EXHIBIT 10.5
EXECUTION COPY
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INVESTOR RIGHTS AGREEMENT
By and Among
MezzCo, L.L.C.
and
The Mezzanine Investors
named herein
and
the other signatories hereto
Dated as of August 9, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS........................................................................................ 1
Section 1.1 Construction of Terms..................................................................... 1
Section 1.2 Number of Interests....................................................................... 2
Section 1.3 Defined Terms............................................................................. 2
ARTICLE II - REPRESENTATIONS AND WARRANTIES.................................................................... 6
Section 2.1 Representations of the Securityholders, the Individual Investors, BH/RE and OpBiz......... 6
Section 2.2 Representations of the Company............................................................ 7
ARTICLE III - RESTRICTIONS ON TRANSFER; CO-SALE; DRAG ALONG.................................................... 7
Section 3.1 Restrictions on Transfer.................................................................. 7
Section 3.2 Co-Sale Option of Mezzanine Investors..................................................... 8
Section 3.3 Drag-Along Obligations.................................................................... 11
Section 3.4 Contemporaneous Transfers................................................................. 12
Section 3.5 Assignment................................................................................ 12
Section 3.6 Gaming Restrictions....................................................................... 12
Section 3.7 Prohibited Transfers...................................................................... 12
ARTICLE IV - RIGHTS TO PURCHASE................................................................................ 12
Section 4.1 Right to Participate in Certain Sales of Additional Securities............................ 13
Section 4.2 Assignment of Rights...................................................................... 13
ARTICLE V - REGISTRATION RIGHTS................................................................................ 13
Section 5.1 Piggyback Registration Rights............................................................. 14
Section 5.2 Parent Registrations...................................................................... 14
Section 5.3 Other Registrations....................................................................... 16
Section 5.4 Registrable Interests..................................................................... 16
Section 5.5 Further Obligations of the Company........................................................ 16
Section 5.6 Indemnification; Contribution............................................................. 18
Section 5.7 Rule 144 Requirements..................................................................... 21
Section 5.8 Market Stand-Off.......................................................................... 21
Section 5.9 Transfer of Registration Rights........................................................... 22
Section 5.10 Other Agreements......................................................................... 22
ARTICLE VI - NEGATIVE CONTROL.................................................................................. 23
Section 6.1 Control Conditions........................................................................ 23
Section 6.2 Cooperation............................................................................... 24
Section 6.3 Drag-Along................................................................................ 24
Section 6.4 Blue-Penciling............................................................................ 26
ARTICLE VII - COVENANTS OF THE COMPANY, THE SOLE MEMBER........................................................ 26
Section 7.1 Additional Senior Debt.................................................................... 26
Section 7.2 Restrictions on Equity Interests.......................................................... 26
Section 7.3 Put Right................................................................................. 27
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Section 7.4 Communication with Gaming Authorities..................................................... 27
Section 7.5 Tax Covenants............................................................................. 27
ARTICLE VIII - MISCELLANEOUS PROVISIONS........................................................................ 28
Section 8.1 Survival of Covenants..................................................................... 28
Section 8.2 Legends on Securities..................................................................... 28
Section 8.3 Amendment and Waiver...................................................................... 30
Section 8.4 Notices................................................................................... 30
Section 8.5 Headings.................................................................................. 32
Section 8.6 Counterparts; Facsimiles.................................................................. 32
Section 8.7 Remedies; Severability.................................................................... 32
Section 8.8 Entire Agreement; No Conflict............................................................. 32
Section 8.9 Adjustments............................................................................... 32
Section 8.10 Law Governing............................................................................ 32
Section 8.11 Successors and Assigns................................................................... 33
Section 8.12 Consent to Jurisdiction; Waiver of Jury Trial............................................ 33
Section 8.13 No Third Party Beneficiaries............................................................. 34
Section 8.14 Term..................................................................................... 34
EXHIBITS
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Exhibit A Form of Joinder Agreement
Exhibit B Form of Resignation of Sole Member
Exhibit C Form of Irrevocable Proxy
Exhibit D Form of Resignation of Individual Investors
Exhibit E Operational Items
Exhibit F Form of Power of Attorney
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INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT is made as of this 9th day of August, 2004
by and among MezzCo, L.L.C., a Nevada limited liability company (the "COMPANY"),
EquityCo, L.L.C., a Nevada limited liability company, and sole member of the
Company ("SOLE MEMBER"), the persons identified on the signature pages hereto as
the Mezzanine Investors (each, a "MEZZANINE INVESTOR" and collectively, the
"MEZZANINE INVESTORS") and any other member of the Company or holder of
securities convertible into securities of the Company who from time to time
becomes party to this Agreement by execution of a Joinder Agreement in
substantially the form attached hereto as Exhibit A (together with the Sole
Member, the "NON-MEZZ INVESTORS"). The Mezzanine Investors and the Non-Mezz
Investors are herein collectively referred to as the "SECURITYHOLDERS" and each
a "SECURITYHOLDER."
WHEREAS, the Mezzanine Investors and the Company are entering into that
certain Securities Purchase Agreement of even date herewith (the "SECURITIES
PURCHASE AGREEMENT") pursuant to which the Mezzanine Investors are purchasing
(i) an aggregate $87,000,000 in Senior Subordinated Secured Notes (the "NOTES")
and (ii) warrants ("WARRANTS") to purchase an aggregate of 17,500 of the
Company's units (subject to adjustment and increase as provided in the Warrants)
representing membership interests in the Company, consisting of, Class B Units
or if the holder so elects, either Class A Units or a combination of Class A
Units and Class B Units exercisable at a price per unit of $.01;
WHEREAS, the Company and the Mezzanine Investors have entered into the
Securities Purchase Agreement in order to finance a portion of the purchase and
renovation of the property known as the Aladdin Resort and Casino (the
"ALADDIN"), which will be purchased by OPBIZ, L.L.C., a Nevada limited liability
company and wholly-owned subsidiary of the Company ("OPBIZ") pursuant to that
certain Purchase and Sale Agreement, dated as of April 23, 2003 by and between
OpBiz and Aladdin Gaming, LLC (the "ACQUISITION AGREEMENT");
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the transactions contemplated by the Securities Purchase Agreement;
and
WHEREAS, the parties hereto desire to agree upon the terms upon which the
outstanding securities of the Company, now or hereafter outstanding and held by
them will be held, Transferred and voted.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
SECTION 1.1 CONSTRUCTION OF TERMS. As used herein, the masculine, feminine
or neuter gender, and the singular or plural number, shall be deemed to be or to
include the other genders or number, as the case may be, whenever the context so
indicates or requires.
SECTION 1.2 NUMBER OF INTERESTS. Whenever any provision of this Agreement
calls for any calculation based on a number of Securities held by a
Securityholder, the number of Securities deemed to be owned or held by that
Securityholder shall be the total number of Interests then owned or held by the
Securityholder, plus the total number of Interests issuable upon the conversion
of any convertible securities or the exercise of any vested options, warrants or
subscription rights then owned or held by such Securityholder.
SECTION 1.3 DEFINED TERMS. The following capitalized terms, as used in
this Agreement, shall have the meanings set forth below.
"ACQUISITION" means the acquisition by OpBiz of the Aladdin and related
assets on the terms and conditions set forth in the Acquisition Agreement.
"ACQUISITION AGREEMENT" shall have the meaning in the Recitals hereto.
"AFFILIATE" of a specified Person means any other Person which, directly
or indirectly, controls, is controlled by or is under common control with, the
specified Person, including, without limitation, any Person: (a) which
beneficially owns or holds, directly or indirectly, ten percent (10%) or more of
(i) any class of voting stock of the specified Person, or (ii) the Equity
Interests (with voting capacity) of a Person; or (b) who (i) is a director or
executive officer (or individual with similar responsibilities) of the specified
Person or (ii) if the Person does not have directors or executive officers, has
similar responsibilities to a director or executive officer. The term "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of the specified
Person. The term "beneficial ownership" shall have the meaning set forth in Rule
13d-3 promulgated by the Commission under the Exchange Act. For the purpose of
this definition, any holder of Notes shall not be deemed to be an Affiliate
solely because such holder is the beneficial owner of Notes.
"ALADDIN" shall have the meaning in the Recitals hereto.
"APPLICABLE LAW" means any law, statute, order, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental Authority
(including the Gaming Authorities), in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject.
"APPRAISER" means an independent nationally recognized investment bank or
other qualified financial institution acceptable to the Company and a Majority
Warrant Interest.
"BH/RE" means BH/RE, L.L.C., a Nevada limited liability company.
"BUSINESS" means, collectively, (i) the rental of guest, conference or
banquet rooms at the Premises; (ii) the operation of the casino at the Premises;
(iii) the operation of restaurant, bar or banquet services at the Premises; (iv)
the rental of commercial, entertainment or retail space to tenants at the
Premises; and (iv) the operation of the Theater.
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"BUSINESS DAY" means any day excluding Saturday, Sunday and any day which
shall be in Nevada, Texas or the City of New York a legal holiday or a day on
which banking institutions authorized by law or other governmental action to
close.
"CLOSING" means the closing of the Acquisition and the simultaneous
release of the Note Proceeds from the Escrow Account.
"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL AGENT" means Post Advisory Group, L.L.C., as collateral agent
under the Security Documents until a successor replaces it in accordance with
the provisions of the Securities Purchase Agreement and the Security Documents,
and thereafter, means each such successor.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" shall refer to the Company and any successor or successors
thereto.
"COMPETITOR" means (i) any Person that operates, or owns 50% or more of
the Equity Interests in, one or more casinos or casino/hotels, (ii) any Person
that engages in the management of one or more casinos or casino/hotels as a
material portion of its business, or (iii) any Person that directly or
indirectly is in control of, is controlled by or under common control with any
of the foregoing.
"EBITDA" has the meaning assigned to such term in the Securities Purchase
Agreement.
"EQUITY INTERESTS" means (i) with respect to the Company, (A) Interests,
(B) Preferred Interests, and (C) any warrants, options or other rights entitling
the holder thereof to purchase or acquire Interests or Preferred Interests, and
(ii) with respect to any other Person, shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interests.
"ESCROW ACCOUNT" has the meaning specified in the Securities Purchase
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
including all rules and regulations issued thereunder.
"Excluded Securities" means (a) Interests or options to purchase Interests
issued to employees of the Company and its subsidiaries (other than employees
that are affiliated with BH/RE) in an aggregate amount not to exceed 6,000 of
the Company's Class B Units (subject to adjustments for splits, dividends,
recapitalizations and similar changes affecting the Class B Units) and (b)
Interests issued to the Sole Member in accordance with Section 7.1 (Additional
Senior Debt) of this Agreement, provided that the number of Warrant Interests to
be issued pursuant to the Warrants is adjusted in accordance with Section
2.2(f)(iv) thereof, (c) the options to purchase 3,000 of the Company's Class B
Units (subject to adjustments for splits, dividends,
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recapitalizations and similar changes affecting the Class B Units) granted to
Xxxxxxx X. Xxxxx, the CEO of OpBiz, (d) any Warrant Interests issued upon
exercise of the Warrants, and (e) any Interests, options, warrants or other
securities convertible into or exchangeable for Interests that are issued as
consideration for an acquisition, or as a replacement of equity incentives
existing at the acquired company or as newly granted equity incentive
compensation to the employees of the business being acquired.
