SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 9, 1994
MIRAGE RESORTS, INCORPORATED
______________________________________________________
(Exact name of Registrant as specified in its charter)
Nevada 1-6697 88-0058016
______________________ ___________ _________________
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
3400 Las Vegas Boulevard South, Las Vegas, Nevada 89109
_______________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 791-7111
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On December 9, 1994, Victoria Partners, a Nevada general
partnership (the "Joint Venture"), was formed as a joint
venture between MRGS Corp. ("MRGS"), an indirect wholly
owned subsidiary of the Registrant, and Gold Strike L.V.
("Gold Strike"), a general partnership composed of the
principals of the Gold Strike, Nevada Landing and
Railroad Pass hotel-casinos in Jean, Henderson and
Boulder City, Nevada. The purpose of the Joint Venture
is to design, develop, construct, own and operate a new
themed hotel-casino resort (the "Project") on
approximately 44 acres at the south end of the former
Dunes Hotel, Casino and Country Club site now owned by
the Registrant. The Project will have more than 400 feet
of frontage on the Las Vegas Strip and will feature
approximately 3,000 guest rooms and an 80,000- to
100,000-square foot casino. The Project will be designed
and marketed to appeal to the value-oriented Las Vegas
visitor.
MRGS and Gold Strike each own 50% of the Joint Venture.
Gold Strike will supervise the design and construction
and will manage and operate the Project without fee.
Construction of the Project is expected to begin in the
spring of 1995 and be completed by late 1996. Based on
preliminary estimates, the total cost of the Project is
anticipated to be between $250 million and $300 million.
This amount includes the estimated value of the land,
which the Registrant will contribute in exchange for its
equity interest in the Joint Venture. The Joint Venture
Agreement governing the Joint Venture is filed as an
exhibit to this Form 8-K.
On December 21, 1994, the Joint Venture entered into a
Reducing Revolving Loan Agreement (the "Loan Agreement")
providing for a $175 million seven-year (subject to
scheduled amortization) reducing revolving credit
facility (the "Facility") from a group of nine
commercial banks led by Bank of America National Trust
and Savings Association, as Administrative Agent.
Borrowings under the Facility are tied, at the Joint
Venture's option, to the prime rate or the London
Interbank Offered Rate. Borrowings under the Facility
are available for development and construction of the
Project and thereafter for working capital and general
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Joint Venture purposes. Borrowings under the Facility
will not be available until (i) Gold Strike has
contributed at least $30 million to the Joint Venture,
(ii) the Registrant has contributed the land to the Joint
Venture, (iii) an affiliate of Gold Strike has delivered
to the lenders a $25 million cash deposit or letter of
credit in support of its guaranty of completion of
construction of the Project and (iv) certain other
condition have been satisfied. If all of such conditions
have not been satisfied by April 30, 1995, the Loan
Agreement will terminate. Borrowings under the Facility
generally may not exceed 70% of the cumulative Project
costs (including the attributed value of the land).
Borrowings under the Facility are collateralized
by first liens on the land and improvements con-
stituting the Project and substantially all of the
Joint Venture's personal property. Loans under the
Facility are not guaranteed by the Registrant. An
affiliate of Gold Strike has agreed to guarantee com-
pletion of construction of the Project by December 31,
1996.
The Loan Agreement contains a number of covenants
applicable to the Joint Venture, including those relating
to the maintenance of specified interest coverage and
leverage ratios and certain limitations on further
indebtedness, liens, capital expenditures, investments,
mergers and sales of assets and distributions to the
venturers. The Loan Agreement is filed as an exhibit to
this Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Joint Venture Agreement, dated as of December 9, 1994,
among MRGS, Gold Strike and the Registrant (without
Exhibit).
99.2 Reducing Revolving Loan Agreement, dated as of December
21, 1994, among the Joint Venture, each Bank party
thereto, The Long-Term Credit Bank of Japan, Ltd., Los
Angeles Agency and Societe Generale, as Co-Agents, and
Bank of America National Trust and Savings Association,
as Administrative Agent (without Schedules or Exhibits).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MIRAGE RESORTS, INCORPORATED
(Registrant)
Dated: January 18, 1995 By: BRUCE A. LEVIN
___________________________________
BRUCE A. LEVIN
Vice President and General Counsel
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JOINT VENTURE AGREEMENT
OF
VICTORIA PARTNERS
Dated as of December 9, 1994
EXHIBIT 99.1
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C> <C>
PREAMBLE .............................................. 1
ARTICLE 1 THE JOINT VENTURE
1.1 Organization.................................. 1
1.2 Name.......................................... 2
1.3 Place of Business............................. 2
1.4 Business of the Joint Venture................. 2
1.5 Purposes Limited.............................. 2
1.6 No Payments of Individual Obligations......... 2
1.7 Statutory Compliance.......................... 2
1.8 Title to Property............................. 3
1.9 Duration...................................... 3
1.10 Definitions................................... 3
ARTICLE 2 THE VENTURERS
2.1 Identification................................ 6
2.2 Services of Venturers......................... 6
2.3 Reimbursement and Fees........................ 7
2.4 Transactions with Affiliates.................. 7
2.5 Liability of the Venturers; Indemnification... 7
ARTICLE 3 CAPITAL CONTRIBUTIONS; LOANS; CAPITAL
ACCOUNTS
3.1 Initial Capital Contributions................. 8
3.2 MR Sub Additional Capital Contribution........ 8
3.3 Gold Strike Additional Capital Contributions.. 9
3.4 Acquisition of Additional Property............ 9
3.5 Failure to Make Capital Contributions......... 10
3.6 Interests..................................... 11
3.7 Loans by Venturers to the Joint Venture....... 11
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
3.8 Loans by Third Parties to the Joint Venture... 12
3.9 No Further Capital Contributions.............. 13
3.10 Capital Accounts.............................. 13
3.11 Return of Capital............................. 13
ARTICLE 4 PREOPENING ACTIVITIES
4.1 Construction Financing........................ 13
4.2 Design, Development and Construction.......... 14
4.3 Governmental Approvals........................ 15
ARTICLE 5 ALLOCATION OF PROFITS AND LOSSES
5.1 Profits and Losses............................ 16
5.2 Allocations................................... 17
5.3 Transfers of Joint Venture Interests.......... 18
ARTICLE 6 NON-LIQUIDATING DISTRIBUTIONS
6.1 Distributable Cash............................ 19
6.2 Distribution of Distributable Cash............ 19
ARTICLE 7 ACCOUNTING AND RECORDS
7.1 Books and Records............................. 20
7.2 Tax Book Values............................... 20
7.3 Reports....................................... 21
7.4 Tax Returns................................... 22
7.5 Tax Matters Partner........................... 22
7.6 Fiscal Year................................... 22
7.7 Bank Accounts................................. 22
7.8 Tax Elections................................. 23
7.9 Tax Withholding............................... 23
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE 8 CONFIDENTIALITY; INTELLECTUAL PROPERTY
8.1 Confidential Treatment of Information......... 24
8.2 Intellectual Property......................... 25
ARTICLE 9 MANAGEMENT
9.1 Management by Managing Venturer............... 25
9.2 Exclusive Powers of the Venturers............. 27
9.3 Replacement of Managing Venturer.............. 28
9.4 Meetings of the Venturers; Time and Place..... 29
9.5 Officers...................................... 29
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 MR Sub........................................ 30
