Failure by the Non-Defaulting Venturers to give any notice of a default as
specified herein, or any failure to insist upon strict performance of any of the
terms of this Agreement shall not constitute a waiver of any such breach or any
of the terms of this Agreement. No breach shall be waived and no duty to be
performed shall be altered or modified except in writing. One or more waivers
or failure to give notice of default shall not be considered as a waiver of a
subsequent or continuing breach of the same covenant.
13.2 Not Exclusive Remedy. The rights granted in Section 13.1 shall not
--------------------
be deemed an exclusive remedy of the Nondefaulting Venturers, but all other
rights and remedies, legal and equitable, shall be available to it.
ARTICLE XIV
DISSOLUTION
-----------
14.1 General Procedures. Upon any event of termination or dissolution of
------------------
the Venture as set forth in Article XII or Article XIII, hereof, the Venture
shall cease to engage in any further business, except to the extent necessary to
perform existing contracts, and shall wind up its affairs and liquidate its
assets, unless the Nondefaulting Venturers elect to continue the business of the
Venture pursuant to Article XII, Section 13.1 above or as otherwise set forth in
this Agreement. During the course of liquidation, the Venturers shall continue
to share in the Profits and Losses as provided in Article V hereof, and the
provisions of this Agreement shall continue to bind the Venturers and apply to
the activities of the Venture, except as specifically provided to the contrary,
but there shall be no cash distributions to any of the Venturers until the
Distribution Date.
29
14.2 Distribution Date. Liquidation will continue until the Venture's
-----------------
affairs are in such condition that there can be a final accounting, showing that
all fixed or liquidated obligations of the Venture are satisfied or can be
adequately provided for hereunder. The assumption or guarantee in good faith by
one or more financially responsible corporations or other persons shall be
deemed to be an adequate means of providing for such obligations. When the
Venturers shall have determined that there can be a final accounting, the
Venturers shall establish a date for the distribution of the Venture's assets
(the "Distribution Date") and the assets of the Venture shall be distributed as
-----------------
provided in Section 14.3 hereof on such date.
14.3 Liquidation and Winding Up. If upon dissolution of the Venture, the
--------------------------
business of the Venture is not continued pursuant to the terms of Article XII or
Section 13.1 (if Paddlewheels and any Affiliate thereof elect not to acquire JV
Interests pursuant to such Section), the Venture shall be liquidated and HCS I
(or other person or persons designated by a decree of a court with proper
jurisdiction) shall wind up the affairs of the Venture. HCS I or other persons
winding up the affairs of the Venture shall promptly proceed to the liquidation
of the Venture and, in settling the accounts of the Venture, the assets and the
property of the Venture shall be distributed in the following order of priority:
(a) the payment of all debts and liabilities of the Venture in the
order of priority as provided by law (including outstanding loans from a
Venturer);
(b) the establishment of any reserves deemed necessary by HCS I or
the person winding up the affairs of the Venture for any contingent
liabilities or obligations of the Venture;
(c) the payment to each Venturer on a pro rata basis an amount
equal to the aggregate amount of initial and Subsequent Capital
Contributions made by each Venturer; and
(d) the balance, if any, distributed to the Venturers (including
Paddlewheels and any Affiliate thereof) pro rata in accordance with such
Venturers' Residual Ownership Ratios; provided, however, that Paddlewheels
or any Affiliate thereof shall not be entitled to any distribution
whatsoever pursuant to this Section 14.3(d) if such party has been, or has
a right to be, paid an amount equal to 10% of the Net Realized Value in
accordance with Section 10.5 of this Agreement.
14.4 Compensation and Reimbursement. HCS I may retain a person (who may be
------------------------------
any Nondefaulting Venturer) to act as liquidator for the Venture's assets. The
Nondefaulting Venturer or other person so retained shall be entitled to
reimbursement for out-of-pocket expenses incurred and reasonable compensation
for services rendered in connection with the winding up and liquidation of the
Venture, as agreed by the Venturers. Such reimbursement shall be paid as an
expense of the Venture after all debts to third parties have been repaid or
adequately provided for.
30
14.5 No Capital Contribution Upon Dissolution. Each Venturer shall look
----------------------------------------
solely to the assets of the Venture for all distributions with respect to the
Venture, and shall have no recourse therefor (upon dissolution or otherwise)
against any other Venturer. No Venturer shall be obligated to restore to the
Venture any negative balance that may exist or continue in such Venturer's
Capital Account.
