Exhibit 10.2
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"), Xxxxxxxx X. Xxxxx
("Xx. Xxxxx", and together with Xx. Xxxxxxx, the "Coinvestment Voteco Members"),
Colony Resorts LVH Coinvestment Voteco, LLC, a Delaware limited liability
company ("Coinvestment Voteco"), and Colony Resorts LVH Co-Investment Partners,
L.P. ("Co-Investment Partners"), a Delaware limited partnership.
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, Coinvestment Voteco was
the record owner of _______ Class A Units and no other Membership Units, and
Co-Investment Partners was the record owner of _______ Class B Units and no
other Membership Units;
WHEREAS, from time to time, Coinvestment Voteco may acquire additional
Class A Units or other equity interests of the Company's convertible into,
exchangeable for or otherwise providing Coinvestment Voteco with the right to
acquire Class A Units, and Co-Investment Partners may acquire additional Class B
Units or other equity interests of the Company's convertible into, exchangeable
for or otherwise providing Co-Investment Partners with the right to acquire
Class B Units;
WHEREAS, the Coinvestment Voteco Members are the record and beneficial
owners of all the issued and outstanding limited liability company interests of
Coinvestment Voteco (the "Coinvestment 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 Coinvestment Voteco and the Coinvestment Voteco Interests
owned by the Coinvestment 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 Co-Investment Partners' 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 Co-Investment Partners shall not be considered a
Class A Holder, regardless of whether Co-Investment Partners 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.
"Co-Investment Partners" has the meaning given to such term in the
introduction hereof.
"Coinvestment Voteco" has the meaning given to such term in the
introduction hereof.
"Coinvestment Voteco Interest" has the meaning given to such term in
the recitals set forth above.
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"Coinvestment Voteco Member" has the meaning given to such term in the
introduction hereof.
"Colony Capital Advisory Committee" means the advisory committee
comprised of certain limited partners of Colony Capital Resorts LVH
Co-Investment, L.P., the general partner of Co-Investment Partners.
"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, 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 Equivalents 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.
"Xx. Xxxxx" 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 Co-Investment Partners from Coinvestment Voteco
pursuant to the exercise by Co-Investment Partners 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 Co-Investment
Partners in a Call Notice delivered by Co-Investment Partners to Coinvestment
Voteco; provided that unless otherwise approved by the Colony Capital Advisory
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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 Coinvestment
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 Co-Investment Partners
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 Co-Investment Partners 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 Co-Investment Partners to its
partners. "Transferred" has the correlative meaning.
Section 2. Restriction on Transfer.
(a) So long as Coinvestment Voteco holds of Class A Units or
Class A Equivalents, Coinvestment 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 Coinvestment 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 Coinvestment Voteco Member shall Transfer record or
beneficial ownership of any or all Coinvestment Voteco Interests owned by such
Coinvestment Voteco Member, unless such Transfer is approved in writing by the
Colony Capital Advisory Committee. The Transfer of record or beneficial
ownership of any Coinvestment Voteco Interests, by operation of law or
otherwise, by or upon the direction or authorization of any Coinvestment Voteco
Member shall be deemed invalid, null and void, and of no force or effect, and
the transferee of any such Coinvestment Voteco Interests shall not be entitled
to vote such Coinvestment Voteco Interests or receive distributions on such
Coinvestment Voteco Interests or have any other rights in or respecting such
Coinvestment Voteco Interests, unless such Transfer is approved in writing by
the Colony Capital 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 Co-Investment
Partners 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
Co-Investment Partners shall have an option, which, unless Co-Investment
Partners otherwise receives approval from Gaming Authorities, Co-Investment
Partners shall assign to such Approved Purchaser (such Approved Purchaser or
Co-Investment Partners, as applicable, hereinafter referred to as the
"Optionholder"), to purchase from Coinvestment Voteco upon such
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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 Coinvestment 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 Coinvestment
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,
Co-Investment Partners 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 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 Co-Investment Partners as of the date
of the Call Notice, (iii) the number of Class B Units or Class B Equivalents to
be sold by Co-Investment Partners 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,
Coinvestment 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. Coinvestment Voteco shall use its reasonable
efforts to cause each certificate representing Class A Units or Class A
Equivalents owned of record and beneficially by Coinvestment 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
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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 stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
(b) Whenever Coinvestment 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 Coinvestment 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) Coinvestment Voteco owning no Class A Units and no Class A
Equivalents or (b) Co-Investment Partners 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, Suite 1200
Xxx Xxxxxxx, Xxxxxxxxxx 00000
if to Xx. Xxxxx:
c/o Colony Capital, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
if to Coinvestment Voteco:
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c/o Colony Capital, LLC
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx
if to Co-Investment Partners:
c/o Colony Capital, LLC
1999 Avenue 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.
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 Coinvestment 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.
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(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.
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XXXXXXXX X. XXXXX
COLONY RESORTS LVH COINVESTMENT VOTECO,
LLC
By:
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Member
COLONY RESORTS LVH CO-INVESTMENT
PARTNERS, L.P.
By: COLONY CAPITAL RESORTS LVH CO-
INVESTMENT, L.P.
its general partner
By: COLONY RESORTS LVH CO-INVESTMENT
GENPAR, LLC
its general partner
By:
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Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Sole Member
[Signature Page to Coinvestment Voteco Transfer Restriction Agreement]
