TABLE OF CONTENTS

		Page
ARTICLE I - DEFINITIONS		2
Section 1.1 Construction of Terms		3
Section 1.2 Number of Interests		3
Section 1.3 Defined Terms		3
Section 1.4 Accounting Terms		11
ARTICLE II — REPRESENTATIONS AND WARRANTIES		11
Section 2.1 Representations of the Securityholders, the Individual Investors and BH/RE		11
Section 2.2 Representations of the Company		11
ARTICLE III - RESTRICTIONS ON TRANSFER; CO-SALE; DRAG ALONG		11
Section 3.1 Restrictions on Transfer		11
Section 3.2 Co-Sale Option of Mezzanine Investors		11
Section 3.3 Drag-Along Obligations		11
Section 3.4 Contemporaneous Transfers		11
Section 3.5 Assignment		11
Section 3.6 Gaming Restrictions		11
Section 3.7 Prohibited Transfers		11
Section 3.8 Replacement of Unsuitable Securityholder		11
Section 3.10 Gaming Authorities and Gaming Approval		11
ARTICLE IV - RIGHTS TO PURCHASE		11
Section 4.1 Right to Participate in Certain Sales of Additional Securities and Indebtedness		11
Section 4.2 Assignment of Rights		11
ARTICLE V - REGISTRATION RIGHTS		11
Section 5.1 Piggyback Registration Rights		11
Section 5.2 Parent Registrations		11
Section 5.3 Other Registrations		11
Section 5.4 Registrable Interests		11
Section 5.5 Further Obligations of the Company		11
Section 5.6 Indemnification; Contribution		11
Section 5.7 Rule 144 Requirements		11
Section 5.8 Market Stand-Off		11
Section 5.9 Transfer of Registration Rights		11
Section 5.10 Other Agreements		11
ARTICLE VI — RESERVED		11

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ARTICLE VII — AFFIRMATIVE COVENANTS OF THE COMPANY, BH/RE AND THE MEMBER		11
Section 7.1 Additional Indebtedness		11
Section 7.2 Restrictions on Equity Interests		11
Section 7.3 Put Right		11
Section 7.4 Communication with Gaming Authorities		11
Section 7.5 Tax Covenants		11
Section 7.6 Books and Records		11
Section 7.7 Financial and Other Information		11
Section 7.8 Notices		11
Section 7.9 Existence, Good Standing and Legal Requirements		11
Section 7.10 Election of Directors; Observation Rights		11
Section 7.11 CMBS Guarantees; Reimbursements		11
Section 7.12 Costs, Expenses and Taxes		11
Section 7.13 Indemnification		11
ARTICLE VIII NEGATIVE COVENANTS OF THE COMPANY AND THE MEMBER		11
Section 8.1 Transactions with Affiliates		11
Section 8.2 Business Conducted		11
Section 8.3 Tax Classification		11
Section 8.4 Limitations on Incurrence of Indebtedness and Issuance of Interests		11
ARTICLE IX - MISCELLANEOUS PROVISIONS		11
Section 9.1 Survival of Covenants		11
Section 9.2 Legends on Securities		11
Section 9.3 Amendment and Waiver		11
Section 9.4 Notices		11
Section 9.5 Headings		11
Section 9.6 Counterparts; Facsimiles		11
Section 9.7 Remedies; Severability		11
Section 9.8 Entire Agreement; No Conflict		11
Section 9.9 Adjustments		11
Section 9.10 Law Governing		11
Section 9.11 Successors and Assigns		11
Section 9.12 Consent to Jurisdiction; Waiver of Jury Trial		11
Section 9.13 No Third Party Beneficiaries		11
Section 9.14 Non-Disclosure		11
Section 9.15 Term		11

 

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EXHIBITS
Exhibit A		Form of CMBS Documents
Exhibit B		Form of Joinder Agreement
Exhibit C		Form of Pledge Agreement
Exhibit D		Description of the Premises

 

SCHEDULES
Schedule 8.1		Transactions with Affiliates

 

 

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AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the “Agreement” ) is made as of this 30 th  day of November, 2006 by and among MezzCo, L.L.C., a Nevada limited liability company (the “Company” ), EquityCo, L.L.C., a Nevada limited liability company and the sole member of the Company ( “EquityCo” or the “Member” ), the persons identified on the signature pages hereto as the Mezzanine Investors (each, a “Mezzanine Investor” and collectively, the “Mezzanine Investors” ) and any other member of the Company or holder of securities convertible into securities of the Company who from time to time becomes party to this Agreement by execution of a Joinder Agreement in substantially the form attached hereto as Exhibit A (together with the Member, the “Non-Mezz Investors” ).  The Mezzanine Investors and the Non-Mezz Investors are herein collectively referred to as the “Securityholders” and each a “Securityholder . ”

WHEREAS, the Securityholders, the Company and the other signatories thereto are parties to that certain Investor Rights Agreement dated as of August 9, 2004 (the “Original Investor Rights Agreement” ) pursuant to which, among other things, the Mezzanine Investors acquired warrants (the “Original Warrants” ) in an aggregate amount of 17,500 of the Company’s units (subject to adjustment and increase as provided in the Original Warrants) representing membership interests in the Company, consisting of, Class B Units or if the holder so elects, either Class A Units or a combination of Class A Units and Class B Units exercisable at a price per unit of $.01;

WHEREAS , the Company has indicated (i) its desire to enter into that certain credit facility with Column Financial Inc., in the aggregate amount of up to $820,000,000 in the form attached hereto as Exhibit A attached hereto (the “CMBS Facility” ), and (ii) in connection therewith, the Company and the Securityholders have determined it is in their best interest to amend and restate the Original Investor Rights Agreement and the terms of the Original Warrants (each such amended and restated Original Warrant, a “Warrant” and collectively, the  “Warrants” ); and

WHEREAS , the parties hereto agree to amending the terms of the Original Warrants and the manner in which the outstanding securities of the Company, now or hereafter outstanding, held by them will be held, Transferred and voted.

NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

ARTICLE I - DEFINITIONS

Section 1.1  Construction of Terms .   As used herein, the masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to be or to include the other genders or number, as the case may be, whenever the context so indicates or requires.