"GAMING APPROVALS" means all applicable gaming licenses, registrations,
permits or exemptions or findings of suitability or waivers from the licensing
requirements or any other approvals or authorizations required by any Gaming
Authority.
"GAMING AUTHORITY" means any of the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the Xxxxx County Liquor and Gaming Licensing Board
and any other gaming regulatory body or any agency or any successor which has,
or may at any time after the Closing Date have, jurisdiction over the gaming
activities of OpBiz or its affiliates or those conducted at the Premises or any
successor to such authority.
"GAMING LAWS" means the provisions of the Nevada Gaming Control Act, as
amended from time to time, all regulations of the Nevada Gaming Commission
promulgated thereunder, as amended from time to time, the provisions of the
Xxxxx County Code, as amended from time to time, and all other laws, statutes,
rules, rulings, orders, ordinances, regulations and other Legal Requirements of
any Gaming Authority.
"GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental or judicial, authority, body, agency, bureau or entity (including
the Gaming Authorities, any zoning authority, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency or the Board of Governors, any
central bank or any comparable authority) or any arbitrator with authority to
bind the party at law.
"INDIVIDUAL INVESTOR" means each of Xxxxxxx Xxxxxxxxxx, Xxxxxx Xxxx and
each of their Transferees.
"INTERCREDITOR AGREEMENT (SENIOR DEBT)" shall have the meaning set forth
in the Securities Purchase Agreement.
"INTERESTS" means the Company's membership interests (whether voting or
non-voting) as authorized under the Company's Second Amended and Restated
Operating Agreement, dated as of August 9, 2004, together with any interests
issued or issuable with respect thereto (whether by way of an interest dividend
or stock split or in exchange for or in replacement of such interests or
otherwise in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization).
"LEGAL REQUIREMENTS" means all laws, ordinances, rules, regulations,
codes, statutes, orders, permits, licenses, authorizations, directives and
requirements of any Governmental Authority applicable to the Company or any
subsidiary, the Mezzanine Investors or the Premises or any portion thereof,
including all applicable licenses, building codes, rent stabilization laws,
zoning, planning, use and subdivision ordinances, flood disaster, health, safety
and
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environmental laws and regulations, and the Americans with Disabilities Act of
1990, Pub. L. No. 89-670, 104 Stat. 327 (1990), as amended, and all regulations
promulgated pursuant thereto.
"LENDER WARRANTS" means warrants to purchase up to 2.94% of BH/RE's Equity
Interest in the Sole Member granted to the lenders under the Senior Credit
Agreement.
"MAJORITY WARRANT INTEREST" means the holder or holders of at least 50% of
the Warrant Interests issuable upon the exercise of all outstanding Warrants.
"MAJORITY NOTEHOLDERS" means the holder or holders of at least 50% in
principal amount of all Notes then outstanding.
"MEZZANINE INVESTOR" shall have the meaning in the recitals hereto.
"NOTE PROCEEDS" shall have the meaning set forth in the Securities
Purchase Agreement.
"NOTES" shall have the meaning in the recitals hereto.
"OPBIZ" shall have the meaning in the recitals hereto.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, Governmental Authority, or any other entity.
"PREFERRED INTERESTS" means all Equity Interests (whether voting or
non-voting) of any class or classes (however designated) that have a
preferential right to share in the Company's dividends or liquidating
distributions, together with any interests issued or issuable with respect
thereto (whether by way of a interest dividend or interest split or in exchange
for or in replacement of such interests or otherwise in connection with a
combination of interests, recapitalization, merger, consolidation or other
corporate reorganization).
"PREMISES" shall have the meaning assigned to such term in the Securities
Purchase Agreement.
"QUALIFIED PUBLIC OFFERING" shall mean an underwritten public offering on
a firm commitment basis lead managed by a nationally recognized investment
banking organization or organizations pursuant to an effective registration
statement under the Securities Act, covering the offer and sale of Interests or
voting common equity securities of the Company or OpBiz or any successor thereto
(A) with respect to which the issuer of such securities receives aggregate net
proceeds attributable to sales for the account of the Company (after deduction
of underwriting discounts and commissions) of not less than $25 million, (B)
with respect to which the gross equity value of the issuer of such securities,
valued at the initial public offering price, is at least $100 million and (C)
with respect to which such Interests are listed for trading on the New York
Stock Exchange or quoted on the NASDAQ National Market.
"REQUIRED INVESTORS" shall have the meaning set forth in Section 3.3(e)
herein.
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"SECURITIES" means, at any time, (i) Interests, (ii) Preferred Interests,
(iii) the Warrants, and (iv) any other equity securities now or hereafter issued
by the Company, together with any options thereon and any other interests issued
or issuable with respect thereto (whether by way of a interests dividend,
interests split or in exchange for or upon conversion of such interests or
otherwise in connection with a combination of interests, recapitalization,
merger, consolidation or other corporate reorganization). At all times, the
number of Securities deemed issued and outstanding or held or to be voted by any
Securityholder shall be calculated in accordance with Section 1.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SECURITIES PURCHASE AGREEMENT" shall have the meaning in the recitals
hereto.
"SECURITIES PURCHASE DOCUMENTS" shall have the meaning assigned to such
term in the Securities Purchase Agreement.
"SECURITY DOCUMENTS" has the meaning assigned to such term in the
Securities Purchase Agreement.
"SECURITYHOLDER" shall have the meaning in the recitals hereto.
"SENIOR CREDIT AGREEMENT" shall have the meaning assigned to such term in
the Securities Purchase Agreement.
"SENIOR DEBT" has the meaning assigned to such term in the Intercreditor
Agreement (Senior Debt).
"SOLE MEMBER" shall have the meaning in the recitals hereto.
"TRANSFER" means any direct or indirect transfer, donation, sale,
assignment, pledge, hypothecation, grant of a security interest in or other
disposal or attempted disposal of all or any portion of a security or of any
rights. "Transferred" means the accomplishment of a Transfer, and "Transferee"
means the recipient of a Transfer; provided, however that a "Transfer" shall not
include any disposal of the Lender Warrants or any the exercise of the Lender
Warrants or the subsequent Transfer of any Equity Interests acquired upon the
exercise of the Lender Warrants.
"WARRANTS" shall have the meaning in the recitals hereto.
"WARRANT INTERESTS" shall have the meaning assigned to such term in the
Warrants.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS OF THE SECURITYHOLDERS, THE INDIVIDUAL
INVESTORS, BH/RE AND OPBIZ. Each of the Securityholders and the Individual
Investors, BH/RE and OpBiz, individually and not jointly, hereby represents,
warrants and covenants to the Company
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and the other Securityholders as follows: (a) such Person has full company power
and authority (in the case of a Person that is a limited liability company,
corporation or similar corporate entity), or capacity (in the case of a Person
who is an individual) to enter into this Agreement and perform its obligations
hereunder; (b) this Agreement constitutes the valid and binding obligation of
such Person enforceable against such Person in accordance with its terms; (c)
the execution, delivery and performance by such Person of this Agreement: (i)
does not and will not violate any laws, rules or regulations of the United
States or any state or other jurisdiction applicable to such Person, or require
such Person to obtain any approval, consent or waiver of, or to make any filing
with, any Person that has not been obtained or made (other than approvals or
consents of Gaming Authorities); and (ii) does not and will not result in a
breach of, constitute a default under, accelerate any obligation under or give
rise to a right of termination of any indenture or loan or credit agreement or
any other material agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which such Person is a party or by which the property of
such Person is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on any
of the assets or properties of such Person; and (d) each of the Sole Member and
BH/RE is a partnership for federal income tax purposes.
SECTION 2.2 REPRESENTATIONS OF THE COMPANY. The Company hereby represents,
warrants and covenants to the Securityholders as follows: (a) it has full
limited liability company power and authority to enter into this Agreement and
perform its obligations hereunder; (b) this Agreement constitutes the valid and
binding obligation of the Company enforceable against it in accordance with its
terms; and (c) the execution, delivery and performance by the Company of this
Agreement: (i) does not and will not violate any laws, rules or regulations of
the United States or any state or other jurisdiction applicable to the Company,
or require the Company to obtain any approval, consent or waiver of, or to make
any filing with, any Person that has not been obtained or made (other than
approvals or consents of Gaming Authorities); and (ii) does not and will not
result in a breach of, constitute a default under, accelerate any obligation
under or give rise to a right of termination of any indenture or loan or credit
agreement or any other material agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Person is a party or by which
the property of the Company is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the assets or properties of the Company.
ARTICLE III - RESTRICTIONS ON TRANSFER; CO-SALE; DRAG ALONG
Except as otherwise expressly stated herein, the provisions of this
Article III shall terminate immediately upon the closing of a Qualified Public
Offering.
SECTION 3.1 RESTRICTIONS ON TRANSFER. Each Securityholder agrees that it
will not Transfer all or any portion of the Securities, except:
(a) Transfers by any Mezzanine Investor to any Person other than a
Competitor made in compliance with the Gaming Laws and any requirements and
restrictions
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imposed by the Gaming Authorities; provided, however, that the Transferee shall
have entered into a Joinder Agreement providing that all Securities so
Transferred shall continue to be subject to all provisions of this Agreement as
if such Securities were held by such Mezzanine Investor and for all purposes
hereunder such Transferee shall be a "Mezzanine Investor"; and
(b) Transfers by any Non-Mezz Investor to any Person other than a
Competitor made in compliance with the Gaming Laws and any requirements and
restrictions imposed by the Gaming Authorities and Section 3.2 hereof; provided,
however, that the Transferee in each case shall have entered into a Joinder
Agreement providing that all Securities so Transferred shall continue to be
subject to all provisions of this Agreement as if such Securities were held by
such Non-Mezz Investor and for all purposes hereunder such Transferee shall be a
"Non-Mezz Investor";
(c) Transfers by a Securityholder pursuant to Section 3.3 hereof
made in accordance with the specific procedures set forth therein; and
(d) Transfers required by Gaming Authorities.
SECTION 3.2 CO-SALE OPTION OF MEZZANINE INVESTORS. In the event a Non-Mezz
Investor ( a "TRANSFERRING INVESTOR") proposes to Transfer all or any portion of
its Securities to any Person (the "OFFEROR") in response to a bona fide offer (a
"TRANSACTION OFFER"), such Transferring Investor may do so only pursuant to and
in accordance with the following provisions of this Section 3.2 and after
receipt of all necessary Gaming Approvals:
(a) Each Mezzanine Investor (a "CO-SELLING INVESTOR") shall have
the right (the "CO-SALE OPTION") to participate in the Transaction Offer with
respect to any Securities subject thereto by giving written notice (the
"ACCEPTANCE NOTICE") to the Transferring Investor within ten (10) Business Days
of receipt of a notice (the "CO-SALE OFFER NOTICE") specifying the terms of the
Transaction Offer. Each Acceptance Notice shall indicate the maximum number and
type of Securities such Co-Selling Investor wishes to sell including the number
and type of Securities it would sell if one or more other Co-Selling Investor do
not elect to participate in the sale on the terms and conditions stated in the
Co-Sale Offer Notice.
