Exhibit 3.3
FORM OF
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
COLONY RESORTS LVH ACQUISITIONS, LLC,
A NEVADA LIMITED LIABILITY COMPANY
_________ __, 2004
TABLE OF CONTENTS
ARTICLE I. GENERAL PROVISIONS...............................................1
ARTICLE II. DEFINITIONS......................................................2
ARTICLE III. CAPITAL CONTRIBUTIONS, MEMBERSHIP PERCENTAGES AND LOANS..........6
ARTICLE IV. CAPITAL ACCOUNTS, DISTRIBUTIONS AND ALLOCATIONS..................7
ARTICLE V. CONVERSION RIGHTS...............................................11
ARTICLE VI. MEMBERS.........................................................11
ARTICLE VII. MANAGEMENT AND CONTROL OF THE COMPANY...........................12
ARTICLE VIII. BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS....................16
ARTICLE IX. TRANSFERS OF MEMBERSHIP UNITS; WITHDRAWALS; CERTAIN RIGHTS......17
ARTICLE X. DISSOLUTION.....................................................18
ARTICLE XI. REPRESENTATIONS AND WARRANTIES..................................19
ARTICLE XII. COMPLIANCE WITH GAMING LAWS.....................................20
ARTICLE XIII. MISCELLANEOUS PROVISIONS........................................21
Schedule A MEMBERSHIP UNITS, CAPITAL CONTRIBUTION AND INITIAL CAPITAL ACCOUNT
FOR THE CLASS A MEMBERS AND CLASS B MEMBERS.
(i)
FORM OF AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
COLONY RESORTS LVH ACQUISITIONS, LLC
This Amended and Restated Limited Liability Company Agreement (this
"Agreement") of Colony Resorts LVH Acquisitions, LLC, a Nevada limited liability
company (the "Company"), is entered into as of _______ __, 2004, by and among
the Persons executing this Agreement as Members (the "Members"). Capitalized
terms used in this Agreement are defined in Article II.
BACKGROUND
A. On December __, 2003, an Articles of Organization for the
Company was filed with the Secretary of State of the State of Nevada.
B. The Members desire to adopt a Limited Liability Company
Agreement for the Company pursuant to the Act.
NOW, THEREFORE, the Members agree as follows:
ARTICLE I.
GENERAL PROVISIONS
1.1. Formation. Pursuant to the Act, the Members have formed a limited
liability company under the laws of the State of Nevada by filing the Articles
with the Secretary of State of the State of Nevada and by entering into this
Agreement.
1.2. Name. The name of the Company will be "Colony Resorts LVH
Acquisitions, LLC" or such other name as the Board may from time to time
determine. Prompt Notice of any change in the name of the Company will be given
to all Members.
1.3. Principal and Registered Office. The Company's principal and
registered office will be located at 3000 Paradise Road, Las Vegas, Nevada
89109, or such other place as the Board may determine from time to time. Service
of process may be made with respect to the Company at its principal office.
Prompt Notice of any change in the location of the principal or registered
office will be given to all Members.
1.4. Term. The term of the Company began on the date the Articles was
filed with the Secretary of State of the State of Nevada, and will continue
indefinitely, unless terminated earlier as provided in this Agreement or as
required by law.
1.5. Purpose and Business of the Company. The business purpose of the
Company shall be to engage in any business activities permitted under the Act
and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of such purposes, including without limitation to
operate, manage, and conduct gaming in a gaming casino on any premises for which
gaming may now or in the future be approved in accordance with Nevada law.
1.6. Partnership Classification. It is the intention of the parties
hereto that the Company be treated as a partnership for federal, state and local
income tax purposes. The Company shall not elect to be treated as a corporation
under Section 301.7701-3(c) of the Code (or any corresponding applicable
provisions of state or local law) unless such election is approved by the Board.
1.7. Certificates. Membership Units in the Company may be evidenced by
certificates in a form approved by the Board. Any such certificates evidencing
the Membership Units acquired by the Members pursuant to the Purchase Agreements
will bear the following legend reflecting the restrictions on the transfer of
such securities contained in this Agreement:
"The securities evidenced hereby are subject to the
terms of that certain Amended and Restated Limited
Liability Company Agreement, dated as of ______ __,
2004, by and among the Company and certain members
identified therein, including certain restrictions on
transfer. A copy of this Agreement has been filed
with the Secretary of the Company and is available
upon request."
ARTICLE II.
DEFINITIONS
The following terms used in this Agreement will have the meanings
set forth below:
"Act" means Chapter 86 of the Nevada Revised Statutes, as it may be
amended from time to time.
"Affiliate" means any Person or entity, directly or indirectly
controlling, controlled by or under common control with such Person or entity.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement, as it may be amended or supplemented from time to time.
"Articles" means the Company's Articles of Organization filed with
the Secretary of State of the State of Nevada, as it may be amended from time to
time.
"Board" means the managing board of the Company and shall be
composed of the Board Members.
"Board Members" has the meaning set forth in Section 7.1 of this
Agreement
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"Book Value" means, except as set forth below, the adjusted basis of
any Company property for federal income tax purposes.
(i) Initial Book Value. The initial Book Value of any property
contributed by a Member to the Company shall be the gross fair market value of
such property at the time of such contribution.
(ii) Adjustments. The Book Value of all of the Company's property
shall be adjusted by the Company to equal their respective gross fair market
values, as determined by the Board, as of the following times: (a) immediately
before the admission of a new Member to the Company or the acquisition by an
existing Member of an additional interest in the Company, in either case by the
issuance of additional Membership Units to such Member by the Company; (b)
immediately before the distribution by the Company of money or property to a
retiring or continuing Member in consideration for the retirement of all or a
portion of such member's Membership Units in the Company; (c) immediately before
the dissolution of the Company under Article X of this Agreement.
(iii) Depreciation and Amortization. The Book Value of Company
property shall be adjusted for the depreciation and amortization of such
property taken into account in computing Net Profit and Net Loss and for Company
expenditures and transactions that increase or decrease the property's federal
income tax basis.
"Business Day" means any day other than a Saturday, a Sunday or a
holiday on which commercial banks in the state of New York or the state of
Nevada are closed.
"Capital Account" means an account maintained for each Member as
provided in Article IV.
"Capital Contribution" means as to any Member the amount of cash or
the Book Value of any property contributed by the Member to the Company as the
Board shall accept in its discretion.
"Class A Member" means any Person who has purchased or been granted
Class A Membership Units and is listed as a Class A Member on Schedule A hereto,
as such schedule may be amended from time to time.
"Class A Membership Units" mean for each Member the number of Class
A Membership Units set forth on Schedule A opposite such Member's name.
"Class B Member" means any of those Members who have purchased or
been granted Class B Membership Units in the Company and who are listed as a
Class B Member on Schedule A hereto, as such schedule may be amended from time
to time.