10.2 Gold Strike................................... 32
10.3 Brokers....................................... 33
ARTICLE 11
TRANSFER OF INTERESTS
11.1 Restrictions on Transfers..................... 33
11.2 Permitted Transfers........................... 34
11.3 Limitation on Ownership of Venturers.......... 36
11.4 Right of First Refusal........................ 36
11.5 Buy-Out on Default............................ 37
ARTICLE 12 EVENTS OF DEFAULT
12.1 Events of Default............................. 38
12.2 Remedies upon Default......................... 40
ARTICLE 13 DISSOLUTION AND LIQUIDATION
13.1 Events of Dissolution......................... 40
13.2 Venturers' Consent to Continue Business....... 41
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C> <C>
13.3 Dissolution and Liquidation................... 42
13.4 Notice of Dissolution......................... 43
ARTICLE 14 MISCELLANEOUS PROVISIONS
14.1 Waiver of Partition and Covenant not to Withdraw.43
14.2 Notices....................................... 44
14.3 Amendments.................................... 45
14.4 Successors and Assigns........................ 45
14.5 Time.......................................... 45
14.6 Severability.................................. 45
14.7 Counterparts.................................. 45
14.8 Attorneys' Fees............................... 45
14.9 Entire Agreement.............................. 46
14.10 Further Assurances............................ 46
14.11 Headings ..................................... 46
14.12 Exhibits ..................................... 46
14.13 Approvals and Consen.......................... 46
14.14 Estoppels .................................... 46
14.15 Compliance with Laws.......................... 46
14.16 Remedies Cumulative........................... 47
14.17 Waiver........................................ 47
14.18 Gaming Licensing Matters...................... 47
14.19 Liquidated Damages............................ 47
14.20 Roll-up of MR Sub Interest.................... 48
14.21 Transportation System......................... 48
14.22 Vehicular Access.............................. 48
14.23 Off-Site Improvements......................... 49
14.24 The Mirage Golf Club.......................... 49
14.25 Recreational Lake............................. 49
SIGNATURES .............................................. 49
EXHIBIT A Map of Property
</TABLE>
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<PAGE>
JOINT VENTURE AGREEMENT
OF
VICTORIA PARTNERS
This Joint Venture Agreement (the "Agreement") is made as of
December 9, 1994 by and between MRGS Corp. ("MR Sub"), a Nevada
corporation controlled by Mirage Resorts, Incorporated, a Nevada
corporation (MRI"), and Gold Strike L.V. ("Gold Strike"), a
Nevada general partnership (MR Sub and Gold Strike are
hereinafter referred to individually as a "Venturer" and
collectively as the "Venturers").
PREAMBLE
WHEREAS, the Venturers desire to form a joint venture for the
purpose of acquiring certain unimproved real property comprising
approximately 43.652 acres located in Clark County, Nevada and
indicated as "Lot 2" on Exhibit A hereto (the "Property") and
designing, developing, constructing, owning and operating a
budget-class hotel-casino and related facilities (the "Facility")
on the Property.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and in
consideration of the mutual promises set forth, the parties agree
as follows:
ARTICLE 1
THE JOINT VENTURE
Section 1.1 Organization. The Venturers hereby form and
establish a joint venture (the "Joint Venture") under and
pursuant to, and which shall continue to constitute a joint
venture for purposes of, the provisions of this Agreement and the
Nevada Uniform Partnership Act (the "Act") as of the date first
above written, upon the terms and conditions set forth in this
Agreement.
Section 1.2 Name. The name of the Joint Venture shall be
Victoria Partners and all business of the Joint Venture shall be
conducted solely in such name.
Section 1.3 Place of Business. The principal office of
the Joint Venture shall be located at such place within Clark
County, Nevada as may be approved by the Venturers.
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Section 1.4 Business of the Joint Venture. The business
of the Joint Venture is to acquire and own the Property and to
design, develop, construct, finance, own and operate the Facility
on the Property. In furtherance of its business, the Joint
Venture shall have and may exercise all the powers now or
hereafter conferred by the laws of the State of Nevada on
partnerships formed under the laws of that State, and may do any
and all things related or incidental to its business as fully as
natural persons might or could do under the laws of that State.
Section 1.5 Purposes Limited. The Joint Venture shall be
a joint venture only for the purposes specified in Section 1.4.
Except as otherwise provided in this Agreement, the Joint Venture
shall not engage in any other activity or business and neither
Venturer shall have any authority to hold itself out as an agent
of the other Venturer in any other business or activity.
Section 1.6 No Payments of Individual Obligations. The
Venturers shall use the Joint Venture's credit and assets solely
for the benefit of the Joint Venture. No asset of the Joint
Venture shall be transferred or encumbered for or in payment of
any individual obligation of a Venturer.
Section 1.7 Statutory Compliance. The Joint Venture
shall exist under and be governed by, and this Agreement shall be
construed and enforced in accordance with, the laws of the State
of Nevada. The Venturers shall make all filings and disclosures
required by, and shall otherwise comply with, all such laws. The
Venturers shall execute, file and record in the appropriate
records any assumed or fictitious name certificate required by
law to be filed or recorded in connection with the formation of
the Joint Venture and shall execute, file and record such other
documents and instruments as may be necessary or appropriate with
respect to the formation of, and conduct of business by, the
Joint Venture.
Section 1.8 Title to Property. All property, whether
real or personal, tangible or intangible, owned by the Joint
Venture shall be owned in the name of the Joint Venture and no
Venturer shall have any ownership interest in such property in
its individual name or right and each Venturer's interest in the
Joint Venturer shall be personal property for all purposes.
Section 1.9 Duration. The Joint Venture shall commence
on the date first above written and shall continue until
dissolved and liquidated pursuant to law or any provision of this
Agreement.
Section 1.10 Definitions. As used in this Agreement:
(a) "Acceptance Notice" has the meaning set forth
in Section 11.4 hereof.
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(b) "Accountants" has the meaning set forth in
Section 7.3 hereof.
(c) "Act" has the meaning set forth in Section
1.1 hereof.
(d) "Affiliate" means a person which directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the person
specified; provided, however, that a Venturer, as such,
shall not be deemed to be an Affiliate of the other
Venturer.
(e) "Applicable Ratio" has the meaning set forth
in Section 3.5 hereof.
(f) "Appraisal Notice" has the meaning set forth
in Section 11.5 hereof.
(g) "Appraised Value" has the meaning set forth
in Section 11.5 hereof.
(h) "Capital Account" has the meaning set forth
in Section 3.10 hereof.
(i) "Code" has the meaning set forth in Section
5.1 hereof.
(j) "Construction Financing" means debt
financing, which may be unsecured or collateralized by a
lien on the Property and the Facility or any portion thereof
(including purchase money financing collateralized by
furniture, furnishings, fixtures, machinery or equipment),
to be obtained by the Joint Venture from one or more
commercial banks or other lenders (including vendors or the
Venturers) for the purpose of funding Project Costs and
which, except as otherwise provided in Section 4.1 hereof,
is non-recourse to the owners and other Affiliates of each
Venturer and does not require the owners or other Affiliates
of any Venturer to provide a personal guaranty.
(k) "Construction Period" has the meaning set
forth in Section 4.1 hereof.
