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EXHIBIT 4.4
WARRANT AGREEMENT
DATED AS OF DECEMBER 30, 1997
BETWEEN
THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED PARTNERSHIP,
AS ISSUER
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
AS WARRANT AGENT
AND JOINED BY
RAS WARRANT CO.
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WARRANT AGREEMENT (the "Agreement"), dated as of December 30, 1997,
between The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership, a Nevada limited
partnership (together with any successors and assigns, the "Partnership"), and
United States Trust Company of New York, a New York banking corporation, as
Warrant Agent (the "Warrant Agent"). RAS Warrant Co., a Nevada corporation
("Warrant Co."), hereby joins in this Agreement with respect to obligations to
the parties to this Agreement and the holders of the Warrants (hereinafter
defined).
WHEREAS, the Partnership proposes, among other things, to issue and
sell pursuant to a Purchase Agreement, dated as of December 22, 1997 (the
"Purchase Agreement"), among the Partnership, The Resort at ▇▇▇▇▇▇▇▇▇, Inc., a
Nevada corporation, Warrant Co., and NatWest Capital Markets Limited
("NatWest"), as Initial Purchaser, 100,000 Units (the "Units") representing
$100,000,000 principal amount of its 13% Senior Subordinated PIK Notes due 2007
(the "Senior PIK Notes") and, at Initial Purchaser's election, either (i)
warrants (the "Partnership Warrants") to the purchase limited partnership
interests (the "LP Partnership Interests") of the Partnership, or (ii) warrants
(the "Corporate Warrants") to purchase shares of common stock, no par value (the
"Common Stock"), of Warrant Co. (whose sole assets will be Warrant Co. LP
Warrants (as defined herein));
WHEREAS, each Unit will represent $1,000 principal amount of Senior PIK
Notes and, in the case of the Partnership Warrants, one warrant to purchase one
LP Partnership Interest representing 0.00008% of the total partnership interests
of the Partnership outstanding as of the date hereof (each an "LP Warrant
Partnership Interest", including all other partnership interests or other
securities issued or issuable upon exercise of the Warrants (hereinafter
defined)) or, in the case of the Corporate Warrants, one warrant to purchase one
share of Common Stock;
WHEREAS, the Partnership proposes to issue to Warrant Co. warrants (the
"Warrant Co. LP Warrants") for the purchase of LP Partnership Interests with the
same terms as the Partnership Warrants and the number of Warrant Co. LP Warrants
issued shall be equal to the number of all Corporate Warrants issued;
WHEREAS, the Partnership wishes the Warrant Agent to act on behalf of
the Partnership and the Warrant Agent is willing to act in connection with the
issuance, division, transfer, exchange and exercise of Partnership Warrants and
Warrant Co. LP Warrants (collectively, the "Warrants") as provided herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Partnership and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent. The Partnership hereby
appoints the Warrant Agent to act as agent for the Partnership in accordance
with the instructions hereinafter set forth in this Agreement, and the Warrant
Agent hereby accepts such appointment.
SECTION 2. Warrant Certificates. The Warrants will be initially issued
in registered form as physical Warrant certificates (the "Physical Warrants").
Any certificates (the "Warrant Certificates") evidencing the Physical Warrants
to be delivered pursuant to this Agreement shall be substantially in the form
set forth in Exhibit A attached hereto. Such Warrant Certificates shall
represent such of the outstanding Warrants as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Warrants from time to time endorsed thereon and that the aggregate amount of
outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Warrant Certificate to reflect
the amount of any increase or decrease in the amount of outstanding Warrants
represented thereby shall be made by the Warrant Agent in accordance with
instructions given by the holder thereof.
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SECTION 3. Execution of Warrant Certificates.
(a) Warrant Certificates shall be signed on behalf of the Partnership
by the general partner of the Partnership. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Partnership may adopt and use the
facsimile signature of any person who shall have been Chairman of the Board,
President, Vice President, Secretary or Assistant Secretary of its general
partner, notwithstanding the fact that at the time the Warrant Certificates
shall be countersigned and delivered or disposed of he shall have ceased to hold
such office.
(b) In case any officer of the general partner of the Partnership who
shall have signed any of the Warrant Certificates shall cease to be such officer
before the Warrant Certificates so signed shall have been countersigned by the
Warrant Agent, or disposed of by the Partnership, such Warrant Certificates
nevertheless may be countersigned and delivered or disposed of as though such
person had not ceased to be such officer of the general partner of the
Partnership; and any Warrant Certificate may be signed on behalf of the general
partner of the Partnership by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the general
partner of the Partnership to sign such Warrant Certificate, although at the
date of the execution of this Warrant Agreement any such person was not such
officer.
(c) Warrant Certificates shall be dated the date of countersignature by
the Warrant Agent.
SECTION 4. Registration and Countersignature.
(a) The Warrants shall be numbered and shall be registered on the books
of the Partnership maintained at the principal office of the Warrant Agent in
the Borough of Manhattan, city of New York (the "Warrant Register") as they are
issued. Warrant Agent agrees to make the Warrant Register available during
normal business hours for inspection by agents and other representatives of the
Nevada State Gaming Control Board upon request.
(b) Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
President, Chief Executive Officer, a Vice President, the Treasurer, Chief
Financial Officer or an Assistant Secretary of the general partner of the
Partnership, initially countersign and deliver Warrants entitling the holders
thereof to purchase not more than an aggregate amount of 100,000 LP Partnership
Interests and shall thereafter countersign and deliver Warrants as otherwise
provided in this Agreement.
(c) The Partnership and the Warrant Agent may deem and treat the
registered holders (the "Holders") of the Warrant Certificates as the absolute
owners thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone) for all purposes, and neither the Partnership nor the
Warrant Agent shall be affected by any notice to the contrary.
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SECTION 5. Transfer and Exchange of Warrants.
(a) The Warrant Agent shall from time to time, subject to the
limitations of Section 6, register the transfer of any outstanding Warrant upon
the records to be maintained by it for that purpose, upon surrender thereof duly
endorsed or accompanied (if so required by it) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly executed
by the registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Subject to the terms of
this Agreement, each Warrant Certificate may be exchanged for another
certificate or certificates entitling the Holder or Holders thereof to purchase
a like aggregate amount of LP Partnership Interests as the certificate or
certificates surrendered then entitle each Holder to purchase. Any Holder
desiring to exchange a Warrant Certificate or Certificates shall make such
request in writing delivered to the Warrant Agent, and shall surrender, duly
endorsed or accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warranty
Agent, the Warrant Certificate or Certificates to be so exchanged.
(b) Upon registration of transfer, the Warrant Agent shall countersign
and deliver by certified mail a new Warrant Certificate or Certificates to the
persons entitled thereto. The Warrant Certificates may be exchanged at the
option of the Holder thereof, when surrendered at the office or agency of the
Partnership maintained for such purpose, which initially will be the corporate
trust office of the Warrant Agent in New York, New York, for another Warrant
Certificate, or other Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the right to purchase a like amount of
LP Partnership Interests.
(c) No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Partnership may require payment of a
sum sufficient to cover any stamp or other tax or other governmental charge that
is imposed in connection with any such exchange or registration of transfer.
(d) Notwithstanding any other provision of this Agreement, on and after
such time as the Partnership shall have obtained a nonrestricted gaming license
(the "License") issued by the Nevada Gaming Commission (the "Nevada
Commission"), no Holder may sell, assign, transfer, pledge or make any other
disposition of a Warrant without the prior approval of the Nevada Commission
unless the Partnership is then registered by the Nevada Commission as a
"publicly traded corporation" (a "Registered Company"), as that term is defined
in the Nevada Gaming Control Act and the regulations promulgated thereunder
(collectively, the "Nevada Act"), and holds certain exemptions from the Nevada
Commission in connection with such registration (the "Exemptions"). The
Partnership shall promptly notify the Warrant Agent and each Holder in writing
in each instance upon becoming the holder of the License, a Registered Company
and the holder of the Exemptions.