Section 1.2  Number of Interests .   Whenever any provision of this Agreement calls for any calculation based on a number of Securities held by a Securityholder, the number of Securities deemed to be owned or held by that Securityholder shall be the total number of

 

Interests then owned or held by the Securityholder, plus the total number of Interests issuable upon the conversion of any convertible securities or the exercise of any vested options, warrants or subscription rights then owned or held by such Securityholder.

Section 1.3  Defined Terms .   The following capitalized terms, as used in this Agreement, shall have the meanings set forth below.

“Affiliate” of a specified Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with, the specified Person, including, without limitation, any Person:  (a) which beneficially owns or holds, directly or indirectly, ten percent (10%) or more of (i) any class of voting stock of the specified Person, or (ii) the Equity Interests (with voting capacity) of a Person; or (b) who (i) is a director or executive officer (or individual with similar responsibilities) of the specified Person or (ii) if the Person does not have directors or executive officers, has similar responsibilities to a director or executive officer.  The term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the specified Person.  The term “beneficial ownership” shall have the meaning set forth in Rule 13d-3 promulgated by the Commission under the Exchange Act.

“Aladdin Bazaar” means Aladdin Bazaar, LLC, a Delaware limited liability company.

“Aladdin Gaming” means Aladdin Gaming, LLC, a Nevada limited liability company.

 “Applicable Law” means any law, statute, order, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority (including the Gaming Authorities), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Appraiser” means an independent nationally recognized investment bank or other qualified financial institution acceptable to the Company and the Majority Holders.

“Approved Officer” means, as to any Person that is a corporation, limited liability company, limited partnership or similar entity, the president, the chief executive officer, the chief operating or chief financial officer, treasurer (or assistant treasurer), controller or any vice-president, manager, managing member or other authorized Person, whose signatures and incumbency have been certified to the Mezzanine Investors in a certificate delivered to the Mezzanine Investors.

“Associate” has the meaning given to such term in Rule 405 promulgated under the Securities Act.

“Bay Harbour Investor” has the meaning assigned to such term in the definition of “Investor Group”.

“BH/RE” means BH/RE, L.L.C., a Nevada limited liability company.

“BH/RE-Starwood Agreement” means the Agreement, made and entered into as of August 9, 2004, by and between Starwood Nevada Holdings, LLC, a Nevada limited liability

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corporation, Sheraton Operating Corporation, a Delaware Corporation BH/RE, EquityCo, OpBiz and, for certain purposes as described therein, Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation.

“Boulevard Invest” means Boulevard Invest, LLC, a Delaware limited liability company.

“Business” means, collectively, (i) the rental of guest, conference or banquet rooms at the Premises; (ii) the operation of the Casino at the Premises; (iii) the operation of restaurant, bar or banquet services at the Premises; (iv) the rental of commercial, entertainment or retail space to tenants at the Premises; and (iv) the operation of the theater on the Premises.

“Business Day” means any day excluding Saturday, Sunday and any day which shall be in Nevada, Texas or the City of New York a legal holiday or a day on which banking institutions authorized by law or other governmental action to close.

“Capital Expenditures” means all expenditures by the Company or a Subsidiary for the acquisition, leasing (pursuant to a Capital Lease), renovation or repair of assets or additions to equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP.

“Capital Lease” means any lease of Property by the Company or a Subsidiary that, in accordance with GAAP, is required to be reflected as a liability on the balance sheet of the Company or such Subsidiary.

“Casino” means the portion of the Premises operated as a casino, including entertainment and music areas, but excluding the Hotel Premises.

“Casualty Event” means the damage, destruction or Taking, as the case may be, of Property, or any part thereof, of the Company or any Subsidiary.

“Closing” means the closing of the transactions contemplated by the Restructuring Documents.

“Closing Date” means November 30, 2006.

“CMBS Documents” means the CMBS Facility, the notes issued thereunder, the security agreements and guaranty agreements executed in connection therewith, all other documents, agreements and certificates executed or delivered in connection therewith or in connection with any other obligations owing to the CMBS Lender from time to time and any refunding, refinancing or replacement thereof to the extent permitted under the CMBS Documents.

“CMBS Facility” has the meaning given such term in the recitals

“CMBS Lender” means Column Financial, Inc., as lender under the CMBS Facility, together with its successors and assigns.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Collateral Agent” means Post Advisory Group, L.L.C., as collateral agent under the Pledge Agreement until a successor replaces it in accordance with the provisions of the Collateral Agency Agreement dated as of the date hereof, and each successor thereafter.

“Commission” means the Securities and Exchange Commission.

“Company” has the meaning assigned to such term in the first paragraph of this Agreement and any successor or successors thereto.

“Competitor” means (i) any Person that operates, or owns 50% or more of the Equity Interests in, one or more casinos or casino/hotels, (ii) any Person that engages in the management of one or more casinos or casino/hotels as a material portion of its business, or (iii) any Person that directly or indirectly is in control of, is controlled by or under common control with any of the foregoing.

“Condition of the Business” means the financial condition and results of operations of the Business (taken as a whole).

“Consolidated” means, in respect of any Person, as applied to any financial or accounting term, such term determined on a consolidated basis in accordance with GAAP (except as otherwise required herein) for such Person and all of its consolidated Subsidiaries.

“Disposition” means with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer (including as a result of a Taking), contribution or other disposition thereof.

“Earl Investor” has the meaning assigned to such term in the definition of “Investor Group”.

“ EBITDA ” means, with respect to the Company and its consolidated Subsidiaries for any period, without duplication, (a) the sum of (i) Net Income, (ii) Interest Expense, (iii) federal, state and local income taxes deducted in determining Net Income, and (iv) depreciation and amortization and other non-cash items properly deducted in determining Net Income, in each case on a consolidated basis for the Company and its Subsidiaries for such period, calculated on a consolidated basis in accordance with generally accepted accounting principles, minus (b) non-cash items properly added in determining Net Income for such period (calculated on a consolidated basis in accordance with generally accepted accounting principles).  Any and all payments made to Northwind in cash pursuant to the Energy Services Agreement shall be deemed to be operating expenses of the Company for the purpose of determining EBITDA.

“Energy Premises” means the real property on which the utility plant owned and operated by Northwind is located and the adjoining optional improvement site and OpBiz’s right, title and interest in such utility plant.

“Energy Premises Lease” means that certain lease, dated December 3, 1997, as amended to date, between Northwind and Aladdin Gaming as amended from time to time, and assigned to OpBiz.

