Exhibit 10.3
FORM OF
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TRANSFER RESTRICTION AGREEMENT
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This Transfer Restriction Agreement (this "Agreement") is made as of
________, 2004 among Xxxxxx X. Xxxxxxx, Xx. ("Xx. Xxxxxxx" or the "Voteco
Member"), Colony Resorts LVH Voteco, LLC, a Delaware limited liability company
("Voteco"), and Colony Resorts LVH Holdings, LLC ("Colony"), a Delaware limited
liability company and a [wholly owned] subsidiary of Colony Investors VI, L.P.,
a Delaware limited partnership ("Colony VI").
RECITALS
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WHEREAS, as of the date hereof (the "Closing Date"), Colony Resorts
LVH Acquisitions, LLC, a Delaware limited liability company (the "Company")
purchased (the "Acquisition") substantially all of the assets of LVH
Corporation, a Nevada corporation ("LVH") pursuant to a Purchase and Sale
Agreement dated as of December 24, 2003 (as amended through the date hereof, the
"Purchase Agreement");
WHEREAS, the Company was authorized to issue membership units
consisting of (i) Class A Membership Units (the "Class A Units"), and (ii) Class
B Membership Units (the "Class B Units" and, together with the Class A Units,
the "Membership Units");
WHEREAS, immediately prior to the Acquisition, Voteco was the record
owner of _______ Class A Units and no other Membership Units, and Colony was the
record owner of _______ Class B Units and no other Membership Units;
WHEREAS, from time to time, Voteco may acquire additional Class A
Units or other equity interests of the Company's convertible into, exchangeable
for or otherwise providing Voteco with the right to acquire Class A Units, and
Colony may acquire additional Class B Units or other equity interests of the
Company's convertible into, exchangeable for or otherwise providing Colony with
the right to acquire Class B Units;
WHEREAS, the Voteco Member is the record and beneficial owner 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 Units owned by Voteco and the Voteco Interests owned by the Voteco
Member; and
WHEREAS, the parties hereto further believe that the execution of this
Agreement will help facilitate the continuous, harmonious and effective
management of Colony's investment 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:
"Acquisition" has the meaning given to such term in the recitals set
forth above.
"Agreement" has the meaning given to such term in the introduction
hereof.
"Approved Purchaser" means a proposed purchaser of Membership Units or
Membership Units Equivalents, who, in connection with its proposed purchase of
Membership Units or Membership Units 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 Units.
"Class A Holder" means a holder of Class A Units or Class A
Equivalents; provided that Colony shall not be considered a Class A Holder,
regardless of whether Colony holds any Class A Units.
"Class A Units" 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 Units, 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 Units" has the meaning given to such term in the recitals set
forth above.
"Colony" has the meaning given to such term in the introduction
hereof.
"Colony VI" has the meaning given to such term in the introduction
hereof.
"Colony VI Advisory Committee" means the advisory committee comprised
of certain limited partners of Colony VI.
"ColonyGP IV" has the meaning given to such term in Section 2(b)
hereof.
"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,
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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, including without limitation, the Nevada
Gaming Commission.
"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[Nevada Gaming Control Act] and the rules and regulations promulgated
thereunder.
"LVH" has the meaning given to such term in the recitals set forth
above.
"Membership Units Equivalents" means the Class A Units, Class A
Equivalents, Class B Units or Class B Equivalents of the Company.
"Membership Units" has the meaning given to such term in the recitals
set forth above.
"Xx. Xxxxxxx" has the meaning given to such term in the introduction
hereto.
"Required Number" means the number of Class A Units or Class A
Equivalents to be purchased by Colony from Voteco pursuant to the exercise by
Colony of its option to purchase Class A Units or Class A Equivalents pursuant
to the provisions of Section 3 hereof, in connection with an Approved Sale, as
specified by Colony in a Call Notice delivered by Colony to Voteco; provided
that unless otherwise approved by the Colony VI Advisory Committee, such
specified number shall be equal to the product of (i) the number of Class A
Units 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 Units or Corresponding Class B Equivalents, as
applicable, to be Transferred by Colony to such Approved Purchaser pursuant to
such Approved Sale and the denominator of which is the total number of Class B
Units or Corresponding Class B Equivalents, as applicable, held by Colony
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 Colony to its partners.
