TRANSFER RESTRICTION AGREEMENT
Exhibit 4.1
This Transfer Restriction Agreement (this “Agreement”) is made as of February 20, 2008
among Xxxxxx Xxxxxxxxxx (“Xx. Xxxxxxxxxx”), Xxxxx Xxxxxx (“Xx. Xxxxxx”) and
Xxxxxxxx Xxxxxx (“Xx. Xxxxxx” and, together with Xx. Xxxxxxxxxx and Xx. Xxxxxx, the
“VoteCo Members”), W2007/ACEP Managers Voteco, LLC, a Delaware limited liability company
(“VoteCo”), and W2007/ACEP Holdings, LLC, a Delaware limited liability company
(“Holdings”).
RECITALS
WHEREAS, American Casino & Entertainment Properties LLC, a Delaware limited liability company
(the “Company”), indirectly owns certain properties, including the hotel and casino
properties known as the Stratosphere Casino Hotel & Tower, Arizona Charlie’s Decatur, Arizona
Charlie’s Boulder and the Aquarius Casino Resort;
WHEREAS, the Company has issued membership interests consisting of (i) Class A Membership
Interests (the “Class A Interests”) and (ii) Class B Membership Interests (the “Class B
Interests” and, together with the Class A Interests, the “Membership Interests”);
WHEREAS, concurrently with the execution of this Agreement, VoteCo is acquiring 30 Class A
Interests and Holdings is acquiring 225,060,866 Class B Interests;
WHEREAS, from time to time, VoteCo may acquire additional Class A Interests or other equity
interests of the Company’s convertible into, exchangeable for or otherwise providing VoteCo with
the right to acquire Class A Interests, and Holdings may acquire additional Class B Interests or
other equity interests of the Company convertible into, exchangeable for or otherwise providing
Holdings with the right to acquire Class B Interests;
WHEREAS, the VoteCo Members are the record and beneficial owners of all the issued and
outstanding limited liability company interests of VoteCo (the “VoteCo Interests”);
WHEREAS, the parties hereto believe it is desirable and in their mutual best interests to
provide for procedures regarding the ownership of the Class A Interests owned by VoteCo and the
VoteCo Interests owned by the VoteCo Members; and
WHEREAS, the parties hereto further believe that the execution of this Agreement will help
facilitate the continuous, harmonious and effective management of Holdings’ investments in the
Company.
NOW, THEREFORE, in consideration of the recitals and the mutual covenants, promises,
agreements, representations and warranties of the parties hereto, the parties hereto hereby agree
as follows:
Section 1. Certain Definitions. As used herein, the following terms have the
respective meanings set forth below:
“Agreement” has the meaning given to such term in the introduction hereof.
“Approved Purchaser” means a proposed purchaser of Membership Interests or Membership
Interests Equivalents, who, in connection with its proposed purchase of Membership Interests or
Membership Interests Equivalents, has obtained all licenses, permits, registrations,
authorizations, consents, waivers, orders, findings of suitability or other approvals required to
be obtained from, and has made all filings, notices or declarations required to be made with, all
Gaming Authorities under all applicable Gaming Laws.
“Approved Sale” has the meaning given to such term in Section 3(a) hereof.
“Approved Sale Date” has the meaning given to such term in Section 3(b) hereof.
“Call Notice” has the meaning given to such term in Section 3(b) hereof.
“Class A Equivalents” means any securities of the Company convertible into,
exchangeable for or otherwise providing the holder thereof any right to acquire Class A Interests.
“Class A Holder” means a holder of Class A Interests or Class A Equivalents; provided
that Holdings shall not be considered a Class A Holder, regardless of whether Holdings holds any
Class A Interests.
“Class A Interests” has the meaning given to such term in the recitals set forth
above.
“Class B Equivalents” means any securities of the Company convertible into,
exchangeable for or otherwise providing the holder thereof any right to acquire Class B Interests,
which securities are substantially equivalent in designations, preferences, limitations,
restrictions and relative rights, but not as to voting, to a class or series of Class A
Equivalents.
“Class B Interests” has the meaning given to such term in the introduction hereof.
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“Company” has the meaning given to such term in the recitals set forth above.
“Corresponding Class A Equivalents” means, with respect to any referenced Class B
Equivalents, the Class A Equivalents that are substantially equivalent in designations,
preferences, limitations, restrictions and relative rights, but not as to voting, to such specified
Class B Equivalents.
“Corresponding Class B Equivalents” means, with respect to any referenced Class A
Equivalents, the Class B Equivalents that are substantially equivalent in designations,
preferences, limitations, restrictions and relative rights, but not as to voting, to such specified
Class A Equivalents.