ARTICLE XV
NOTICES
-------
15.1 Notices. All notices or other communications hereunder shall be in
-------
writing and shall be deemed delivered, given or made, upon delivery if delivered
personally, by facsimile, or by express mail or other overnight courier service
or 72 hours after deposit thereof in the United States mails, certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to Paddlewheels:
Shreveport Paddlewheels, L.L.C.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Chief Executive Officer
With copy to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Esq.
If to HCS I or HCS II:
HCS I, INC. or HCS II, INC.
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
Any party shall have the right to change its address for notice by written
notice to the other Venturers delivered in accordance with this Section 15.1.
31
ARTICLE XVI
ADDITIONAL AGREEMENTS
---------------------
16.1 Covenant. Paddlewheels hereby covenants and agrees, and shall cause
--------
all of its permitted assignees and Affiliates, not to institute any legal
proceedings arising out of any claims, which have arisen or may arise out of or
are in any way connected with this Agreement, the Master Agreement, the Marine
Agreement, the Management Agreement, the Technical Services Agreement, the
Assignment Agreement, or any agreement, contract, instrument in connection
herewith or therewith or transactions contemplated hereby or thereby.
Notwithstanding the foregoing, Paddlewheels may bring any claim, demand, cause
of action, either in law or in equity, against the Venture or HCS I, HCS II or
any of their successors and assignees for any and all liabilities and damages
arising from the Venture's failure to make payments due and owing to
Paddlewheels under this Agreement, the Marine Agreement and its right to receive
1% of "Complex Net Revenues" (as defined in the Assignment Agreement pursuant to
--------------------
the Assignment Agreement).
16.2 Additional Obligations. The Venture and the Venturers agree that
----------------------
Paddlewheels shall not be required to make Subsequent Capital Contributions to
the Venture or additional contributions to the City of New Orleans or any other
third party (the "Exit Payments") in connection with the Venture's $7 million
exit fee payment obligation to the City of New Orleans, Louisiana pursuant to
the terms and conditions of the (i) Compromise Agreement, (ii) Loan and
Settlement Agreement, (iii) the Side Agreement, (iv) the Escrow Agreement and
(v) the Indemnity Agreement, each dated January 16, 1998 among NOP, HNOC and
certain other respective parties expressly named therein (collectively, the
"Settlement Agreements") or otherwise, and the Venture shall indemnify, defend
and hold Paddlewheels harmless from and against any claims for any Exit Payments
made by Paddlewheels in connection with the Settlement Agreements. The
Venturers agree not to amend, change or modify any of the Settlement Agreements
in any manner that adversely affects Paddlewheels' rights thereunder without
Paddlewheels' prior written consent. HCS I and HCS II agree and acknowledge
that if Paddlewheels is required to satisfy all or any portion of the
outstanding principal or accrued interest payable by the Venture to HNOC
pursuant to the terms and conditions of the Loan and Settlement Agreement, then
Paddlewheels shall be deemed to be a creditor of the Venture to the extent of
such satisfied amounts, provided that Paddlewheels shall not, in any manner,
seek recourse against HCS I or HCS II or any of their respective Affiliates for
payment of the same.
16.3 Termination of Marine Agreement. In the event Paddlewheels and any
-------------------------------
Affiliate thereof assigns, conveys or otherwise transfers all of their JV
Interests to a party other than Paddlewheels or its Affiliate (a "Third Party"),
then Paddlewheels' right to receive payments from the Venture pursuant to the
Marine Agreement shall immediately terminate, unless at the same time of such
assignment, conveyance or transfer to a Third Party, Paddlewheels and such
Affiliates assign to such Third Party all of Paddlewheels' and such Affiliates'
rights and obligations under the Marine Agreement.
32
16.4 Appraisal. Unless otherwise expressly set forth in this Agreement,
---------
any appraisal required to be performed between a selling and purchasing party
pursuant to this Agreement shall be conducted by an appraiser selected pursuant
to the provisions set forth in this Section 16.4. The selling party or group and
purchasing party or group shall each appoint an appraiser who, in turn, shall
appoint a "third party" appraiser to perform the applicable appraisal. The
decision of the third party appraiser shall be final and binding and not
reviewable for any type of error. Unless otherwise expressly set forth in this
Agreement, the fees and costs of appraisal shall be borne equally by the selling
party or group and purchasing party or group.