"Transferred" has the correlative meaning.
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"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.
Section 2. Restriction on Transfer.
(a) So long as Voteco holds of Class A Units or Class A
Equivalents, Voteco shall not Transfer ownership of any or all such Membership
Units or equivalents owned by it except as contemplated by Section 3 hereof. The
Transfer of record or beneficial ownership of any Class A Units 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, unless
such Transfer is approved in writing by the Colony VI Advisory Committee. 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
approved in writing by the Colony Advisory Committee.
Section 3. Call Option.
(a) Right to Call Class A Units and Class A Equivalents.
Notwithstanding any other provision hereof, on each occasion that Colony
proposes to Transfer (including, without limitation, by operation of law or
pursuant to any merger, consolidation, reorganization or recapitalization) any
of the Class B Units or Class B Equivalents held by it to an Approved Purchaser
(any such transaction, an "Approved Sale"), then Colony shall have an option,
which, unless Colony otherwise receives approval from Gaming Authorities, Colony
shall assign to such Approved Purchaser (such Approved Purchaser or Colony, as
applicable, hereinafter referred to as the "Optionholder"), to purchase from
Voteco upon such Approved Sale the Required Number of Class A Units, in the case
of an Approved Sale of Class B Units, or Corresponding Class A Equivalents, in
the case of an Approved Sale of Class B Equivalents, at a cash price per unit
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
Units 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 units of Class A Units 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,
Colony shall
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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 Units 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 Units and Class B Equivalents
held of record by Colony as of the date of the Call Notice, (iii) the number of
Class B Units or Class B Equivalents to be sold by Colony to the Approved
Purchaser pursuant to such Approved Sale, (iv) the Required Number of Class A
Units 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 Units or Class A
Equivalents to be purchased by the Optionholder.
(c) Delivery of Certificates. On the Approved Sale Date, Voteco
shall deliver to the Optionholder the certificates for the Class A Units or
Class A Equivalents being sold by it to the Optionholder, duly endorsed for
transfer with signatures 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 Units or Class A Equivalents.
Section 4. Legends. Voteco shall use its reasonable efforts to cause
each certificate representing Class A Units or Class A Equivalents owned of
record and beneficially by Voteco to contain the following legends:
"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, REQUIRE 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 [_________], 2004. THE
CORPORATION WILL FURNISH A COPY OF SUCH TRANSFER RESTRICTION AGREEMENT
WITHOUT CHARGE TO ANY STOCKHOLDER ON REQUEST."
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 Units by
reason of any
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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 Units, such units shall be subject to the terms of this
Agreement and included in the definition of "Class A Units" hereunder. Whenever
Voteco becomes the record or beneficial owner of any additional Class A
Equivalents, 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 Units and no Class A Equivalents or (b)
Colony owning no Class B Units 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 Xx. Xxxxxxx:
c/o Colony Capital, LLC
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
if to Voteco:
c/o Colony Capital, LLC
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx
if to Colony or Colony VI:
x/x Xxxxxx Xxxxxxx, XXX
0000 Xxxxxx of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxxx X. Xxxxxxxxx
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.
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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 Units
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.
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.
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XXXXXX X. XXXXXXX, XX.
COLONY RESORTS LVH VOTECO, LLC
By:
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Sole Member
COLONY RESORTS LVH HOLDINGS, LLC
By: COLONY INVESTORS IV, L.P.
its sole member
By: COLONY CAPITAL IV, L.P.
its general partner
By: COLONY XX XX, LLC
its general partner
By:
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Sole Member
[Signature Page to Voteco Transfer Restriction Agreement]