"Class B Membership Units" mean for each Member the number of Class
B Membership Units set forth on Schedule A opposite such Member's name.
"Co-Investment" means Colony Resorts LVH Co-Investment Partners,
L.P., a Delaware limited partnership.
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"Co-Investment Transfer Restriction Agreement" means that certain
Transfer Restriction Agreement, dated as of ___________, 2004, by and among
Thomas J. Barrack, Jr., Nicholas L. Ribis, Co-Investment Voteco and
Co-Investment.
"Co-Investment Voteco" means Colony Resorts LVH Co-Investment
Voteco, LLC, a Delaware limited liability company.
"Code" means the Internal Revenue Code of 1986, as amended (or any
corresponding provision of succeeding law), and, to the extent applicable, the
Regulations.
"Colony" means Colony Resorts LVH Holdings, LLC, a Delaware limited
liability company.
"Commission" means the Nevada Gaming Commission.
"Company" means Colony Resorts LVH Acquisitions, LLC, a Nevada
limited liability company.
"Consent" means either (a) the consent given by vote at a meeting
called and held in accordance with the provisions of Article VII of this
Agreement; (b) a written consent required or permitted to be given pursuant to
this Agreement or applicable law; or (c) the act of voting or granting any such
written consent, as the context may require.
"Equity Securities" means (a) any Membership Units of the Company or
rights to acquire Membership Units, or securities convertible into Membership
Units or, if the Company shall have converted to a corporation pursuant to the
terms of this Agreement, any shares of capital stock of the Company, warrants,
options or other rights to acquire capital stock and debt securities convertible
into capital stock and (b) with respect to any of the Company's Subsidiaries,
any shares of capital stock or membership interests, warrants, options or other
rights to acquire shares of capital stock or membership interests, and debt
securities convertible into capital stock or membership interests, of such
Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, as of the relevant date of determination,
(i) in the case of securities, if the subject securities are listed or admitted
on any national securities exchange or included for trading on any national
securities market, the average closing price of such securities for the prior
thirty (30) trading days, and (ii) in the case of assets or securities not
listed or admitted for trading on a national securities exchange or included for
trading on a national securities market, the amount which an independent, third
party, fully financed buyer would be willing to pay in cash for such assets or
securities as of such date (determined in good faith by the Board).
"GAAP" means U.S. generally accepted accounting principles.
"Holders Agreement" means the Holders Agreement, dated as of ______
__, 2004, among the Company, Voteco, Co-Investment Voteco, Colony and
Co-Investment.
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"Member" means each of those Members listed on Schedule A, and any
additional or substitute Member admitted to the Company in accordance with the
terms of this Agreement and the Holders Agreement.
"Membership Units" means Class A Membership Units and Class B
Membership Units.
"Net Profit" or "Net Loss," as the case may be, means the income and
loss of the Company as determined in accordance with the accounting methods
followed by the Company for federal income tax purposes but including income
exempt from tax and described in Section 705(a)(1)(B) of the Code, treating as
deductions items of expenditure described in, or under Regulations deemed
described in, Section 705(a)(2)(B) of the Code and treating as an item of gain
(or loss) both any increase (decrease) in the Book Value of the Company's
property and the excess (deficit), if any, of the fair market value of
distributed property over (under) its Book Value. Depreciation, depletion,
amortization, income and gain (or loss) with respect to the Company's property
shall be computed with reference to its Book Value rather than to its adjusted
bases.
"Notification" or "Notice" means a writing containing the
information required by this Agreement to be communicated to any Person, sent or
delivered in accordance with the provisions of Section 13.4; provided, however,
that any written communication containing such information sent to such Person
and actually received by such Person will constitute Notification or Notice for
all purposes of this Agreement.
"Parent" means any limited liability companies, partnerships,
corporations or other legal entities which hold a controlling interest in the
Company.
"Person" means an individual, partnership, joint-stock company
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or subdivision thereof.
"Purchase Agreements" means those certain Subscription Agreements,
dated as of _______ __, 2004, by and between the Company and each of Voteco,
Colony, Co-Investment and Co-Investment Voteco.
"Regulations" means the income tax regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means any limited liability companies, partnerships,
corporations or other legal entities in which the Company holds a controlling
interest or has the right to direct the management of such entity.
"Transfer" means a sale, exchange, transfer, assignment, pledge,
encumbrance or other disposition of a Membership Unit. "Transferee" means the
recipient of a Transfer of a Membership Unit, and "Transferor" means the Person
making such Transfer.
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"Transfer Restriction Agreements" means the Co-Investment Transfer
Restriction Agreement and the Voteco Transfer Restriction Agreement.
"Voteco" means Colony Resorts LVH Voteco, LLC, a Delaware limited
liability company.
"Voteco Transfer Restriction Agreement" means that certain Transfer
Restriction Agreement, dated as of _________, 2004, by and among Thomas J.
Barrack, Jr., Voteco and Colony.
"Voting Majority In Interest" means the holders of a majority of the
then outstanding Class A Membership Units, which initially shall be
Co-Investment Voteco.
ARTICLE III.
CAPITAL CONTRIBUTIONS, MEMBERSHIP PERCENTAGES AND LOANS
3.1. Contributions Generally. As of the effective date hereof, each
Member shall have contributed or be deemed to have contributed to the Company
the property or amount set forth opposite such Member's name on the attached
Schedule A. Each Member's number of Class A Membership Units or Class B
Membership Units is set forth opposite such Member's name on Schedule A, which
shall be amended from time to time upon admission of new Members or the
acceptance of additional Capital Contributions as set forth herein.
3.2. Admission of New Members.
(a) Additional Persons, including Persons who are officers or
employees of, or consultants to, the Company and/or any of its Affiliates, or
have otherwise provided valuable services or opportunities to the Company or its
Affiliates, including, without limitation, introducing investors to the Company,
may be admitted to the Company as Members from time to time by the Board at a
price per Membership Unit to be determined by the Board.
(b) In the event a Member ceases to beneficially own Membership
Units, such Member shall no longer be deemed a Member for any purpose hereunder.
No less frequently than as of each fiscal year, the Company will prepare a new
Schedule A setting forth each Member's Membership Units for such year.
3.3. Additional Contributions. No Member will be required to make any
contribution to the Company's capital in addition to the amounts contributed
pursuant to Section 3.1. Subject to the foregoing, the Board may determine from
time to time that additional capital is necessary or appropriate to enable the
Company to conduct its activities and may seek (but not require) additional
Capital Contributions from Members and others, on such terms as the Board may
propose in its sole discretion.
3.4. Procedures for Admitting Additional Members. As a condition to
becoming a Member of the Company, all additional Members shall execute and
deliver to the Company such number of counterpart signature pages to this
Agreement as the Board may require, evidencing such Member's intent to be bound
by all of the terms and conditions of this Agreement. The
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initial Capital Contribution of any additional Member shall be paid in cash or
cash equivalent at the time of such Member's admission into the Company, or in
consideration otherwise acceptable to the Board in its sole discretion. Schedule
A will be amended to reflect each additional Member admitted to the Company.