16.5 Conversion to Limited Liability Company or Limited Partnership. The
--------------------------------------------------------------
Venturers hereby agree to pursue the possible change of the Venture from a
general partnership to either a limited liability company or a limited
partnership.
ARTICLE XVII
CASUALTY AND CONDEMNATION
-------------------------
17.1 Insurance. The Venture shall maintain insurance with respect to the
---------
ownership and operation of the Complex, and any additional assets and the risks
of conducting its business, including but not limited to worker's compensation
coverage, all risk coverage, difference in conditions coverage, public liability
coverage, property damage coverage, and boiler and machinery coverage, on such
terms and in such amounts as are determined by HCS I from time to time.
17.2 Procedure Following Casualty. Upon the occurrence of a casualty
----------------------------
resulting in any damage to or destruction of all or any portion of the Complex,
any insurance proceeds in respect of such casualty, net of any collection costs
and amounts due to any lender to the Venture, shall, subject to the Management
Agreement, be used to repair or reconstruct such damaged portion of the Complex
on the condition that the Venturers (other than Paddlewheels and an Affiliate
thereof) shall have previously mutually agreed upon or mutually approved each of
the following:
(a) A construction schedule calling for complete repair or
reconstruction of the damage within a specified time period after the date
of occurrence of the casualty ;
(b) A construction contract pursuant to which the repair or
reconstruction is to be accomplished;
(c) Plans and specifications for the repair or reconstruction;
(d) An operating budget for the restored property which
demonstrates that the Complex, after repair or reconstruction, can
reasonably be expected to be economically viable; and
33
(e) A budget and source of funds for the cost of such repair or
reconstruction and express approval of any expenses in excess of any
insurance proceeds that may be available for such repair or reconstruction.
17.3 Procedure Following Partial Condemnation. Upon the occurrence of any
----------------------------------------
partial condemnation of the Complex, any proceeds or payments to the Venture as
a result of such partial condemnation, net of any collections costs and amounts
due to any lender to the Venture, shall, subject to the terms and conditions of
the Management Agreement, be used to repair or reconstruct the remaining portion
of the Complex on the condition that the Venturers (other than Paddlewheels and
any Affiliate thereof) shall have previously mutually agreed upon or mutually
approved each of the following:
(a) A construction schedule calling for complete repair or
reconstruction of the remaining portion of the Complex within a specified
time period after the partial taking;
(b) A construction contract pursuant to which the repair or
reconstruction is to be accomplished;
(c) Plans and specifications for the repair or reconstruction;
(d) An operating budget for the remaining portion of the Complex
which demonstrates that such remaining portion of the Complex, after the
repair or reconstruction, can reasonably be expected to be economically
viable; and
(e) A budget and source of funds for the cost of such repair and
reconstruction and express approval of any expenses in excess of any
condemnation proceeds that may be available for such repair or
reconstruction.
ARTICLE XVIII
GENERAL PROVISIONS
------------------
18.1 Other Interests. Each of the Venturers understands that each other
---------------
Venturer or its Affiliates may be interested, directly or indirectly, in various
other businesses and undertakings not included in the Venture. Except as
provided in Section 18.3 hereof or elsewhere in this Agreement or as mutually
agreed upon by the Venturers, the Venturers hereby agree that the creation of
the Venture and the assumption by each of the Venturers of its duties hereunder
shall be without prejudice to their rights (or the rights of its respective
Affiliates) to have such other interests and activities and to receive and enjoy
Profits and Losses or compensation therefrom, and each Venturer waives any
rights it may otherwise have to, by reason of any duty otherwise owed to the
Venture or its Venturers, share or participate in such other interests or
activities of the other Venturer or its Affiliates. Except as provided in
Section 18.3 hereof or elsewhere in the Agreement, the Venturers and their
Affiliates may engage in or possess any interest in any other business venture
of any nature or description independently or with others, including, but not
limited to, the ownership, financing, leasing, operation, management,
syndication, brokerage, or development of real property and gambling casinos,
and
34
neither the Venture nor any other Venturer shall have the right by virtue of
this Agreement or otherwise to prevent or participate in any such activity or
the income or Profits and Losses derived therefrom.