(e) Upon any Holder's surrender of a Warrant Certificate for transfer
of such Partnership Warrants to Warrant Co., subject to Section 6, such transfer
shall be registered in accordance with this Section 5 and the Holder's
Partnership Warrant shall be cancelled and a Warrant Co. LP Warrant shall be
issued to Warrant Co. in respect thereof; provided that such Holder and Warrant
Co. certify to the Partnership and the Warrant Agent that such transfer is
solely for the purpose of exchanging a Corporate Warrant corresponding thereto
as contemplated by this Agreement.
(f) Upon Warrant Co.'s surrender of a Warrant Certificate for transfer
to a holder of a Corporate Warrant, subject to Section 6, such transfer shall be
registered in accordance with this Section 5, such Warrant Co. LP Warrant shall
be cancelled and a corresponding Partnership Warrant shall be
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issued to such Corporate Warrant holder in respect thereof; provided that such
Corporate Warrant holder and Warrant Co. certify to the Partnership and Warrant
Agent that such transfer is solely for the purpose of exchanging a Corporate
Warrant corresponding thereto as contemplated by this Agreement.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Warrants. When Physical Warrants
are presented to the Warrant Agent with a request:
(i) to register the transfer of the Physical Warrants; or
(ii) to exchange such Physical Warrants for an equal number of
Physical Warrants of other authorized denominations, the Warrant Agent
shall, subject to Section 5, register the transfer or make the exchange
as requested if the requirements under this Agreement as set forth in
this Section 6 for such transactions are met; provided, however, that
the Physical Warrants presented or surrendered for registration of
transfer or exchange;
(I) shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the
Warrant Agent, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(II) in the case of Physical Warrants the offer and
sale of which have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), such Physical
Warrants shall be accompanied, in the sole discretion of the
Partnership, by the following additional information and
documents, as applicable:
(A) if such Physical Warrants are being
delivered to the Warrant Agent by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit B
hereto); or
(B) if such Physical Warrants are being
transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act (a
"Qualified Institutional Buyer")) in accordance with
Rule 144A under the Securities Act, a certificate to
that effect (in substantially the form of Exhibit B
hereto); or
(C) if such Physical Warrants are being
transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (an "Institutional Accredited
Investor")) delivery of a certification to that
effect (in substantially the form of Exhibit B
hereto) and a Transferee Certificate for
Institutional Accredited Investors in substantially
the form of Exhibit C hereto; or
(D) if such Physical Warrants are being
transferred in reliance on Regulation S under the
Securities Act ("Regulation S"), delivery of a
certification to that effect (in substantially the
form of Exhibit B hereto) and a Transferee
Certificate for Regulation S Transfers in
substantially the form of Exhibit D
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hereto and an opinion of counsel reasonably
satisfactory to the Partnership to the effect that
such transfer is in compliance with the Securities
Act; or
(E) if such Physical Warrants are being
transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to that
effect (in substantially the form of Exhibit B
hereto) and an opinion of counsel reasonably
satisfactory to the Partnership to the effect that
such transfer is in compliance with the Securities
Act; or
(F) if such Physical Warrants are being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto) and an opinion of counsel
reasonably satisfactory to the Partnership to the
effect that such transfer is in compliance with the
Securities Act.
(b) Legends.
(i) For so long as transfer of a Warrant is not
permitted without registration under the Securities Act, each
Warrant Certificate evidencing such Warrant (and all Warrants
issued in exchange therefor or substitution thereof) shall
bear a legend substantially to the following effect:
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD
OR PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR A BENEFICIAL INTERST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS SECURITY
FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON, AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) (TAKING
INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN
EFFECT WITH RESPECT TO SUCH TRANSFER, ON THE DATE OF THE
TRANSFER OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED
PARTNERSHIP (THE "ISSUER") OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR
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THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRANSFER AGENT
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
WARRANT AGENT), AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE AMOUNT OF SECURITIES AT THE TIME OF TRANSFER OF LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE, BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER), (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR (G) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER) AND IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION
REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER
OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
THIS WARRANT AND THE LIMITED PARTNER INTERESTS OF THE
PARTNERSHIP INTO WHICH THIS WARRANT IS EXERCISABLE ARE SUBJECT
TO A REGISTRATION RIGHTS AND LIMITED PARTNERS' AGREEMENT DATED
AS OF DECEMBER 30, 1997, WHICH CONTAINS PROVISIONS REGARDING
THE RESTRICTIONS ON THE TRANSFER AND PROVISIONS REQUIRING THE
MANDATORY TRANSFER OF SUCH PARTNERSHIP INTERESTS AND OTHER
MATTERS. A COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION
AT THE PRINCIPAL OFFICE OF THE PARTNERSHIP.
(ii) On and after the date of issuance of a License
to the Partnership and until the Partnership has been
registered as a Registered Company and granted the Exemptions
by the Nevada Commission, each Warrant Certificate evidencing
such Warrant (and all Warrants issued in exchange therefor or
substitution thereof) shall bear a legend substantially to the
following effect:
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR OTHER DISPOSITION
OF ANY INTEREST IN THE LIMITED PARTNERSHIP IS VOID UNLESS
APPROVED IN ADVANCE BY THE NEVADA GAMING COMMISSION. IF AT ANY
TIME THE NEVADA GAMING COMMISSION
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FINDS THAT AN INDIVIDUAL OWNER OF ANY SUCH INTEREST IS
UNSUITABLE TO HOLD THAT INTEREST, THE NEVADA GAMING COMMISSION
SHALL IMMEDIATELY NOTIFY THE LIMITED PARTNERSHIP OF THAT FACT.
THE LIMITED PARTNERSHIP SHALL, WITHIN TEN DAYS FROM THE DATE
THAT IT RECEIVES THE NOTICE FROM THE NEVADA GAMING COMMISSION,
RETURN TO THE UNSUITABLE OWNER THE AMOUNT OF HIS CAPITAL
ACCOUNT AS REFLECTED ON THE BOOKS OF THE LIMITED PARTNERSHIP.
BEGINNING ON THE DATE WHEN THE NEVADA GAMING COMMISSION SERVES
NOTICE OF A DETERMINATION OF UNSUITABILITY, PURSUANT TO THE
PRECEDING SENTENCE, UPON THE LIMITED PARTNERSHIP, IT IS
UNLAWFUL FOR THE UNSUITABLE OWNER: (A) TO RECEIVE ANY SHARE OF
THE PROFITS OR DISTRIBUTIONS OF ANY CASH OR OTHER PROPERTY
OTHER THAN A RETURN OF CAPITAL AS REQUIRED ABOVE; (B) TO
EXERCISE, DIRECTLY OR THROUGH ANY WARRANT AGENT OR NOMINEE,
ANY VOTING RIGHT CONFERRED BY SUCH INTEREST; OR (C) TO RECEIVE
ANY REMUNERATION IN ANY FORM FROM THE LIMITED PARTNERSHIP, FOR
SERVICES RENDERED OR OTHERWISE.