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“Energy Services Agreement” means that certain Energy Service Agreement dated as of September 24, 1998 by and between Aladdin Gaming and Northwind as amended from time to time, and assigned to by OpBiz.

“Environmental Laws” mean all federal, state and local laws, rules, regulations, ordinances, and consent decrees relating to health, safety, hazardous substances, and environmental matters applicable to the business and facilities of the Company or a Subsidiary (in each case whether or not owned by it).  Such laws and regulations include but are not limited to the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., as amended; the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., as amended; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., as amended; the Oil Pollution Act, 33 U.S.C. § 2701 et seq., as amended; the Clean Air Act, 42 U.S.C. § 7401 et seq., as amended; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the Nevada Hazardous Materials law (NRS Chapter 459); the Nevada Solid Waste/Disposal of Garbage or Sewage law (NRS 444.440 to 444.650, inclusive); the Nevada Water Controls/Pollution law (NRS Chapter 445A); the Nevada Air Pollution law (NRS Chapter 445B); the Nevada Cleanup of Discharged Petroleum law (NRS 590.700 to 590.920, inclusive); the Nevada Control of Asbestos law (NRS 618.750 to 618.850, inclusive); the Nevada Appropriation of Public Waters law (NRS 533.324 to 533.4385, inclusive); and the Nevada Artificial Water Body Development Permit law (NRS 502.390).

“EquityCo” means EquityCo, L.L.C., a Nevada limited liability company.

“Equity Interests” means (i) with respect to the Company, (A) Interests, (B) Preferred Interests, and (C) any warrants, options or other rights entitling the holder thereof to purchase or acquire Interests or Preferred Interests, and (ii) with respect to any other Person, shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) which together with the Company or any of its Subsidiaries would be treated as a single employer under the provisions of Title I or Title IV of ERISA.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, including all rules and regulations issued thereunder.

“Excluded Securities” means (a) Interests or options to purchase Interests issued to employees of the Company and its Subsidiaries (other than employees that are affiliated with BH/RE) in an aggregate amount not to exceed 6,000 of the Company’s Class B Units (subject to adjustments for splits, dividends, recapitalizations and similar changes affecting the Class B Units), (b) Interests issued to the Member in accordance with Section 7.1 (Additional Debt) of this Agreement, provided that the number of Warrant Interests to be issued pursuant to the Warrants is adjusted in accordance with Section 2.2(f)(iv) thereof, (c) the options to purchase 3,000 of the Company’s Class B Units (subject to adjustments for splits, dividends,

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recapitalizations and similar changes affecting the Class B Units) granted to Michael V. Mecca, the CEO of OpBiz, (d) any Warrant Interests issued upon exercise of the Warrants, (e) any Interests, options, warrants or other securities convertible into or exchangeable for Interests that are issued as consideration for an acquisition, or as a replacement of equity incentives existing at the acquired company or as newly granted equity incentive compensation to the employees of the business being acquired, and (f) any Indebtedness under the CMBS Facility, and any Indebtedness incurred in an arms-length transaction with a third-party lender to refinance the outstanding balance of and any accrued interest on the CMBS Facility (including any premiums and reasonable fees and expenses incurred in connection with such refinancing) or any successive refinancings thereof that comply with the restrictions on refinancings set forth in this clause (f) .

“Expiration Date” shall have the meaning specified in the Warrants.

“Fiscal Quarter” means any of the quarterly accounting periods of the Company, ending on March 31, June 30, September 30 and December 31 of each year.

“Fiscal Year” means the Company’s Fiscal Year for financial accounting purposes, which ends on December 31 of each year.  Any reference in this Agreement to “Fiscal Year” immediately followed by a specific year (e.g., Fiscal Year 2003) means the Fiscal Year ending on December 31 of such year.

“Gaming Approvals” means all applicable gaming licenses, registrations, permits or exemptions or findings of suitability or waivers from the licensing requirements or any other approvals or authorizations required by any Gaming Authority.

“Gaming Authority” means any of the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Clark County Liquor and Gaming Licensing Board and any other gaming regulatory body or any agency or any successor which has, or may at any time after the Closing Date have, jurisdiction over the gaming activities of OpBiz or its affiliates or those conducted at the Premises or any successor to such authority.

“Gaming Laws”   means the provisions of the Nevada Gaming Control Act, as amended from time to time, all regulations of the Nevada Gaming Commission promulgated thereunder, as amended from time to time, the provisions of the Clark County Code, as amended from time to time, and all other laws, statutes, rules, rulings, orders, ordinances, regulations and other Legal Requirements of any Gaming Authority.

“Gaming License” means any license, qualification, franchise, accreditation, approval, registration, permit, finding of suitability or other authorization relating to gaming, the gaming business or the operation of a casino under the Gaming Laws or required by the Gaming Authorities or otherwise necessary for the operation of gaming, the gaming business or a resort casino.

“Governmental Authority” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental or judicial, authority, body, agency, bureau or entity (including the Gaming Authorities, any zoning authority, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the

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Board of Governors, any central bank or any comparable authority) or any arbitrator with authority to bind the party at law.

“ Governing Body ” and “ Governing Bodies ” means any board of directors, board of managers, board of advisors or similar governing or advisory body of the Company and its Subsidiaries.

“Hotel Investor” means any Person (other than the Earl Investor and the Bay Harbour Investor) approved in writing by the Majority Holders to hold Equity Interests, directly or indirectly of the Company and in any event shall include Starwood if Sheraton becomes the Manager.

“Hotel Premises” means the portion of the Premises operated as a hotel, including all rooms and suites, amenities, restaurants, conference centers, meeting, banquet and other public rooms, spa, parking spaces and other facilities of the hotel portion of the Premises, but excluding the Casino.

“Identified Hotel Manager” means any of Sheraton, Hilton Hotels Corporation, Hyatt Corporation, Marriott International Inc. or Loew’s Hotels Holding Corporation (or any Affiliate of any of the foregoing primarily engaged in the management of hotels of at least a like quality to a Sheraton), or any replacement of comparable standing in the hotel management industry that is (i) acceptable to the Majority Holders and (ii) identified on a list delivered to the Mezzanine Investors by the Company no more frequently than once every two years, commencing on August 9, 2006.