18.2 Other Opportunities. Except as provided in this Agreement, no
-------------------
Venturer need disclose to any other Venturer or the Venture any other business
venture in which it or its Affiliates may have an interest or any other business
opportunity presented to it, even if such opportunity is of a character which,
if presented to the Venture, could be taken by the Venture, and each Venturer
and its Affiliates shall have the right to take for its own account or to
recommend to others any such particular investment opportunity or business
venture.
18.3 Prohibited Payments. Each Venturer agrees that it and its Affiliates
-------------------
will conduct their activities, and will cause any activities conducted on their
behalf to be conducted, in a lawful manner and specifically will not engage in
the following transactions:
(a) Payments or offers of payment, directly or indirectly, to any
domestic or foreign government official or employee in order to obtain
business, retain business or direct business to others, or for the purpose
of inducing such government official or employee to fail to perform or to
perform improperly his official functions;
(b) receive, pay or offer anything of value, directly or
indirectly, from or to any private party in the form of a commercial bribe,
influence payment or kickback for any such purpose; or
(c) use, directly or indirectly, any funds or other assets of the
Venture or of such Venturer for any unlawful purpose including, without
limitation, political contributions in violation of applicable laws,
regulations, rules or orders.
18.4 Subsequent Actions and Good Faith. Each Venturer shall hereafter
---------------------------------
execute, deliver and file such further instruments and do such further acts and
things as may be required or useful to carry out the intent and purpose of this
Agreement and that are not inconsistent with the terms of this Agreement. Each
Venturer shall exercise in good faith and its best efforts in all transactions
affecting the Venture. If a Venturer is required to retain the services of an
attorney to enforce or otherwise litigate or defend any matter arising out of
this Agreement between such Venturer and the Venture or any other of the
Venturers, the prevailing party shall be entitled to be reimbursed for its
reasonable attorney's fees by the non-prevailing party.
18.5 Standing and Discharge of Liens. Each Venturer: (a) shall at all
-------------------------------
times preserve and keep in good standing its corporate status, as the case may
be, in Louisiana and in the State under whose laws it is organized; and (b)
shall pay all federal, state and local taxes, assessments and other governmental
charges imposed upon it or its JV Interests before any such taxes, assessments
or charges become a lien on its JV Interests.
35
18.6 Captions. The captions and section headings used herein are for
--------
convenience and for ease of reference only and constitute no part of the
agreement or understanding of the parties hereto, and no reference shall be made
thereto for the purpose of construing or interpreting any of the provisions of
this Agreement.
18.7 Counterparts. This Agreement and any amendments hereto may be
------------
executed in one or more counterparts, all of which, taken together, shall
constitute one agreement binding upon the parties, notwithstanding that all
parties are not signatories to the same counterpart.
18.8 Applicable Law. This Agreement is made pursuant to, and shall be
--------------
governed by the internal laws of the State of Louisiana.
18.9 Entire Agreement. Except for the Master Agreement, Management
----------------
Agreement, the Marine Agreement and the Assignment Agreement and all other
agreements attached hereto and thereto as exhibits or expressly referred to
herein or therein, this Agreement shall supersede any written and oral agreement
among such parties and constitutes the entire understanding and agreement of the
Venturers with respect to the subject matter, and may not be altered, modified
or rescinded except by written instrument executed by the Venturers. The
parties hereto acknowledge that they do not deem or intend their interests in
the Venture, either alone, together or in conjunction with the Management
Agreement or any other document or understanding, to represent or to be a
"security" for the purposes of any state or federal law.
18.10 Severability. If any of the terms and provisions of this Agreement
------------
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall in no event affect any of the other terms or provisions,
each of which other terms and provisions of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
18.11 Successors and Assigns. The terms, provisions, covenants,
----------------------
undertakings, agreements, obligations and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the permitted successors in
interest and assigns of the parties hereto with the same effect as if mentioned
in each instance where the party hereto is named or referred to, except that no
Transfer by a Venturer in violation of the provisions of this Agreement shall
vest any rights in the assignee, transferee, purchaser, secured party, mortgagee
or pledgee.
18.12 Time of the Essence. Time is of the essence with respect to all of
-------------------
the terms, covenants, obligations and agreements herein contained.