(iii) On and after the date of issuance of a License
to the Partnership and until the Partnership has been
registered as a Registered Company and granted the Exemptions
by the Nevada Commission, each certificate representing LP
Partnership Interests (and all LP Partnership Interests issued
in exchange therefor or substitution thereof) shall bear a
legend substantially to the following effect:
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR OTHER DISPOSITION
OF ANY INTEREST IN THE LIMITED PARTNERSHIP IS VOID UNLESS
APPROVED IN ADVANCE BY THE NEVADA GAMING COMMISSION. IF AT ANY
TIME THE NEVADA GAMING COMMISSION FINDS THAT AN INDIVIDUAL
OWNER OF ANY SUCH INTEREST IS UNSUITABLE TO HOLD THAT
INTEREST, THE NEVADA GAMING COMMISSION SHALL IMMEDIATELY
NOTIFY THE LIMITED PARTNERSHIP OF THAT FACT. THE LIMITED
PARTNERSHIP SHALL, WITHIN TEN DAYS FROM THE DATE THAT IT
RECEIVES THE NOTICE FROM THE NEVADA GAMING COMMISSION, RETURN
TO THE UNSUITABLE OWNER THE AMOUNT OF HIS CAPITAL ACCOUNT AS
REFLECTED FROM THE NEVADA GAMING COMMISSION, RETURN TO THE
UNSUITABLE OWNER THE AMOUNT OF HIS CAPITAL ACCOUNT AS
REFLECTED ON THE BOOKS OF THE LIMITED PARTNERSHIP. BEGINNING
ON THE DATE WHEN THE NEVADA GAMING COMMISSION SERVES NOTICE OF
A DETERMINATION OF UNSUITABILITY, PURSUANT TO THE PRECEDING
SENTENCE, UPON THE LIMITED PARTNERSHIP, IT IS UNLAWFUL FOR THE
UNSUITABLE OWNER: (A) TO RECEIVE ANY SHARE OF THE PROFITS OR
DISTRIBUTIONS OF ANY CASH OR OTHER PROPERTY OTHER THAN A
RETURN OF CAPITAL AS REQUIRED ABOVE; (B) TO EXERCISE, DIRECTLY
OR THROUGH ANY WARRANT AGENT OR NOMINEE, ANY VOTING RIGHT
CONFERRED BY SUCH INTEREST; OR (C) TO RECEIVE
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ANY REMUNERATION IN ANY FORM FROM THE LIMITED PARTNERSHIP, FOR
SERVICES RENDERED OR OTHERWISE.
ANY LIMITED PARTNER GRANTED DELAYED LICENSING THAT IS LATER
FOUND UNSUITABLE BY THE NEVADA GAMING COMMISSION SHALL RETURN
ALL EVIDENCE OF ANY OWNERSHIP IN THE LIMITED PARTNERSHIP TO
THE LIMITED PARTNERSHIP, AT WHICH TIME THE LIMITED PARTNERSHIP
SHALL REFUND TO THE UNSUITABLE LIMITED PARTNER NO MORE THAN
THE AMOUNT THAT HE PAID FOR HIS OWNERSHIP INTEREST, AND THE
UNSUITABLE LIMITED PARTNER SHALL NO LONGER HAVE ANY DIRECT OR
INDIRECT INTEREST IN THE LIMITED PARTNERSHIP.
(c) Obligations with Respect to Transfers and Exchanges of
Physical Warrants.
(i) To permit registrations of transfers and
exchanges, the Partnership shall execute, at the Warrant
Agent's request, and the Warrant Agent shall countersign
Physical Warrants.
(ii) All Physical Warrants issued upon any
registration, transfer or exchange of Physical Warrants shall
be the valid obligations of the Partnership, entitled to the
same benefits under this Agreement as the Physical Warrants
surrendered upon the registration of transfer or exchange.
(iv) Prior to due presentment for registration of
transfer of any Warrant, the Warrant Agent and the Partnership
may deem and treat the person in whose name any Warrant is
registered as the absolute owner of such Warrant, and neither
the Warrant Agent nor the Partnership shall be affected by
notice to the contrary.
SECTION 7. Separation of Warrants; Terms of Warrants; Exercise of
Warrants.
(a) The Senior PIK Notes and Warrants will be immediately separated
upon sale by the Initial Purchaser.
(b) Subject to the terms of this Agreement, each Holder shall have the
right, which may be exercised commencing on or after the date of issuance and
until 5:00 p.m., New York City time, on December 15, 2007 (the "Expiration
Date"), to receive from the Partnership upon the exercise of each Warrant the
number of LP Warrant Partnership Interests which the Holder may at the time be
entitled to receive on exercise of such Warrant and payment of the Exercise
Price (as defined) then in effect for such LP Warrant Partnership Interests.
Each Warrant not exercised prior to the Expiration Date shall become void and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease as of such time. No adjustments as to distributions will be made
upon exercise of the Warrants.
(c) The initial price at which one LP Warrant Partnership Interest
shall be purchasable upon exercise of a Warrant (the "Exercise Price") shall be
$.01, subject to adjustment as herein provided, provided, that in no event shall
such Exercise Price be less than $.01 per partnership interest. A Warrant may be
exercised upon surrender at the office or agency of the Partnership maintained
for such purpose, which initially will be the corporate trust office of the
Warrant Agent in New York, New York, of the certificate or certificates
evidencing the Warrant to be exercised with the form of election to purchase on
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the reverse thereof duly filled in and signed, which signature shall be
guaranteed by a participant in a recognized Signature Guarantee Medallion
Program, and upon payment to the Warrant Agent for the account of the
Partnership of the Exercise Price, as adjusted as herein provided, for the LP
Warrant Partnership Interests in respect to which such Warrant is then
exercised. Payment of the Exercise Price shall be made in cash or by certified
or official bank check to the order of the Partnership in immediately available
funds.
(d) Subject to the provisions of Section 6 and such other conditions
precedent to the exercise of the Warrants as may be set forth in this Agreement,
if any, upon such surrender of a Warrant and payment of the Exercise Price in
respect thereof, the Partnership shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Holder and in such name
or names as the Holder may designate a certificate or certificates for the LP
Warrant Partnership Interests issuable upon the exercise of such Warrant
together with cash as provided in Section 13; provided, however, that if any
consolidation, merger or sale of assets is proposed to be effected by the
Partnership as described in Subsection 12(j), or a tender offer or an exchange
offer for LP Partnership Interests shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Partnership shall,
as soon as practicable, but in any event not later than 2 days, other than a
Saturday or Sunday or a day on which banking institutions in the State of New
York are not open for business ("Business Day"), thereafter, issue and cause to
be delivered the LP Warrant Partnership Interests issuable upon the exercise of
such Warrant in the manner described in this sentence together with cash as
provided in Section 13. Such certificate or certificates shall be deemed to have
been issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such LP Warrant Partnership Interest as of the
date of the surrender of such Warrant and payment of the Exercise Price in
respect thereof.
EACH WARRANT SHALL BE EXERCISABLE ONLY IN FULL, AND NOT IN PART.
(e) All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates
shall then be disposed of by the Warrant Agent in a manner consistent with the
Warrant Agent's customary procedure for such disposal and in a manner reasonably
satisfactory to the Partnership. The Warrant Agent shall account promptly to the
Partnership with respect to Warrants exercised and concurrently pay to the
Partnership all monies received by the Warrant Agent for the purchase of the LP
Warrant Partnership Interests through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Partnership shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement as
the Warrant Agent may request.
(g) Notwithstanding any other provision of this Agreement, on and after
such time as the Partnership has obtained the License, no Warrant may be
exercised without the prior approval of and licensing of the Holder by the
Nevada Commission unless the Partnership is then registered by the Nevada
Commission as a Registered Company and holds the Exemptions.
SECTION 8. Payment of Taxes. The Partnership will pay all documentary
stamp taxes attributable to the initial issuance of LP Warrant Partnership
Interests upon the exercise of Warrants; provided, however, that the Partnership
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue of any Warrant Certificates or any
certificates for LP Warrant Partnership Interests in a name other than that of
the registered holder of a Warrant
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Certificate surrendered upon the exercise of a Warrant, and the Partnership
shall not be required to issue or deliver such Warrant Certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Partnership the amount of such tax or shall have established to the
satisfaction of the Partnership that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Partnership may at its discretion issue and the Warrant Agent may countersign,
in exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Partnership and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity also satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Partnership or the
Warrant Agent may prescribe.
SECTION 10. Reservation of LP Warrant Partnership Interests.
(a) The Partnership will at all times reserve and keep available, free
from preemptive or other similar rights of partners of the Partnership or
others, the right to issue additional LP Partnership Interests for the purpose
of enabling it to satisfy its obligation to issue LP Warrant Partnership
Interests upon exercise of Warrants up to the maximum number of LP Warrant
Partnership Interests which may then be deliverable upon the exercise of all
outstanding Warrants.