(b) Each Co-Selling Investor shall have the right to sell a
portion of its Securities pursuant to the Transaction Offer which is equal to or
less than the product obtained by multiplying the total number of Securities
subject to the Transaction Offer and available for sale to the Offeror by a
fraction, the numerator of which is the total number of Securities owned by such
Co-Selling Investor on the date of the Co-Sale Offer Notice on an as exercised
basis and the denominator of which is the total number of Securities then held
by all Co-Selling Investors and the Transferring Investor on the date of the
Co-Sale Offer Notice (also on an as exercised basis). To the extent one or more
Co-Selling Investors elects not to sell, or fails to exercise its rights to sell
the full amount of such Securities which they are entitled to sell pursuant to
this Section 3.2, the right of the Co-Selling Investors who have elected to sell
Securities shall be increased proportionately based on their relative holdings
and such other Co-Selling Investors shall have an additional three (3) Business
Days from the date upon which they are notified of such election or failure to
exercise in which to increase the number of Securities to be sold by them
hereunder.
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(c) Within ten (10) calendar days after the date by which the
Co-Selling Investors were first required to notify the Transferring Investor of
their intent to participate, the Transferring Investor shall notify each
participating Co-Selling Investor of the number of Securities held by such
Co-Selling Investor that will be included in the sale and the date on which the
Transaction Offer will be consummated, which shall be no later than the later of
(i) sixty (60) calendar days after the date by which the Co-Selling Investors
were required to notify the Transferring Investor of their intent to participate
and (ii) the satisfaction of any approval or filing requirements of any
Governmental Authority, if any.
(d) Each participating Co-Selling Investor may effect its or his
participation in any Transaction Offer hereunder by delivery to the Offeror, or
to the Transferring Investor for delivery to the Offeror, of one or more
instruments or certificates, properly endorsed for Transfer, representing the
Securities it elects to sell therein. The Co-Selling Investors shall make
customary representations and warranties and provide customary indemnities in
connection therewith. The Co-Selling Investors further agree that (i) the
liability of any Mezzanine Investor with respect to any representation or
warranty made by such Mezzanine Investor in connection with any sale pursuant to
this Section 3.2 shall be several and not joint with any other Person, and shall
be limited to each such Mezzanine Investor's net proceeds from such sale. Each
Co-Selling Investor shall execute and deliver such instruments of conveyance and
Transfer and take such other action, and execute any related documents as the
Transferring Investor or Offeror may reasonably require in order to carry out
the terms and provisions of this Section 3.2. In connection with any Transfer
subject to this Section 3.2, (i) each Co-Selling Investor shall be fully
responsible for (x) its own legal fees, (y) its pro rata share (calculated in
accordance with Section 3.2(b)) of any applicable placement or brokerage fees,
if any and (z) its pro rata share (calculated in accordance with Section 3.2(b))
of any expenses incurred by the Transferring Investor for the benefit of all
participating Securityholders, and (ii) the Transferring Investor shall bear its
own expenses. At the time of consummation of the Transaction Offer, the Offeror
shall remit directly to each relevant Co-Selling Investor that portion of the
sale proceeds to which the relevant Co-Selling Investor is entitled by reason of
its participation therein (less any adjustments due to the conversion of any
convertible securities or the exercise of any exercisable securities and any
required tax withholding). No Securities may be purchased by the Offeror from
the Transferring Investor unless the Offeror simultaneously purchases from the
participating Co-Selling Investors all of the Securities that they have elected
to sell pursuant to this Section 3.2.
(e) Any Securities held by a Transferring Investor which are the
subject of the Transaction Offer that the Transferring Investor desires to sell
following compliance with this Section 3.2 may be sold to the Offeror only
during the period specified in Section 3.2(c) and only on terms no more
favorable to the Transferring Investor than those contained in the Co-Sale Offer
Notice. Promptly after such sale, the Transferring Investor shall notify the
Co-Selling Investors of the consummation thereof and shall furnish such evidence
of the completion and time of completion of such sale and of the terms thereof
as may reasonably be requested by the Co-Selling Investors. The Offeror shall
take such Securities subject to the provisions of this Article III. In the event
that the Transaction Offer is not consummated within the period required by this
Section 3.2 or the Offeror fails timely to remit to each participating Mezzanine
Investor its portion of the sale proceeds, the Transaction Offer shall be deemed
to lapse, and any Transfers of Securities pursuant to such Transaction Offer
shall be deemed to be
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in violation of the provisions of this Agreement unless the Transferring
Investor once again complies with the provisions of this Section 3.2 hereof with
respect to such Transaction Offer.
(f) If (i) any Individual Investor proposes to Transfer all or a
portion of its Equity Interests in BH/RE that, when taken together with all
previous Transfers of Equity Interests by such Individual Investor (except for
any transactions specifically excluded by this second to last sentence of this
Section 3.2(f)) would equal an aggregate amount of Equity Interests equal to or
greater than 5% of all such Investor's Equity Interests in BH/RE held as of the
date hereof, then the Individual Investor shall (subject to any required
consents or approvals of Gaming Authorities) offer to exchange the Securities
held by each Mezzanine Investor for Equity Interests in BH/RE of the kind
proposed to be Transferred in such sale at their respective fair market values
as agreed to by the Individual Investors and a Majority Warrant Interest or (ii)
BH/RE proposes to Transfer (the definition of which excludes the grant of the
Lender Warrants, the exercise of the Lender Warrants or the subsequent Transfer
of any Equity Interests acquired upon exercise of the Lender Warrants) all or a
portion of its Equity Interests in the Sole Member (either (i) or (ii) of this
Section 3.2(f) a "PARENT SALE"), then BH/RE or the Sole Member, as applicable,
shall (subject to any required consents or approvals of Gaming Authorities)
offer to exchange the Securities held by each Mezzanine Investor for Equity
Interests in BH/RE or the Sole Member, as applicable, of the kind proposed to be
Transferred in such Parent Sale at their respective fair market values as agreed
to by the Individual Investors and a Majority Warrant Interest. If the
Individual Investors and the Majority Warrant Interest are unable to agree
either valuation, then the Individual Investors and the Majority Warrant
Interest shall select an Appraiser to determine any disputed valuation, the cost
of which shall be borne equally by the Majority Warrant Interest and Company.
Mezzanine Investors who exchange their Securities for Equity Interests in BH/RE
or the Sole Member shall be entitled to participate in such Parent Sale in
accordance with the other terms of this Section 3.2 as if such terms were
applicable to such Parent Sale, and BH/RE and the Sole Member agree to cooperate
with the Mezzanine Investors, in good faith, to achieve this result. The
provisions of this Section 3.2(f) shall not apply to Transfers by any Individual
Investor (y) to the spouse, children or siblings of such Individual Investor or
to a trust or family limited partnership for the benefit of any of them, or (z)
upon the death of any Individual Investor to such Individual Investor's heirs,
executors or administrators or to a trust under such Individual Investor's will,
or Transfers between such Individual Investor and such Individual Investor's
guardian or conservator, provided that in each case the Transferee shall have
entered into a Joinder Agreement in substantially the form attached hereto as
Exhibit A providing that all Securities so Transferred shall continue to be
subject to all provisions of this Agreement as if such Securities were still
held by such Individual Investor, except that no further Transfer shall
thereafter be permitted hereunder except in compliance with this Sections
3.2(f). Notwithstanding anything to the contrary in this Agreement or any
failure by a Transferee under this Section 3.2(f) to execute a Joinder
Agreement, such Transferee shall take any Securities so Transferred subject to
all provisions of this Agreement as if such Securities were still held by the
Individual Investor making such Transfer, whether or not they so agree in
writing. The parties hereto (including without limitation BH/RE and the
Individual Investors) agree that in the event of any exchange of Securities held
by a Mezzanine Investor for Equity Interests in the Sole Member of BH/RE
pursuant to this Section 3.2(f), all steps will be taken that may be necessary
or advisable to ensure that such exchange qualifies under Section 721 of the
Code as a tax-free contribution of property to a partnership in exchange for an
interest in the partnership. The parties hereto (including, without limitation,
BH/RE and the Individual Investors) further agree
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to treat and report any such exchange for all purposes (including accounting and
tax purposes) in conformity with the preceding sentence.
SECTION 3.3 DRAG-ALONG OBLIGATIONS.
(a) If the Required Investors (as defined in Section 3.3(e) below)
(the "SELLING SECURITYHOLDERS") determine to sell or otherwise dispose of all or
substantially all of the assets of the Company or all or substantially all of
the Equity Interests of the Company to any Person not Affiliated with either of
the Company or any of the Securityholders (the "BUYER"), or to cause the Company
to merge with or into or consolidate with any Buyer, in a bona fide arm's length
transaction (an "APPROVED SALE"), each Securityholder, subject to the provisions
of this Section 3.3, shall be obligated to and shall upon the written request of
the Selling Securityholders (and subject to the receipt of all required Gaming
Approvals: (i) sell, Transfer and deliver, or cause to be sold, Transferred and
delivered, to the Buyer, his, her or its pro rata portion of Securities on
substantially the same terms applicable to the Selling Securityholders (with
appropriate adjustments to reflect the conversion of convertible securities, the
redemption of redeemable securities and the exercise of exercisable securities);
and (ii) execute and deliver such instruments of conveyance and Transfer and
take such other action, including exercising any voting rights in favor of any
Approved Sale proposed by the Selling Securityholders (including by delivering
any irrevocable written proxy authorizing the Selling Securityholders or their
authorized representatives to vote in favor or such Approved Sale) and executing
any purchase agreements, merger agreements, escrow agreements or related
documents, as the Selling Securityholders may reasonably require in order to
carry out the terms and provisions of this Section 3.3; provided further that
each Mezzanine Investor shall be required to make any representations or
warranties and to provide any customary indemnities in connection therewith
severally, but not jointly, with the Selling Securityholders. The Selling
Securityholders shall pay all reasonable out-of-pocket costs and expenses
incurred by the Mezzanine Investors in connection with the provisions of this
Section 3.3 (including the reasonable fees and expenses of one independent
counsel for the Mezzanine Investors as a group, selected by the Majority Warrant
Interest). The Mezzanine Investors shall bear on their pro rata share
(calculated in accordance with Section 3.2(b)) of any expenses incurred by the
Selling Securityholders for the benefit of all Selling Securityholders.
(b) Not less than thirty (30) days prior to the date proposed for
the closing of any Approved Sale, the Selling Securityholders shall give written
notice to each other Securityholder, setting forth in reasonable detail the name
or names of the Buyer, the terms and conditions of the Approved Sale, including
the purchase price, and the proposed closing date.
(c) The obligations of each Securityholder set forth in this
Section 3.3 are subject to condition that, upon consummation of the Approved
Sale, each Securityholder receives the same form and per unit amount of
consideration, or if any Securityholder is given an option as to the form and
per unit amount of consideration, such option is made available to all
Securityholders.