3.5. Loans by Members. No Member will be required to make loans to the
Company by virtue of being a Member in the Company. Loans may be made, however,
by any Member to the Company and will not be considered Capital Contributions.
The amount of any such loan will be a debt due from the Company to such lending
Member, and will be made upon such terms and conditions and bearing interest at
such rates as will be approved by the Board in its sole discretion.
ARTICLE IV
CAPITAL ACCOUNTS, DISTRIBUTIONS AND ALLOCATIONS
4.1. Capital Accounts.
(a) General. The Board shall cause to be performed all general and
administrative services on behalf of the Company in order to assure that
complete and accurate books and records of the Company are maintained at the
Company's principal place of business showing the names, addresses and number of
Membership Units of each of the Members, all receipts and expenditures, assets
and liabilities, profits and losses, and all other records necessary for
recording the Company's business and affairs, including a Capital Account for
each Member. The Capital Accounts shall be maintained for each Member in
accordance with Regulations Sections 1.704-1(b) and 1.704-2.
(b) Initial Capital Accounts. As of the date of this Agreement,
Schedule A sets forth the initial Capital Account balance of each Member with
respect to each class of Membership Unit held by such Member.
(c) Adjustments to Capital Accounts.
(i) The Capital Account with respect to the relevant Membership
Units shall be increased by:
(A) the amount of any money contributed by the Member to the
Company;
(B) the fair market value of any property contributed by the
Member to the Company;
(C) the amount of Net Profit allocated to the Member; and
(D) the amount of any Company liabilities assumed by such
Member (or taken subject to) if property is distributed to the Member by the
Company.
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(ii) The Capital Account with respect to the relevant Membership
Units shall be decreased by:
(A) the amount of any money distributed to the Member by the
Company;
(B) the fair market value of any property distributed to the
Member by the Company;
(C) the amount of Net Loss allocated to the Member; and
(D) the amount of any Member liabilities assumed by the
Company (or taken subject to) if property is contributed to the Company by the
Member.
(d) Regulations Section 1.704-1(b)(2)(iv). The Capital Accounts
shall be adjusted by all other adjustments required by Regulations Section
1.704-1(b)(2)(iv). The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations under Section 704(b) of the Code and, to the extent not
inconsistent with the provisions of this Agreement, shall be interpreted and
applied in a manner consistent with such Regulations.
(e) Transfers. If any Membership Units (or portions thereof) in
the Company are transferred in accordance with the terms of this Agreement, the
transferee will succeed to the Capital Account of the transferor to the extent
it relates to the transferred Membership Units (or portions thereof).
4.2. Allocations of Net Profit and Net Loss.
(a) Allocation of Net Profit and Net Loss. Subject to the other
provisions of this Article IV, for purposes of adjusting the Capital Accounts of
the Members, the Net Profit, Net Loss, and other items of income, gain, loss,
credit, and deduction shall be allocated with respect to each taxable year (or
portion thereof) as follows:
(i) Net Profit and similar items for any taxable year shall be
allocated as follows:
(1) first, to the Members in proportion to, and to the extent
of, the excess of prior allocations of Net Loss under Section 4.2(a)(ii)(4) over
prior allocations of Net Profit under this Section 4.2(a)(i)(1) for the
then-current taxable year and all prior taxable years;
(2) second, to the Members in proportion to, and to the
extent of, the excess of prior allocations of Net Loss under Section
4.2(a)(ii)(3) over prior allocations of Net Profit under this Section
4.2(a)(i)(2) for the then-current taxable year and all prior taxable years;
(3) third, to the Members in proportion to, and to the extent
of, the excess of prior allocations of Net Loss under Section 4.2(a)(ii)(2) over
prior allocations of Net Profit under this Section 4.2(a)(i)(3) for the
then-current taxable year and all prior taxable years; and
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(4) fourth, to the Members in proportion to their relative
Membership Units.
(ii) Net Loss and similar items for any taxable year shall be
allocated proportionally among the Members as follows:
(1) first, to all Members in proportion to, and to the extent
of, the excess of prior allocations of Net Profit under Section 4.2(a)(i)(4)
over prior allocations of Net Loss under this Section 4.2(a)(ii)(1) for the
then-current taxable year and all prior taxable years;
(2) second, to the Members in proportion to their relative
Membership Units until the Capital Account of any Member is reduced to zero;
(3) third, to the Members in proportion to, and to the extent
of, their positive Capital Account balances; and
(4) fourth, to the Members in proportion to their relative
Membership Units.
(b) Tax Allocations. Notwithstanding the general allocation rules
set forth in Section 4.2(a), the following special allocation rules shall apply
under the circumstances described therein:
(i) Deficit Capital Account and Nonrecourse Debt Rules. The
special rules in this Section 4.2(b)(i) apply, in the following order, to take
into account the possibility of Members having deficit Capital Account balances
for which they are not economically responsible and the effect of the Company or
any entity taxed as a partnership in which the Company has an ownership interest
incurring nonrecourse debt.
(A) Company Minimum Gain Chargeback. If there is a net
decrease in "partnership minimum gain" during any year, determined in accordance
with the tiered partnership rules of Regulations Section l.704-2(k), each Member
shall be allocated items of income and gain for such year equal to such Member's
share of the net decrease in partnership minimum gain within the meaning of
Regulations Section l.704-2(g)(2), except to the extent not required by
Regulations Section 1.704-2(f). To the extent that this Section 4.2(b)(i)(A) is
inconsistent with Regulations Section l.704-2(f) or 1.704-2(k) or incomplete
with respect to such regulations, the minimum gain chargeback provided for
herein shall be applied and interpreted in accordance with such regulations.
(B) Partnership Nonrecourse Debt Minimum Gain Chargeback. If
there is during any year a net decrease in "partner nonrecourse debt minimum
gain" within the meaning of Regulations Section 1.704-2(i)(2), each Member who
has a share of the partner nonrecourse debt minimum gain attributable to partner
nonrecourse debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be allocated items of income and gain for such year (and,
if necessary, subsequent years) equal to such Member's share of the net decrease
in partner nonrecourse debt minimum gain. This allocation will be made in
accordance with Regulations Section 1.704-2(i)(4) and 1.704-2(f)(5). To the
extent that this Section 4.2(b)(i)(B) is inconsistent with Regulations Section
1.704-2(i) or 1.704-2(k) or incomplete with respect to such
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regulations, the partner nonrecourse debt minimum gain chargeback provided for
herein shall be applied and interpreted in accordance with such regulations.