(b) The Partnership or, if appointed, the transfer agent for the LP
Partnership Interests (the "Transfer Agent") and every subsequent transfer agent
for any partnership interests of the Partnership issuable upon the exercise of
any of the rights of purchase aforesaid will be irrevocably authorized and
directed at all times to reserve such amount of LP Partnership Interests,
whether stated as units or otherwise, as shall be required for such purpose. The
Partnership will keep a copy of this Agreement on file with the Transfer Agent
and with every subsequent transfer agent for any partnership interests of the
Partnership issuable upon the exercise of the rights of purchase represented by
the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition
from time to time from such Transfer Agent any limited partner certificates or
other instruments required to honor outstanding Warrants upon exercise thereof
in accordance with the terms of this Agreement. The Partnership will supply such
Transfer Agent with duly executed certificates or other instruments for such
purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 13. The Partnership will furnish such Transfer
Agent a copy of all notices of adjustments and certificates related thereto
transmitted to each Holder pursuant to Section 14 hereof.
(c) The Partnership covenants that all LP Warrant Partnership Interests
which may be issued upon exercise of Warrants made in accordance with the terms
of this Agreement will, upon payment of the Exercise Price therefor and issue,
be validly authorized and issued, free of preemptive and other similar rights
and free from all taxes, liens, charges and security interests with respect to
the issuance thereof. The Partnership will not enter into any agreements
inconsistent with the rights of Holders hereunder. The Partnership will use its
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Partnership to perform its obligations under this Agreement. The Partnership
shall not take any action reasonably within its control, including the hiring of
a broker to solicit exercises, which would render unavailable an exemption from
registration under the Securities Act which might otherwise be available with
respect to the issuance of LP Warrant Partnership Interests upon exercise of any
Warrants.
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SECTION 11. Obtaining Stock Exchange Listings. The Partnership will
from time to time take all actions which may be necessary so that the LP Warrant
Partnership Interests, immediately upon their issuance upon the exercise of
Warrants, will be listed on the principal securities exchanges and markets
within the United States of America (including the NASDAQ National Market
System), if any, on which other LP Partnership Interests are then listed. In the
event that, at any time during the period in which the Warrants are exercisable,
the LP Partnership Interests are not listed on any principal securities or
exchanges or markets within the United States of America, the Partnership will
use its reasonable best efforts to permit the LP Warrant Partnership Interests
to be designated PORTAL securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the Private Offering, Resales and Trading through Automated Linkages
market.
SECTION 12. Adjustment of Number of LP Warrant Partnership Interests
Issuable. The number of LP Warrant Partnership Interests issuable upon exercise
of a Warrant (the "Exercise Rate") is subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 12. The Exercise
Rate shall initially be one.
(a) Adjustment for Change in Capital. If the Partnership:
(1) makes a distribution on its outstanding LP
Partnership Interests payable in LP Partnership
Interests or other partnership interests of the in
Partnership;
(2) subdivides, combines or reclassifies its outstanding
LP Partnership Interests; and
(3) makes a distribution to all holders of its
outstanding LP Partnership Interests of rights,
warrants or options to purchase LP Partnership
Interests at a price per partnership interest less
than the Current Market Value (as defined in Section
12(d)) at the Time of Determination (as defined
below);
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the Holder of any Warrant thereafter exercised
may receive the aggregate amount and kind of partnership interests of the
Partnership which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action; provided, however,
that notwithstanding the foregoing, upon the occurrence of an event described in
any of paragraphs (1) or (3) above, which otherwise would have given rise to an
adjustment, no adjustment shall be made if the Partnership includes the Holders
of Warrants in such distribution pro rata to all LP Partnership Interests issued
and outstanding (after giving effect to the LP Warrant Partnership Interests as
if they were issued and outstanding).
The adjustment shall become effective (the "Time of Determination")
immediately after the record date in the case of a distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a Holder of a Warrant upon exercise of it may
receive interests in two or more classes of the partnership interests of the
Partnership, the general partner of the Partnership shall determine the
allocation of the adjusted Exercise Price between such separate classes of
partnership interests of the Partnership. After such allocation, the exercise
privilege and the Exercise Price of each class of partnership interests shall
thereafter be subject to adjustment on terms comparable to those applicable to
LP Partnership Interests in this Subsection 12(a).
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Adjustments pursuant to this Subsection 12(a) shall be made
successively whenever any event listed above shall occur.
(b) Adjustment for Certain Issuances of LP Partnership Interests.
Subject to Subsection 12(a), if the Partnership issues or sells LP Partnership
Interests or distributes any rights, options or warrants to all holders of its
LP Partnership Interests entitling them to purchase LP Partnership Interests, or
securities convertible into or exchangeable for LP Partnership Interests (other
than pursuant to (1) the exercise of the Warrants or issuance of LP Partnership
Interests to Warrant Co. solely to accommodate a holder of Warrant Co.'s common
stock right to receive the corresponding LP Warrant Partnership Interest held by
Warrant Co. in exchange for such common stock, (2) any options, warrants or
rights outstanding as of the date of this Agreement, (3) without limiting any
options, warrants or rights outstanding covered by the immediately preceding
clause (2), any executive management plans and employee option or purchase plans
to the extent that the aggregate amount of LP Partnership Interests (or
securities convertible into or exchangeable or exercisable for LP Partnership
Interests) distributed under all such executive management plans and employee
option and purchase plans does not exceed ten percent (10%) of the Partnership's
partnership interests at any time (of which no options to purchase are currently
outstanding) and (4) any security convertible into, or exchangeable or
exercisable for, LP Partnership Interests as to which the issuance thereof has
previously been the subject of any required adjustment pursuant to this
Agreement and exercisable securities of the Partnership for which the applicable
adjustment has already been made), at a price per partnership interest less than
the Current Market Value at the Time of Determination, the Exercise Rate shall
be adjusted in accordance with the formula:
(0 + N)
-------
E(1) = E x 0 + (N x P)
-------
M
where:
E(1) = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination of any such distribution.
0 = the number of Fully Diluted Partnership Interests
(as defined in Section 12(l)) outstanding on the
Time of Determination for any such issuance, sale
or distribution.
N = the number of additional LP Partnership Interests
issued, sold or issuable upon exercise of such
rights, options or warrants.
P = the price received in the case of any issuance or
sale of LP Partnership Interests or exercise price
per partnership interest of such rights, options or
warrants.
M = the Current Market Value per LP Partnership
Interest on the Time of Determination for any such
issuance, sale or distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of holders of
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partnership interests of the Partnership entitled to receive the rights, options
or warrants. If at the end of the period during which any such rights, options
or warrants are exercisable, not all rights, options or warrants shall have been
exercised, the Warrant shall be immediately readjusted to what it would have
been if "N" in the above formula had been the amount of partnership interests
actually issued.
(c) Adjustment for Other Distribution. Subject to Subsection 12(a), if
the Partnership distributes to all holders of its LP Partnership Interests (i)
any evidences of indebtedness of the Partnership, (ii) any assets of the
Partnership (excluding cash distributions or distributions from current or
retained earnings other than any Extraordinary Cash Distribution), or (iii) any
rights, options or warrants to acquire any of the foregoing or to acquire any
other securities of the Partnership, the Exercise Rate shall be adjusted in
accordance with the formula:
E(1) = E x M
-----
M - F
where:
E(1) = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination of any such distribution.
M = the Current Market Value per LP Partnership
Interest on the record date mentioned below.
F = the fair market value on the record date mentioned
below of the indebtedness, assets, rights, options
or warrants distributable in respect of each LP
Partnership Interest.
Adjustments pursuant to this Subsection 12(c) shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of holders of
partnership interests of the Partnership entitled to receive the distribution.