“Indebtedness” means, without duplication, with respect to the Company and its Subsidiaries:  (a) all obligations of such Person for borrowed money or for the deferred purchase price of Property or services (other than current accounts payable incurred in the ordinary course of business, and accrued expenses and liabilities incurred in the ordinary course of business), and all obligations evidenced by bonds, debentures, notes, or similar instruments; (b) all obligations and liabilities of any Person secured by any Lien on the Property of the Company or any Subsidiary, with respect to which obligations and liabilities neither the Company nor any of its Consolidated Subsidiaries shall have assumed or become liable for the payment thereof; provided , however , that all such obligations and liabilities which are limited in recourse to such Property shall be included in Indebtedness only to the extent of the book value of such Property that would be shown on a Consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP; (c) all obligations or liabilities created or arising under any Capital Lease or conditional sale or other title retention agreement with respect to Property acquired by the Company or any of its Subsidiaries, even if the rights and remedies of the lessor, seller or lender thereunder are limited to repossession of such Property; provided, however, that all such obligations and liabilities which are limited in recourse to such Property shall be included in Indebtedness only to the extent of the book value of such Property that would be shown on a Consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP;  and (d) all obligations and liabilities under guaranties, indemnities, and for reimbursement in connection with letters of credit and surety bonds; provided , however , that for purposes of this Agreement, Indebtedness shall not include indebtedness incurred in connection with the financing of the utility plant owned and operated by Northwind and located on the Energy Premises.  For the purposes of this Agreement, the Indebtedness of any Person shall include the proportion of Indebtedness of any partnership in which such Person is a general

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partner or joint venturer with liability for the indebtedness of such Person but only to the extent of such Person’s interest in such general partnership or joint venture.

“ Individual Investor ” means each of Douglas Teitelbaum, Robert Earl and each of their Transferees.

“ Interest Expense ” means, with respect to the Company for any period, the aggregate interest expense of the Company and its consolidated Subsidiaries during such period determined on a consolidated basis, and shall in any event include, without limitation, (i) the amortization of debt discounts, (ii) the amortization of all fees payable in connection with the incurrence of indebtedness to the extent included in interest expense and (iii) the portion of any obligations in respect of Capital Leases allocable to interest expense (recognizing that, in any event, no portion of “Debt Service” or “Return on Equity” under the Energy Service Agreement shall be treated as interest expense on Capital Lease obligations, regardless of GAAP, but instead shall be treated as a component of EBITDA as set forth in the definition of EBITDA).

“Interests” means the Company’s membership interests (whether voting or non-voting) as authorized under the Company’s Third Amended and Restated Operating Agreement, dated as of November 30 th , 2006, together with any interests issued or issuable with respect thereto (whether by way of an interest dividend or stock split or in exchange for or in replacement of such interests or otherwise in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization).

“Investor Group” means, collectively, Robert Earl, an individual resident in the State of Florida, or one or more Affiliates of such individual (the “ Earl Investor ”), Bay Harbour Management, LC,  a Florida company, or an Affiliate thereof (the “ Bay Harbour Investor ”), and, at the option of the Earl Investor and the Bay Harbour Investor (including for this purpose Douglas P. Teitelbaum), a Hotel Investor or any successor to any of such Persons that the CMBS Lender has approved in writing.

“Issuer Group” means the Company, EquityCo, BH/RE and the owners of their Equity Interests and their equity sponsors.

“Leases” mean collectively, all space leases, occupancy agreements, subleases, licenses, permits, concessions or other agreements or arrangements, whether written or oral, and all agreements for the use or occupancy of all or any portion of the Premises, entered into by the Company or any of its Subsidiaries or by any Person on behalf of the Company or any of its Subsidiaries or assumed by Aladdin Gaming and assigned to the Company or any of its Subsidiaries, together with any and all extensions or renewals thereof, excluding room rentals.

“Leasing Manager” means any leasing manager designated by the Company pursuant to a Leasing Services Agreement and approved in writing by the Majority Holders prior to the retention thereof.

“Leasing Services Agreement” means any contract or agreement pursuant to which any Person other than the Company or an employee of the Company is granted authority to manage the leasing of the Retail Shops or any other portion of the Premises.

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“Legal Requirements”  means all laws, ordinances, rules, regulations, codes, statutes, orders, permits, licenses, authorizations, directives and requirements of any Governmental Authority applicable to the Company or any subsidiary, the Mezzanine Investors or the Premises or any portion thereof, including all applicable licenses, building codes, rent stabilization laws, zoning, planning, use and subdivision ordinances, flood disaster, health, safety and environmental laws and regulations, and the Americans with Disabilities Act of 1990, Pub. L. No. 89-670, 104 Stat. 327 (1990), as amended, and all regulations promulgated pursuant thereto.

“Liens” mean any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute, or contract, and including, without limitation, (a) a security interest, charge, claim, or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement, or conditional sale or a lease, consignment or bailment for security purposes, or (b) any reservation, exception, encroachment, easement, right-of-way, condition, restriction or other title exception or encumbrance affecting Property.

“Majority Holder” means the holder or holders of at least 50% of the Warrant Interests issuable upon the exercise of all outstanding Warrants.

“Management Agreement” means (a) the Management Contract for Planet Hollywood Hotel and Casino, a Sheraton Hotel, between Sheraton and OpBiz, dated April 23, 2003, together with the modifications thereto set forth in the BH/RE-Starwood Agreement, and any other amendment or modification thereto made in accordance with the terms of such agreement or (b) any other management agreement entered into in substitution, amendment or modification of the foregoing which has been approved in writing by the Majority Holders hereof prior to the effectiveness thereof.

“Management Pool” means options to purchase up to 6,000 Class B Units of the Company (subject to adjustments for splits, dividends, recapitalizations and similar changes affecting the Class B Units) to employees or management (other than Michael V. Mecca) of the Company and its Subsidiaries.

“Manager” means (a) any Identified Hotel Manager or any other Person approved in writing by the Majority Holders or (b) any replacement manager designated by the Company and approved in writing by the Majority Holders prior to the retention thereof; provided, that the consent of the Majority Holders shall not be required in the event that the Company replaces any Manager with an Identified Hotel Manager.

“Material Adverse Effect” means an event has occurred or condition exists that has or would reasonably be expected to have a material adverse effect on the (i) Condition of the Business, (ii) gaming business (taken as a whole) conducted by casinos located on the portion of Las Vegas Boulevard in Clark County, Nevada bounded by Blue Diamond Road at the south end and Oakey Boulevard at the north end, or (iii) on the validity or enforceability of this Agreement, the Warrants, the other Restructuring Documents or the rights or remedies of the Mezzanine Investors hereunder or thereunder; provided, that the material adverse effect was not the direct or indirect result of any action or inaction of the Company or any Subsidiary or Affiliate of the Company taken at the written request of any of the Mezzanine Investors.