18.13 No Third Party Beneficiaries. Except for the rights and benefits
----------------------------
granted to Venture Creditors and to Secured Party Transferees pursuant to this
Agreement, nothing contained in this Agreement shall inure to the benefit of any
third parties or grant such third parties any rights or causes of action against
any of the parties hereto.
18.14 Regulatory Information. Each Venturer shall provide, to the Venture
----------------------
or regulatory agency, as the case may be, as required by applicable laws,
regulations, rules
36
or orders, all information pertaining to the Venture and such Venturer's
officers, directors, shareholders, financial sources, and associations as shall
be required by any federal or state securities law or any regulatory authority
with jurisdiction over the Venture, the Complex, or any Venturer or any
Affiliates of such person.
18.15 Lender Suitability. No Venturer shall incur or permit any person or
------------------
entity that holds any JV Interests to incur any indebtedness unless the
documents for such indebtedness provide that:
(a) If any lender to the Venture or to any person that holds any JV
Interest becomes subject to an unsuitability determination by the Gaming
Authorities the result of which is to threaten the revocation, suspension,
termination or rescission of any permit, approval, any entitlement or
license granted by the Gaming Authorities to or for the benefit of the
Venture, a Venturer, or any Affiliate of a Venturer, or result in any other
penalty to the Venture, a Venturer and any Affiliate of a Venturer, and if
such Unsuitability Determination is not cured in accordance with applicable
laws, regulations rules or orders, then to the extent and so long as
provided by applicable laws, regulations, rules or orders: (i) all payments
to such lender shall be suspended and escrowed; (ii) such lender shall
immediately divest itself of all loans made to the Venture or such person;
and (iii) such lender shall be subject to any other remedies as shall be
required by applicable laws, regulations, rules and orders.
(b) If HCS I reasonably determines that the existence of a loan
from a lender to the Venture will threaten any gaming license, permit,
approval, or other entitlement that such Venturer or any Affiliate of such
Venturer holds or applies for in any other jurisdiction, such Venturer may,
at no cost to the Venture or the other Venturer: (i) require the Venture to
exercise any redemption rights in any loan documents with such lender and
redeem such loan so long as such Venturer makes a loan to the Venture (with
the same security, interest and maturity provisions as the redeemed loan)
of the funds necessary to effect such redemption or procures a loan for the
Venture (with the same interest, security and maturity provisions as the
redeemed loan) from a substitute lender and so long as such loan is in
compliance with the Venture's loan documents and this Agreement; (ii)
require the Venture to exercise the rights in any loan documents with such
lender to procure a substitute lender or lenders that will assume and
accept the rights and obligations of the objectionable lender; or (iii)
with the consent of such lender, if required in any loan documents with
such lender, procure a substitute lender or lenders that assume and accept
the rights and obligations of the objectionable lender.
ARTICLE XIX
INSURANCE
---------
19.1 Coverage.
--------
37
(a) Required Insurance. The Venture shall secure and maintain the
------------------
following insurance with respect to the Complex at all times during the
term of this Agreement:
(i) Comprehensive general liability insurance at a limit of
at least $1 million per occurrence/$2 million aggregate, including,
but not limited to, liquor liability and innkeepers liability
coverage to protect against theft of or damage to guests' property;
(ii) Automobile liability and physical damage insurance for
at least $1 million combined single limit to include broad form drive
other car coverage;
(iii) Comprehensive crime insurance including, but not limited
to, employee dishonesty and depositor's forgery coverages;
(iv) Worker's compensation insurance and employer's
liability, including the maritime employers liability endorsement,
U.S.L.& H., and similar insurance as may be required by law;
(v) Group benefits insurance including major medical and
hospitalization for Complex employees;
(vi) Fiduciary liability insurance, as required by the
Employment Retirement Income Security Act of 1974 covering pension
and benefit plans, in a limit sufficient to cover the assets at risk;
(vii) Marine hull and machinery and property insurance in an
amount equal to at least 100% of the agreed insurable value including
all gaming equipment thereof on a replacement cost basis;
(viii) Marine business interruption insurance against loss of
Profits measured by net income of the Venture;
(ix) Builder's risk insurance, if required, including delayed
opening coverage;
(x) Protection and indemnity coverage, if required,
including ▇▇▇▇▇ Act, in an amount of at least $1 million with Excess
Protection and Indemnity coverage in an amount of not less than $25
million;
(xi) Vessel pollution insurance, if required;
(xii) Media/memorabilia professional liability insurance
affording protection for liabilities which may arise from the use and
display of "Hollywood" themed media and memorabilia at the Complex of
at least $2 million;
38
(xiii) Any insurance which the Venture or Operator may be
required to obtain pursuant to any franchise covering the Complex;
(xiv) Umbrella (excess liability) insurance in an amount of
not less than $100 million;
(xv) Any other insurance required by the terms of the Project
financing; and
(xvi) Insurance against such other insurable risks as may
reasonably be required.