If an adjustment is made pursuant to clause (iii) above of this Subsection 12(c)
as a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable, not
all such rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by amount
of LP Partnership Interests outstanding on the record date. Notwithstanding the
foregoing provisions of this Subsection 12(c), (x) an event which would
otherwise give rise to an adjustment pursuant to this Subsection 12(c) shall not
give rise to such an adjustment if the Partnership includes the holders of the
Warrants in such distribution pro rata to all LP Partnership Interests issued
and outstanding after giving effect to the LP Warrant Partnership Interests as
if they were issued and outstanding and (y) no adjustment shall be made pursuant
to this Subsection 12(c) with respect to cash distributions other than
Extraordinary Cash Distributions.
This Subsection 12(c) does not apply to rights, options or warrants
referred to in Subsection 12(b).
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(d) Merger, Consolidation, Etc. If (x) the Partnership merges or
consolidates with, or sells all or substantially all of its property and assets
to, another person (other than an Affiliate of the Partnership) and
consideration is payable to holders of LP Partnership Interests in exchange for
their LP Partnership Interests in connection with such merger, consolidation or
sale which consists solely of cash, or (y) in the event of a dissolution,
liquidation or winding up of the Partnership, then the holders of Warrants shall
be entitled to receive distributions on the date of such event on an equal basis
with all holders of LP Partnership Interests (or other securities issuable upon
exercise of the Warrants) as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price. Upon receipt of such payment, if
any, the rights of a Holder of a Warrant shall terminate and cease and his or
her Warrants shall expire. In case of any such merger, consolidation or sale of
assets, the surviving or acquiring person and, in the event of any dissolution,
liquidation or winding up of the Partnership, the Partnership shall deposit
promptly with the Warrant Agent the funds, if any, necessary to pay the Holders
of the Warrants. After receipt of such deposit from such person or the
Partnership and after receipt of surrendered Warrant Certificates, the Warrant
Agent shall make payment by delivering a check in such amount as is appropriate
(or, in the case of consideration other than cash, such other consideration as
is appropriate) to such person or persons as it may be directed in writing by
the Holders surrendering such Warrants.
(e) Current Market Value. "Current Market Value" of an LP Partnership
Interest or of any other security (herein collectively referred to as a
"Security") at any date shall be:
(1) if the Security is not registered under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (i) the value of the Security determined in good faith
by the general partner of the Partnership, based on the most
recently completed arm's length transaction between the
Partnership and a person other than an Affiliate of the
Partnership in which such determination is necessary and the
closing of which occurs on such date or shall have occurred
within the six months preceding such date, (ii) if no such
transaction shall have occurred on such date or within such
six-month period, the value of the Security most recently
determined as of a date within the six months preceding such
date by an Independent Financial Expert or (iii) if neither
clause (i) nor (ii) is applicable, the value of the Security
determined as of such date by an Independent Financial Expert,
or
(2) if the Security is registered under the Exchange
Act, the average of the daily market prices for each business
day during the period commencing 15 Business Days before such
date and ending on the date one day prior to such date or, if
the Security has been registered under the Exchange Act for
less than 15 consecutive Business Days before such date, then
the average of the daily market prices for all of the Business
Days before such date for which daily market prices are
available. If the market price is not determinable for at
least 10 Business Days in such period, the Current Market
Value of the Security shall be determined as if the Security
was not registered under the Exchange Act.
The "market price" for any Security on each Business Day means: (A) if
such Security is listed or admitted to trading on any securities exchange, the
closing price, regular way, on such day on the principal exchange on which such
Security is traded, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, (B) if such Security is not then
listed or admitted to trading on any securities exchange, the last reported sale
price on such day, or if there is no such last reported sale price on such day,
the average of the closing bid and the asked prices on such day, as reported by
a
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reputable quotation source designated by the Partnership, or (C) if neither
clause (A) nor (B) is applicable, the average of the reported high bid and low
asked prices on such day, as reported by a reputable quotation service, or a
newspaper of general circulation in the Borough of Manhattan, City of New York,
customarily published on each business day, designated by the Partnership. If
there are no such prices on a Business Day, then the market price shall not be
determinable for such Business Day.
"Independent Financial Expert" shall mean (a) NatWest (or any
successor) or (b) another nationally recognized investment banking firm, a
nationally recognized regional investment banking firm or a nationally
recognized accounting firm selected by the Partnership reasonably acceptable to
the Warrant Agent (i) that does not (and whose directors, officers, employees
and Affiliates do not) have a direct or indirect material financial interest in
the Partnership, (ii) that has not been, and, at the time it is called upon to
serve as an Independent Financial Expert under this Agreement is not (and none
of whose directors, officers, employees or Affiliates is) a promoter, director
or officer of the Partnership, (iii) that has not been retained by the
Partnership for any purpose, other than to perform an equity valuation, within
the preceding twelve months, and (iv) that, in the reasonable judgment of the
general partner of the Partnership, is otherwise qualified to serve as an
independent financial advisor. Any such person may receive customary
compensation and indemnification by the Partnership for opinions or services it
provides as an Independent Financial Expert.
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such person. For the purposes of this definition, "control"
when used with respect to any person, means the power to direct the management
and policies of such person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Extraordinary Cash Distribution" means cash distributions with respect
to LP Partnership Interests, the aggregate amount of which in any fiscal year
exceeds the lesser of (i) 15% of the net income of the Partnership for the
fiscal year immediately preceding the payment of such distribution or (ii)
$1,000,000.
(f) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate need be made unless the adjustment would require an increase or
decrease of at least .5% in the Exercise Rate. Notwithstanding the foregoing,
any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised. All calculations under
this Section 12 shall be made to the nearest cent or to the nearest 1/100th of a
partnership interest.
(g) When No Adjustment Required. If an adjustment is made upon the
establishment of a record date for a distribution subject to Subsections 12(a),
(b) or (c) and such distribution is subsequently cancelled, the Exercise Rate
then in effect shall be readjusted, effective as of the date when the general
partner of the Partnership determines to cancel such distribution, to that which
would have been in effect if such record date had not been fixed. To the extent
the Warrants become convertible into cash, no adjustment need be made thereafter
as to the amount of cash into which such Warrants are exercisable. Interest will
not accrue on the cash.
(h) Notice of Adjustment. Whenever the Exercise Rate or Exercise Price
is adjusted, the Partnership shall provide the notices required by Section 14
hereof.
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(i) Voluntary Reduction. The Partnership from time to time may increase
the Exercise Rate by any amount for any period of time (including, without
limitation, permanently) if the period is at least 20 Business Days. An increase
of the Exercise Rate under this Subsection 12(i) (other than a permanent
increase) does not change or adjust the Exercise Rate otherwise in effect for
purposes of Subsections 12(a), 12(b) or 12(c).
(j) When Issuance or Payment May Be Deferred. In any case in which this
Section 12 shall require that an adjustment in the Exercise Rate be made
effective as of a record date for a specified event, the Partnership may elect
to defer until the occurrence of such event (i) issuing to the Holder of any
Warrant exercised after such record date the LP Warrant Partnership Interests
and other partnership interests of the Partnership or other entities, if any,
issuable upon such exercise over and above the LP Warrant Partnership Interests
and other partnership interests of the Partnership or other entities, if any,
issuable upon such exercise on the basis of the Exercise Rate prior to such
adjustment, and (ii) paying to such Holder any amount in cash in lieu of a
fractional interest pursuant to Section 13; provided, however, that the
Partnership shall deliver to the Warrant Agent and shall cause the Warrant
Agent, on behalf of and at the expense of the Partnership, to deliver to such
Holder a due ▇▇▇▇ or other appropriate instrument evidencing such Holder's right
to receive such additional LP Warrant Partnership Interests and other
partnership interests of the Partnership or other entities and cash upon the
occurrence of the event requiring such adjustment.