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“Material Operating Agreements” means (a)  the Management Agreement (if any), the Leasing Services Agreement (if any), the Energy Premises Lease, the Energy Service Agreement, the Parking Agreement, the REA, the Planet Hollywood License Agreement and any casino operating agreement entered into in accordance with this Agreement) and any contracts or agreements entered into in replacement thereof or substitution therefor, and (b) any other Operating Agreements entered into after the Closing Date by the Company or any Manager or any other Person on their behalf with respect to the Premises or other Property, which (i) has a noncancellable term which exceeds one (1) year in length and requires in excess of an aggregate of $1,500,000 per annum in payments by or on behalf of the Company or any Manager or (ii) requires in excess of an aggregate of $1,500,000 per annum in payments by or on behalf of the Company or any Manager regardless of the term of such Operating Agreement; provided, that contracts or agreements entered into in respect of events or performances at the theater on the Premises will be excluded from Material Operating Agreements so long as any such contracts or agreements (x) are entered into by the Company or any Manager with a headline performing artist of international repute and standing and the average ticket price for any such performance or event shall be at least $100 per ticket or (y)  have a term or duration of less than sixty (60) days and are entered into by the Company or any Manager with a Person who is not covered by clause (x) above.

“Member” shall have the meaning in the recitals hereto.

“Mezzanine Investors” shall have the meaning in the recitals hereto.

“ Net Income ” means with respect to the Company for any period, the consolidated net income (or net loss) of the Company and its Subsidiaries for such period but excluding any extraordinary gains or losses or any gains or losses from the sale or disposition of assets other than in the ordinary course of business, all computed and calculated in accordance with GAAP.

“Northwind” means Northwind Aladdin, LLC, a Nevada limited liability company.

“OpBiz” means OpBiz, L.L.C., a Nevada limited liability company.

“Operating Agreements” mean, collectively, all agreements entered into by the Company, any Subsidiary thereof or by any other Person on behalf of the Company or any Subsidiary thereof or assumed by the Company or any Subsidiary thereof, relating to the ownership, operation or maintenance of the Premises or any other Property.

“Organizational Documents” means, (a) for any corporation, the Articles of Incorporation and by-laws of such and all amendments thereto, (b) for any partnership, collectively, the general or limited partnership agreement, as the case may be, with all amendments thereto, together with if appropriate, a certificate of limited partnership and all amendments thereto, and (c) for any limited liability company, the operating agreement and any other similar agreements governing the organization of the limited liability company and the management of its business and affairs, and all amendments thereto.

“Parking Agreement” means that certain Common Parking Area Use Agreement, dated as of February 26, 1998, by and between Aladdin Gaming and Boulevard Invest, as amended and modified from time to time and as assumed by Aladdin Gaming and as assumed by OpBiz.

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“Permits” means all licenses, permits, franchises, authorizations, certificates, approvals and consents, including, without limitation, all certificates of occupancy, all environmental, liquor, health and safety licenses of all Governmental Authorities which are material to the conduct of the Business and the ownership, use, occupation and operation of the Premises.

“Permitted Indebtedness” means (a) Indebtedness incurred in connection with the CMBS Facility and any Indebtedness incurred in refinancings of the outstanding principal amount of the CMBS Facility (together with any accrued interest, premiums, and any reasonable fees and expenses incurred therewith); provided that in no event shall principal amount thereof exceed $820 million less the amount of any repayments of principal and any permanent reductions in the commitments, and (b) Indebtedness incurred in connection with the financing of the utility plant owned and operated by Northwind and located on the Energy Premises.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, Governmental Authority, or any other entity.

“Plan” means any pension plan, as defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is maintained or contributed to by (or to which there is an obligation to contribute of) the Company or an ERISA Affiliate and each such plan for the five-year period immediately following the latest date on which the Company or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.

“Planet Hollywood License Agreement” means the Amended and Restated Planet Hollywood Hotel& Casino Licensing Agreement dated as of August 9, 2004 entered into by and among Planet Hollywood International, Inc., Planet Hollywood Memorabilia, Inc. and OpBiz.

“Pledge Agreement” means the Pledge Agreement in the form attached hereto as Exhibit C entered into by and between the Collateral Agent and EquityCo and acknowledged by the Company.

“ Preferred Interests ” means all Equity Interests (whether voting or non-voting) of any class or classes (however designated) that have a preferential right to share in the Company’s dividends or liquidating distributions, together with any interests issued or issuable with respect thereto (whether by way of a interest dividend or interest split or in exchange for or in replacement of such interests or otherwise in connection with a combination of interests, recapitalization, merger, consolidation or other corporate reorganization).

“Premises”   means the premises presently known as Aladdin Hotel and Casino and related complexes located at Las Vegas Boulevard and Harmon Avenue in Clark County, Nevada, as described in Exhibit D attached hereto, which Premises include, without limitation, the Hotel Premises, the Retail Shops, the Casino, and the Energy Premises.

“Property” means any right or interest in or to property of any kind whatsoever of the Company or any Subsidiary, whether real, personal or mixed and whether tangible or intangible, including, without limitation, the Premises and Equity Interests held by the Company or any Subsidiary.

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“Qualified Public Offering” shall mean an underwritten public offering on a firm commitment basis lead managed by a nationally recognized investment banking organization or organizations pursuant to an effective registration statement under the Securities Act, covering the offer and sale of Interests or voting common equity securities of the Company or any successor thereto (A) with respect to which the issuer of such securities receives aggregate net proceeds attributable to sales for the account of the Company (after deduction of underwriting discounts and commissions) of not less than $50 million, (B) with respect to which the gross equity value of the issuer of such securities, valued at the initial public offering price, is at least $200 million and (C) with respect to which such Interests are listed for trading on the New York Stock Exchange or quoted on The NASDAQ Stock Market, Inc.