(l) "Cumulative Excess Contributions" has the
meaning set forth in Section 3.5 hereof.
(m) "Defaulting Venturer" has the meaning set
forth in Section 12.1 hereof.
(n) "Disqualification Notice" has the meaning set
forth in Section 11.4 hereof.
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(o) "Distributable Cash" has the meaning set
forth in Section 6.1 hereof.
(p) "Event of Bankruptcy" has the meaning set
forth in Section 12.1 hereof.
(q) "Event of Default" has the meaning set forth
in Section 12.1 hereof.
(r) "Facility" means a new budget-class hotel-
casino and related restaurant, entertainment, retail and
other facilities and amenities, containing not less than
2,500 nor more than 3,000 guest rooms, to be designed,
developed and constructed by the Joint Venture on the
Property, including all furniture, furnishings, machinery,
equipment and other tangible personal property located
therein and used in connection therewith.
(s) "Gold Strike" means Gold Strike L.V., a
Nevada general partnership.
(t) "Initiating Venturer" has the meaning set
forth in Section 11.4 hereof.
(u) "Interest" has the meaning set forth in
Section 3.6 hereof.
(v) "Losses" has the meaning set forth in Section
5.1 hereof.
(w) "Managing Venturer" means Gold Strike until
such time, if any, as MR Sub becomes the Managing Venturer
pursuant to Section 9.3 hereof, and thereafter means MR Sub.
(x) "MRI" means Mirage Resorts, Incorporated, a
Nevada corporation.
(y) "MR Sub" means MRGS Corp., a Nevada
corporation.
(z) "Nevada Gaming Authorities" means,
collectively, the Nevada Gaming Commission, the Nevada State
Gaming Control Board and the Clark County Liquor and Gaming
Licensing Board, or any governmental agency of the State of
Nevada or its political subdivisions which succeeds to the
functions of such agencies.
(aa) "Non-Managing Venturer" means MR Sub until
such time, if any, as MR Sub becomes the Managing Venturer
pursuant to Section 9.3 hereof, and thereafter means Gold
Strike.
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(bb) "Offering Notice" has the meaning set forth
in Section 11.4 hereof.
(cc) "Profits" has the meaning set forth in
Section 5.1 hereof.
(dd) "Project Cost" means all costs of designing,
developing, constructing, equipping and opening the Facility
paid or accrued prior to the end of the Construction Period,
including all direct costs related thereto such as labor,
materials, supplies, furniture, furnishings, fixtures,
machinery, equipment, construction management,
architectural, engineering and design fees, site work,
utility installation and hook-up fees, construction permits,
certificates and bonds, preopening expenses, gaming tax
deposits, license fees, initial gaming bankroll and interest
and fees on the Construction Financing, but excluding the
value of the Property and the cost of acquiring any
additional property pursuant to Section 3.4 hereof.
(ee) "Property" has the meaning set forth in the
Preamble to this Agreement.
(ff) "Responding Venturer" has the meaning set
forth in Section 11.4 hereof.
(gg) "Transfer" has the meaning set forth in
Section 11.1 hereof.
(hh) "Venturer" and "Venturers" means,
individually or collectively, as applicable, the parties
named as such in the initial paragraph of this Agreement or
any successor to either party by Transfer expressly
permitted by this Agreement.
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ARTICLE 2
THE VENTURERS
Section 2.1 Identification. MR Sub and Gold Strike shall
be the Venturers of the Joint Venture. No other person may
become a Venturer except pursuant to a Transfer specifically
permitted under and effected in compliance with this Agreement.
Section 2.2 Services of Venturers. During the existence
of the Joint Venture, the Venturers shall be required to devote
only such time and effort to Joint Venture business as may be
necessary to promote adequately the interests of the Joint
Venture and the mutual interests of the Venturers, it being
specifically understood and agreed that the Venturers shall not
be required to devote full time to Joint Venture business and,
except as provided in Section 3.4 hereof, each Venturer and its
Affiliates may at any time and from time to time engage in and
possess interests in other business ventures of every type and
description, independently or with others, whether or not such
ventures relate to or compete with the Facility; and neither the
Joint Venture nor the other Venturer shall by virtue of this
Agreement have any right, title or interest in or to such
independent ventures or to the income or profits derived
therefrom.
Section 2.3 Reimbursement and Fees. Unless expressly
permitted in this Agreement or approved by each of the Venturers,
none of the Venturers nor any Affiliate thereof shall be paid any
compensation for its services to the Joint Venture or be
reimbursed for out-of-pocket, overhead or general administrative
expenses.
Section 2.4 Transactions with Affiliates. Unless
expressly permitted by this Agreement or approved by each of the
Venturers, the Joint Venture shall not employ or retain, or enter
into any transaction or contract with, any Venturer or any
officer, employee or Affiliate of any Venturer, except for such
compensation and upon such other terms and conditions as are no
less favorable to the Joint Venture than those that could be
obtained at the time from an unrelated party.
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Section 2.5 Liability of the Venturers; Indemnification.
No Venturer shall be liable for damages or otherwise to the
Joint Venture or the other Venturer for any act or omission
performed or omitted by it in good faith on behalf of the Joint
Venture and in a manner reasonably believed by it to be within
the scope of the authority granted to it by this Agreement and in
the best interests of the Joint Venture if it shall not have been
guilty of gross negligence, bad faith or willful misconduct with
respect to such acts or omissions. Each Venturer shall be
indemnified by the Joint Venture from and against any and all
claims, losses, damages and liabilities, including reasonable
attorneys' fees which shall be reimbursed as incurred, arising
out of or relating to any act or failure to act performed or
omitted by it within the scope of the authority conferred upon it
by this Agreement; provided, however, that such indemnity shall
be payable only if such Venturer acted in good faith and in a
manner it reasonably believed to be in, or not opposed to, the
best interests of the Joint Venture and the Venturers. Any
indemnity under this Section 2.5 shall be paid from, and shall be
limited to the extent of, Joint Venture assets, and no Venturer
shall have any personal liability on account thereof.
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ARTICLE 3
CAPITAL CONTRIBUTIONS; LOANS; CAPITAL ACCOUNTS
Section 3.1 Initial Capital Contributions. On the date
of this Agreement, each Venturer shall contribute or cause to be
contributed to the Joint Venture, as its initial capital
contribution, (i) cash in the amount of $1,000 and (ii) its 50%
undivided interest in and to that certain option to purchase the
property known as the Desert Rose Motel in Las Vegas, Nevada. As
of the date of this Agreement, the initial capital contributions
represent the total capital of the Joint Venture.
Section 3.2 MR Sub Additional Capital Contribution. On
the latest date practicable prior to the first draw on the
Construction Financing, and concurrently with the additional
capital contribution to the Joint Venture by Gold Strike pursuant
to the first sentence of Section 3.3, MR Sub shall, as an
additional capital contribution, transfer and convey, or cause to
be transferred and conveyed, to the Joint Venture by Grant,
Bargain and Sale Deed fee title to the Property, free and clear
of all monetary liens and encumbrances and all other liens and
encumbrances which would materially adversely affect the Joint
Venture's intended use of the Property, other than such liens and
encumbrances as are reflected on the preliminary title report
dated as of October 18, 1994 issued by Nevada Title Company (No.