“Gaming Authorities” means all governmental authorities or agencies with regulatory
control or jurisdiction over the gaming or gambling operations of the Company and its subsidiaries
or any person’s ownership of an interest therein , including without limitation, the Nevada Gaming
Commission and the Nevada State Gaming Control Board.
“Gaming Laws” means any U.S. Federal, state, local or foreign statute, ordinance,
rule, regulation, permit, consent, approval, license, judgment, order, decree, injunction or other
authorization governing or relating to the current or contemplated manufacturing, distribution,
casino gambling and gaming activities and operations of the Company, including, without limitation,
the gaming laws and regulations of the State of Nevada.
“Holdings” has the meaning given to such term in the introduction hereof.
“Holdings Managing Member” means the “Managing Member” of Holdings, as such term is
defined in the Amended and Restated Limited Liability Company Agreement of Holdings, of even date
herewith.
“Membership Interests Equivalents” means the Class A Equivalents or Class B
Equivalents of the Company.
“Membership Interests” has the meaning given to such term in the recitals set forth
above.
“Xx. Xxxxxx” has the meaning given to such term in the introduction hereto.
“Xx. Xxxxxx” has the meaning given to such term in the introduction hereto.
“Xx. Xxxxxxxxxx” has the meaning given to such term in the introduction hereto.
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“Required Number” means the number of Class A Interests or Class A Equivalents to be
purchased by Holdings from VoteCo pursuant to the exercise by Holdings of its option to purchase
Class A Interests or Class A Equivalents pursuant to the provisions of Section 3 hereof, in
connection with an Approved Sale, as specified by Holdings in a Call Notice delivered by Holdings
to VoteCo; provided that unless otherwise approved by the Holdings Managing Member, such specified
number shall be equal to the product of (i) the number of Class A Interests or Class A Equivalents,
as applicable, held by VoteCo immediately prior to the consummation of such Approved Sale times
(ii) a fraction, the numerator of which is the number of Class B Interests or Corresponding Class B
Equivalents, as applicable, to be Transferred by Holdings to such Approved Purchaser pursuant to
such Approved Sale and the denominator of which is the total number of Class B Interests or
Corresponding Class B Equivalents, as applicable, held by Holdings immediately prior to
consummation of such Approved Sale.
“Securities Act” means the Securities Act of 1933, as amended.
“Transfer” means to voluntarily or involuntarily sell, assign, exchange or in any
other manner transfer with or without consideration, except pursuant to a distribution of equity
interests by Holdings to its members. “Transferred” has the correlative meaning.
“VoteCo” has the meaning given to such term in the introduction hereof.
“VoteCo Interest” has the meaning given to such term in the recitals set forth above.
“VoteCo Member” has the meaning given to such term in the introduction hereof.
“Voteco Operating Agreement” means the Limited Liability Company Agreement of
W2007/ACEP Managers Voteco, LLC, dated as of April 24, 2007, between Xxxxxx Xxxxxxxxxx, Xxxxx
Xxxxxx and Xxxxxxxx Xxxxxx.
Section 2. Restriction on Transfer.
(a) So long as VoteCo holds Class A Interests or Class A Equivalents, VoteCo shall not
Transfer ownership of any or all such Membership Interests or equivalents owned by it except as
contemplated by Section 3 hereof. The Transfer of record or beneficial ownership of any Class A
Interests or Class A Equivalents, by operation of law or otherwise, by or upon the direction or
authorization of VoteCo shall be deemed invalid, null and void, and of no force or effect, unless
such Transfer is made pursuant to the provisions of Section 3 hereof.
(b) No VoteCo Member shall Transfer record or beneficial ownership of any or all VoteCo
Interests owned by such VoteCo Member; provided that any Voteco Member may Transfer record or
beneficial ownership of any or all of such Voteco Member’s Voteco Interests pursuant to Section 3
below and as specifically
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permitted pursuant to the Voteco Operating Agreement. The Transfer of record or beneficial
ownership of any VoteCo Interests, by operation of law or otherwise, by or upon the direction or
authorization of any VoteCo Member shall be deemed invalid, null and void, and of no force or
effect, and the transferee of any such VoteCo Interests shall not be entitled to vote such VoteCo
Interests or receive distributions on such VoteCo Interests or have any other rights in or
respecting such VoteCo Interests, unless such Transfer is a Transfer described in the proviso to
the immediately preceding sentence.
Section 3. Call Option.