“REA” means  that certain Construction, Operation and Reciprocal Easement Agreement dated as of February 26, 1998 among Aladdin Gaming, Boulevard Invest (as successor in interest to Aladdin Bazaar) and Aladdin Music Holdings, LLC, as amended by that certain (i) Amendment and Ratification of Construction, Operation and Reciprocal Easement Agreement dated as of November 20, 2000 between Aladdin Gaming and Boulevard Invest (as successor in interest to Aladdin Bazaar) which was recorded in the Official Records of Clark County in Book 20001120, Document No.:  00858 and (ii) Second Amendment of Construction, Operation and Reciprocal Easement Agreement between Aladdin and Boulevard Invest (as successor in interest to Aladdin Bazaar) which was recorded in the Official Records of Clark County in Book 20030331, Document No.:  04875 on March 31, 2003, as further amended, modified or supplemented from time to time.

“Required Investors” has the meaning set forth in Section 3.3(e) herein.

“Restructuring Agreement”  means the Restructuring Agreement entered into on the date hereof by and among the Company, EquityCo, the “Purchasers” named therein and the “Warrantholders” named therein.

“Restructuring Documents” has the meaning given such term in the Restructuring Agreement.

“Retail Shops” means collectively, the portion of the Hotel Premises or Casino where retail shops are located.

“Securities” means, at any time, (i) Interests, (ii) Preferred Interests,  (iii) the Warrants, and (iv) any other equity securities now or hereafter issued by the Company, together with any options thereon and any other interests issued or issuable with respect thereto (whether by way of a interests dividend, interests split or in exchange for or upon conversion of such interests or otherwise in connection with a combination of interests, recapitalization, merger, consolidation or other corporate reorganization).  At all times, the number of Securities deemed issued and outstanding or held or to be voted by any Securityholder shall be calculated in accordance with Section 1.2.

“Securities Act” means the Securities Act of 1933, as amended, or any similar successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Securityholder” shall have the meaning in the recitals hereto.

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“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to each direct or indirect Subsidiary or Subsidiaries of the Company.

“Taking” (and its correlative meanings) means any temporary or permanent taking by any Governmental Authority of the Premises or any portion thereof through eminent domain, condemnation or other proceedings or by any settlement or compromise of such proceedings, or any voluntary conveyance of such property or any portion thereof during the pendency of any such proceedings.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority and any and all liabilities (including interest, fines, penalties or additions to tax) with respect to the foregoing.

“Transfer” means any direct or indirect transfer, donation, sale, exchange, assignment, pledge, hypothecation, grant of a security interest in or other disposal or attempted disposal of all or any portion of a security or of any rights.  “Transferred” means the accomplishment of a Transfer, and “Transferee” means the recipient of a Transfer.

“Warrants” shall have the meaning in the recitals hereto.

“ Warrant Interests ” shall have the meaning assigned to such term in the Warrants.

Section 1.4  Accounting Terms .   All accounting terms not specifically defined herein shall be construed in accordance with GAAP, and all financial data submitted pursuant to this Agreement and all financial tests to be calculated in accordance with this Agreement shall be prepared and calculated in accordance with GAAP.  All financial tests relating to the Company shall be calculated with respect to the Company.  If any changes in accounting principles are hereafter occasioned by promulgation of rules, regulations, pronouncements or opinions by or are otherwise required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions), and any of such changes results in a change in the method of calculation of, or affects the results of such calculation of, any of the financial covenants, standards or terms found herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to reflect fairly and equitably such changes, with the desired result that the criteria for evaluating the Company’s financial condition and results of operations shall be the same after such changes as if such changes had not been made.

 

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ARTICLE II — REPRESENTATIONS AND WARRANTIES

Section 2.1  Representations of the Securityholders, the Individual Investors and BH/RE .   Each of the Securityholders, the Individual Investors and BH/RE, individually and not jointly, hereby represents, warrants and covenants to the Company and the other Securityholders as follows: (a) such Person has full company power and authority (in the case of a Person that is a limited liability company, corporation or similar corporate entity), or capacity (in the case of a Person who is an individual) to enter into this Agreement and perform its obligations hereunder; (b) this Agreement constitutes the valid and binding obligation of such Person enforceable against such Person in accordance with its terms; (c) the execution, delivery and performance by such Person of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to such Person, or require such Person to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made (other than approvals or consents of Gaming Authorities); and (ii) does not and will not result in a breach of, constitute a default under, accelerate any obligation under or give rise to a right of termination of any indenture or loan or credit agreement or any other material agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which such Person is a party or by which the property of such Person is bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the assets or properties of such Person; and (d) each of the Member and BH/RE is a partnership for federal income tax purposes.

Section 2.2  Representations of the Company .   The Company hereby represents, warrants and covenants to the Securityholders as follows: (a) it has full limited liability company power and authority to enter into this Agreement and perform its obligations hereunder; (b) this Agreement constitutes the valid and binding obligation of the Company enforceable against it in accordance with its terms; and (c) the execution, delivery and performance by the Company of this Agreement: (i) does not and will not violate any laws, rules or regulations of the United States or any state or other jurisdiction applicable to the Company, or require the Company to obtain any approval, consent or waiver of, or to make any filing with, any Person that has not been obtained or made (other than approvals or consents of Gaming Authorities); and (ii) does not and will not result in a breach of, constitute a default under, accelerate any obligation under or give rise to a right of termination of any indenture or loan or credit agreement or any other material agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which such Person is a party or by which the property of the Company is bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the assets or properties of the Company.

ARTICLE III - RESTRICTIONS ON TRANSFER; CO-SALE; DRAG ALONG

Except as otherwise expressly stated herein, the provisions of this Article III shall terminate immediately upon the closing of a Qualified Public Offering.

Section 3.1  Restrictions on Transfer .   Each Securityholder agrees that it will not Transfer all or any portion of the Securities, except:

(a)           Transfers by any Mezzanine Investor to any Person other than a Competitor made in compliance with the Gaming Laws and any requirements and restrictions

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imposed by the Gaming Authorities; provided , however , that the Transferee shall have entered into a Joinder Agreement providing that all Securities so Transferred shall continue to be subject to all provisions of this Agreement as if such Securities were held by such Mezzanine Investor and for all purposes hereunder such Transferee shall be a “Mezzanine Investor”; and

(b)           Transfers by any Non-Mezz Investor to any Person other than a Competitor made in compliance with the Gaming Laws and any requirements and restrictions imposed by the Gaming Authorities and Section 3.2 hereof; provided , however , that the Transferee in each case shall have entered into a Joinder Agreement providing that all Securities so Transferred shall continue to be subject to all provisions of this Agreement as if such Securities were held by such Non-Mezz Investor and for all purposes hereunder such Transferree shall be a “Non-Mezz Investor”;

(c)           Transfers by a Securityholder pursuant to Section 3.3 hereof made in accordance with the specific procedures set forth therein; and

(d)           Transfers required by Gaming Authorities.