(b) Changes in Coverage. The Venture may raise the minimum amount
-------------------
of insurance to be maintained with respect to the Complex under Section
19.1(a) above to make such insurance comparable to the amount of insurance
carried with respect to other similar operations taking into account the
size, location and character of the Complex. In addition, neither party
shall unreasonably withhold its consent to a request by the other party
that such minimum limits of insurance be lowered on the basis that such
insurance cannot be obtained in such amounts, or can be obtained only at a
prohibitive cost. Similarly, if during the term of this Agreement changes
in the insurance industry shall make any of the descriptions of the
required insurance coverage inaccurate or inappropriate, then the Venture
may change such requirements to accurately describe, the type of insurance
which would be comparable to the coverage described in Section 19.1(a)
above.
(c) Requirements. All policies of insurance shall be written on an
------------
"occurrence" basis, if possible, and if any policy is written on a "claims
made" basis, then such policy must, if possible, be continued in effect for
a period of two years following the expiration or early termination of this
Agreement. The insurance coverage shall in any event comply with the
requirements of the Loan Commitments, if any.
19.2 Policies and Endorsements.
-------------------------
(a) Policies. All insurance provided for under Section 19.1 above
--------
shall be effected by policies issued by insurance companies of good
reputation and of sound and adequate financial responsibility as determined
by HCS I. The Venture shall furnish to each Venturer certificates of
insurance with respect to all of the policies of insurance so procured,
including existing, additional and renewal policies, and in the case of
insurance about to expire, the Venture shall deliver to each Venturer
certificates of insurance with respect to the renewal policies not less
than 30 days after the respective dates of expiration.
(b) Endorsements. All policies of insurance provided for under this
------------
Article XIX shall have attached thereto (a) an endorsement that such policy
shall not be canceled or materially changed without at least 30 days prior
written notice to the Venture and each Venturer, (b) an endorsement to the
effect that no act or
39
omission of the Venture or any Venturer shall affect the obligation of the
insurer to pay the full amount of any loss sustained and (c) an endorsement
to the effect that all liability policies of insurance shall be endorsed to
include worldwide coverage for suits brought against named insureds as
described in Section 19.2(c) below.
(c) Named Insureds. All policies of insurance required under
--------------
clauses (a)(i) and (a)(ii) of Section 19.1 shall be carried in the name of
the Venture, and, if required, the lender under the Loan Commitments, and
each of the Venturers shall be named as additional insureds thereunder.
Losses thereunder shall be payable to the parties as their respective
interests may appear. Notwithstanding the foregoing, if the lender under
the Loan Commitments is an institutional lender, and so requires, losses
may be made payable to such lender, or to a bank or trust company, in
either instance as trustee for the custody and disposition of the proceeds
therefrom. The Venturers agree that any Loan Commitment documents shall
contain a provision to the effect that proceeds from property insurance
shall be available for restoration of the Complex. All insurance policies
required in clauses (a)(iii), (a)(iv) and (a)(v) of Section 19.1 shall name
the Venture and its Affiliates, and the directors, officers, agents and
employees of each such entity as named insureds, and the Venturers and
their Affiliates, and the directors, officers, agents and employees of such
entity as additional insureds.
19.3 Waiver of Liability. No Venturer shall assert against the other, and
-------------------
each of the Venturers hereby waives with respect to each other, or against any
other entity or person named as additional insureds on any policies carried
under this Article XIX, any claims for any losses, damages, liability or
expenses (including attorney's fees) incurred or sustained by either of them on
account of injury to persons or damage to property arising out of the ownership,
development, construction, completion, operation or maintenance of the Complex,
to the extent that the same are covered by the insurance required under this
Article XIX. Each policy of insurance shall contain a specific waiver of
subrogation reflecting the provisions of this Section 19.3, or a provision to
the effect that the existence of the preceding waiver shall not affect the
validity of any such policy or the obligation of the insurer to pay the full
amount of any loss sustained.