(C) Deficit Capital Account Chargeback and Qualified Income
Offset. If any Member has a negative Capital Account at the end of any year,
including a negative Capital Account for such Member caused or increased by an
adjustment, allocation or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), such Member shall be allocated items of
income and gain (consisting of a pro rata portion of each item of Company
income, including gross income and gain) in an amount and manner sufficient to
eliminate such negative Capital Account as quickly as possible. This Section
4.2(b)(i)(C) is intended to constitute a "qualified income offset" pursuant to
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
(D) Partner Nonrecourse Deductions. Any partner nonrecourse
deductions for any year or other period shall be allocated to the Member who
bears the economic risk of loss with respect to the partner nonrecourse debt to
which such partner nonrecourse deductions are attributable in accordance with
Regulations Section 1.704-2(i) or 1.704-2(k).
(E) Curative Allocations. The allocations under this Section
4.2(b) will not be consistent with the manner in which the Members intend to
divide Net Profit, Net Loss and similar items. Accordingly, Net Profit, Net Loss
and other items (including guaranteed payments within the meaning of Section
707(c) of the Code) will be reallocated among the Members (in the same year and
to the extent necessary, in subsequent years) in a manner consistent with
Regulations Section 1.704-1(b) and 1.704-2 so as to prevent such allocations
from distorting the manner in which Net Profit, Net Loss and other items are
intended to be allocated among the Members pursuant to Section 4.2(a).
(F) Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Company asset pursuant to Section 734(b) or
Section 743(b) of the Code is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of Net Profit (if the adjustment increases the basis of the asset) or Net
Loss (if the adjustment decreases such basis) and such Net Profit or Net Loss
shall be specially allocated to the Members in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to
such section of the Regulations.
(ii) Change in Member's Membership Units. If there is a change in
any Member's share of the Company's Net Profit, Net Loss or other items during
any year, allocations among the Members shall be made in accordance with their
interests in the Company from time to time during such year in accordance with
Section 706 of the Code, using the closing-of-the-books method.
4.3. Distributions Generally. The Company shall make distributions of
available cash net of reasonable reserves at such times and in such amounts as
determined by the Board. Except as provided in Section 10.2 (distributions upon
liquidation), any such distributions shall be made to all of the Members in
proportion to their relative Membership Units.
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4.4. Distributions in Kind. If any assets of the Company are distributed
in kind, such assets will be distributed in accordance with Section 4.3 and on
the basis of the Fair Market Value thereof at the effective time of the
distribution, as reasonably determined by the Board.
ARTICLE V.
CONVERSION RIGHTS
5.1. Optional Conversion. Each of Colony and Co-Investment and their
respective successor entities and affiliates (as such term is defined in Rule
501(b) under the Securities Act) (collectively, the "Designated Class B
Holders") shall have the right at any time, at their option, to convert any of
their Class B Membership Units into an equal number of Class A Membership Units,
without cost. So long as the Designated Class B Holders in the aggregate hold at
least one Class B Membership Unit, no holder of Class B Membership Units who is
not a Designated Class B Holder may convert such units to Class A Membership
Units without the prior written consent of Designated Class B Holders holding a
majority of the outstanding Class B Membership Units then held by Designated
Class B Holders (which consent may be granted in each such holder's sole and
absolute discretion). At any time that no Designated Class B Holder holds any
Class B Membership Units, each holder of Class B Membership Units who is not a
Designated Class B Holder shall have the right, at its option, to convert any of
its Class B Membership Units into an equal number of Class A Membership Units,
without cost. Notwithstanding the foregoing, the rights of each holder of Class
B Membership Units to convert such units into Class A Membership Units shall be
subject at all times to compliance with all gaming and other statutes, laws,
rules and regulations applicable to the Company and such holder at that time. So
long as the Company shall continue to be an entity qualifier with the
Commission, the Designated Class B Holders shall only be permitted to convert
Class B Membership Units into Class A Membership Units as part of or following
an in-kind distribution of the entire interest of Colony or Co-Investment, as
the case may be, in the units of the Company and, to the extent required, only
after being found qualified by the Commission. Upon any distribution of units of
Class B Membership Units to the limited partners of Colony or Co-Investment, as
the case may be, such limited partners shall obtain qualification or waiver to
the extent required by the [Nevada Casino Control Act].
ARTICLE VI.
MEMBERS
6.1. Limited Liability. Except as may be required under the Act, no
Member will be personally liable to any third party for any debt, obligation, or
liability of the Company, whether that liability or obligation arises in
contract, tort or otherwise. The failure of the Company to observe any
formalities or requirements relating to the exercise of its powers or management
of its business or affairs under this Limited Liability Company Agreement or the
Act will not be grounds for imposing personal liability on the Members for
liabilities of the Company.
6.2. Admission of Additional Members. Additional Members may be admitted
only according to the provisions specified in Article III.
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6.3. Confidentiality. As to so much of the information and other material
furnished under or in connection with this Agreement (whether furnished before,
on or after the date hereof) as constitutes or contains confidential business,
financial or other information of the Company or any subsidiary, each of the
Members and the Company covenants for itself and its directors, officers and
partners that it will use due care to prevent its officers, directors, partners,
employees, counsel, accountants and other representatives from disclosing such
information to Persons other than their respective authorized employees,
counsel, accountants, shareholders, partners, limited partners and other
authorized representatives; provided, however, that each Member may disclose or
deliver any information or other material disclosed to or received by it should
such Member be advised by its counsel that such disclosure or delivery is
required by law, regulation or judicial or administrative order. For purposes of
this Section 6.3, "due care" means at least the same level of care that such
Member would use to protect the confidentiality of its own sensitive or
proprietary information, and this obligation shall survive termination of this
Agreement.
6.4. Voting Rights. Each issued and outstanding Class A Membership Unit
shall be entitled to one (1) vote per Membership Unit. Except as provided by
law, the holders of Class B Membership Units shall have no right to vote on any
matter to be voted on by the Members (including, without limitation, any
election or removal of members of the Board), and their Class B Membership Units
shall not be included in determining the number of Membership Units voting or
entitled to vote on such matters.
ARTICLE VII.
MANAGEMENT AND CONTROL OF THE COMPANY
7.1. Management by the Board.
(a) The management of the Company shall be vested in the Board.
Except as otherwise provided in this Agreement, the Board shall have all
authority, rights and powers in the management of the Company business to do any
and all acts and things necessary, proper, appropriate, advisable, incidental or
convenient to effectuate the purposes of this Agreement. Any action taken by the
Board on behalf of the Company in accordance with the foregoing provisions shall
constitute the act of and shall serve to bind the Company. The Board shall
initially be comprised of two persons, consisting initially of Thomas J.
Barrack, Jr. and Nicholas L. Ribis; (collectively, the "Board Members"), and
thereafter shall consist of such number as may be fixed from time to time by
resolution the Voting Majority In Interest. The Board shall also consist of one
person to serve as a non-voting board observer representing the employees of the
Company (the "ERISA Representative"). The ERISA Representative shall be entitled
to attend any and all meetings of the Board but shall not have any voting rights
in respect of any actions taken by the Board.