(k) Reorganizations. In case of any capital reorganization, other than
the cases referred to in Subsections 12(a), 12(b), 12(c) or 12(d), or the
consolidation or merger of the Partnership with or into another entity (other
than a merger or consolidation in which the Partnership is the continuing entity
and which does not result in any reclassification of the outstanding LP
Partnership Interests into other partnership interests or other securities or
property), or the sale of the property of the Partnership as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the amount of LP Warrant Partnership
Interests theretofore deliverable), the amount of partnership interests or other
securities or property to which a holder of the amount of LP Warrant Partnership
Interests that would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the
general partner of the Partnership, shall be made in the application of the
provisions herein set forth with respect to the rights and interests of Holders
so that the provisions set forth herein shall thereafter be applicable, as
nearly as possible, in relation to any partnership interests or other securities
or property thereafter deliverable upon exercise of Warrants.
The Partnership shall not effect any such Reorganization unless prior
to or simultaneously with the consummation thereof the successor entity (if
other than the Partnership) resulting from such Reorganization or the entity
purchasing or leasing such assets or other appropriate entity shall (i)
expressly assume, by a supplemental Warrant Agreement or other acknowledgment
executed and delivered to the Warrant Agent the obligation to deliver to the
Warrant Agent and to cause the Warrant Agent to deliver to each Holder of
Warrants such partnership interests or other securities or property as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase, and all other obligations and liabilities under this Agreement and
(ii) enter into an agreement providing to the Holders of Warrants rights and
benefits substantially similar to those enjoyed by such Holders under the
Registration Rights and Limited Partners' Agreement of even date herewith.
The provisions of this Subsection 12(k) shall apply to successive
Reorganization transactions.
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(l) Form of Warrants. Irrespective of any adjustments in the number or
kind of partnership interests or other securities or property purchasable upon
the exercise of the Warrants, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of partnership interests
as are stated in the Warrants initially issuable pursuant to this Agreement.
(m) Miscellaneous. For purposes of this Section 12 the term "Fully
Diluted Partnership Interests" shall mean (i) all LP Partnership Interests
outstanding as of a specified date, and (ii) all LP Partnership Interests into
or for which rights, options, warrants or other securities outstanding as of
such date are exercisable or convertible (other than the Warrants). In the event
that at any time, as a result of an adjustment made pursuant to this Section 12,
the Holders of Warrants shall become entitled to purchase any securities of the
Partnership other than, or in addition to, LP Partnership Interests, thereafter
the number or amount of such other securities so purchasable upon exercise of
each Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
LP Warrant Partnership Interests contained in Subsections 12(a) through 12(l),
inclusive, and the provisions of Sections 7, 8, 10 and 13 with respect to the LP
Warrant Partnership Interests or other LP Partnership Interests shall apply on
like terms to any such other securities.
SECTION 13. Fractional Interests. The Partnership shall not be required
to issue fractional LP Warrant Partnership Interests on the exercise of
Warrants. The number of full LP Partnership Interests which shall be issuable
upon the exercise of a Warrant shall be computed on the basis of the aggregate
number of LP Warrant Partnership Interests purchasable on exercise of the
Warrant so presented. If any fraction of a LP Warrant Partnership Interest
would, except for the provisions of this Section 13, be issuable on the exercise
of any Warrant, the Partnership shall pay an amount in cash equal to the Current
Market Value on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction.
SECTION 14. Notices to Warrant Holders. Upon any adjustment pursuant to
Section 12 hereof, the Partnership shall give prompt written notice of such
adjustment to the Warrant Agent and shall cause the Warrant Agent, on behalf of
and at the expense of the Partnership, within 10 days after such adjustment, to
mail by first class mail, postage prepaid, to each Holder a notice of such
adjustment(s) and shall deliver to the Warrant Agent a certificate of the
general partner of the Partnership, accompanied by the report thereon by a firm
of independent public accountants selected by the general partner of the
Partnership (who may be the regular accountants for the Partnership), setting
forth in reasonable detail (i) the number of LP Warrant Partnership Interests
purchasable upon the exercise of each Warrant and the Exercise Price of such
Warrant after such adjustment(s), (ii) a brief statement of the facts requiring
such adjustment(s) and (iii) the computation by which such adjustment(s) was
made. Where appropriate, such notice may be given in advance and included as a
part of the notice required under the other provisions of this Section 14.
In case:
(a) the Partnership shall authorize the issuance
to all holders of LP Partnership Interests
rights, options or warrants to subscribe for
or purchase LP Partnership Interests or of
any other subscription rights or warrants;
or
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(b) the Partnership shall authorize the
distribution to all holders of LP
Partnership Interests of evidences of its
indebtedness or assets; or
(c) of any consolidation or merger to which the
Partnership is a part and for which approval
of any partners of the Partnership is
required, or of the conveyance or transfer
of the properties and assets of the
Partnership substantially as an entirety, or
of any reclassification or change of LP
Partnership Interests (other than as a
result of a subdivision or combination), or
a tender offer or exchange offer for LP
Partnership Interests; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the
Partnership; or
(e) the Partnership proposes to take any action
that would require an adjustment to the
Exercise Rate or the Exercise Price pursuant
to Section 12;
then the Partnership shall give prompt written notice to the Warrant Agent and
shall cause the Warrant Agent, on behalf of and at the expense of the
Partnership to give to each of the registered holders of the Warrant
Certificates at his or its address appearing on the Warrant register, at least
30 days (or 20 days in any case specified in clauses (a) or (b) above) prior to
the applicable record date hereinafter specified, or the date of the event in
the case of events for which there is no record date, by first-class mail,
postage prepaid, a written notice stating (i) the day as of which the holders of
record of LP Partnership Interests to be entitled to receive any rights,
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for LP
Partnership Interests, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of LP Partnership Interests shall be entitled to exchange such
LP Partnership Interests for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure by the Partnership or the
Warrant Agent to give such notice or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any action.
The Partnership shall give prompt written notice to the Warrant Agent
and shall cause the Warrant Agent, on behalf of and at the expense of the
Partnership to give to each Holder written notice of any determination to make a
distribution to the holders of LP Partnership Interests of any cash, assets,
debt securities, or any rights or warrants to purchase debt securities, assets
or other securities (other than LP Partnership Interests, or rights, options, or
warrants to purchase LP Partnership Interests) of the Partnership, which notice
shall state the nature and amount of such planned distribution and the record
date therefor, and shall be received by the Holders at least 30 days prior to
such record date therefor.
Nothing contained in this Agreement or in any Warrant Certificate shall
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as limited partners in respect of the meetings of limited
partners of the Partnership or any other matter, or any rights whatsoever as
limited partners of the Partnership.
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SECTION 15. Notices to the Partnership and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by any Holder to or on the Partnership shall be sufficiently given or made when
received at the office of the Partnership expressly designated by the
Partnership as its office for purposes of this Agreement (until the Warrant
Agent is otherwise notified in accordance with this Section 15 by the
Partnership), as follows:
The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Any notice pursuant to this Agreement to be given by the Partnership or
by any Holder(s) to the Warrant Agent shall be sufficiently given when received
by the Warrant Agent at the address appearing below (until the Partnership is
otherwise notified in accordance with this Section by the Warrant Agent).
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 16. Supplements and Amendments. The Partnership and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Partnership and the Warrant
Agent may deem necessary or desirable and which shall not in any way adversely
affect the interests of any Holder of Warrants. No other amendment or
modification of this Agreement or the rights and obligations of the Partnership
or the rights of Holders of Warrants may be made at any time by the Partnership
and the Warrant Agent without the consent of Holders of Warrants representing a
majority in number of the then outstanding Warrants.
SECTION 17. Concerning the Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Partnership and the Holders, by their
acceptance of Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the
Partnership, and the Warrant Agent assumes no
responsibility for the correctness of any of the same
except such as describe the Warrant Agent or any
action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of
the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for and
shall incur no liability to the Partnership or any
Holder for any failure of the Partnership to comply
with the covenants contained in this Agreement or in
the Warrants to be complied with by the Partnership.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any
duty hereunder either itself (through its employee)
by
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or through its attorneys or agents (which shall not
include its employees) and shall not be responsible
for the negligence or misconduct of any agent
appointed with due care.