(d) The Selling Securityholders further agree that (i) the
liability of any Mezzanine Investor with respect to any representation or
warranty made by such Mezzanine
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Investor in connection with any Approved Sale shall be several and not joint
with any other Person, and shall be limited to each such Mezzanine Investor's
net proceeds from the Approved Sale, (ii) the Mezzanine Investors shall not be
required to consummate any Approved Sale unless the Mezzanine Investors are
provided with (or entitled to rely on) an opinion of counsel to the effect that
the Approved Sale is not in violation of any Applicable Law (including Gaming
Laws), or in the alternative, such Mezzanine Investors shall be indemnified by
the Buyer (or the Selling Securityholders) for any violation thereof and (iii)
no Mezzanine Investor shall be required to agree to any covenant not to compete
or covenant not to solicit customers, employees or suppliers of the Buyer or any
Affiliate thereof.
(e) The "REQUIRED INVESTORS" means any Securityholder (or group of
Securityholders) who at the time hold at least 75% of the aggregate Interests of
the Company then outstanding (without regard to Section 1.2) (the "THRESHOLD
AMOUNT"); provided that to the extent Warrant Interests are issued upon the
exercise of Warrants originally issued as an adjustment or increase under
Section 2.2 of the Warrants, the Threshold Amount shall be reduced by a
percentage corresponding to the percentage increase of the aggregate holdings of
the Securityholders resulting from the issuance of such Warrant Interests.
SECTION 3.4 CONTEMPORANEOUS TRANSFERS. If two or more Securityholders
propose concurrent Transfers which are subject to this Article III, then the
relevant provisions of Sections 3.2 and Section 3.3 shall apply to each such
proposed Transfer.
SECTION 3.5 ASSIGNMENT. Each Securityholder shall have the right to assign
its rights to any Transferees of its Securities in a Transfer made in compliance
with this Article III, and any such Transferee shall be deemed within the
definition of a "Mezzanine Investor" or "Non-Mezz Investor", as the case may be,
for all purposes of this Article III.
SECTION 3.6 GAMING RESTRICTIONS. Notwithstanding anything to the contrary
in this Article III, no Securityholder shall be permitted to Transfer any
Securities, except upon the receipt of all required Gaming Approvals in
accordance with all applicable Gaming Laws and any requirements or restrictions
imposed by the applicable Gaming Authorities.
SECTION 3.7 PROHIBITED TRANSFERS. If any Transfer is made or attempted
contrary to the provisions of this Agreement, such purported Transfer shall be
void ab initio; the Company and the other parties hereto shall have, in addition
to any other legal or equitable remedies which they may have, the right to
enforce the provisions of this Agreement by actions for specific performance (to
the extent permitted by law); and the Company shall have the right to refuse to
recognize any Transferee as one of its members for any purpose.
ARTICLE IV - RIGHTS TO PURCHASE
Notwithstanding anything herein to the contrary, the following
provisions of this Article IV shall terminate immediately prior to the closing
of a Qualified Public Offering and shall not apply with respect to any Qualified
Public Offering.
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SECTION 4.1 RIGHT TO PARTICIPATE IN CERTAIN SALES OF ADDITIONAL
SECURITIES. If at any time the Company intends to issue any (i) Equity
Interests, (ii) securities convertible into or exchangeable for Equity
Interests, or (iii) options, warrants or rights carrying any rights to purchase
Equity Interests, other than Excluded Securities (collectively, the "OFFERED
SECURITIES"), it shall submit a written offer to each Mezzanine Investor
(collectively, the "OFFEREES"), identifying the terms of the proposed issuance
and sale (including price, number or aggregate principal amount of the Offered
Securities and all other material terms), to purchase its Pro Rata Allotment (as
hereinafter defined) of the Offered Securities (subject to increase for
over-subscription if some Offerees do not fully exercise their rights) on terms
and conditions, including price, not less favorable to the Offerees than those
on which the Company proposes to sell the Offered Securities to a third party or
parties; provided, however, that such Offeree agrees to purchase the Offered
Securities and any other securities to be purchased in tandem therewith by the
prospective purchaser. The Company's obligation to complete any such issuance or
sale is subject to the receipt of all necessary Gaming Approvals. Each Offeree's
"PRO RATA ALLOTMENT" of the Offered Securities shall be based on the ratio (as
determined in accordance with Section 1.2 hereof) which the Offered Securities
then owned by it bears to all of the then issued and outstanding Securities as
of the date of such written offer. The Company's offer pursuant to this Section
4.1 shall remain open and irrevocable for a period of ten (10) Business Days,
and the recipients of such offer shall elect to purchase by giving written
notice thereof to the Company within such 10-day period, including therein the
maximum number of Offered Securities of the Company which the Offeree would
purchase if other Offerees do not elect to purchase, with the rights of electing
Offerees to purchase such additional Offered Securities to be based upon the
relative holdings of Securities of the electing Offerees in the case of
over-subscription. Any Offered Securities which are not purchased pursuant to
such offer plus, at the Company's election, an equivalent number of securities
so purchased by the Offerees may be sold by the Company, but only on the terms
and conditions set forth in the initial offer, at any time within ninety (90)
days following the termination of the above-referenced 10-day period or any
longer period of time as may be required by any Gaming Authorities but may not
be sold to any other Person or on terms and conditions, including price, that
are more favorable to the purchaser than those set forth in such offer or after
such 90-day period or such longer period as may be required by any Gaming
Authorities without renewed compliance with this Section 4.1.
SECTION 4.2 ASSIGNMENT OF RIGHTS. The rights of each Offeree set forth in
this Article IV are transferable to any Transferee of Securities held by any
Mezzanine Investor that would also be an eligible Transferee under Section
3.1(a), to any Affiliate of any Mezzanine Investor that would also be an
eligible Transferee under Section 3.1(a) and to any other Mezzanine Investor.
Upon such Transfer and execution of a Joinder Agreement, such Transferee shall
be deemed a "Mezzanine Investor" for all purposes of Sections 4.1 and 4.2.
ARTICLE V - REGISTRATION RIGHTS
Notwithstanding anything herein to the contrary, the following provisions
shall continue to be in effect until this Agreement is otherwise terminated.
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SECTION 5.1 PIGGYBACK REGISTRATION RIGHTS. If at any time or times on or
after the date that is 180 days following the completion of a Qualified Public
Offering, the Company shall determine to register any Equity Interests or
securities convertible into or exchangeable or exercisable for Equity Interests
under the Securities Act (whether in connection with a public offering of
securities by the Company (a "PRIMARY OFFERING"), a public offering of
securities by members (a "SECONDARY OFFERING"), or both, but not in connection
with a registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 or any other similar rule of the Commission under
the Securities Act is applicable), the Company will promptly give written notice
thereof to the Mezzanine Investors. In connection with any such registration, if
within thirty (30) days after their receipt of such notice (or ten (10) days in
the case of a proposed registration on Form S-3) any Mezzanine Investor requests
in writing the inclusion in such registration of some or all of the Registrable
Interests (as hereinafter defined) owned by such Mezzanine Investor, or into
which any units held by such Mezzanine Investor are convertible or exchangeable,
the Company will use its best efforts to effect the registration under the
Securities Act of all Registrable Interests which such Mezzanine Investor so
requests; provided, however, that if at any time after giving written notice of
its intention to register any Registrable Interests and prior to the effective
date of the registration statement in connection with such registration, the
Company shall determine in good faith, for any reason not to register such
Registrable Interests, the Company shall give written notice to the Mezzanine
Investors and, thereupon, shall be relieved of its obligation to register any
such Registrable Interests in connection with such registration; provided,
further, that in the case of an underwritten public offering, if the managing or
lead underwriter(s) determine that a limitation on the number of units to be
underwritten is required, such underwriter(s) may limit the number of
Registrable Interests to be included in the registration and underwriting to an
amount that, in the judgment of the underwriter, would not materially affect the
term of the offering (including, without limitation the price at which such
securities can be sold to the public or the market for the Company's
securities). The Company shall advise all Mezzanine Investors promptly after
such determination by the managing or lead underwriter(s), and the number of
Registrable Interests that may be included in the registration and underwriting
shall be allocated among all Mezzanine Investors requesting registration in
proportion, as nearly as practicable, to their respective holdings of
Registrable Interests; provided that all Persons participating in the offering
(other than the Company) shall be "cut back" on a pro rata basis. The Company
may select the underwriters for any underwritten offering in its sole
discretion. All reasonable out-of-pocket expenses incurred by the Mezzanine
Investors in connection with the provisions of this Section 5.1 (including the
reasonable fees and expenses of one independent counsel for the Mezzanine
Investors as a group, selected by the Majority Warrant Interest) shall be borne
by the Company, except that the Mezzanine Investors shall bear underwriting and
selling commissions and Transfer taxes attributable to the sale of their
Registrable Interests.
SECTION 5.2 PARENT REGISTRATIONS. If (i) BH/RE proposes to register any of
its Equity Interests or securities convertible into or exchangeable or
exercisable for its Equity Interests, or (ii) the Sole Member proposes to
register any of its Equity Interests or securities convertible into or
exchangeable or exercisable for its Equity Interests, in each case under the
Securities Act (whether in connection with a public offering of securities by
BH/RE or the Sole Member, a public offering of securities by members, or both,
but not in connection with a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 or any
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other similar rule of the Commission under the Securities Act is applicable)
(each a "PARENT REGISTRATION"), BH/RE or the Sole Member, as applicable, will
promptly give written notice thereof to the Mezzanine Investors and offer to
exchange the Securities held by each Mezzanine Investor for Equity Interests in
BH/RE or the Sole Member, as applicable, of the kind proposed to be registered
at their respective fair market values as agreed to by the Individual Investors
and a Majority Warrant Interest. If the Individual Investors and the Majority
Warrant Interest are unable to agree on such valuation, then the Individual
Investors and the Majority Warrant Interest shall select an Appraiser to make
such determination, the cost of which shall be borne by the Company. Mezzanine
Investors who exchange their Securities for Equity Interests in BH/RE or the
Sole Member, as applicable, shall be entitled to participate in such Parent
Registration in accordance with the terms of this Article V as if such terms
were applicable to such Parent Registration, and BH/RE and the Sole Member agree
to cooperate with the Mezzanine Investors, in good faith, to achieve this
result. The parties hereto (including without limitation, BH/RE and the
Individual Investors) agree that in the event of any exchange of Securities held
by a Mezzanine Investor for Equity Interests in the Sole Member or BH/RE
pursuant to this Section 5.2, and in the event that such exchange can reasonably
be construed as an exchange qualifying under Section 351 of the Code, all
reasonable steps will be taken that may be necessary or advisable to ensure that
such exchange so qualifies.