94-10-1362 RMG) which has been previously reviewed and approved
by the Managing Venturer. Such transfer and conveyance shall not
include any water rights appurtenant to the Property, nor any of
the existing wells, pumps, motors and related facilities located
on the Property, all of which shall be retained and reserved by
MR Sub or its Affiliates. MR Sub or its Affiliates shall also
retain and reserve a perpetual easement over the Property to
operate and maintain such wells, pumps, motors and related
facilities, to transport water from such wells over the Property
to adjacent property owned by an Affiliate of MR Sub and to
operate and maintain such transportation facilities. The
Venturers shall cooperate with each other with respect to the
location of such easement, taking into account the intended
location of the Facility on the Property.
At the time of the transfer and conveyance of the Property
to the Joint Venture, MR Sub shall also grant, or cause to be
granted, to the Joint Venture a perpetual non-exclusive easement
over the approximately 56-foot-wide roadway consisting of the
indicated portion of "Lot 1" on Exhibit A hereto for purposes
of access to the Property from Tropicana Avenue.
The parties agree that the fair market value of the Property
is at least $30,000,000 as of the date of this Agreement. At the
time of the transfer and conveyance of the Property to the Joint
Venture, the parties shall agree as to the fair market value at
that time, which shall not be less than $30,000,000.
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All real property transfer taxes and other costs and
expenses of transferring and conveying the Property to the Joint
Venture shall be borne by MR Sub.
Notwithstanding the foregoing, if MR Sub, in the exercise of
its best efforts, is unable to transfer and convey the Property
to the Joint Venture by March 31, 1995 free of any governmental
requirement that MR Sub's Affiliate dedicate a portion of its
adjacent property for the purpose of the proposed Harmon Avenue
extension, or any similarly onerous governmental requirement, the
Joint Venture shall be dissolved as provided in Article 13
hereof.
Section 3.3 Gold Strike Additional Capital Contributions.
Concurrently with the transfer and conveyance of the Property to
the Joint Venture by MR Sub pursuant to Section 3.2, Gold Strike
shall make an additional capital contribution of $30,000,000 to
the Joint Venture. From time to time thereafter, Gold Strike
shall make additional capital contributions of cash to the Joint
Venture in an aggregate amount equal to the difference between
(i) the Project Cost and (ii) the sum of (A) the net proceeds
from the Construction Financing and (B) the $30,000,000
contributed pursuant to the first sentence of this Section 3.3.
The additional capital contributions referred to in the
immediately preceding sentence shall be made at such time or
times required by the provider of the Construction Financing or
at the time or times as the Managing Venturer reasonably
determines necessary to coincide with the funding of the Project
Cost.
Section 3.4 Acquisition of Additional Property. The
Joint Venture may attempt to acquire additional property fronting
on Las Vegas Boulevard South adjacent to the Property in order to
expand the frontage of the Property on Las Vegas Boulevard South
in a southerly direction. The purchase price and other terms of
any such acquisition shall be subject to the approval of each
Venturer. The acquisition cost of any other additional property
shall be funded by equal additional capital contributions by each
of the Venturers on or prior to the acquisition date. If any
such additional property is acquired by the Joint Venture and the
Joint Venture is thereafter dissolved and liquidated, MR Sub
shall have the option, exercisable for a period of 90 days
following liquidation of the Joint Venture, to purchase any or
all of such additional property for cash at a purchase price
equal to the Joint Venture's acquisition cost of such additional
property.
Section 3.5 Failure to Make Capital Contributions. If a
Venturer defaults in its obligation to make capital contributions
required by this Article 3, the other Venturer shall have and may
exercise all remedies available pursuant to this Agreement, at
law or in equity. In addition, if a Venturer defaults in its
obligation to make capital contributions in cash required by this
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Article 3, the other Venturer may, but shall not be required to,
contribute to the Joint Venture all or a portion of such amount.
If such other Venturer contributes any amount to the Joint
Venture pursuant to this Section 3.5, immediately following such
contribution the Interest of the contributing Venturer in the
Joint Venture shall be increased and the Interest of the
defaulting Venturer in the Joint Venture shall be decreased. The
resulting Interest of the contributing Venturer shall be the
number of percentage points (rounded to the nearest one-hundredth
of a percentage point) determined in accordance with the
following formula: (i) determine the percentage equivalent of a
fraction, the numerator of which shall be the aggregate capital
contributions made to the Joint Venture by the contributing
Venturer pursuant to this Agreement, and the denominator of which
shall be the aggregate capital contributions made to the Joint
Venture by all Venturers pursuant to this Agreement, (ii)
subtract 50 percentage points, (iii) multiply the result of (i)
and (ii) by the Applicable Ratio (as hereinafter defined)
(rounded to the nearest one-hundredth of a percentage point) and
(iv) add 50 percentage points to the result of (i), (ii) and
(iii). For purposes of the immediately preceding sentence, the
value of the Property contributed by MR Sub pursuant to Section
3.2 shall at all times be deemed to be equal to the aggregate
amount of all cash capital contributions made by Gold Strike
pursuant to Section 3.3 (or made by MR Sub hereunder following a
default by Gold Strike pursuant to Section 3.3). The resulting
Interest of the defaulting Venturer shall be the number of
percentage points equal to 100 minus the resulting Interest of
the contributing Venturer as determined above.
As used in this Section 3.5: (i) to the extent that the
cash contributed by the contributing Venturer pursuant to this
Section 3.5 in response to such default, together with all cash
previously contributed by the contributing Venturer pursuant to
this Section 3.5 in response to prior defaults (collectively, the
"Cumulative Excess Contributions"), is less than $30,000,000, the
Applicable Ratio shall be 1.20; (ii) with respect to that portion
of the Cumulative Excess Contributions that is between
$30,000,000 and $39,999,999, the Applicable Ratio shall be 1.30;
(iii) with respect to that portion of the Cumulative Excess
Contributions that is between $40,000,000 and $49,999,999, the
Applicable Ratio shall be 1.40; and (iv) with respect to that
portion of the Cumulative Excess Contributions that is
$50,000,000 or more, the Applicable Ratio shall be 1.50.
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By way of illustration, assume that (i) MR Sub and Gold
Strike each has a 50% Interest, (ii) MR Sub has previously
contributed the Property and Gold Strike has previously
contributed $30,000,000 pursuant to Sections 3.2 and 3.3,
respectively and (iii) Gold Strike is required to contribute an
additional $35,000,000 pursuant to Section 3.3. If Gold Strike
fails to contribute such amount, and MR Sub elects to contribute
such $35,000,000 pursuant to this Section 3.5, the resulting
Interest of MR Sub following such contribution would be 82.57%,
determined as follows:
$30,000,000 plus $35,000,000 plus $35,000,000 [MR Sub cash and
Property contributions]
_________________________________________________________________
$65,000,000 plus $65,000,000 [total cash and Property
contributions]
equals 76.92%, minus 50% equals 26.92%, multiplied by 1.21 [the
blended Applicable Ratio applicable to $35,000,000] equals
32.57%, plus 50% equals 82.57%.
Accordingly, the resulting Interest of Gold Strike would be
17.43% .