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for
the Partnership), and the Warrant Agent shall incur
no liability or responsibility to the Partnership or
to any Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and
in accordance with the opinion or the advice of such
counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary
or desirable that any fact or matter be proved or
established by the Partnership prior to taking or
suffering any action hereunder, such fact or matter
(unless such evidence in respect thereof be herein
specifically prescribed) may be deemed conclusively
to be proved and established by a certificate signed
by the Chairman of the Board, the President, one of
the Vice Presidents, the Treasurer or the Secretary
of the general partner of the Partnership and
delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for
any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance
upon such certificate.
(f) The Partnership agrees to pay the Warrant Agent
reasonable compensation for all services rendered by
the Warrant Agent in the performance of its duties
under this Agreement, to reimburse the Warrant Agent
for all expenses, taxes and governmental charges and
other charges of any kind and nature incurred by the
Warrant Agent in the performance of its duties under
this Agreement (including, without limitation,
reasonable fees and expenses of counsel), and to
indemnify the Warrant Agent and its agents,
employees, directors, officers and affiliates and
save it and them harmless against any and all
liabilities, losses and expenses, including, without
limitation, judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the
performance of its duties under this Agreement,
except as a result of the Warrant Agent's negligence
or bad faith.
(g) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to
take any other action likely to involve expense
unless the Partnership or one or more Holders shall
furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be
incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of
action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrants or the
production thereof at any trial or other proceeding
relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any
recovery of judgment shall be for the ratable benefit
of the Holders, as their respective rights or
interests may appear.
(h) The Warrant Agent and any stockholder, director,
officer or employee ("Related Parties") of the
Warrant Agent may buy, sell or deal in any of the
Warrants or
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other securities of the Partnership or become
pecuniarily interested in any transactions in which
the Partnership may be interested, or contract with
or lend money to the Partnership or otherwise act as
fully and freely as though it were not Warrant Agent
under this Agreement or such director, officer or
employee. Nothing herein shall preclude the Warrant
Agent or any Related Party from acting in any other
capacity for the Partnership or for any other legal
entity including, without limitation, acting as
Transfer Agent or as a lender to the Partnership or
an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as
agent, and its duties shall be determined solely by
the provisions thereof. The Warrant Agent shall not
be liable for anything which it may do or refrain
from doing in connection with this Agreement except
for its own negligence or bad faith.
(j) The Warrant Agent will not incur any liability or
responsibility to the Partnership or to any Holder
for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate or
other paper, document or instrument reasonably
believed by it to be genuine and to have been signed,
sent or presented by the property party or parties.
(k) The Warrant Agent shall not be under any
responsibility in respect of the validity of this
Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of
any Warrant (except its countersignature thereof);
nor shall the Warrant Agent by any act hereunder be
deemed to make any representation or warranty as to
the authorization or reservation of any LP Warrant
Partnership Interests (or other stock) to be issued
pursuant to this Agreement or any Warrant, or as to
whether any LP Warrant Partnership Interests (or
other stock) will, when issued, be validly issued,
fully paid and nonassessable, or as to the Exercise
Price or the number or amount of LP Warrant
Partnership Interests or other securities or other
property issuable upon exercise of any Warrant.
(l) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the
performance of its duties hereunder from the Chairman
of the Board, the President, any Vice President or
the Secretary of the general partner of the
Partnership, and to apply to such officers for advice
or instructions in connection with its duties, and
shall not be liable for any action taken or suffered
to be taken by it in good faith and without
negligence in accordance with instructions of any
such officer or officers.
SECTION 18. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Partnership
30 days' notice in writing. The Warrant Agent may be removed by like notice to
the Warrant Agent from the Partnership. If the Warrant Agent shall resign or be
removed or shall otherwise be incapable of acting, the Partnership shall appoint
a successor to the Warrant Agent. If the Partnership shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Partnership), then any Holder may apply to any
court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment
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23
of a successor to the Warrant Agent, either by the Partnership or by such court,
the duties of the Warrant Agent shall be carried out by the Partnership. Any
successor warrant agent, whether appointed by the Partnership or such a court,
shall be a bank or trust company in good standing, incorporated under the laws
of the United States of America or any State thereof or the District of Columbia
and having at the time of its appointment as warrant agent a combined capital
and surplus of at least $50,000,000. After appointment, the successor warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor warrant
agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Failure
to file any notice provided for in this Section 18, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Warrant Agent or the appointment of the successor warrant agent, as the
case may be. In the event of such resignation or removal, the Partnership or the
successor warrant agent shall mail by first class mail, postage prepaid, to each
Holder, written notice of such removal or resignation and the name and address
of such successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the LP Partnership Interests, or any other partnership
interests or other securities of the Partnership issuable upon the exercise of
the Warrants, the Partnership shall file with the Warrant Agent a statement
setting forth the name and address of such Transfer Agent.
SECTION 20. Successors. All the covenants and provisions of this
Agreement by and for the benefit of the Partnership, the Warrant Agent or any
holder of Warrants shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 21. Termination. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised or redeemed pursuant to
this Agreement.
SECTION 22. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and shall be governed by and construed in accordance with the
laws of said State, without regard to the conflict of law rules thereof.
SECTION 23. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Partnership,
the Warrant Agent and the registered holders of the Warrant Certificates any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Partnership, the
Warrant Agent and the registered holders of the Warrant Certificates.
SECTION 24. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
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24
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED PARTNERSHIP
By: The Resort at ▇▇▇▇▇▇▇▇▇, Inc., general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Warrant Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
JOINDER:
RAS WARRANT CO.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
23
25
EXHIBIT A
[Form of Warrant Certificate]
[Face]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY,
MAY NOT BE OFFERED, SOLD OR PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR A BENEFICIAL
INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON, IS NOT
ACQUIRING THIS SECURITY FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON, AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
WITH RESPECT TO SUCH TRANSFER, ON THE DATE OF THE TRANSFER OF THIS SECURITY
RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE RESORT AT
▇▇▇▇▇▇▇▇▇, LIMITED PARTNERSHIP (THE "ISSUER") OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QIB IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRANSFER AGENT A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE WARRANT AGENT), AND IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE AMOUNT OF SECURITIES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE, BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER), (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (G)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER) AND
IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
26
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE
TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
THIS WARRANT AND THE LIMITED PARTNER INTERESTS OF THE PARTNERSHIP INTO
WHICH THIS WARRANT IS EXERCISABLE ARE SUBJECT TO A REGISTRATION RIGHTS AND
LIMITED PARTNERS' AGREEMENT, DATED AS OF DECEMBER 30, 1997, WHICH CONTAINS
PROVISIONS REGARDING THE RESTRICTIONS ON THE TRANSFER AND PROVISIONS REQUIRING
THE MANDATORY TRANSFER OF SUCH PARTNERSHIP INTERESTS AND OTHER MATTERS. A COPY
OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
PARTNERSHIP.