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SECTION 5.3 OTHER REGISTRATIONS. In order to assist the Mezzanine
Investors in obtaining any required Gaming Approvals or meeting any other
requirements imposed by Gaming Authorities in connection with the exercise of
any Warrants, the Company shall, within one month of a written request of a
Majority Warrant Interest (i) file with the Commission a registration statement
on Form 10 (the "FORM 10") registering the Warrant Interests under the Exchange
Act, (ii) file an application with the Nevada Gaming Commission for registration
as a publicly traded corporation (the "PTC REGISTRATION", and collectively with
the Form 10, the "ADDITIONAL FILINGS") and (iii) use its commercially reasonable
best efforts to promptly take or cause to be taken, any other action or to do,
or cause to be done, all things reasonably necessary under Applicable Law to
facilitate the receipt by Mezzanine Investors of any required Gaming Approvals
or in meeting any other requirements imposed by Gaming Authorities. The
Additional Filings, as initially filed with the Commission and the Nevada Gaming
Commission, and as each may be supplemented, amended and refiled, shall each be
in form and substance reasonably satisfactory to the Mezzanine Investors. The
Company shall use it commercially reasonable best efforts, in cooperation with
the Mezzanine Investors, to respond to any comments of the Commission or the
Nevada Gaming Commission, as applicable, on the Additional Filings. The Company
shall notify the Mezzanine Investors promptly of the receipt of any comments
from the Commission (or its staff) or the Nevada Gaming Commission (or its
staff), as applicable, and of any request by either the Commission (or its
staff) or the Nevada Gaming Commission (or its staff), or any other governmental
officials for amendments or supplements to the Applicable Filings or for
additional information, and will supply the Mezzanine Investors with copies of
all correspondence with respect to the Additional Filings. The Additional
Filings, shall in all respects, comply with as to form all Applicable Laws.
Whenever any event occurs which is required to be set forth in any amendment or
supplement to an Additional Filing, the Company shall promptly inform the
Mezzanine Investors of such occurrence and cooperate in filing with the
Commission or its staff, or the Nevada Gaming Commission or its staff, as
applicable, such amendment or supplement. The costs of the Additional Filings
(including legal fees, audit fees and filing or application fees) shall be borne
by the Company. The costs of obtaining Gaming Approvals and meeting any other
requirements that the Gaming Authorities may impose in connection with such
exercise shall be borne equally by Libra Securities, LLC, on the one hand, and
the Majority Warrant Interest, on the other hand.
SECTION 5.4 REGISTRABLE INTERESTS. For the purposes of this Article V, the
term "Registrable Interests" shall mean the Interests held by the Mezzanine
Investors or subject to acquisition by the Mezzanine Investors upon exercise of
the Warrants, including any Interests issued by way of a dividend or split or in
connection with a combination of units, recapitalization, merger, consolidation
or other reorganization; provided, however, that Interests sold in a registered
sale pursuant to an effective registration statement under the Securities Act or
Transferred pursuant to Rule 144 thereunder or transferable pursuant to Rule
144(k) thereunder without restriction as to volume, shall not be deemed
Registrable Interests.
SECTION 5.5 FURTHER OBLIGATIONS OF THE COMPANY. Whenever, under the
provisions of Section 5.1 of this Agreement, the Company is required to register
any Registrable Interests, it agrees that to the extent not otherwise already
set forth in this Article V, it shall do the following:
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(a) Use its reasonable commercial best efforts to diligently
prepare and file with the Commission, a registration statement and such
amendments, post-effective amendments and supplements to said registration
statement and the prospectus used in connection therewith as may be necessary to
keep said registration statement effective for such period, not exceeding 180
days, as may be necessary for any Mezzanine Investor participating in a
registered offering to dispose of the Registrable Interests registered
thereunder in the manner specified and to comply with the provisions of the
Securities Act with respect to the sale of securities covered by said
registration statement;
(b) Furnish to each selling Mezzanine Investor such copies of each
preliminary and final prospectus and such other documents as such Mezzanine
Investor may reasonably request to facilitate the public offering of its
Registrable Interests;
(c) Use its reasonable commercial best efforts to register or
qualify the securities covered by said registration statement under the
securities or "blue-sky" laws of such jurisdictions as any selling Mezzanine
Investors may reasonably request, provided that the Company shall not be
required to register or qualify the securities in any jurisdictions which
require it to qualify to do business, subject itself to general taxation in any
such jurisdiction, subject itself to general service of process therein or amend
any provision of its organizational documents in a manner that would be adverse
to the Company or its members;
(d) Immediately notify each selling Mezzanine Investor at any time
when a prospectus relating to its Registrable Interests is required to be
delivered under the Securities Act, of the happening of any event as a result of
which such prospectus contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein not misleading, and,
at the request of any such selling Mezzanine Investor, prepare and file with the
Commission a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Interests, such prospectus will
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
(e) Cause all such Registrable Interests to be listed on or
included in each securities exchange or quotation system, if any, on which
similar securities issued by the Company are then listed, provided that the
applicable listing requirements are satisfied;
(f) Otherwise use its reasonable commercial best efforts to comply
in all material respects with all applicable rules and regulations of the
Commission and make generally available to its members, in each case as soon as
practicable, but not later than thirty (30) calendar days after the close of the
period covered thereby an earnings statement of the Company which will satisfy
the provisions of Section 11(a) of the Securities Act;
(g) Cooperate with each Mezzanine Investor and each underwriter
participating in the disposition of Registrable Interests and their respective
counsel in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.;
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(h) During the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
(i) Appoint a transfer agent and registrar for all Registrable
Interests covered by a registration statement no later than the effective date
of such registration statement;
(j) In connection with an underwritten offering, to the extent
reasonably requested by the managing or lead underwriter(s) for the offering or
the Mezzanine Investors, participate in and support customary efforts to sell
the securities in the offering, including, without limitation, participating in
"road shows";
(k) Otherwise cooperate with the managing or lead underwriter(s),
the Commission and other regulatory agencies (including Gaming Authorities) and
take all reasonable actions and execute and deliver or cause to be executed and
delivered all documents necessary to effect the registration of any Registrable
Interests under this Section 5.5; and
(l) In connection with an underwritten offering, furnish to each
selling Mezzanine Investor a signed counterpart, addressed to each Mezzanine
Investor, of:
(i) an opinion of counsel for the Company customary in form
and substance for such a transaction and reasonably satisfactory to the
Mezzanine Investor; and
(ii) to the extent permitted by applicable professional
standards, a "comfort" letter, signed by the independent public
accountants who have certified the Company's financial statements included
in such registration statement, customary in form and substance for such a
transaction and reasonably satisfactory to the Mezzanine Investors;
(m) Each holder of Registrable Interests agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 5.5(d), such holder shall forthwith discontinue
disposition of Registrable Interests pursuant to the registration
statement covering such Registrable Interests until such holder's receipt
of the copies of the supplemented or amended prospectus contemplated by
Section 5.5(d), and, if so directed by the Company, such holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the prospectus
covering such Registrable Interests current at the time of receipt of such
notice. If the Company shall give any such notice, the Company shall
extend the period during which such registration statement shall be
maintained effected pursuant to Section 5.5(a) by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 5.5(d) to and including the date when each seller of
Registrable Interests covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated
by Section 5.5(d).
SECTION 5.6 INDEMNIFICATION; CONTRIBUTION
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(a) Incident to any registration statement referred to in this
Article V, the Company will indemnify and hold harmless each underwriter and
each Mezzanine Investor who offers or sells any such Registrable Interests in
connection with such registration statement (including their respective partners
(including partners of partners and stockholders and members of any such
partners), and directors, officers, managers, members, employees and agents of
any of them (a "SELLING HOLDER"), and each person who controls any of them
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (a "CONTROLLING PERSON"), from and against any and all losses,
claims, damages, expenses and liabilities, joint or several (including any
investigation, reasonable legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), as the same are incurred to which they, or any of them, may
become subject under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based on (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement (including any related preliminary or definitive
prospectus, or any amendment or supplement to such registration statement or
prospectus), (ii) any omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading, or (iii) any violation by the Company of the Securities Act,
any state securities or "blue sky" laws or any rule or regulation thereunder in
connection with such registration; provided, however, that the Company will not
be liable to the extent that such loss, claim, damage, expense or liability
arises from and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
furnished in writing to the Company by such Selling Holder or Controlling Person
expressly for use in such registration statement or is due to the failure of
such Selling Holder or Controlling Person to deliver a copy of the prospectus or
any supplements thereto a reasonable period of time after the Company has
furnished such Selling Holder or Controlling Person with a sufficient number of
copies of the same or by the delivery of prospectuses by such Selling Holder or
Controlling Person after the Company notified such Selling Holder or Controlling
Person in writing to discontinue delivery of prospectuses. With respect (i) to
such untrue statement or omission or alleged untrue statement or omission in the
information furnished in writing to the Company by such Selling Holder or
Controlling Person expressly for use in such registration statement or (ii) to
the failure of any Selling Holder of Controlling Person to refrain from
delivering any prospectus or supplements thereto a reasonable period of time
following notice from the Company to discontinue delivery such prospectus or
supplements, such Selling Holder will indemnify and hold harmless each
underwriter, the Company (including its directors, officers, employees, agents
and Controlling Persons), and each other Selling Holder (including its partners
(including partners of partners and stockholders of such partners) and
directors, officers, employees, agents and Controlling Person of any of them),
from and against any and all losses, claims, damages, expenses and liabilities,
joint or several, to which they, or any of them, may become subject under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, at common law or otherwise to the same extent provided in the
immediately preceding sentence. In no event, however, shall the liability of a
Selling Holder or Controlling Person for indemnification under this Section
5.6(a) in its capacity as such exceed the net proceeds (before deducting
expenses) received by such Selling Holder from its sale of Registrable Interests
under such registration statement.
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(b) If the indemnification provided for in Section 5.6(a) above
for any reason is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party in respect of any losses, claims, damages, expenses or
liabilities referred to therein, then each Indemnifying Party under this Section
5.6, in lieu of indemnifying such indemnified party thereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, expenses or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the other
Selling Holders and the underwriters, if any, from the offering of the
Registrable Interests or (ii) if the allocation provided by clause (i) above is
not permitted by Applicable Law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, the other Selling Holders and the underwriters,
if any, in connection with the statements or omissions which resulted in such
losses, claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Holders and the underwriters, if any, shall be deemed to be in the same
respective proportions that the net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Holders and the underwriting
discount received by the underwriters, if any, in each case as set forth in the
table on the cover page of the applicable prospectus, bear to the aggregate
public offering price of the Registrable Interests. The relative fault of the
Company, the Selling Holders and the underwriters, if any, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Holders or the underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 5.6(b) were determined by pro
rata or per capita allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. In no event, however, shall a Selling Holder be required to
contribute any amount under this Section 5.6(b) in excess of the net proceeds
(before deducting expenses) received by such Selling Holder from its sale of
Registrable Interests under such registration statement. No person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.