(a) Right to Call Class A Interests and Class A Equivalents. Notwithstanding any
other provision hereof, on each occasion that Holdings proposes to Transfer (including, without
limitation, by operation of law or pursuant to any merger, consolidation, reorganization or
recapitalization) any of the Class B Interests or Class B Equivalents held by it to an Approved
Purchaser (any such transaction, an “Approved Sale”), then Holdings shall have an option,
which, upon approval by the Gaming Authorities, Holdings shall assign to such Approved Purchaser
(such Approved Purchaser or Holdings, as applicable, hereinafter referred to as the
“Optionholder”), to purchase from VoteCo upon such Approved Sale the Required Number of
Class A Interests, in the case of an Approved Sale of Class B Interests, or Corresponding Class A
Equivalents, in the case of an Approved Sale of Class B Equivalents, at a cash price per interest
equal to the sum of (a) the amount in cash or fair market value of any other consideration
originally paid by VoteCo for such Required Number of Class A Interests or Corresponding Class A
Equivalents, as applicable, plus (b) the amount equivalent to a six percent (6%) annual rate of
interest on such amount or fair market value, compounded annually, calculated from the date VoteCo
acquired such Class A Interests or Corresponding Class A Equivalents, as applicable, on the basis
of a 360-day year comprised of twelve 30-day months, to and excluding the Approved Sale Date.
(b) Call Notice. Prior to consummating any Approved Sale, if the Optionholder elects
to exercise the options granted to it under this Section 3, Holdings shall provide each of the
Class A Holders with a written notice (the “Call Notice”) not less than five (5) days prior
to the proposed date of the Approved Sale (the “Approved Sale Date”). The Call Notice
shall state that the Optionholder is exercising its option to purchase Class A Interests or Class A
Equivalents pursuant to this Section 3 and shall set forth: (i) the name and address of the
Optionholder, (ii) the aggregate number of Class B Interests and Class B Equivalents held of record
by Holdings as of the date of the Call Notice, (iii) the number of Class B Interests or Class B
Equivalents to be sold by Holdings to the Approved Purchaser pursuant to such Approved Sale,
(iv) the Required Number of Class A Interests or Class A Equivalents to be purchased by the
Optionholder in connection with such Approved Sale, (v) the Approved Sale Date and (vi) the address
for delivery of the certificates representing the Class A Interests or Class A Equivalents to be
purchased by the Optionholder. Anything herein to the contrary notwithstanding, the Optionholder
shall not be permitted to exercise its option under this Section 3 with respect to Membership
Interests held by Voteco unless, concurrently with such exercise, it shall also exercise a similar
option in respect of a proportional amount of the Class A
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Interests and/or Class A Equivalents held by each other Class A Holder on substantially
similar economic and non-economic terms.
(c) Delivery of Certificates. On the Approved Sale Date, VoteCo shall deliver to the
Optionholder the certificates for the Class A Interests or Class A Equivalents being sold by it to
the Optionholder, duly endorsed for transfer with signature guaranteed, in the manner and at the
address indicated in the Call Notice against delivery of immediately available funds in the amount
of the purchase price for such Class A Interests or Class A Equivalents.
Section 4. Legends. VoteCo shall use its reasonable efforts to cause each certificate
representing Class A Interests or Class A Equivalents owned of record and beneficially by VoteCo to
contain the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF (A “TRANSFER”) EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT OF AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC, DATED AS OF FEBRUARY 20,
2008. ANY TRANSFEREE OF THESE SECURITIES TAKES SUBJECT TO THE TERMS OF SUCH AGREEMENT, A
COPY OF WHICH IS ON FILE WITH THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR STATE SECURITIES LAWS, AND NO TRANSFER OF
THESE SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR (B) PURSUANT TO AN EXEMPTION THEREFROM WITH RESPECT TO WHICH THE COMPANY
MAY, UPON REQUEST, REQUIRED A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT.
THE OWNERSHIP AND TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AND RESTRICTED BY THE TERMS AND CONDITIONS OF A CERTAIN TRANSFER RESTRICTION
AGREEMENT DATED FEBRUARY 20, 2008. THE COMPANY WILL FURNISH A COPY OF SUCH TRANSFER
RESTRICTION AGREEMENT WITHOUT CHARGE TO ANY MEMBER ON REQUEST.
VoteCo shall have the power and authority to cause each certificate representing
Class A Interests or Class A Equivalents to bear such other legends, including, without
limitation, any legends VoteCo deems appropriate to assure that VoteCo and each of the
Class A Holders comply with applicable Gaming
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Laws and the Company’s order of registration issued by the Nevada Gaming Commission,
as amended from time to time.