COMMENCING WITH THE DATE A NONRESTRICTED GAMING LICENSE IS ISSUED TO
THE PARTNERSHIP BY THE NEVADA GAMING COMMISSION AND THEREAFTER UNTIL THE
PARTNERSHIP HAS BEEN REGISTERED AS A REGISTERED COMPANY AND GRANTED THE
EXEMPTIONS BY THE NEVADA GAMING COMMISSION, THE SALE, ASSIGNMENT, TRANSFER,
PLEDGE, OR OTHER DISPOSITION OF ANY INTEREST IN THE LIMITED PARTNERSHIP IS VOID
UNLESS APPROVED IN ADVANCE BY THE NEVADA GAMING COMMISSION. IF AT ANY TIME THE
NEVADA GAMING COMMISSION FINDS THAT AN INDIVIDUAL OWNER OF ANY SUCH INTEREST IS
UNSUITABLE TO HOLD THAT INTEREST, THE NEVADA GAMING COMMISSION SHALL IMMEDIATELY
NOTIFY THE LIMITED PARTNERSHIP OF THAT FACT. THE LIMITED PARTNERSHIP SHALL,
WITHIN TEN DAYS FROM THE DATE THAT IT RECEIVES THE NOTICE FROM THE NEVADA GAMING
COMMISSION, RETURN TO THE UNSUITABLE OWNER THE AMOUNT OF HIS CAPITAL ACCOUNT AS
REFLECTED ON THE BOOKS OF THE LIMITED PARTNERSHIP. BEGINNING ON THE DATE WHEN
THE NEVADA GAMING COMMISSION SERVES NOTICE OF A DETERMINATION OF UNSUITABILITY,
PURSUANT TO THE PRECEDING SENTENCE, UPON THE LIMITED PARTNERSHIP, IT IS UNLAWFUL
FOR THE UNSUITABLE OWNER: (A) TO RECEIVE ANY SHARE OF THE PROFITS OR
DISTRIBUTIONS OF ANY CASH OR OTHER PROPERTY OTHER THAN A RETURN OF CAPITAL AS
REQUIRED ABOVE; (B) TO EXERCISE, DIRECTLY OR THROUGH ANY WARRANT AGENT OR
NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH INTEREST; OR (C) TO RECEIVE ANY
REMUNERATION IN ANY FORM FROM THE LIMITED PARTNERSHIP, FOR SERVICES RENDERED OR
OTHERWISE.
2
27
EXERCISABLE ON OR AFTER THE DATE OF ISSUANCE
AND ON OR BEFORE DECEMBER 15, 2007
No. _________
Warrant
CUSIP No.:
Warrant Certificate
The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership
This Warrant Certificate certifies that ______________, or registered
assigns, is the registered holder of one Warrant expiring December 15, 2007 (the
"Warrant") to purchase a limited partner interest ("LP Partnership Interest") in
The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership, a Nevada limited partnership (the
"Partnership"). The Warrant initially entitles the holder upon exercise to
receive from the Partnership on or after the date hereof and on or before 5:00
p.m. New York City Time on December 15, 2007, one LP Partnership Interest at the
initial exercise price (the "Exercise Price") of $___ payable in lawful money of
the United States of America upon surrender of this Warrant Certificate and
payment of the Exercise Price at the office or agency of the Warrant Agent, but
only subject to the conditions set forth herein and in the Warrant Agreement
referred to on the reverse hereof. The Exercise Price and the number of LP
Partnership Interests issuable upon exercise of the Warrant are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
The Warrant may not be exercised after 5:00 p.m., New York City Time,
on December 15, 2007, and to the extent not exercised by such time the Warrant
shall become void.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed and construed in accordance
with the internal laws of the State of New York.
28
IN WITNESS WHEREOF, The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership has
caused this Warrant Certificate to be signed by its general partner, The Resort
at ▇▇▇▇▇▇▇▇▇, Inc., by its [ ] and by its [ ].
Dated:
THE RESORT AT ▇▇▇▇▇▇▇▇▇, LIMITED PARTNERSHIP
BY: THE RESORT AT ▇▇▇▇▇▇▇▇▇, INC.,
General Partner
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Countersigned:
United States Trust Company of New York,
as Warrant Agent
By:_____________________________________
Authorized Signature
2
29
[Form of Warrant Certificate]
[Reverse]
The Warrant evidenced by this Warrant Certificate is part of a duly
authorized issue of Warrants expiring December 15, 2007, entitling the holders
on exercise of each Warrant initially to receive one LP Partnership Interest,
and is issued or to be issued pursuant to a Warrant Agreement dated as of
December 30, 1997 (the "Warrant Agreement"), duly executed and delivered by the
Partnership and United States Trust Company of New York, a banking corporation
organized and existing under the laws of the State of New York, as warrant agent
(the "Warrant Agent"). The Warrant Agreement is hereby incorporated by reference
in and made a part of this Warrant Certificate and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Partnership and the holders (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Partnership.
The Warrant may be exercised at any time on or after the date hereof
and on or before December 15, 2007, subject to extension as provided in the
Warrant Agreement. The holder of the Warrant evidenced by this Warrant
Certificate may exercise it by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price in cash at the office of the Warrant
Agent. The Warrant evidenced hereby shall be exercisable only in full, and not
in part. No adjustment shall be made for any distributions on the LP Partnership
Interests issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the LP Partnership Interest issuable upon exercise of the Warrant may,
subject to certain conditions, be adjusted. No fractional LP Partnership
Interests will be issued upon the exercise of Warrants, but the Partnership will
pay the cash value thereof determined as provided in the Warrant Agreement.
3
30
This Warrant Certificate, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate Warrants to purchase the aggregate number of
LP Partnership Interests to which the surrendered Warrant was entitled.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and representing in the aggregate the right
to purchase a like amount of LP Partnership Interests shall be issued to the
transferee(s) in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Partnership and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Partnership nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a limited partner of the Partnership.
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31
[Form of Election to Purchase]
(To Be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _____ limited partner
interests in, and herewith tenders payment for such partnership interest to the
order of, The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership in the amount of
$__________ in accordance with the terms hereof. The undersigned requests that a
certificate for such partnership interest be registered in the name of
___________________, whose address is ___________________ ______________________
and that evidence of such partnership interest be delivered to ___________
________, whose address is ____________________________________________________.
Signature:
Date:
Signature Guarantee:
________________________________________
(Signatures must be guarantee by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements will include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
5
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to purchase limited
partnership interests (the "Securities") of
The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership
This Certificate relates to ____________ Securities held in
the form of Physical Warrants by _________________ (the "Transferor").
The Transferor:*
/ / has requested that the Warrant Agent by written order to exchange
or register the transfer of a Physical Warrant or Physical Warrants.
In connection with such request and in request of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 6 of such Warrant
Agreement, and that the transfer of these Securities does not require
registration under the Securities Act of 1933, as amended (the "Act") because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer.
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act.
/ / Such Security is being transferred in reliance on Regulation S
under the Act.
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/ / Such Security is being transferred in reliance on Rule 144 under
the Act.
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
___________________________________
(INSERT NAME OF TRANSFEROR)
By: _______________________________
(Authorized Signature)
Date:
_____________________________
*Check applicable box.
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EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
[Date]
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership
(the "Partnership") Warrants to purchase
limited partnership interests (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities of the
Partnership, we confirm that:
1. We have received such information as we deem necessary in order to
make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Warrant
Agreement and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the limited partner interests of the Partnership
represented by this Certificate are subject to a Registration Rights and Limited
Partners' Agreement dated as of December 30, 1997, which contains provisions
regarding restrictions on the transfer and the mandatory transfer of such
interests and other matters.
4. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities, we will do so only (A) to the
Partnership or any subsidiary thereof, (B) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Warrant Agent a
signed letter substantially in the form hereof, (D) outside the United States in
accordance with Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing
Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
35
5. We understand that, on any proposed resale of Securities, we will be
required to furnish the Warrant Agent and the Partnership, such certification,
legal opinions and other information as the Warrant Agent and the Partnership
may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Securities purchased by
us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Partnership are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
(Name of Transferor)
By: __________________________
(Authorized Signatory)
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36
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
[Date]
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Attention: Corporate Trust Administration
Re: The Resort at ▇▇▇▇▇▇▇▇▇, Limited Partnership
(the "Partnership") Warrants to purchase
limited partnership interests (the "Securities")
Dear Sirs:
In connection with our proposed purchase of ___________ of the
Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) neither (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
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(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Partnership are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby. Defined terms used herein without definition have
the respective meanings provided in Regulation S.
Very truly yours,
(Name of Transferor)
By: __________________________
(Authorized Signatory)
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