(c) As promptly as is reasonably practicable after receipt by a
party seeking indemnification pursuant to this Section 5.6 (an "INDEMNIFIED
PARTY") of written notice of any investigation, claim, proceeding or other
action in respect of which indemnification is being sought (each, a "CLAIM"),
the Indemnified Party promptly shall notify the party against whom
indemnification pursuant to this Section 5.6 is being sought (the "INDEMNIFYING
PARTY") of the commencement thereof; but the omission to so notify the
Indemnifying Party shall not relieve it from any liability hereunder, except to
the extent that the Indemnifying Party is materially prejudiced by reason of
such failure. In connection with any Claim, the Indemnifying Party shall be
entitled to assume the defense thereof. Notwithstanding the assumption of the
defense of any Claim by the Indemnifying Party, the Indemnified Party shall have
the right to employ separate legal counsel and to participate in the defense of
such Claim, and the Indemnifying Party shall bear the reasonable fees,
out-of-pocket costs and expenses of such separate legal counsel to the
Indemnified Party if (and only if): (x) the Indemnifying Party shall
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have agreed to pay such fees, costs and expenses, (y) the Indemnified Party
shall reasonably have concluded that representation by the same legal counsel
would not be appropriate due to (i) actual or potentially differing interests
between such parties in the conduct of the defense of such Claim, or (ii) legal
defenses that may be available to the Indemnified Party that are in addition to
or disparate from those available to the Indemnifying Party, or (z) the
Indemnifying Party shall have failed to employ legal counsel reasonably
satisfactory to the Indemnified Party and take action to defend such claim
within 30 days after notice of the commencement of such Claim or the
Indemnifying Party shall, in the reasonable judgment of the Indemnified Party,
have ceased to conduct a diligent defense of such claim. If the Indemnified
Party employs separate legal counsel in circumstances other than as described in
clauses (x), (y) or (z) above, the fees, costs and expenses of such legal
counsel shall be borne exclusively by the Indemnified Party. Except as provided
above, the Indemnifying Party shall not, in connection with any Claim in the
same jurisdiction, be liable for the fees and expenses of more than one firm of
counsel for the Indemnified Party (together with appropriate local counsel). No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, settle or compromise any Claim or consent to the entry of any judgment
with respect thereto, unless such settlement, compromise or consent (i) includes
an unconditional release of each Indemnifying Party from all liabilities with
respect to such Claim or judgment and (ii) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Party.
(d) The indemnification and contribution provided for in this
Section 5.6 will remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Parties or any officer, director,
employee, agent or Controlling Person of the Indemnified Parties.
SECTION 5.7 RULE 144 REQUIREMENTS. If the Company becomes subject to the
reporting requirements of either Section 13 or 15(d) of the Exchange Act, the
Company will use its reasonable best efforts thereafter to file with the
Commission such information as is specified under either of said Sections for so
long as any of the Mezzanine Investors (i) holds any Registrable Interests or
(ii) otherwise qualifies to sell Registrable Interests pursuant to Rule 144(k)
under the Securities Act (or any successor or similar exemptive rules hereafter
in effect); and in such event, the Company shall use its reasonable best efforts
to take all action as may be required as a condition to the availability of Rule
144 under the Securities Act (or any successor or similar exemptive rules
hereafter in effect). The Company shall furnish to any transfer agent or
registrar upon request a written statement as to the steps it has taken to
comply with the current public information requirement of Rule 144 or such
successor rules.
SECTION 5.8 MARKET STAND-OFF. Each Securityholder agrees, if requested by
the Company and an underwriter of Registrable Interests in connection with any
Qualified Public Offering, not to directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise Transfer or dispose of any Securities or any
other securities of the issuer of the securities in a Qualified Public Offering
during any "blackout period" required by any underwriter in connection with a
Qualified Public Offering, which "blackout period" shall in no event exceed the
earlier of (i) 180 days from the date securities are first sold in the Qualified
Public Offering, and (ii) the date any holder of 1% or more of the voting common
equity securities of the Company, which holder was previously
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restricted by any such "blackout period", is able to Transfer all or any portion
of its voting common equity securities free from any such restriction. In order
to enforce the foregoing covenant, the issuer in such Qualified Public Offering
may impose stop-transfer instructions with respect to the securities of each
Securityholder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such "blackout period."
SECTION 5.9 TRANSFER OF REGISTRATION RIGHTS. The registration rights and
related obligations under this Article V of the Mezzanine Investors with respect
to their Registrable Interests may be Transferred in connection with any
transaction or series of related transactions complying with Article III, or to
any other Mezzanine Investor, and upon any such Transfer and execution of the
Joinder Agreement such Transferee shall be deemed to be included within the
definition of an "Mezzanine Investor" for purposes of this Article V with the
rights set forth herein.
SECTION 5.10 OTHER AGREEMENTS. The Company, BH/RE and the Sole Member each
agree that it shall not enter into any agreement or arrangement other than this
Agreement pursuant to which it grants or agrees to grant to any other Person
registration rights in respect of any capital interests of the Company, BH/RE or
the Sole Member, other than registration rights contemplated by Section 9.12 of
the Amended and Restated Operating Agreement of the Sole Member as amended by
the BH/RE-Starwood Agreement (as defined in the Securities Purchase Agreement),
that are in any respect senior or otherwise more favorable when taken as a whole
to the rights of the Mezzanine Investors hereunder unless (i) the Company, BH/RE
or the Sole Member, as the case may be, receives the prior written consent of a
Majority Warrant Interest or (ii) the Mezzanine Investors relinquish their
registration rights pursuant to this Article V (other than pursuant to Section
5.2 and Section 5.3) in exchange for the same registration rights being granted
to such other Person.
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ARTICLE VI - NEGATIVE CONTROL
SECTION 6.1 CONTROL CONDITIONS. If EBITDA is less than Minimum EBITDA
shown in the table below for any period, then following payment in full of the
Senior Debt (but subject to reinstatement as provided in the Intercreditor
Agreement (Senior Debt)) by the Noteholders or their designees (whether through
a refinancing or otherwise), (B) the receipt by the Majority Noteholders or
other relevant party of all required Gaming Approvals and (C) any other required
regulatory approvals or filings (all of the foregoing conditions, the "CONTROL
CONDITIONS"), the Majority Noteholders shall have the right to obtain management
control of OpBiz in a manner satisfactory to the Majority Noteholders (the
"CONTROL RIGHT"); provided that the Control Right shall terminate upon the
consummation of a Qualified Public Offering.
PERIOD MINIMUM EBITDA
------ --------------
The consecutive twelve (12) $67,500,000
month period immediately
following the fourth anniversary
of the Closing Date (the "FIRST
MEASUREMENT PERIOD")
The consecutive twelve (12) $72,000,000
month period immediately
following the last day of the
First Measurement Period (the
"SECOND MEASUREMENT
PERIOD")
The consecutive twelve (12) $76,500,000
month period immediately
following the last day of the
Second Measurement Period
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SECTION 6.2 COOPERATION Once the Control Conditions have been satisfied,
the Sole Member and the Company agree to cooperate with the Majority Noteholders
in obtaining management control of OpBiz in the manner that the Majority
Noteholders desire as soon as practicable. It is understood that such
cooperation shall include, but not be limited to, the following:
(a) Representatives of BH/RE, the Sole Member, the Company and
OpBiz appearing before the Gaming Authorities;
(b) The Sole Member tendering its resignation as manager or
managing member of the Company, in the form of Exhibit B or in such other form
requested by the Majority Noteholders;
(c) The Sole Member irrevocably appointing one or more designees
of the Majority Noteholders as the manager or managing member of the Company;
(d) The Sole Member delivering an irrevocable proxy to the
Majority Noteholders, in the form of Exhibit C or in such other form requested
by the Majority Noteholders (the "Irrevocable Proxy"), to vote its Equity
Interests in the Company on all matters (including a sale of OpBiz) in any way
that the Majority Noteholders desire;
(e) Each Individual Investor tendering his resignation for all
positions held at the Company and OpBiz, in the form of Exhibit D or in such
other form requested by the Majority Noteholders;
(f) Representatives of BH/RE, the Sole Member, the Company and
OpBiz delivering (or making available) all tangible or electronic items in their
possession or control that are necessary or useful to operate the Business,
including all items listed on Exhibit E;
(g) Representatives of BH/RE, the Sole Member, the Company and
OpBiz providing assistance in the preparation of an information memorandum
(including historical and pro forma financial statements) and the verification
of the completeness and accuracy of the information contained therein; and
(h) Representatives BH/RE, of the Sole Member, the Company and
OpBiz participating in meetings and conference calls with potential acquirors,
lenders or investors at such places and time as the Majority Noteholders may
reasonably request.
SECTION 6.3 DRAG-ALONG. Once the Control Conditions have been satisfied,
the Sole Member shall, on the request of the Majority Noteholders and subject to
any required approvals
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of the Gaming Authorities, (i) sell, Transfer and deliver, or cause to be sold,
Transferred and delivered, to any Person in connection with a Sale Event (the
"BUYER") all of its Equity Interests in the Company; and (ii) execute and
deliver such instruments of conveyance and Transfer and take such other action,
including voting such Equity Interests in favor of any Sale Event (as defined
below) proposed by the Majority Noteholders and executing any purchase
agreements, merger agreements, indemnity agreements, escrow agreements or
related documents, as such Majority Noteholders or the Buyer may reasonably
require in order to carry out the terms and provisions of this Section 6.3 (the
"DRAG-ALONG RIGHT"); provided, however that the Noteholders, on the one hand,
and the Sole Member, on the other, shall bear responsibility for any indemnity
given to the Buyer in connection with such Sale Event in proportion to the net
proceeds received by each in the Sale Event. The Sole Member shall be entitled
to receive all of the proceeds of any Sale Event that are not used to repay the
Noteholder Obligations; provided that the holders of Warrants shall be entitled
to receive the portion of such proceeds to which they are entitled under the
terms and conditions of the Warrants (except that any Warrant Interests granted
under Sections 2.2(f) of the Warrants after the fulfillment of the Control
Conditions shall be disregarded).
(a) For purposes of this Section 6.3, a "SALE EVENT" shall mean a
bona fide, arms-length negotiated transaction in which the Majority Noteholders
have determined (i) to sell or otherwise dispose of all or substantially all of
the assets of the Company and its subsidiaries (on a consolidated basis), or
(ii) to sell sufficient capital stock of the Company or any of its subsidiaries
to constitute a change in control of the Company or such subsidiary or (iii) to
cause the Company or any of its subsidiaries to merge with or into or
consolidate with any non-Affiliate(s) of the Company.
(b) In furtherance of the provisions of this Section 6.3, the Sole
Member has executed the power of attorney (the "POWER OF ATTORNEY") and
irrevocable proxy, in the forms attached as Exhibit F and Exhibit C hereto and,
solely for the purposes set forth in this Article VI and subject to the
satisfaction of the Control Conditions, hereby (i) irrevocably appoints the
Collateral Agent, as its agent and attorney-in-fact (the "ATTORNEY-IN-FACT")
(with full power of substitution) to execute all agreements, instruments and
certificates and take all actions necessary or desirable to effectuate any sale
hereunder; and (ii) grants to the Attorney-in-Fact a proxy to vote the Equity
Interests held by such holder in favor of any Sale Event hereunder.