Section 3.6 Interests. The respective percentage
interest (the "Interest") of the Venturers in the Joint Venture
shall initially be as follows:
MR Sub - 50%
Gold Strike - 50%
Section 3.7 Loans by Venturers to the Joint Venture. If
the Managing Venturer reasonably determines that the Joint
Venture's existing funds (giving effect to funds available
pursuant to existing third-party financing and amounts required
to be contributed to the Joint Venture by Gold Strike pursuant to
Section 3.3) are insufficient to meet the Joint Venture's costs,
expenses, obligations and liabilities, the Managing Venturer
shall offer to each Venturer the opportunity to advance funds to
the Joint Venture in proportion to its respective Interest. No
Venturer shall be required to advance funds to the Joint Venture.
To the extent either Venturer does not elect to advance to the
Joint Venture the amount of required funds in proportion to its
Interest, the other Venturer may, but shall not be required to,
advance the balance of the required funds to the Joint Venture.
All amounts so advanced shall take the form of an unsecured loan
and shall bear interest at a floating rate equal to the Joint
Venture's weighted average cost of borrowed funds (or, if the
Joint Venture then has no borrowed funds, the published prime
rate charged from time to time by Bank of America NT & SA). Such
loans shall be repayable on demand but solely out of property or
assets of the Joint Venture, in accordance with the provisions of
Section 6.2(a) and Article 13 hereof, and no Venturer shall have
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any personal liability on account thereof, nor shall there be any
recourse to such Venturer's assets. To the extent required by
the terms of the Construction Financing or such other third-party
financing obtained by the Joint Venture, repayment of such loans
shall be subordinated to the prior repayment of the Construction
Financing or other third-party financing. Without the approval
of each Venturer, the aggregate principal amount of indebtedness
incurred pursuant to this Section 3.7 outstanding at any time
shall not exceed $10,000,000. The provisions of this Section 3.7
are solely and exclusively for the benefit of the Venturers, may
only be enforced by the Venturers and shall not inure to the
benefit of, or be enforceable by, any third party, including
without limitation any creditor of the Joint Venture.
Section 3.8 Loans by Third Parties to the Joint Venture.
To the extent the Venturers fail to advance to the Joint Venture
the amount of funds required by the Joint Venture as determined
in accordance with Section 3.7, the Managing Venturer shall use
its best efforts to cause the Joint Venture to borrow the balance
of the required funds from a commercial bank or other lender
which is not an Affiliate of any Venturer on the most favorable
terms available to the Joint Venture. Without the approval of
each Venturer, such third-party borrowings shall not (i) exceed
$1,000,000 in outstanding principal amount or (ii) be secured by
any property or assets of the Joint Venture.
Section 3.9 No Further Capital Contributions. The
Venturers shall not be required to contribute additional capital
or lend any funds to the Joint Venture, except as expressly
provided in this Article 3.
Section 3.10 Capital Accounts. Each Venturer shall have a
single capital account (the "Capital Account") that shall be (i)
increased by (a) the sum of the cash and the fair market value of
any property contributed by such Venturer, (b) such Venturer's
distributive share of Joint Venture Profits and (c) the amount of
any Joint Venture liabilities assumed by such Venturer or secured
by any Joint Venture property distributed to such Venturer and
(ii) decreased by (a) the sum of the cash and the fair market
value of property distributed to such Venturer, (b) such
Venturer's distributive share of Joint Venture Losses and (c) the
amount of liabilities of such Venturer assumed by the Joint
Venture or that are secured by property contributed by such
Venturer to the Joint Venture. No Venturer shall be entitled to
receive or shall be paid interest on his contributions to the
capital of the Joint Venture or on his Capital Account balance.
This Section 3.10 is intended to comply with the requirements of
Treasury Regulation S 1.704-1(b) regarding the maintenance of
capital accounts and shall be interpreted and applied in a manner
consistent with that provision.
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Section 3.11 Return of Capital. Except as specifically
provided herein, no Venturer may withdraw capital from the Joint
Venture. To the extent any cash which any Venturer is entitled
to receive pursuant to any provision of this Agreement would
constitute a return of capital, each of the Venturers consents to
the withdrawal of such capital. If any capital is, or is to be,
returned to a Venturer, the Venturer shall not have the right to
receive property other than cash, except as otherwise expressly
provided in this Agreement.
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ARTICLE 4
PREOPENING ACTIVITIES
Section 4.1 Construction Financing. Upon execution of
this Agreement, the Managing Venturer, in consultation and
cooperation with the Non-Managing Venturer, shall use its best
efforts to obtain as promptly as practicable after the date of
this Agreement committed Construction Financing on the most
favorable terms available to the Joint Venture. The Managing
Venturer shall have the responsibility and authority for the
negotiation, structuring and documentation of the Construction
Financing. Without the approval of each Venturer, the
outstanding principal amount of the Construction Financing at any
date shall not exceed 82.4% of the Project Cost incurred through
such date; provided, however, that if the weighted average
interest rate accrued on such indebtedness during the period
beginning on the day on which the first draw on such indebtedness
is made and ending on the day before the day on which the
Facility opens to the general public (the "Construction Period")
exceeds 8% per annum, the outstanding principal amount of
Construction Financing at any date shall not exceed the sum of
(i) 82.4% of the Project Cost incurred through such date plus
(ii) 100% of the difference between (A) the interest accrued on
such indebtedness during the Construction Period and (B) the
interest which would have accrued on such indebtedness during the
Construction Period if such weighted average interest rate had
been 8% per annum. In any event, without the approval of each
Venturer, the aggregate principal amount of Construction
Financing and all other Joint Venture indebtedness outstanding at
any time shall not exceed $210,000,000. The interest rate and
other terms of any such indebtedness shall be approved by each
Venturer, such approval not to be unreasonably withheld or
delayed. If non-recourse debt financing is not available to the
Joint Venture on terms reasonably acceptable to the Venturers,
the Venturers will cooperate in good faith to agree on
alternative construction financing and to seek such alternative
construction financing (and in such event such alternative
construction financing shall constitute "Construction Financing"
as such term is used in this Agreement). In the event that
Construction Financing in the principal amount of at least
$175,000,000 has not been committed by December 31, 1994, either
Venturer may elect to dissolve the Joint Venture as provided in
Article 13 hereof.
Section 4.2 Design, Development and Construction. Except
as provided in Section 9.2 hereof, the Managing Venturer shall
have the responsibility and authority for supervising the design,
development and construction of the Facility. The Managing
Venturer shall prepare or cause to be prepared as promptly as
practicable after the date of this Agreement all necessary
preliminary plans and architectural, engineering, design and
construction drawings and other construction documents for the
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Facility and shall engage on behalf of the Joint Venture
reputable and qualified contractors, architects, engineers,
designers and other professionals for the design, development and
construction of the Facility. The Managing Venturer shall keep
the other Venturer fully advised on a regular basis with respect
to all aspects of the design, development and construction of the
Facility. Without the consent of each Venturer, construction of
the Facility shall not commence until the closing of the
Construction Financing, and shall commence as soon as practicable
thereafter. If construction of the Facility has not commenced by
May 31, 1995, either Venturer may, by written notice to the other
Venturer delivered by June 30, 1995, elect to dissolve the Joint
Venture as provided in Article 13 hereof, in which event, prior
to any distribution of assets to the Venturers, Gold Strike shall
pay MR Sub, from Gold Strike's funds and not from the assets of
the Joint Venture, a termination fee of $2,000,000, unless such
delay in the commencement of construction is attributable to
factors beyond Gold Strike's reasonable control, including,
without limitation, the inability of the Joint Venture to obtain
Construction Financing as provided in Section 4.1 or the
inability or failure of MR Sub or its Affiliates to obtain any
requisite governmental license, approval or permit (but which
factors shall not include any lack of financial resources that
prevents Gold Strike from contributing all amounts required by
Section 3.3 hereof).