(b) Except as otherwise required by law, any Board Member may be
removed from the Board, with or without cause, by the Voting Majority In
Interest and the office of such Board Member shall forthwith become vacant. Any
Board Member may resign at any time. Such resignation shall take effect at the
time specified therein, and if no time be specified, at the time of its receipt
by the Board. The acceptance of a resignation shall not be necessary to make
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it effective, unless so specified therein. Any vacancy on the Board, occurring
from any cause whatsoever, shall be filled by a candidate appointed by the
Voting Majority In Interest.
(c) Meetings of the Board shall be held at such times and locations
as may be determined by the Voting Majority In Interest. Notice of each meeting
shall be given by the Voting Majority In Interest to each Board Member and shall
state the place, date and time of the meeting. Notice of such meeting shall be
mailed, postage prepaid, to each Board Member addressed to him at his address or
usual place of business by first class mail, at least ten (10) business days
before the day on which such meeting is to be held, or shall be sent addressed
to such Board Member at such place by facsimile, overnight courier, telex, or be
delivered to him personally or by telephone, at least seven (7) days before the
time at which such meeting is to be held.
(d) A majority of the Board Members shall constitute a quorum for
the transaction of business. If a quorum shall not be present at any meeting of
the Board, the Board Members present thereat may adjourn the meeting to another
time and place. Notice of such time and place of the adjourned meeting shall be
given to all of the Board Members unless such time and place were announced at
the meeting at which the adjournment was taken, in which case such notice shall
only be given to the Board Members who were not present thereat. At such
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally called. Wherever
approval by the Board is required by this Agreement, such approval shall, except
as otherwise set forth herein, consist of the affirmative vote of a majority of
a quorum of the Board Members.
(e) (i) Any action required or permitted to be taken by the Board
may be taken without a meeting if all the Board Members consent in writing, and
(ii) one or more Board Members may participate in any meeting of the Board by
means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in the meeting pursuant to this Section 7.1(e)(ii) shall
constitute presence in person at the meeting.
7.2. Officers. The Board may, by written delegation, appoint or remove
officers of the Company from time to time. The officers will serve at the
pleasure of the Board. The salaries of all officers and agents of the Company
shall be fixed by the Board. The initial officers of the Company shall be:
Name: Title:
----- ------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
7.3. Conversion to Corporate Form; Public Offering.
(a) The parties hereto acknowledge that the Board may approve a
restructuring of the legal status and capital structure of the Company in the
future in order to
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facilitate a public offering of securities by a corporate entity that,
immediately after such restructuring, shall own, directly or indirectly, 100% of
the assets and business of the Company (the "IPO Entity"), that such
restructuring will result in the direct or indirect conversion of the Membership
Units of the Company into capital stock of the IPO Entity and that the form of
such restructuring shall be at the sole discretion of the Board.
(b) Subject to the foregoing, the Board may, without the consent of
the Members, in order to facilitate a public offering of securities of the IPO
Entity, cause the Company to incorporate its business or any portion thereof, or
require the holders of Membership Units to transfer such Membership Units or
shares to a newly-formed corporation as successor to the Company in exchange for
common stock of said corporation, including without limitation in a transaction
resulting in a dissolution of the Company pursuant to Article X of this
Agreement, and, in connection therewith, each Member hereby expressly agrees to
any such dissolution of the Company and the transfer of its Membership Units in
accordance with the terms of the exchange as provided by the Board.
(c) The Members hereby acknowledge and agree that it is the
intention of the Members that each member shall receive common stock in the IPO
Entity (on an "as converted" basis in the case of the Class B Membership Units)
of equivalent economic value to the Membership Units exchanged therefor
immediately prior to any restructuring under this Section 7.3, and that such
exchange shall be contingent upon consummation of a public offering of equity
securities by the IPO Entity.
7.4. Members To Have No Managerial Authority. Except as expressly set
forth in this Agreement, as set forth in the terms of applicable employment
agreements between the Company and any Member or as otherwise delegated to a
Member by the Board, or as required by applicable law, the Members will have no
power to participate in the management of the Company except as expressly
authorized by this Agreement or the Articles and except as expressly required by
the Act. Unless expressly and duly authorized in writing to do so by the Board,
no Member will have any power or authority to bind or act on behalf of the
Company in any way, to pledge its credit, or to render it liable for any
purpose.
7.5. Meetings; Approvals. Meetings of the Board shall be held in
accordance with Section 7.1(c) and meetings of the Members shall be held at such
times and on such dates as the Board shall determine. Notice of each such
meeting shall be provided by the Board to the Members at least ten (10) business
days prior to the date of such meeting. In any instance in which the approval of
the Members is required under this Agreement, such approval may be obtained in
any manner permitted by the Act. For purposes of obtaining any consent of the
Members or any class of Members (or a specified percentage in interest thereof)
as to any matter proposed by the Board, the Board may, in the Notice seeking
such consent, require a response within a specified period (which shall not be
less than fifteen (15) days). In addition to meetings called by the Board as set
forth above in this Section 7.5, the Board may, with or without formal Notice,
hold informal informational meetings of the Board and one or more Members in any
manner consistent with the Act at such times and on such dates as the Board may
in its sole discretion determine.
7.6. Liability and Indemnification of the Board.
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(a) Limitation on Liability. Subject to Section 7.6(a) and 7.6(b)
and relevant provisions of the Act, the members of the Board, the officers of
the Company and their respective Affiliates (each, an "Indemnitee") will not be
liable to the Company or to any other Member for any act or omission based upon
errors of judgment or other fault in connection with the business or affairs of
the Company (including, without limitation, any act or omission in connection
with the termination of the Company or the winding up of its affairs or any
distribution of its assets in connection therewith), if the Indemnitee acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
(b) Indemnification. Subject to relevant provisions of the Act, the
Company shall indemnify each Indemnitee who is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the rights of the
Company, by reason of the fact that the person is or was a manager, member,
employee, agent or organizer of the Company, or is or was serving at the request
of the Company as a manager, member, employee or agent of another limited
liability company, corporation, partnership joint venture, trust or other
enterprise against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with any action, suit or proceeding; provided that the Indemnitee
acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The rights of an Indemnitee under this subsection will not preclude
any other right to which such Indemnitee may be lawfully entitled; provided that
an Indemnitee may not satisfy any right of indemnity or reimbursement granted
under this subsection except out of the assets of the Company, and no Member
will be personally liable as to any such claim for indemnity or reimbursement.
(c) Advance of Legal Fees. Subject to relevant provisions of the
Act, the Company shall advance funds for legal expenses and other costs incurred
by an Indemnitee or by a Person acting at his request as a result of a legal
action if the following conditions are satisfied: (i) the legal action relates
to the performance of duties or services by such Indemnitee for the Company; and
(ii) the Indemnitee that is requesting such advance undertakes to repay the
advanced funds to the Company in cases in which that Indemnitee would not be
entitled to indemnification under this Section 7.6.