Section 3.2  Co-Sale Option of Mezzanine Investors .   In the event a Non-Mezz Investor described in Section 3.1(b) above ( a “ Transferring Investor ”) proposes to Transfer all or any portion of its Securities to any Person (the “ Offeror ”) in response to a bona fide offer (a “ Transaction Offer ”), such Transferring Investor may do so only pursuant to and in accordance with the following provisions of this Section 3.2 and after receipt of all necessary Gaming Approvals:

(a)           Each Mezzanine Investor (a “Co-Selling Investor” ) shall have the right (the “Co-Sale Option” ) to participate in the Transaction Offer with respect to any Securities subject thereto by giving written notice (the “Acceptance Notice” ) to the Transferring Investor within ten (10) Business Days of receipt of a notice (the “Co-Sale Offer Notice” ) specifying the terms of the Transaction Offer.  Each Acceptance Notice shall indicate the maximum number and type of Securities such Co-Selling Investor wishes to sell including the number and type of Securities it would sell if one or more other Co-Selling Investor do not elect to participate in the sale on the terms and conditions stated in the Co-Sale Offer Notice.

(b)          Each Co-Selling Investor shall have the right to sell a portion of its Securities pursuant to the Transaction Offer which is equal to or less than the product obtained by multiplying the total number of Securities subject to the Transaction Offer and available for sale to the Offeror by a fraction, the numerator of which is the total number of Securities owned by such Co-Selling Investor on the date of the Co-Sale Offer Notice on an as exercised basis and the denominator of which is the total number of Securities then held by all Co-Selling Investors and the Transferring Investor on the date of the Co-Sale Offer Notice (also on an as exercised basis).  To the extent one or more Co-Selling Investors elects not to sell, or fails to exercise its rights to sell the full amount of such Securities which they are entitled to sell pursuant to this Section 3.2, the right of the Co-Selling Investors who have elected to sell Securities shall be increased proportionately based on their relative holdings and such other Co-Selling Investors shall have an additional three (3) Business Days from the date upon which they are notified of such election or failure to exercise in which to increase the number of Securities to be sold by them hereunder.

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(c)           Within ten (10) calendar days after the date by which the Co-Selling Investors were first required to notify the Transferring Investor of their intent to participate, the Transferring Investor shall notify each participating Co-Selling Investor of the number of Securities held by such Co-Selling Investor that will be included in the sale and the date on which the Transaction Offer will be consummated, which shall be no later than the later of (i) sixty (60) calendar days after the date by which the Co-Selling Investors were required to notify the Transferring Investor of their intent to participate and (ii) the satisfaction of any approval or filing requirements of any Governmental Authority, if any.

(d)          Each participating Co-Selling Investor may effect its or his participation in any Transaction Offer hereunder by delivery to the Offeror, or to the Transferring Investor for delivery to the Offeror, of one or more instruments or certificates, properly endorsed for Transfer, representing the Securities it elects to sell therein.  The Co-Selling Investors shall make customary representations and warranties and provide customary indemnities in connection therewith.  The Co-Selling Investors further agree that (i) the liability of any Mezzanine Investor with respect to any representation or warranty made by such Mezzanine Investor in connection with any sale pursuant to this Section 3.2 shall be several and not joint with any other Person, and shall be limited to each such Mezzanine Investor’s net proceeds from such sale.  Each Co-Selling Investor shall execute and deliver such instruments of conveyance and Transfer and take such other action, and execute any related documents as the Transferring Investor or Offeror may reasonably require in order to carry out the terms and provisions of this Section 3.2 .  In connection with any Transfer subject to this Section 3.2 , (i) each Co-Selling Investor shall be fully responsible for (x) its own legal fees, (y) its pro rata share (calculated in accordance with Section 3.2(b) ) of any applicable placement or brokerage fees, if any and (z) its pro rata share (calculated in accordance with Section 3.2(b) ) of any expenses incurred by the Transferring Investor for the benefit of all participating Securityholders, and (ii) the Transferring Investor shall bear its own expenses.  At the time of consummation of the Transaction Offer, the Offeror shall remit directly to each relevant Co-Selling Investor that portion of the sale proceeds to which the relevant Co-Selling Investor is entitled by reason of its participation therein (less any adjustments due to the conversion of any convertible securities or the exercise of any exercisable securities and any required tax withholding).  No Securities may be purchased by the Offeror from the Transferring Investor unless the Offeror simultaneously purchases from the participating Co-Selling Investors all of the Securities that they have elected to sell pursuant to this Section 3.2 .

(e)           Any Securities held by a Transferring Investor which are the subject of the Transaction Offer that the Transferring Investor desires to sell following compliance with this Section 3.2 may be sold to the Offeror only during the period specified in Section 3.2(c) and only on terms no more favorable to the Transferring Investor than those contained in the Co-Sale Offer Notice.  Promptly after such sale, the Transferring Investor shall notify the Co-Selling Investors of the consummation thereof and shall furnish such evidence of the completion and time of completion of such sale and of the terms thereof as may reasonably be requested by the Co-Selling Investors.  The Offeror shall take such Securities subject to the provisions of this Article III .  In the event that the Transaction Offer is not consummated within the period required by this Section 3.2 or the Offeror fails timely to remit to each participating Mezzanine Investor its portion of the sale proceeds, the Transaction Offer shall be deemed to lapse, and any Transfers of Securities pursuant to such Transaction Offer shall be deemed to be

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in violation of the provisions of this Agreement unless the Transferring Investor once again complies with the provisions of this Section 3.2 hereof with respect to such Transaction Offer.