In the event that construction of the Facility has commenced
but construction of the Facility is not completed and the
Facility is not open to the public by December 31, 1996, unless
such delay is attributable to events of force majeure or other
factors beyond Gold Strike's reasonable control (but which
factors shall not include any lack of financial resources that
prevents Gold Strike from contributing all amounts required by
Section 3.3 hereof), MR Sub may, at its option, by written notice
to Gold Strike delivered by January 31, 1997, (i) elect to become
the Managing Venturer pursuant to Section 9.3 hereof, (ii) elect
to dissolve the Joint Venture as provided in Article 13 hereof,
in which event, prior to any distribution of assets to the
Venturers, Gold Strike shall pay MR Sub, from Gold Strike's funds
and not from the assets of the Joint Venture, a termination fee
of $2,000,000 or (iii) elect to purchase Gold Strike's entire
Interest for cash in an amount equal to Gold Strike's Capital
Account balance, which purchase right may be assigned in whole or
in part to any person, including any Affiliate of MR Sub.
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Section 4.3 Governmental Approvals. The Managing
Venturer shall have the responsibility and authority for
preparing, filing and processing all applications to obtain all
governmental licenses, approvals, permits, and entitlements on
behalf of the Joint Venture necessary or appropriate for the
design, development, construction, ownership and operation of the
Facility, including without limitation building and environmental
permits and licenses and approvals issued by the Nevada Gaming
Authorities, the costs of which shall be borne by the Joint
Venture. The Venturers shall cooperate with each other and
furnish all documents and other information necessary in order to
obtain such licenses, approvals, permits and entitlements.
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ARTICLE 5
ALLOCATION OF PROFITS AND LOSSES
Section 5.1 Profits and Losses. The terms "Profits" and
"Losses" shall mean, for each fiscal year, an amount equal to the
Joint Venture's federal taxable income or loss for such period
determined in accordance with Section 703(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), but disregarding
Section 703(a)(1) of the Code, and with the following
adjustments:
(a) income exempt from federal income tax shall
be added to such taxable income or loss;
(b) expenditures not deductible in computing the
Joint Venture's taxable income and that are not properly
chargeable as capital expenditures shall be subtracted from
such taxable income or loss;
(c) in the event that the tax book value of any
Joint Venture asset is adjusted pursuant to Section 7.2(a)
or (b) hereof, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such
asset in computing Profits and Losses;
(d) gain or loss from any disposition of a Joint
Venture asset with respect to which gain or loss is
recognized for federal income tax purposes shall be computed
by reference to the tax book value and not the adjusted
federal income tax basis of the asset disposed of; and
(e) if the tax book value of a Joint Venture
asset has been adjusted pursuant to Section 7.2 hereof, in
lieu of federal income tax depreciation, tax book
depreciation (which shall be in the same ratio to tax book
value at the beginning of the taxable period as federal
income tax depreciation is to adjusted federal income tax
basis at the beginning of such period) shall be taken into
account in computing Profits and Losses.
Section 5.2 Allocations. Profits or Losses, including
without limitation all items of income, gain, profit, loss, cost,
expense, deduction or credit earned or incurred by the Joint
Venture, shall be allocated and credited to the Venturers, and
reflected in the Capital Accounts of the Venturers, in accordance
with each Venturer's Interest. Notwithstanding the foregoing,
the following items shall be specially allocated in the following
manner:
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(a) Solely for the purpose of federal, state and
local taxes, and without affecting or in any way being taken
into account in computing a Venturer's Capital Account or
share of Profits, Losses or other items or distributions
pursuant to any provision of this Agreement:
(i) items of income, gain, loss and
deduction with respect to any property contributed
to the Joint Venture by any Venturer shall be
allocated among the Venturers in accordance with
Section 704(c) of the Code so as to take account
of any variation between the adjusted basis of the
property to the Joint Venture and the fair market
value of the property (as determined by the
Venturers) at the time of the contribution; and
(ii) in the event that the tax book
value of a Joint Venture asset is adjusted
pursuant to Section 7.2(a) hereof, subsequent
allocations of income, gain, loss and deduction
with respect to such asset shall take account of
any difference between the adjusted basis of
such asset for federal income tax purposes and
its book value in the same manner as under
Section 704(c) of the Code.
(b) To the extent the adjusted federal income tax
basis of a Joint Venture asset is adjusted pursuant to
Section 734(b) or 743(b) of the Code, and such adjustment is
required by Treasury Regulation S 1.704-1(b)(2)(iv)(m) to be
taken into account in determining Capital Accounts, the
amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases
such basis), and such gain or loss shall be allocated to the
Venturers in a manner consistent with the manner in which
their Capital Accounts are required to be adjusted pursuant
to such Treasury Regulation.
(c) Except as provided in Treasury Regulation S
1.704-2(f)(2), (3) and (4) (pertaining to conversion or
repayment of nonrecourse liabilities), in the event there is
a net decrease in partnership minimum gain (within the
meaning of Treasury Regulation S 1.704-2(d)) for a taxable
year of the Joint Venture, each Venturer must be allocated
items of partnership income and gain for that year equal to
that Venturer's share of the net decrease in partnership
minimum gain (within the meaning of Treasury Regulation S
1.704-2(g)(2)). Allocations made pursuant to this Section
5.2(c) shall consist of gains recognized from the
disposition of Joint Venture property subject to one or more
nonrecourse liabilities of the Joint Venture and then, if
necessary, shall consist of a pro rata portion of the Joint
Venture's other items of income and gain for that taxable
year.
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(d) Items of loss or deductions attributable to a
nonrecourse liability to a Venturer incurred pursuant to
Section 3.7 hereof or to a nonrecourse liability with
respect to which a Venturer bears the economic risk of loss
(within the meaning of Treasury Regulation S 1.752-2) shall
be allocated to such Venturer.
(e) If the additional capital contributions of
Gold Strike pursuant to Section 3.3 hereof exceed the fair
market value of the Property as agreed by the Venturers
pursuant to Section 3.2 hereof, upon liquidation of the
Joint Venture in accordance with Article 13 hereof, MR Sub
shall be allocated items of income and gain, including gross
income if necessary, equal to the excess of such additional
capital contributions over such fair market value.
Section 5.3 Transfers of Joint Venture Interests. If any
Interest in the Joint Venture is Transferred in accordance with
Section 11.2(a) hereof, all items of Profits or Losses, including
without limitation all items of Profits or Losses, including
without limitation all items of income, gain, profit, loss,
deduction, cost, expense or credit and all other items of the
Joint Venture with respect to the Interest so Transferred, shall
be allocated between the transferor and the transferee in
accordance with Section 706 of the Code using such conventions as
may be selected by the Venturers.