(d) Reliance on Agents. The Board may execute any power granted, or
perform any duty imposed by, this Agreement either directly or through agents,
including any of its Affiliates. The Board may consult with counsel,
accountants, appraisers, management consultants, investment bankers, and other
consultants. An opinion by any such Person on a matter that the Board believes
to be within such Person's professional or expert competence will be full and
complete protection for any action taken or omitted by the Board in good faith
based on the opinion. The Board will not be responsible for the misconduct,
negligence, acts, or omissions of any such Person or of any agent or employee of
the Company, the Board, or any of their Affiliates, except that it must use due
care in selecting such Persons.
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ARTICLE VIII.
BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS
8.1. Keeping of Books. The Company and its Subsidiaries will keep proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Company and its
Subsidiaries in accordance with GAAP.
8.2. Books and Records. Books and records of the Company and its
Subsidiaries will be maintained at the principal office of the Company. The
Company and its Subsidiaries will maintain the following books and records:
(a) A current list of the full name and last known business or
residence address of each Member, together with the Capital Contribution, Class
A Membership Units and Class B Membership Units, as the case may be, of each
Member;
(b) A copy of the Articles and all amendments thereto, together
with executed copies of any power of attorney pursuant to which the Articles or
any amendments have been executed; and
(c) Copies of this Agreement and all amendments hereto, together
with executed copies of any powers of attorney pursuant to which this Agreement
or any amendments hereto have been executed.
8.3. Inspection of Records. Each Member has the right, on reasonable
request, but subject to such Member's agreement to maintain the confidentiality
thereof, to:
(a) Inspect and copy (at such Member's expense) during normal
business hours any of the Company records required to be maintained by Section
8.1; and
(b) Obtain from the Company, promptly after they are available, a
copy of the Company's federal, state, and local income tax or information
returns for each year.
8.4. Tax Returns and Elections. The Company's tax or fiscal year will end
on December 31 of each year unless otherwise determined by the Board. The
Company's accountants will be instructed to prepare and file all required income
tax returns for the Company. The Board will make any tax election necessary for
completion of the Company's tax return; provided however (i) items of income,
gain, loss, or deduction with respect to "Section 704(c) property" and with
respect to property that has been revalued shall be determined in accordance
with the traditional method described in Regulations Section 1.704-3(b)(1) and
the Company shall not elect to make curative or remedial allocations with
respect to such property; and (ii) at the request of a transferor of a
Membership Unit, the Company shall make an election under Section 754 of the
Code with respect to such transfer.
8.5. Tax Matters Member. Thomas J. Barrack, Jr. will be the "tax matters
partner" as defined in Section 6231 of the Code, and will have all the authority
granted by the Code to the tax matters partner.
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8.6. Withholding and Tax Advances.
(a) Authority To Withhold. To the extent the Company is required by
law to withhold or to make tax payments on behalf of or with respect to any
Member (e.g., (i) backup withholding, (ii) withholding with respect to Members
that are neither citizens nor residents of the United States, or (iii)
withholding with respect to Members that are not residents of any state that the
Company is required to withhold from (collectively, "Tax Advances")), the
Company may withhold such amounts and make such tax payments as may be required.
(b) Repayment of Tax Advances. All Tax Advances made on behalf of a
Member will, at the option of the Company, either be (i) promptly paid to the
Company by the Member on whose behalf such Tax Advances were made, or (ii)
repaid by reducing the amount of the current or next succeeding distribution or
distributions which would otherwise have been made to such Member (or, if such
distributions are not sufficient for that purpose, by so reducing the proceeds
of liquidation otherwise payable to such Member). Whenever the Company selects
option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by
a Member, for all other purposes of this Agreement such Member will be treated
as having received all distributions (whether before or upon liquidation)
unreduced by the amount of such Tax Advance.
(c) Indemnification. Each Member hereby agrees to indemnify and
hold harmless the Company from and against any liability with respect to Tax
Advances made on behalf of or with respect to such Member.
(d) Certification. Each Member will promptly give the Company any
certification or affidavit that the Company may request in connection with this
Section 8.6.
8.7. Bank and Brokerage Accounts. The Board will maintain the funds of
the Company in one or more separate accounts in the name of the Company with
such financial institutions as the Board may determine and the Board will not
permit the funds of the Company to be commingled in any fashion with the funds
of any other Person.
ARTICLE IX.
TRANSFERS OF MEMBERSHIP UNITS; WITHDRAWALS; CERTAIN RIGHTS
9.1. Restrictions on Transfers of Membership Units.
(a) No Member shall Transfer any Membership Units now or hereafter
held, other than in accordance with the terms of this Agreement, the Holders
Agreement and the applicable Transfer Restriction Agreement. Any Transfer or
purported Transfer made in violation of this Agreement, the Holders Agreement or
the applicable Transfer Restriction Agreement shall be null and void and of no
effect.
(b) Notwithstanding anything to the contrary expressed or implied
in this Agreement, the sale, assignment, transfer, pledge or other disposition
of any interest in the Company is ineffective unless approved in advance by the
Commission. If at any time the Commission notifies the Company that a Member
which owns any interest in the Company is
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unsuitable to hold that interest, the Company shall, within 10 days from the
date that it receives the notice from the Commission, return to the unsuitable
Member the amount of his capital account as reflected on the books of the
Company. Beginning on the date when the Commission serves notice of a
determination of unsuitability, pursuant to the preceding sentence, upon the
Company, it is unlawful for the unsuitable Member: (i) to receive any share of
the distribution of profits or cash or any other property of, or payments upon
dissolution of, the Company, other than a return of capital as required above;
(ii) to exercise directly or through a trustee or nominee, any voting right
conferred by such interest; (iii) to participate in the management of the
business and affairs of the Company; or (iv) to receive any remuneration in any
form from the Company, for services rendered or otherwise.
(c) Any Member that is found unsuitable by the Commission shall
return all evidence of any ownership in the Company to the Company, at which
time the Company shall within 10 days, after the Company receives notice from
the Commission, return to the Member in cash, the amount of his capital account
as reflected on the books of the Company, and the unsuitable Member shall no
longer have any direct or indirect interest in the Company.
9.2. Allocations between Transferor and Transferee. In the case of any
Transfer, the Transferee will succeed to the Capital Account of the Transferor
with respect to the Transferred Membership Units. The Net Profit and Net Loss
allocable in respect of the Transferred Membership Units will be prorated
between the Transferor and the Transferee on the basis of the number of days in
the fiscal year that each was the holder of those Membership Units without
regard to the performance of the Company's assets during the period before and
after the effective date of the Transfer, unless the Transferor and the
Transferee agree to an allocation based on the performance of the Company's
assets as of the effective date of the Transfer (or any other method permissible
under the Code) and agree to reimburse the Company for the cost of making and
reporting any such allocation.