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SECTION 6.4 BLUE-PENCILING. The Sole Member and the Company acknowledge
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under Applicable Law. If any portion or provision of this Agreement
is to any extent declared illegal or unenforceable by the Gaming Authorities or
a court of competent jurisdiction, then the remainder of this Article VI or
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, will not be affected thereby,
and each portion and provision of this Article VI shall be valid and enforceable
to the fullest extent permitted by Applicable Law. In the event that any
provision of this Article VI is determined by the Gaming Authorities or any
court of competent jurisdiction to be unenforceable, such provision shall be
replaced by an enforceable provision as nearly similar in scope and effect to
such unenforceable provision as permitted under Applicable Law by such Gaming
Authority or appropriate judicial body.
SECTION 6.5 NO CHALLENGE. BH/RE, the Sole Member, the Company, OpBiz and
each Individual Investor acknowledge and agree that the Irrevocable Proxy and
the Power of Attorney delivered to the Collateral Agent hereunder are
enforceable, and are intended, upon satisfaction of the Control Conditions, to
authorize the Collateral Agent subject to the terms and conditions of the
Irrevocable Proxy and the Power of Attorney, respectively to take any and all
lawful actions that can be taken by the Sole Member in its capacity as a member
of the Company, in the place and stead of the Sole Member. In furtherance
thereof, and as a material inducement to the Mezzanine Investors to purchase the
Securities as contemplated by the Securities Purchase Agreement, BH/RE, the Sole
Member, the Company, OpBiz and each Individual Investor agree that it or they
will not participate in any lawsuit, arbitration, action, charge or claim that
attempts to challenge, limit or set aside any of the rights, remedies, powers,
provisions or other benefits set forth in the Irrevocable Proxy and the Power of
Attorney.
ARTICLE VII - COVENANTS OF THE COMPANY, THE SOLE MEMBER
The Company and the Sole Member covenant and agree as follows:
SECTION 7.1 ADDITIONAL SENIOR DEBT. In the event the Senior Debt exceeds
$530 million (as such amount may be reduced by payment of principal thereon,
other than with respect to payments as a result of permitted refinancings) (the
"SENIOR DEBT THRESHOLD"), the Company shall, within five (5) Business Days,
provide written notice thereof to the Sole Member and each Mezzanine Investor
(the "SENIOR DEBT NOTICE"), which notice shall specify the amount of Senior Debt
outstanding at the time, as well as the amount by which such Senior Debt exceeds
the Senior Debt Threshold (the "ADDITIONAL SENIOR DEBT"). The Sole Member shall
cause a total capital contribution to be made to OpBiz in an amount equal to 20%
of the Additional Senior Debt (the "ADDITIONAL CAPITAL AMOUNT") as promptly as
possible, but in no event more than thirty (30) days after the date of the
Senior Debt Notice. Any equity interests owned by OpBiz or the Company in
connection with such capital contribution shall be membership interests of the
type outstanding on the Closing Date.
SECTION 7.2 RESTRICTIONS ON EQUITY INTERESTS. Notwithstanding any other
provision of this Agreement, the Company and the Sole Member acknowledge and
agree as follows:
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(a) The Company shall not issue any additional securities without
the prior approval of the Nevada Gaming Commission.
(b) The Company shall furnish to the Nevada State Gaming Control
Board, within 10 calendar days after the end of each fiscal quarter of the
Company, a complete list of all Securityholders, with respect to all the
Company's Equity Interests.
(c) The Company shall not admit any additional members, without
the approval of the Nevada Gaming Commission.
(d) The Sole Member shall not declare any dividends or
distributions with respect to any of the Company's securities without the prior
approval of the Nevada Gaming Commission, including without limitation, any
Interests held by the Mezzanine Investors.
SECTION 7.3 PUT RIGHT. The Company acknowledges that the Mezzanine
Investors have the right to put their Warrants and Warrant Interests to the
Company in accordance with the terms of the Warrants. The Company further
acknowledges that the Put Right (as defined in the Warrants) shall continue to
apply to any Warrant Interests held by a Mezzanine Investor, notwithstanding a
full exercise or exchange of the Warrants held by such Mezzanine Investor.
SECTION 7.4 COMMUNICATION WITH GAMING AUTHORITIES. If and to the extent
that the Company is required or requested to communicate or meet with any Gaming
Authority or otherwise intends to communicate or meet with any Gaming Authority
regarding any matter that adversely affects the rights and remedies of the
Mezzanine Investors under the Securities Purchase Documents, the Company will
(i) provide any affected Securityholder with prior notification of any such
meeting or communication to the extent practicable under the circumstances and
to the extent permitted by applicable law and (ii) either (A) request that any
such Securityholder be allowed to attend such meting or participate in such
communication (it being understood that the Company will have no obligation to
ensure that such attendance or participation is available to the Securityholder,
such decision ultimately resting with the applicable Gaming Authority) or (B) if
such Securityholder is not entitled to attend or participate, inform such
Securityholder of the substance of the discussions at such meeting or of such
communication to the extent permitted by the Gaming Authorities or applicable
law, provided that the Company shall not be required to disclose privileged
information or any information that it is prohibited from disclosing by the
Gaming Laws or by such Gaming Authority. Notwithstanding the foregoing, the
Company shall not be required to take any action under this Section 7.4 if, in
its sole discretion, such action could reasonably be expected to materially
prejudice the granting, continuation or renewal of any Gaming License of the
Company, OpBiz, EquityCo, BH/RE or any of their Affiliates or any other permit
or license material to the Company's or OpBiz's business.
SECTION 7.5 TAX COVENANTS. Each of the Sole Member and BH/RE shall
maintain its status as a partnership for federal income tax purposes at all
times prior to any Parent Registration (as defined in Section 5.2). The Sole
Member shall convert to a C corporation for federal income tax purposes in
connection with any registration of its Equity Interests (or
-27-
securities convertible into or exchangeable or exercisable for its Equity
Interests) under Section 5.2. BH/RE shall convert to a C corporation for federal
income tax purposes in connection with any registration of its Equity Interests
(or securities convertible into or exchangeable or exercisable for its Equity
Interests) under Section 5.2. Prior to any such Parent Registration, neither the
Sole Member nor BH/RE will have income which is either (i) "effectively
connected with the conduct of a trade or business within the United States"
under Code Sections 871(b) or 882, or (ii) "unrelated business taxable income"
under Code Sections 512 or 514.
ARTICLE VIII - MISCELLANEOUS PROVISIONS
SECTION 8.1 SURVIVAL OF COVENANTS. Each of the parties hereto agrees that
each covenant and agreement made by it in this Agreement or in any certificate,
instrument or other document delivered pursuant to this Agreement is material,
shall be deemed to have been relied upon by the other parties and shall remain
operative and in full force and effect after the date hereof regardless of any
investigation. This Agreement shall not be construed so as to confer any right
or benefit upon any Person other than the parties hereto and their respective
successors and permitted assigns to the extent contemplated herein.
SECTION 8.2 LEGENDS ON SECURITIES.The Company and the Securityholders
acknowledge and agree that the following legends shall be typed on each
certificate evidencing any of the securities subject hereto held at any time by
any of the Securityholder:
THE SECURITIES REPRESENTED HEREBY AND THE UNDERLYING SECURITIES ISSUABLE
UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES, (2) IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS AND (3) IN
ACCORDANCE WITH APPLICABLE STATE GAMING LAWS AND REQUIREMENTS AND
RESTRICTIONS IMPOSED BY THE NEVADA GAMING COMMISSION.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A
CERTAIN INVESTOR RIGHTS AGREEMENT, DATED AS OF AUGUST 9, 2004, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN. A COMPLETE AND CORRECT
COPY OF SUCH AGREEMENT IS
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AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL
BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
WHEN THE LIMITED LIABILITY COMPANY ISSUING THE OWNERSHIP INTEREST
REPRESENTED BY THIS CERTIFICATE HAS BEEN LICENSED BY OR REGISTERED WITH
THE NEVADA GAMING COMMISSION, THE PURPORTED SALE, ASSIGNMENT, TRANSFER,
PLEDGE, GRANTING OF ANY OPTION TO PURCHASE OR OTHER DISPOSITION OF SUCH
INTEREST SHALL BE INEFFECTIVE UNLESS APPROVED IN ADVANCE BY THE NEVADA
GAMING COMMISSION. IF AT ANY TIME THE NEVADA GAMING COMMISSION FINDS THAT
A MEMBER IS UNSUITABLE TO HOLD SUCH INTEREST, THE COMPANY SHALL REDEEM THE
MEMBER'S INTEREST ON THE TERMS PROVIDED IN [THE AGREEMENT PURSUANT TO
WHICH THIS INSTRUMENT WAS ORIGINALLY ISSUED] OR [THE COMPANY'S OPERATING
AGREEMENT]. BEGINNING ON THE DATE WHEN THE NEVADA GAMING COMMISSION SERVES
NOTICE OR A DETERMINATION OF UNSUITABILITY PURSUANT TO APPLICABLE LAW UPON
THE COMPANY, IT SHALL BE UNLAWFUL FOR THE UNSUITABLE MEMBER (A) TO RECEIVE
ANY DIVIDEND OR INTEREST OR ANY PAYMENT OR DISTRIBUTION OF ANY KIND,
INCLUDING OF ANY SHARE OF THE DISTRIBUTION OF PROFITS OR CASH OR ANY OTHER
PROPERTY, OR PAYMENTS UPON DISSOLUTION, FROM THE COMPANY, OTHER THAN A
RETURN OF CAPITAL AS REQUIRED ABOVE; (B) TO EXERCISE DIRECTLY OR THROUGH
ANY PROXY, TRUSTEE OR NOMINEE ANY VOTING RIGHT CONFERRED BY THE MEMBER'S
INTEREST IN THE COMPANY; (C) TO PARTICIPATE IN THE MANAGEMENT OF THE
COMPANY; OR (D) TO RECEIVE ANY REMUNERATION IN ANY FORM FROM THE COMPANY
OR FROM ANY COMPANY HOLDING A GAMING LICENSE FOR SERVICES RENDERED OR
OTHERWISE.
(b) The Company and the Securityholders acknowledge and agree that
in addition to the legend set forth in 8.2(a), the following legend shall be
typed on each certificate evidencing membership interests of the Company held by
the Sole Member:
THIS MEMBERSHIP INTEREST IS SUBJECT TO AN IRREVOCABLE PROXY DATED AUGUST
9, 2004 WHEREBY EQUITYCO, L.L.C. HAS GRANTED TO POST ADVISORY GROUP,
L.L.C. AS, COLLATERAL AGENT, AN IRREVOCABLE PROXY TO VOTE AND TAKE OTHER
ACTIONS WITH RESPECT TO THIS MEMBERSHIP INTEREST AS SET FORTH IN SAID
IRREVOCABLE PROXY. A COMPLETE AND CORRECT COPY OF SUCH IRREVOCABLE PROXY
IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
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OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND
WITHOUT CHARGE.