Section 5. Recapitalization, etc.; After-Acquired Stock
(a) The provisions of this Agreement (including any calculation of ownership interests) shall
apply to any and all equity interests of the Company or any capital stock, partnership interests or
any other security evidencing ownership interests in any successor of the Company (whether by
merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange
for, or in substitution of the Membership Interests by reason of any stock dividend, split, reverse
split, combination, recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
(b) Whenever VoteCo becomes the record or beneficial owner of any additional Class A
Interests, such interests shall be subject to the terms of this Agreement and included in the
definition of “Class A Interests” hereunder. Whenever VoteCo becomes the record or beneficial
owner of any additional Class A Equivalent, such Class A Equivalents shall be subject to the terms
of this Agreement and included in the definition of “Class A Equivalents” hereunder. The
certificates therefor shall be surrendered for legending in accordance with Section 4 of this
Agreement, unless already so legended.
Section 6. Termination. This Agreement shall terminate upon the earlier of (a) VoteCo
owning no Class A Interests and no Class A Equivalents or (b) Holdings owning no Class B Interests
and no Class B Equivalents.
Section 7. Notices. Whenever notice is required to be given under the provisions of
this Agreement, it shall be given in writing by hand-delivery, telefax, or United States registered
or certified mail, return receipt requested, and shall be deemed to have been transmitted on the
date such notice is so delivered, transmitted or mailed, if addressed as set forth below or to such
other addresses and fax numbers as any of the parties hereto by written notice to the other parties
hereto, may from time to time designate.
if to any Voteco Member:
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
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if to VoteCo:
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxx
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxx
with a copy to:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
if to Holdings:
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Section 8. Additional Actions and Documents. Each party hereto shall take or cause to
be taken such further actions and to execute and deliver such documents or instruments as may from
time to time be reasonably necessary in order to carry out the purposes of this Agreement.
Section 9. Specific Performance. The parties hereto recognize that the provisions
herein contained are of particular importance for the protection and promotion of their existing
and future interests; that the Membership Interests of the Company and the VoteCo Interests will be
closely held; and that the relationships of the parties to one another are and will be such that,
in the event of any breach of this Agreement, a claim for monetary damages may not constitute an
adequate remedy; and that it may, therefore, be necessary for the protection of all of the parties
hereto and for the effectuation of the provisions of this Agreement, in the event of a breach of
this Agreement, to apply for specific performance thereof. It is, accordingly, hereby agreed that
no objection to the form of the action or to the form of relief prayed for in any proceeding for
specific performance of this Agreement, shall be raised by any party hereto, in order that such
relief may be obtained by the party aggrieved.
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Section 10. Construction. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, to the singular include the plural, to
the male gender include the female and neuter genders and vice versa, and to the part include the
whole. The term “including” is not limiting. The words “hereof,” “herein,” “hereby,” “hereunder”
and similar terms in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section and clause references are to this Agreement unless otherwise
specified.
Section 11. Miscellaneous.
(a) No Waiver. No waiver or modification of any term or condition of this Agreement
shall be effective unless in writing signed by all the parties hereto.
(b) Severability. In case any of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or provisions are not
contained herein.
(c) Binding Effect. This Agreement shall be binding and inure to the benefit of the
parties hereto, their respective heirs, guardians, personal representatives, successors, successors
in interest, and assigns.
(d) Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
(e) Counterparts. This Agreement may be executed in counterparts (including by
facsimile), each of which shall be an original, but all of which together shall constitute one
document.
[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal with the intent
that this be a sealed instrument, as of the day and year first above written.
| /s/ Xxxxx Xxxxxx | ||||||
| XXXXX XXXXXX | ||||||
| /s/ Xxxxxxxx Xxxxxx | ||||||
| XXXXXXXX XXXXXX | ||||||
| /s/ Xxxxxx Xxxxxxxxxx | ||||||
| XXXXXX XXXXXXXXXX | ||||||
| W2007/ACEP MANAGERS VOTECO, LLC | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: Xxxxx Xxxxxx | ||||||
| Title: Manager | ||||||
| W2007/ACEP HOLDINGS, LLC | ||||||
| By: | W2007 Finance Sub, LLC | |||||
| its Managing Member | ||||||
| By: | Whitehall Street Global Real Estate | |||||
| Limited Partnership 2007 | ||||||
| its Managing Member | ||||||
| By: | WH Advisors, L.L.C., 2007 | |||||
| its General Partner | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: Xxxxx Xxxxxx | ||||||
| Title: Manager | ||||||
[Signature Page to W2007/ACEP Managers VoteCo Transfer Restriction Agreement]