(f)            If (i) any Individual Investor proposes to Transfer all or a portion of its Equity Interests in BH/RE that, when taken together with all previous Transfers of Equity Interests by such Individual Investor (except for any transactions specifically excluded by this second to last sentence of this Section 3.2(f) ) would equal an aggregate amount of Equity Interests equal to or greater than 5% of all such Investor’s Equity Interests in BH/RE held as of the date hereof, then the Individual Investor shall (subject to any required consents or approvals of Gaming Authorities) offer to exchange the Securities held by each Mezzanine Investor for Equity Interests in BH/RE of the kind proposed to be Transferred in such sale at their respective fair market values as agreed to by the Individual Investors and the Majority Holders or (ii) BH/RE proposes to Transfer all or a portion of its Equity Interests in any Member (either (i) or (ii) of this Section 3.2(f) a “ Parent Sale ”), then BH/RE or such Member, as applicable, shall (subject to any required consents or approvals of Gaming Authorities) offer to exchange the Securities held by each Mezzanine Investor for Equity Interests in BH/RE or such Member, as applicable, of the kind proposed to be Transferred in such Parent Sale at their respective fair market values as agreed to by the Individual Investors and the Majority Holders.  If the Individual Investors and the Majority Holders are unable to agree either valuation, then the Individual Investors and the Majority Holders shall select an Appraiser to determine any disputed valuation, the cost of which shall be borne equally by the Majority Holders and Company.  Mezzanine Investors who exchange their Securities for Equity Interests in BH/RE or the Member shall be entitled to participate in such Parent Sale in accordance with the other terms of this Section 3.2 as if such terms were applicable to such Parent Sale, and BH/RE and the Member agree to cooperate with the Mezzanine Investors, in good faith, to achieve this result.  The provisions of this Section 3.2(f) shall not apply to Transfers by any Individual Investor (y) to the spouse, children or siblings of such Individual Investor or to a trust or family limited partnership for the benefit of any of them, or (z) upon the death of any Individual Investor to such Individual Investor’s heirs, executors or administrators or to a trust under such Individual Investor’s will, or Transfers between such Individual Investor and such Individual Investor’s guardian or conservator, provided that in each case the Transferee shall have entered into a Joinder Agreement in substantially the form attached hereto as Exhibit B providing that all Securities so Transferred shall continue to be subject to all provisions of this Agreement as if such Securities were still held by such Individual Investor, except that no further Transfer shall thereafter be permitted hereunder except in compliance with this Sections 3.2(f).  Notwithstanding anything to the contrary in this Agreement or any failure by a Transferee under this Section 3.2(f) to execute a Joinder Agreement, such Transferee shall take any Securities so Transferred subject to all provisions of this Agreement as if such Securities were still held by the Individual Investor making such Transfer, whether or not they so agree in writing.  The parties hereto (including without limitation BH/RE and the Individual Investors) agree that in the event of any exchange of Securities held by a Mezzanine Investor for Equity Interests in the Member or BH/RE pursuant to this Section 3.2(f) , all steps will be taken that may be necessary or advisable to ensure that such exchange qualifies under Section 721 of the Code as a tax-free contribution of property to a partnership in exchange for an interest in the partnership. The parties hereto (including, without limitation, BH/RE and the Individual Investors) further agree to treat and report any such exchange for all purposes (including accounting and tax purposes) in conformity with the preceding sentence.

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Section 3.3  Drag-Along Obligations .

(a)           If the Required Investors (as defined in Section 3.3(e) below) (the “Selling Securityholders” ) determine to sell or otherwise dispose of all or substantially all of the assets of the Company or all or substantially all of the Equity Interests of the Company to any Person not Affiliated with either of the Company or any of the Securityholders (the “Buyer” ), or to cause the Company to merge with or into or consolidate with any Buyer, in a bona fide arm’s length transaction (an “Approved Sale” ), each Securityholder, subject to the provisions of this Section 3.3 , shall be obligated to and shall upon the written request of the Selling Securityholders (and subject to the receipt of all required Gaming Approvals:  (i) sell, Transfer and deliver, or cause to be sold, Transferred and delivered, to the Buyer, his, her or its pro rata portion of Securities on substantially the same terms applicable to the Selling Securityholders (with appropriate adjustments to reflect the conversion of convertible securities, the redemption of redeemable securities and the exercise of exercisable securities); and (ii) execute and deliver such instruments of conveyance and Transfer and take such other action, including exercising any voting rights in favor of any Approved Sale proposed by the Selling Securityholders (including by delivering any irrevocable written proxy authorizing the Selling Securityholders or their authorized representatives to vote in favor or such Approved Sale) and executing any purchase agreements, merger agreements, escrow agreements or related documents, as the Selling Securityholders may reasonably require in order to carry out the terms and provisions of this Section 3.3 ; provided further that each Mezzanine Investor shall be required to make any representations or warranties and to provide any customary indemnities in connection therewith severally, but not jointly, with the Selling Securityholders.  The Selling Securityholders shall pay all reasonable out-of-pocket costs and expenses incurred by the Mezzanine Investors in connection with the provisions of this Section 3.3 (including the reasonable fees and expenses of one independent counsel for the Mezzanine Investors as a group, selected by the Majority Holders).  The Mezzanine Investors shall bear on their pro rata share (calculated in accordance with Section 3.2(b) ) of any expenses incurred by the Selling Securityholders for the benefit of all Selling Securityholders.

(b)           Not less than thirty (30) days prior to the date proposed for the closing of any Approved Sale, the Selling Securityholders shall give written notice to each other Securityholder, setting forth in reasonable detail the name or names of the Buyer, the terms and conditions of the Approved Sale, including the purchase price, and the proposed closing date.

(c)           The obligations of each Securityholder set forth in this Section 3.3 are subject to condition that, upon consummation of the Approved Sale, each Securityholder receives the same form and per unit amount of consideration, or if any Securityholder is given an option as to the form and per unit amount of consideration, such option is made available to all Securityholders.

(d)           The Selling Securityholders further agree that (i) the liability of any Mezzanine Investor with respect to any representation or warranty made by such Mezzanine Investor in connection with any Approved Sale shall be several and not joint with any other Person, and shall be limited to each such Mezzanine Investor’s net proceeds from the Approved Sale, (ii) the Mezzanine Investors shall not be required to consummate any Approved Sale unless the Mezzanine Investors are provided with (or entitled to rely on) an opinion of counsel to the effect that the Approved Sale is not in violation of any Applicable Law (including Gaming

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Laws), or in the alternative, such Mezzanine Investors shall be indemnified by the Buyer (or the Selling Securityholders) for any violation thereof and (iii) no Mezzanine Investor shall be required to agree to any covenant not to compete or covenant not to solicit customers, employees or suppliers of the Buyer or any Affiliate thereof.

(e)           The “Required Investors” means any Securityholder (or group of Securityholders) who at the time hold at least 75% of the aggregate In