19.4 Insurance by Venturers. Any insurance provided by the Venture under
----------------------
this Article XIX may be effected under policies of blanket insurance which cover
other properties of the Venturers, or any of their respective Affiliates, and
the pro rata portion of such premiums shall be charged and allocated to the
Complex on the same basis as allocated to other participating operations of said
Venturer. Any policies of insurance maintained by the Venture pursuant to the
provisions of this Article XIX may contain deductible provisions in such amounts
as are maintained with respect to other operations of said Venturer, taking into
account local standards and practices. Further, in lieu of all or a part of
comprehensive public liability insurance and worker's compensation and
employer's liability insurance under clauses (a)(iii) and (a)(v) of Section
19.1, any or all of the risks covered by such insurance may be self-insured or
self-assumed by the Venture under a self-insurance or assumption of risk program
similar to those in effect at
40
other operations of said Venturer, up to such amounts as such risks are assumed
or self-insured at other operations of said Venturers.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
41
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
HCS I, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Executive Vice President and
Chief Financial Officer
--------------------------------
HCS II, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Executive Vice President and
Chief Financial Officer
--------------------------------
SHREVEPORT PADDLEWHEELS, L.L.C.
By: ---------------------------------
Name: --------------------------------
Title: -------------------------------
42
EXHIBIT A
DEVELOPMENT PARCEL A parcel of land containing 91,703.01.08 square feet, more or
less, located east of ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway, as recorded in Book 2100,
pages 279 and 329, records of Caddo Parish. Louisiana. south of the Easterly
extension of ▇▇▇▇▇▇ Street, as recorded in Book 50, 537, Caddo Parish.
Louisiana, North of Texas Street Bridge and West of the Ordinary High Water
Stage of Red River, being more particularly described as follows:
From an "x" cut in concrete at the point of intersection of the east
right-of-way line of said ▇▇▇▇▇ ▇. ▇▇▇▇ Parkway and the Easterly extension of
the centerline of said ▇▇▇▇▇▇ Street; run South 39 degrees 38' 37" East, along
said east right-of-way, a distance of 422.28 feet, to the point of beginning
(P.O.B.) of the parcel, herein described; run North 50 degrees 27' 16" East,
along a line common to the Shoreside Complex Parcel and the Development Parcel,
a distance of 281.02 feet, to the point of intersection with the 155.50 foot
contour meander line of Red River, as of 7:15 a.m., December 13, 1996; run
thence South 40 degrees 29' 46" East, along said meander line, a distance of
27.16 feet; run thence South 44 degrees 08' 00" East, along said meander line, a
distance of 44.13 feet; run thence South 39 degrees 47' 11" East, along said
meander line, a distance of 39.06 feet; run thence South 43 degrees 13' 45"
East, along said meander line, a distance of 50.39 feet; run thence South 45
degrees 20' 03" East, along said meander line, a distance of 55.14 feet; run
thence South 51 degrees 11' 22" East, along said meander line, a distance of
47.26 feet, to the point of intersection with the north right-of-way line of the
Texas Street Bridge; run thence South 50 degrees 21' 23" West, along said
right-of-way line of the ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway; run thence North 39
degrees 38' 37" West, along said right-of-way line, a distance of 316.72 feet,
to the point of beginning (P.O.B.).