SECTION 8.3 AMENDMENT AND WAIVER. Any party may waive any provision hereof
intended for its benefit in writing. No failure or delay on the part of any
party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof. The remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to any party hereto at law or in
equity or otherwise. This Agreement may be amended with the prior written
consent of each of (a) the Company, (b) a Majority Warrant Interest, and (c) the
Sole Member; provided however, that no amendment or waiver of Section 3.1
(restrictions on transfer), Section 3.2 (co-sale option), Section 3.3
(drag-along obligations), Section 3.5 (assignment), Section 4.1 (right to
participate), Section 4.2 (assignment) or Section 5.6 (indemnification;
contribution), Article VI (negative control), Section 7.1 (additional senior
debt), Section 7.3 (put right), this Section 8.3 (amendment and waiver), or
Section 8.14 (term), shall be effective against any Mezzanine Investor that is
adversely affected by such amendment or waiver and that does not consent to such
amendment or waiver; provided, further, no amendment or waiver of this Agreement
shall be effective against any party that is adversely affected by such
amendment or waiver unless such party consents to such amendment or waiver.
SECTION 8.4 NOTICES. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given,
delivered and received (a) if delivered personally or (b) if sent by facsimile,
registered or certified mail (return receipt requested) postage prepaid, or by
courier guaranteeing next day delivery, in each case to the party to whom it is
directed at the following addresses (or at such other address for any party as
shall be specified by notice given in accordance with the provisions hereof,
provided that notices of a change of address shall be effective only upon
receipt thereof). Notices delivered personally shall be effective on the day so
delivered, notices sent by registered or certified mail shall be effective three
days after mailing, notices sent by facsimile shall be effective when receipt is
acknowledged, and notices sent by courier guaranteeing next day delivery shall
be effective on the earlier of the second Business Day after timely delivery to
the courier or the day of actual delivery by the courier:
If to the Company: MezzCo, L.L.C.
c/o OpBiz, L.L.C.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx c/o Xxxxxx Faint
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx Day
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Bay Harbour Management, L.C.
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000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
If to any Mezzanine Investor: To the address specified on the signature
page hereto for such Mezzanine Investor
With a copy to: Xxxxxxx Procter LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Non-Mezz Investors: At such address is as found in the
Company's records
With a copy to: Xxxxx Day
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Senior Agent:
The Bank of New York
Asset Solutions Division
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to Risk Management at the above address.
With copies to:
Xxxx Xxxxxxx LLP
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
70 West Madison Street
Chicago, IL 60602-4231311
Attention: Xxxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Xxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx
-00-
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
SECTION 8.5 HEADINGS. The Article and Section headings used or contained
in this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
SECTION 8.6 COUNTERPARTS; FACSIMILES. This Agreement may be executed in
one or more counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which together shall be deemed to constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed an
original signature hereto.
SECTION 8.7 REMEDIES; SEVERABILITY. It is specifically understood and
agreed that any breach of the provisions of this Agreement by any Person subject
hereto will result in irreparable injury to the other parties hereto, that the
remedy at law alone will be an inadequate remedy for such breach, and that, in
addition to any other legal or equitable remedies which they may have, such
other parties, to the extent permitted by law, shall be entitled to equitable
relief (including, without limitation, specific performance) without any
requirement as to the posting of any bond or other indemnity securing such
remedy, and the Company may refuse to recognize any unauthorized Transferee as
one of its members for any purpose, including, without limitation, for purposes
of dividend and voting rights, until the relevant party or parties have complied
with all applicable provisions of this Agreement.
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
SECTION 8.8 ENTIRE AGREEMENT; NO CONFLICT. This Agreement is intended by
the parties as a final expression of their agreement and intended to be complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. Except as specifically
provided herein, this Agreement and the other agreements specifically
contemplated hereby (including the exhibits hereto) supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
SECTION 8.9 ADJUSTMENTS. All references to unit prices and amounts herein
shall be equitably adjusted to reflect splits, dividends, recapitalizations and
similar changes affecting the capital interests of the Company.
SECTION 8.10 LAW GOVERNING. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of New York (without
giving effect to
-32-
principles of conflicts of law). Each party also waives trial by jury in any
action relating to this Agreement. Nothwithstanding the foregoing, matters of
law in this Agreement that are (x) related to gaming in Nevada shall be governed
by the Gaming Laws and (y) related to limited liability companies organized
under Nevada law shall be governed by applicable provisions of Nevada law.
SECTION 8.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the respective successors and permitted assigns of
the parties hereto as contemplated herein, and any successor to the Company by
way of merger or otherwise shall specifically agree to be bound by the terms
hereof as a condition of such successor. The rights of the Mezzanine Investors
hereunder shall be assignable to Transferees of their Securities as contemplated
herein.
SECTION 8.12 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
THE COMPANY, EACH SECURITYHOLDER AND EACH OTHER PARTY HERETO AGREE THAT NONE OF
THEM NOR ANY TRANSFEREE, ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON OR ARISING
OUT OF, THIS AGREEMENT OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY
OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW,
THE COMPANY, EACH SECURITYHOLDER AND EACH OTHER PARTY HERETO HEREBY WAIVES ANY
RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE
PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE COMPANY, EACH
SECURITYHOLDER AND EACH OTHER PARTY HERETO WITH THEIR RESPECTIVE COUNSEL, AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HERETO HAS AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
THE COMPANY, EACH SECURITYHOLDER AND EACH OTHER PARTY HERETO IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE
STATE OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE SECURITIES. TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE COMPANY, EACH SECURITYHOLDER AND
EACH OTHER PARTY HERETO IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-33-
SECTION 8.13 NO THIRD PARTY BENEFICIARIES. Except as expressly provided
herein, no person not a party hereto shall have any rights under this Agreement.
SECTION 8.14 TERM. Except for Articles III, IV and VI hereof, which
terminate as provided therein, this Agreement shall remain in effect until the
earlier to occur of (i) such time as the parties hereto agree in writing and
(ii) with respect to any Mezzanine Investor, such time as such Mezzanine
Investor is no longer a holder of any Securities; provided, however, that any
provision with respect to the payment of expenses or indemnification obligations
of any party, and the provisions of Article VIII hereof, shall survive the
termination of this Agreement.
SECTION 8.15 LENDER WARRANTS. For the avoidance of doubt, none of the
provisions of this Agreement shall restrict the issuance of the Lenders Warrants
or the transfer of the Lender Warrants to any Person or otherwise restrict any
holder of Lender Warrants from exercising the Lender Warrants or acquiring or
transferring any Equity Interest upon or following the exercise thereof.
SECTION 8.16 OPBIZ ACKNOWLEDGMENT.The acknowledgment of OpBiz to this
Agreement is made solely to acknowledge the provisions of Article VI and Section
7.1 hereof, and is subject to the Intercreditor Agreement (Senior Debt).
[SIGNATURE PAGE FOLLOWS]
-34-
IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be duly executed as of the date first set forth above.
THE COMPANY:
MezzCo, L.L.C.,
a Nevada limited liability company
By: EquityCo, L.L.C.,
a Nevada limited liability company,
its sole member
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
SOLE MEMBER:
EquityCo, L.L.C.,
a Nevada limited liability company
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
SOLELY TO ACKNOWLEDGE AND AGREE TO
THE PROVISIONS OF ARTICLE VI AND SECTION 7.1
OpBiz, L.L.C.,
a Nevada limited liability company
By: MezzCo, L.L.C.,
a Nevada limited liability company,
its sole member
By: EquityCo, L.L.C.,
a Nevada limited liability company,
its sole member
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
SOLELY TO ACKNOWLEDGE AND AGREE TO
THE PROVISIONS OF SECTION 2.1, SECTION 3.2(F), SECTION 5.2, SECTION 5.10,
ARTICLE VI, SECTION 7.1 AND SECTION 7.5
BH/RE, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Manager
SOLELY TO ACKNOWLEDGE AND AGREE TO
THE PROVISIONS OF SECTION 2.1, SECTION 3.2(F), SECTION 5.2, AND ARTICLE VI:
/s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxxx, individually
/s/ Xxxxxx Xxxx
-------------------------------------
Xxxxxx Xxxx, individually
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
MEZZANINE INVESTORS:
POST TOTAL RETURN FUND, L.P.
By: Post Advisory Group, L.L.C.,
its General Partner
By: /s/ Xxxxxxxx X. Post
--------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
POST TOTAL RETURN OFFSHORE
FUND, LTD.
By: Post Advisory Group, L.L.C.,
its Authorized Agent
By: /s/ Xxxxxxxx X. Post
--------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
POST OPPORTUNITY FUND, L.P.
By: Post Advisory Group, L.L.C.,
its General Partner
By: /s/ Xxxxxxxx X. Post
--------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
SOUTH DAKOTA INVESTMENT COUNCIL
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
DB DISTRESSED OPPORTUNITIES FUND, LTD.
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
DB DISTRESSED OPPORTUNITIES FUND, L.P.
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
MW POST PORTFOLIO FUND, LTD.
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
MW POST OPPORTUNITY OFFSHORE FUND, LTD.
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
HFR DS OPPORTUNITY MASTER TRUST
By: Post Advisory Group, L.L.C.,
its Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
SPHINX DISTRESSED FUND SPC
By: Post Advisory Group, L.L.C., its
Authorized Agent
By: /s/ Xxxxxxxx X. Post
---------------------------------
Name: Xxxxxxxx X. Post
Title: Chief Investment Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Post Advisory Group, L.L.C.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
CANYON CAPITAL ADVISORS, L.L.C.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
ADDRESS FOR NOTICES UNDER SECTION 8.4:
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
CANPARTNERS INVESTMENTS IV, L.L.C.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
ADDRESS FOR NOTICES UNDER SECTION 8.4:
c/o Canyon Capital Advisors, L.L.C.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
CONTINENTAL CASUALTY COMPANY
By: /s/ Xxxxxxx X. XxXxx
---------------------------------
Name: Xxxxxxx X. XxXxx
Title: Vice President and Assistant Treasurer
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxxx Xxxxxx Xxxxxx - 00 Xxxxx
Xxxxxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
XXXX XXXXXXX HIGH YIELD FUND
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President Investment Operations
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Notification for Future corporate actions
etc. (both required):
Xxxx Xxxxxxx High Yield Fund
X/X Xxxx xx Xxx Xxxx Xxxxxxxxxx Xxxxxxxxxx
X.X. Xxx 00,000
Xxx Xxxx, XX 00000
FAX (000) 000-0000
Xxxx Xxxxxxx High Yield Fund
C/O Xxxx Xxxxxxx Advisers, LLC
Attn: Investment Operations, 7th Floor
Private Placement Corporate Actions
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
FAX (000) 000-0000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
ANDOVER CAPITAL PARTNERS LP
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Partner of the General
Partner
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxx
WITH A COPY TO:
Xxxxxx Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Xxxx Xxxxxx
ANDOVER CAPITAL OFFSHORE
PARTNERS LTD.
By: /s/ Xxxxx Xxxxxx
-------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Partner of the Advisor
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxx
WITH A COPY TO:
Xxxxxx Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Xxxx Xxxxxx
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
XXXXXXX ROAD, LLC
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: Attorney-in-Fact
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
YORK CREDIT OPPORTUNITIES FUND, L.P.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Financial Officer
ADDRESS FOR NOTICES UNDER SECTION 8.4
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
XXXXXXX X. XXXXXXXX
ADDRESS FOR NOTICES UNDER SECTION 8.4:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]