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ARTICLE 6
NON-LIQUIDATING DISTRIBUTIONS
Section 6.1 Distributable Cash. The term "Distributable
Cash" with respect to any period shall mean an amount equal to
the total cash revenues and receipts of the Joint Venture from
any source (including capital contributions, loans and
refinancings) for such period, less the sum of (i) all operating
expenses paid or incurred by the Joint Venture, including current
principal and interest payments on the Construction Financing and
other Joint Venture indebtedness, but excluding any distributions
pursuant to Section 6.2, (ii) all capital expenditures made by
the Joint Venture and (iii) the amount of any increase during
such period in, or amounts established during such period for,
reasonable reserves for anticipated costs, expenses, liabilities
and obligations of the Joint Venture, working capital needs of
the Joint Venture or other appropriate Joint Venture purposes, as
reasonably determined by the Managing Venturer in consultation
with the other Venturer.
Section 6.2 Distribution of Distributable Cash. Subject
to any applicable covenants contained in the documentation
governing the Construction Financing or any other agreements to
which the Joint Venture is a party, commencing with the fiscal
quarter during which the Facility opens to the public,
Distributable Cash for each fiscal quarter shall be distributed
within 45 days after the end of each such quarter, in the
following order of priority:
(a) first, to the Venturers to repay amounts, if
any, lent by them to the Joint Venture pursuant to Section
3.7 hereof, any such payments to be made on a pro rata basis
according to the then outstanding balances of such loans,
with such payments applied first against accrued interest;
and
(b) the balance, if any, to the Venturers, pro
rata in accordance with their respective Interests.
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ARTICLE 7
ACCOUNTING AND RECORDS
Section 7.1 Books and Records. The Joint Venture shall
keep at its principal office separate books of account for the
Joint Venture which shall show a true and accurate record of all
costs and expenses incurred, all charges made, all credits made
and received and all income derived in connection with the
operation of the Joint Venture business in accordance with
generally accepted accounting principles consistently applied.
Each Venturer shall, at its sole expense, have the right, at
any time without notice to the other, to examine, copy and audit
the Joint Venture's books and records during normal business
hours.
Section 7.2 Tax Book Values. The tax book value of any
Joint Venture asset shall be such asset's adjusted basis for
federal income tax purposes, except as follows:
(a) The tax book value of Joint Venture assets
shall be adjusted to equal their respective gross fair
market values, as determined by the Venturers, as of the
following times:
(i) upon the acquisition of an additional
Interest in the Joint Venture by any new or
existing Venturer in exchange for more than a de
minimis capital contribution; and
(ii) upon the liquidation of the Joint
Venture within the meaning of Treasury Regulation
S 1.704-1(b)(2)(ii)(g).
(b) The tax book value of a Joint Venture asset
that is distributed to any Venturer shall be the fair market
value of such asset at the time of distribution, as
determined by the Venturers.
(c) The tax book value of Joint Venture assets
shall be increased (or decreased) to reflect any adjustments
to the adjusted basis of such assets pursuant to Section
734(b) or 743(b) of the Code, but only to the extent such
adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulation S 1.704-
1(b)(2)(iv)(m).
(d) If the tax book value of a Joint Venture
asset has been adjusted pursuant to this Section 7.2, such
tax book value shall thereafter be adjusted by the amount of
tax book depreciation taken into account with respect to
such asset for the purpose of determining Profits and
Losses.
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Section 7.3 Reports.
(a) The Managing Venturer shall cause to be
prepared and distributed to each Venturer the following
reports as promptly as practicable, but in any event within
75 days after the end of each fiscal year of the Joint
Venture:
(i) a balance sheet as of the end of the
fiscal year and statements of income, Venturers'
equity and cash flows for the year then ended,
each of which shall be audited by a firm of
independent certified public accountants (the
"Accountants") selected by the Venturers in
accordance with Section 9.2(m) hereof;
(ii) a general description of the activities
of the Joint Venture during the period covered by
the report; and
(iii) a report of any material contracts or
transactions between the Joint Venture and the
Venturers or any of their Affiliates, including
fees or compensation paid by the Joint Venture and
the products supplied and services performed by
the Venturers or any such Affiliate for such fees
or compensation.
(b) As promptly as practicable, but in any event
within 30 days after the end of each of the first three
quarters of each fiscal year, the Managing Venturer shall
cause to be prepared and distributed to each Venturer a
quarterly report containing a balance sheet and statement of
income for the period covered by the report, each of which
may be unaudited but which shall be certified by the chief
financial officer of the Joint Venture as fairly presenting
the financial position and results of operations of the
Joint Venture during the period covered by the report and as
having been prepared in accordance with generally accepted
accounting principles applied on a basis substantially
consistent with that of the Joint Venture's audited
financial statements. The report shall also contain a
description of any material event regarding the business of
the Joint Venture during the period covered by the report.
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(c) As promptly as practicable, but in any event
within 75 days after the end of each fiscal year, the
Managing Venturer shall cause to be prepared and distributed
to each Venturer all information necessary for the
preparation of such Venturer's federal income tax returns,
including a statement showing such Venturer's share of
income, gains, losses, deductions and credits for such year
for federal income tax purposes and the amount of any
distributions made to or for the account of such Venturer
pursuant to this Agreement.
Section 7.4 Tax Returns. The Managing Venturer, at the
expense of the Joint Venture, shall cause the Accountants to
prepare all income and other tax returns, on an accrual basis, of
the Joint Venture and cause the same to be filed in a timely
manner. The Managing Venturer shall furnish to each Venturer a
copy of each such return as soon as it has been filed, together
with any schedules or other information which each Venturer may
require in connection with such Venturer's own tax affairs. Each
of the Venturers shall, in its respective income tax return and
other statements filed with the Internal Revenue Service or other
taxing authority, report taxable income in accordance with the
provisions of this Agreement.
Section 7.5 Tax Matters Partner. The Managing Venturer
is hereby designated as the "Tax Matters Partner" of the Joint
Venture as defined in Section 6231 of the Code and, to the extent
authorized or permitted under applicable law, the Managing
Venturer shall represent the Joint Venture in connection with all
examinations of Joint Venture affairs by taxing authorities,
including, without limitation, resulting administrative and
judicial proceedings.
Section 7.6 Fiscal Year. The fiscal year of the Joint
Venture shall be the calendar year. As used in this Agreement, a
fiscal year shall include any partial fiscal year at the
beginning or end of the term of the Joint Venture.
Section 7.7 Bank Accounts. The Managing Venturer shall
be responsible for causing one or more accounts to be maintained
in one or more banks, which accounts shall be used for the
payment of expenses incurred in connection with the business of
the Joint Venture, and in which shall be deposited any and all
cash receipts. All such amounts shall be and remain the property
of the Joint Venture and shall be received, held and disbursed by
the Joint Venture for the purposes specified in this Agreement.
There shall not be deposited in any of such accounts any funds
other than funds belonging to the Joint Venture, and no other
funds shall be commingled with such funds.
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Section 7.8 Tax Elections.
(a) At the request of any Venturer, the Managing
Venturer, on behalf of the Joint Venture, shall elect to
adjust the basis of the assets of the Joint Venture for
federal income tax purposes in accordance with Section 754
of the Code in the event of a distribution of Joint Venture
property as described in Section 734 of the Code or a
transfer by any Venturer of its Interest in the Joint
Venture as described in Section 743 of the Code.
(b) The Managing Venturer, on behalf of the Joint
Venture, shall from time to time make such other tax
elections as it deems necessary or desirable to carry out
the business of the Joint Venture or the purposes of this
Agreement.