ARTICLE X.
DISSOLUTION
10.1. Dissolution. The Company will be dissolved and its affairs will be
wound up upon the earliest to occur of the following:
(a) On the date on which a majority of the Class A Members shall
have agreed in writing to terminate this Agreement; or
(b) The effective date of a decree of judicial dissolution under
the Act.
10.2. Distributions Upon Liquidation. Upon the occurrence of any event
specified in Section 10.1, the Members will take full account of the Company's
liabilities and assets, and the Company's assets will be liquidated as promptly
as is consistent with obtaining the fair value thereof; provided, that upon the
occurrence of any event specified in Section 10.1 in connection with the
conversion to corporate form provided for in Section 7.3 hereof, the Company's
assets will be distributed in kind in the manner set forth in the following
sentence. Subject to the
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relevant provisions of the Act, the proceeds from the liquidation (or
distribution in kind) of the Company's assets will be applied and distributed in
the following order:
(a) First, to the payment and discharge of all of the Company's
debts and liabilities (including debts and liabilities to the Members, to the
extent permitted by law), and the establishment of any necessary reserves; and
(b) Second, to the Members in accordance with their positive
Capital Account balances, computed, in the case of any unrecognized gain or loss
inherent in the assets of the Company, after treating such unrecognized gain or
loss as Net Profit or Net Loss and allocating such amounts in accordance with
the provisions of Article IV hereof.
10.3. Return of Contribution Nonrecourse to Other Members. Except as
provided by law, upon dissolution, each Member will look solely to the assets of
the Company for the return of the Member's Capital Contribution. If the Company
property remaining after the payment or discharge of the debts and liabilities
of the Company is insufficient to return the contribution of any Members, such
Member will have no recourse against any other Member.
ARTICLE XI.
REPRESENTATIONS AND WARRANTIES
11.1. Representations and Warranties of the Members. Each Member
represents and warrants to the Company and the other Members that such Member:
(a) if the Member is a corporation, partnership, limited liability
company, trust, employee benefit plan, individual retirement account, Keogh plan
or other entity, such Person is authorized and qualified to become a Member in
the Company; and the Member and the undersigned signatory hereto further
represent and warrant that such signatory has been duly authorized by the Member
to execute this Agreement;
(b) has sufficient financial strength to hold its Membership Units
in the Company as an investment and bear the economic risks of that investment
(including possible complete loss of such investment) for an indefinite period
of time;
(c) at the time he or she became a Member had a pre-existing
personal or business relationship with the Company or one or more of its
Members, or by reason of his, her or its business or financial experience, or by
reason of the business or financial experience of his, her or its financial
advisor who is unaffiliated with and who is not compensated, directly or
indirectly, by the Company or any Affiliate of the Company, is capable of
evaluating the risks and merits of an investment in the Company and of
protecting his, her or its own interests in connection with this investment;
(d) has not seen, received, been presented with, or been solicited
by any leaflet, public promotional meeting, article or any other form of
advertising or general solicitation as to the Company's sale to such Member of
his, her or its Membership Units;
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(e) has acquired his, her or its Membership Units in the Company
for his, her or its own account, for investment, and not with a view to or for
the resale, distribution, subdivision or fractionalization thereof; and no other
Person will have any direct or indirect beneficial interest in or right to such
Membership Units;
(f) has no contract, undertaking, understanding, agreement, or
arrangement, formal or informal, with any Person to sell, transfer, or pledge
all or any portion of his, her or its Membership Units in the Company; and has
no current plans to enter into any such contract, undertaking, understanding,
agreement, or arrangement; and
(g) has been afforded full and complete access to the books,
financial statements, records, contracts, documents and other information
concerning the Company and its proposed activities, and has been afforded an
opportunity to ask such questions of the Company's agents, accountants and other
representatives concerning the Company's proposed business, operations,
financial condition, assets, liabilities and other relevant matters as he has
deemed necessary or desirable, and has been given all such information as has
been requested, in order to evaluate the merits and risks of the investment
contemplated herein.
ARTICLE XII.
COMPLIANCE WITH GAMING LAWS.
12.1. Legends. The Board shall have the power and authority to provide
that the all certificates issued to represent or evidence a Member's interest
shall bear legends, including, without limitation, any legends as the Board deem
appropriate to assure that the Company complies with applicable gaming laws and
does not become liable for violations of federal or state securities laws or
other applicable law.
12.2. Qualifications.
(a) Members. If the Company becomes and for as long as it remains
subject to regulation under any gaming laws, ownership of the Company shall be
held subject to the applicable provisions of any applicable gaming laws. If a
Member is found to be unsuitable by any gaming authorities, then the Member
shall dispose of its Member's interest in the Company pursuant to the applicable
provisions of any gaming laws and orders or rulings of any gaming authorities.
(b) Managers and Officers. The election of an individual to serve
as a manager or officer of the Company is subject to any qualifications or
approvals required under any gaming laws . For purposes of this Agreement, an
individual shall be qualified to serve as a manager or officer for so long as
that individual is determined to be, and continues to be, qualified and suitable
by all gaming authorities having jurisdiction over the Company, manager or
officer and under all applicable gaming laws. In the event that individual does
not continue to be qualified and suitable, that individual shall be disqualified
and shall cease to be a manager or officer of the Company.
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ARTICLE XIII.
MISCELLANEOUS PROVISIONS
13.1. Appointment of an Attorney-in-Fact.
(a) Each Member, including each substituted Member, by the
execution of this Agreement, irrevocably constitutes and consents to the
appointment of a Person to be designated by the Board as its true and lawful
attorney-in-fact ("Attorney-in-Fact") with full power and authority in its name,
place and stead to execute, acknowledge, deliver, swear to, file, and record at
the appropriate public offices such documents as may be necessary or appropriate
to carry out the provisions of this Agreement, including but not limited to: (i)
all certificates and other instruments, and any amendment thereof, that the
Board deems appropriate in order to form, qualify, or continue the Company as a
limited liability company in the jurisdiction in which the Company may conduct
business or in which such formation, qualification or continuation is, in the
discretion of the Board, necessary to protect the limited liability of the
Member; (ii) all amendments to this Agreement and the Articles adopted in
accordance with the terms hereof and all instruments which the Board deems
appropriate to reflect a change or modification of the Company in accordance
with the terms of this Agreement; (iii) all conveyances and other instruments
which the Board deems appropriate to reflect the dissolution and termination of
the Company; and (iv) as to each Member, any and all documents necessary to
convey such Member's Membership Units in the Company to any Transferee thereof
and thereby to withdraw such Member from the Company and admit any substitute
Member to the Company.