BLOCK 72 A parcel of land containing 122,895.9879 square feet, more or less,
being bound on the West by Commerce Street, on the north by ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇ The east by ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway, And On The South by ▇▇▇▇▇ Street,
being more particularly described as follows:
From the point of intersection of the north right-of-way line of ▇▇▇▇▇ Street
and the east right-of-way line of Commerce Street, as recorded in book 50, page
537, and book 150, page 129, records of Caddo Parish, Louisiana, said point
being the point of beginning, (P.O.B.) run North 39 degrees 38' 37' West, along
the east right-of-way line of said Commerce Street, being 66.00 feet. east of
and parallel to the centerline of said Commerce Street, a distance of 320.00
feet, to the point of intersection of the south right-of-way line of the Texas
Street Bridge, as recorded in book 50, page 537 and book 150, page 129, records
of Caddo Parish, Louisiana; run thence North 50 degrees 21' 23" East, along said
right-of-way, line being 50.00 feet south of and parallel to the centerline of
said Texas Street Bridge, a distance of 384.05 feet, to the point of
intersection with the west right-of-way line of the ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial
Parkway, as recorded in book 2100, pages 329 through 335 records of Caddo
Parish, Louisiana; run thence South 39 degrees 38' 37" East, along the west
right-of-way line of said ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway, a distance of 320.00
feet, to the point of intersection with the north right-of-way line of ▇▇▇▇▇
Street, as recorded in book 50, page 537, and book 150, page 129, records of
Caddo Parish, Louisiana; run thence South 50 degrees 21'
23" west. along said right-of-way line of ▇▇▇▇▇ Street. being 33.00 feet north
of and parallel to the centerline of said ▇▇▇▇▇ Street, a distance of 384.05
feet, to the point of beginning.
▇▇▇▇▇▇▇▇ CENTER PARKING AREA A parcel of land containing 72.850.0384 square
feet, more or less, bounded on the West by the east right-of-way line of ▇▇▇▇▇
▇. ▇▇▇▇ Memorial Parkway, on the North by the south right-of-way line of Texas
Street Bridge, on the East by the west 155.50 foot contour meander line of Red
River and on the South by the north face of the ▇▇▇▇▇▇▇▇ Center building, being
more particularly described as follows:
From the point of intersection of the south right-of-way line of the Texas
Street Bridge, as recorded in book 50, page 537 and book 150, page 129, records
of Caddo Parish, Louisiana and the east right-of-way line of the ▇▇▇▇▇ ▇. ▇▇▇▇
Memorial Parkway, as recorded in book 2100, pages 329 through 335, records of
Caddo Paris, Louisiana Said Point Being The Point Of Beginning (P.O.B.), run
North 50 degrees 21' 23" East, along said south right-of-way line, being 50.00
feet south of and parallel to the centerline of said Texas Street Bridge, a
distance of 306.25 feet, to the point of intersection with the 155.50 foot,
contour meander line of Red River, as of 7:15 a.m., December 13, 1996; run
thence South 38 degrees 41' 30" East, along said meander line, a distance of
88.90 feet run thence South 35 degrees 15' 54" East, along said meander line, a
distance of 153.31 feet run thence south 50 degrees 21' 23" West, a distance of
293.07 feet, to the point of intersection with the east right-of-way line, of
said ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway; run thence North 39 degrees 38' 37" West,
along said east right-of-way line a distance of 241.75 feet, to the point of
beginning.
EXPO HALL PARKING AREA A parcel of land containing 90,636.8985 square feet, more
or less, bounded on the north by the face of the Expo Hall building, on the east
by the west right-of-way line of the ▇▇▇▇▇ ▇. ▇▇▇▇ Memorial Parkway, on the
south by north right-of-way line of the Texas Street Bridge and on the west by
the east right-of-way line of Commerce Street, being more particularly described
as follows:
From the point of intersection of the north right-of-way line of the Texas
Street Bridge, and the east right-of-way line of Commerce Street, as recorded in
book 50, page 537 and book 150, page 129, records of Caddo Parish, Louisiana,
said point being the point of beginning (P.O.B.) run North 39 degrees 38' 37"
West, along said east right-of-way line of Commerce Street, being 66.00 feet
east of and parallel to the centerline of said Commerce Street, a distance of
230.01 feet; run then North 50 degrees 21' 23" East, a distance of 394.05 feet,
to the point of intersection with the west right-of-way line of ▇▇▇▇▇ ▇. ▇▇▇▇
Memorial Parkway, as recorded in book 2100, page 329 through 335, records of
Caddo Parish, Louisiana; run thence South 39 degrees 38' 37" East, along said
right-of-way line, a distance of 230.01 feet, to the point of intersection with
the north right-of-way line of the said Texas Street Bridge; run thence south 50
degrees 21' 23" West, along said north right-of-way line, being 50.00 feet,
north or and parallel to the centerline of said Texas Street Bridge a distance
of 394.05 feet, to the point of beginning.