(b) The appointment by all Members of the Attorney-in-Fact will be
deemed to create a power coupled with an interest, in recognition of the fact
that the Members under this Agreement will be relying upon the power of the
Attorney-in-Fact to act as contemplated by this Agreement in any filing and
other action by it on behalf of the Company, and will survive any event of
bankruptcy, death, adjudication of incompetence or dissolution of any Person
giving such power, and the Transfer of all or any part of the Membership Units
of such Person; provided, however, that in the event of a Transfer, the
foregoing power of attorney will survive such Transfer only until such time as
the Transferee will have been admitted to the Company as a substituted Member
and all required documents and instruments will have been duly executed, filed
and recorded to effect such substitution.
13.2. Counterparts. This Agreement may be executed in several counterparts
(including by facsimile), and as executed will constitute one agreement, binding
on all of the parties hereto.
13.3. Successors and Assigns. Except as otherwise provided herein, the
terms and provisions of this Agreement will be binding upon and will inure to
the benefit of the successors and permitted assigns of the parties hereto.
13.4. Notices. Any notice hereunder shall be in writing and shall be
deemed effectively given and received upon (i) personal delivery if on a
Business Day and one (1) Business Day thereafter if not on a Business Day, when
sent by facsimile, electronic mail or similar electronic
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means, (ii) three (3) Business Days after mailing by registered or certified
mail, return receipt requested, or (iii) on the next Business Day after sending
by overnight courier, in each such case when delivered as set forth above to the
address, telecopy number or electronic mail address maintained by the Company
for such Person; provided, that any notice sent by facsimile, electronic mail or
similar electronic means shall be promptly followed by a copy of such notice
sent by mail or overnight courier in the manner described herein (a "Follow-Up
Notice"); but provided, further, that any failure to send such Follow-Up Notice
shall not render ineffective any notice given hereunder if the Person to which
such notice is provided actually receives such notice or acknowledges receipt of
such notice, whether orally, in writing, by return receipt, by taking action
based on such notice, or otherwise.
13.5. No Third Party Beneficiaries. Except as expressly provided herein,
this Agreement is entered into for the sole and exclusive benefit of the parties
hereto and will not be interpreted in such a manner as to give rise to or create
any rights or benefits of or for any Person not a party hereto.
13.6. Amendments. This Agreement may be amended, and the observance of any
term of this Agreement may be waived, with (and only with) the written consent
of the holders of a majority of the Class A Units.
13.7. Severability. If any covenant, condition, term or provision of this
Agreement or if the application of such provision to any Person or circumstance
is judicially determined to be invalid or unenforceable, then the remainder of
this Agreement, or the application of such covenants, condition, term or
provision to Persons or circumstances other than those to which it is held
invalid or unenforceable, will not be affected thereby, and each covenant, term,
condition and provision of this Agreement will be valid and enforceable to the
fullest extent permitted by law.
13.8. Complete Agreement. This Agreement, the Articles and any other
document signed by the parties at or after the signing of this Agreement
constitute the complete agreement between the parties concerning the subject
matter in such documents and supersede all prior understandings among such
parties.
13.9. Governing Law. This Agreement will be governed by and interpreted
under the laws of the State of Nevada applicable to contracts entered into and
performed entirely within the State of Nevada.
13.10. Attorneys' Fees. In the event that any dispute between the Company
and the Members or among the Members should result in litigation or arbitration,
the prevailing party in such dispute will be entitled to recover from the other
party all reasonable fees, costs and expenses of enforcing any right of the
prevailing party, including, without limitation, reasonable attorneys' fees and
expenses.
13.11. Cross-References. All cross-references in this Agreement, unless
specifically directed to another agreement or document or statute, refer to
provisions within this Agreement.
13.12. Covenant to Sign Documents. Each Member will execute, with
acknowledgment or affidavit if required, all documents and writings reasonably
necessary or appropriate in the
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creation of the Company and the achievement of its purpose, including any
certification of non-foreign status for purposes of Section 1446 of the Code.
13.13. Cumulative Remedies. The remedies of the Members under this
Agreement are cumulative and will not exclude any other remedies to which any
Member may be lawfully entitled.
13.14. No Waiver. A Member's failure to insist on the strict performance of
any covenant or duty required by this Agreement, or to pursue any remedy under
this Agreement, will not constitute a waiver of the breach or the remedy.
13.15. No Partnership Intended for Non-Tax Purposes. The Members have
formed the Company under the Act, and expressly do not intend hereby to form a
general or limited partnership under any applicable law. The Members do not
intend to be partners one to another, or partners as to any third party. To the
extent any Member, by word or action, represents to another Person that any
other Member is a partner or that the Company is a partnership, the Member
making such wrongful representation will be liable to any other Member who
incurs personal liability by reason of such wrongful representation. The
foregoing shall not apply to the determination of the Company's status as a
partnership for purposes of the Code.
13.16. Accounting Principles. Where the character or amount of any asset or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, this shall be done in accordance
with U.S. generally accepted accounting principles at the time in effect, to the
extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
-23-
IN WITNESS WHEREOF, this Limited Liability Company Agreement of Colony
Resorts LVH Acquisitions, LLC, is executed as of the date set forth above.
COLONY RESORTS LVH ACQUISITIONS,
LLC, a Nevada limited liability company
By:
-------------------------------------
Name:
Title:
COLONY RESORTS LVH VOTECO, LLC,
a Delaware limited liability company
By:
-------------------------------------
Name: Thomas J. Barrack, Jr.
Title: Sole Member
COLONY RESORTS LVH CO-INVESTMENT
VOTECO, LLC, a Delaware limited
liability company
By:
-------------------------------------
Name: Nicholas L. Ribis
Title: Member
COLONY RESORTS LVH CO-INVESTMENT,
PARTNERS, L.P. a Delaware limited
partnership
By: Colony Capital Resorts LVH
Co-Investment, L.P., its
General Partner
By: Colony Resorts LVH Co-Investment
Genpar, LLC, its General Partner
By:
-------------------------------------
Name: Thomas J. Barrack, Jr.
Title: Sole Member
[Signature page to Acquisitions Operating Agreement]
COLONY RESORTS LVH HOLDINGS, LLC,
a Delaware limited liability company
By: Colony Investors VI, L.P.,
its sole member
By: Colony Capital VI, L.P.,
its general partner
By: ColonyGP VI, LLC,
its general partner
By:
-------------------------------------
Name: Thomas J. Barrack, Jr.
Title: Sole Member
Signature page to Acquisitions Operating Agreement]
SCHEDULE A
- --------------------------------------------------------------------------------
CLASS A MEMBERSHIP UNITS
- --------------------------------------------------------------------------------
Class A Member Class A Capital Initial
and Address Membership Units Contribution Capital Account
- --------------------------------------------------------------------------------
Voteco $ $
Voteco Co-Investment $ $
Total $ $
CLASS B MEMBERSHIP UNITS
- --------------------------------------------------------------------------------
Class B Member Class B Capital Initial
and Address Membership Units Contribution Capital Account
- --------------------------------------------------------------------------------
Colony $ $
Co-Investment $ $
Total $ $
1