Section 7.9 Tax Withholding. Except as otherwise
provided in this Section 7.9, if the Joint Venture incurs an
obligation to withhold taxes with respect to any Venturer, any
amount withheld or paid as withholding taxes by the Joint Venture
with respect to such Venturer shall be treated for all purposes
of this Agreement as if it had been distributed to such Venturer.
The Venturers may make such elections with respect to such
withholding obligations, including without limitation an election
pursuant to Section 1446 of the Code, as they reasonably
determine. If the withholding obligation exceeds the amount that
would have been distributed to such Venturer determined without
regard to the provisions of this Section 7.9, such excess amount
shall be treated for all purposes of this Agreement as if it had
been transferred to such Venturer by the Joint Venture as an
interest-free loan. If the Joint Venture incurs any liability as
a result of a failure to withhold with respect to any Venturer,
such liability will be borne by such Venturer and charged to such
Venturer's Capital Account. Amounts treated as loaned to any
Venturer pursuant to this Section 7.9 shall be repaid by such
Venturer to the Joint Venture as promptly as practicable. The
Joint Venture shall offset such amounts against any amounts that
would otherwise be distributed to such Venturer.
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ARTICLE 8
CONFIDENTIALITY; INTELLECTUAL PROPERTY
Section 8.1 Confidential Treatment of Information. Each
of the Venturers agrees, and shall cause each of its Affiliates
(i) not to disclose any information concerning the Joint Venture
or its business to the press or the general public without the
approval of the other Venturer, such approval not to be
unreasonably withheld or delayed and (ii) to retain in strict
confidence any proprietary confidential information and trade
secrets of the other Venturer, whether disclosed prior to or
after the date hereof, and not to use or disclose to persons
other than the Venturer or its Affiliates ("third parties"), and
to use its best efforts to cause its employees, agents and
consultants not to use or disclose to third parties, such
proprietary confidential information or trade secrets without the
approval of the other Venturer, unless in either case it can be
established by the disclosing party that such information:
(a) at the time of disclosure is part of the
public domain and readily accessible to the public or such
third party;
(b) at the time of disclosure is already known by
the receiving party otherwise than pursuant to a breach of
an obligation of confidentiality;
(c) is required by applicable law, regulation or
court order to be disclosed; or
(d) is required by any vendor, supplier or
consultant in order to carry out the business of the Joint
Venture, provided that the disclosing Venturer shall obtain
the written agreement and obligation of such third party, in
a form reasonably satisfactory to the other Venturer, prior
to disclosing such information, that all of the provisions
of this Article 8 shall apply with equal effect to such
third party. The Joint Venture shall be a third-party
beneficiary of any such written agreement.
Section 8.2 Intellectual Property. Neither the Joint
Venture, nor Gold Strike or its Affiliates, shall have the right
to use any trademark, service mark, trade name, logo, copyright
or other intellectual property owned by MRI or any of its
Affiliates in connection with the Facility or the business of the
Joint Venture. The Managing Venturer, on behalf and at the
expense of the Joint Venture, shall prepare, file and prosecute
all applications which it reasonably deems necessary or
appropriate to protect and preserve any intellectual property
acquired or developed by the Joint Venture. Following the
dissolution and liquidation of the Joint Venture as provided in
Article 13 hereof, each Venturer shall be entitled to retain, as
its sole and separate property, the respective intellectual
property, including design and development plans and elements,
that such Venturer or its Affiliates contributed to the design
and development of the Facility.
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ARTICLE 9
MANAGEMENT
Section 9.1 Management by Managing Venturer. Subject to
Section 9.3 hereof, Gold Strike shall be and hereby is appointed
the Managing Venturer of the Joint Venture and shall serve in
such capacity without fee or other compensation.
Except as otherwise provided in this Agreement, the Managing
Venturer shall have, and hereby assumes, sole responsibility and
authority for the prudent day-to-day management and operation of
the Joint Venture and the Facility, and in furtherance thereof
may exercise the following specific rights and powers without
approval of the other Venturer:
(a) oversee and manage the day-to-day operations
of the Facility, the Joint Venture business and such other
activities as are customary in connection with such
operations;
(b) except as otherwise provided in Section 9.2,
direct and oversee the architectural, engineering, design,
construction, legal and other work necessary for the design,
development, construction, completion, financing, opening,
operation and improvement of the Facility and other Joint
Venture business;
(c) prepare appropriate budgets and construction
schedules for the development, construction, opening,
repair, improvement and operation of the Facility and other
Joint Venture property;
(d) except as otherwise provided in Section 9.2,
negotiate with and enter into contracts for the design,
development, construction, completion, opening, operation
and improvement of the Facility, and supervise all such
work;
(e) implement decisions made by all of the
Venturers;
(f) use its best efforts to operate, on behalf of
and for the sole benefit of the Joint Venture, the Facility
and such other business and activities as are customary in
connection with such operation;
(g) preserve, maintain and distribute Joint
Venture funds in accordance with the provisions of this
Agreement;
(h) contract on behalf of the Joint Venture for
the services of independent contractors, including
attorneys, accountants and financial advisers;
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(i) establish, maintain and supervise the deposit
of funds and securities of the Joint Venture with federally
insured banking institutions; and the Managing Venturer is
authorized to sign on behalf of the Joint Venture on all
accounts with such banking institutions;
(j) acquire by purchase, lease or otherwise such
personal property as may be necessary, convenient or
incidental to the accomplishment of the purposes of the
Joint Venture;
(k) procure on behalf of the Joint Venture such
general liability, casualty, comprehensive, workers'
compensation, fidelity, errors and omissions, business
interruption and other insurance as is adequate to protect
the Joint Venture; and
(l) execute on behalf of the Joint Venture any
and all agreements, documents, certificates and instruments
necessary or convenient in connection with the management
and operation of the Facility or in connection with managing
the affairs of the Joint Venture.
Section 9.2 Exclusive Powers of the Venturers. In
addition to those matters which, pursuant to other provisions of
this Agreement, require approval of each Venturer, the following
matters shall require the approval of each Venturer:
(a) except as otherwise provided in this
Agreement, the admission of an additional Venturer;
(b) the design, development and construction of
the exterior of the Facility, including landscaping, signage
and entrances to the Facility;
(c) except as otherwise provided in this
Agreement, the construction, extension or attachment of any
transportation system between the Facility and any other
hotel or casino;
(d) the acquisition of any real property in
addition to the Property;
(e) any transaction which is unrelated to the
purposes of the Joint Venture or makes it unlawful or
impossible to carry out the purposes of the Joint Venture;
(f) except with respect to the Construction
Financing or as otherwise provided in this Agreement, the
incurrence of any indebtedness;
(g) the refinancing or early retirement of any
Joint Venture indebtedness;
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(h) except in connection with the Construction
Financing, the sale or hypothecation of all or any
significant part of the property or assets of the Joint
Venture, other than in the ordinary course of business;
(i) capital improvements which in the aggregate
exceed $500,000 and are not included in the original
construction budget;
(j) except as otherwise provided in Article 11
hereof, the Transfer of all or any portion of a Venturer's
Interest in the Joint Venture;
(k) the compromise of any claim owned by the
Joint Venture in excess of $500,000 or submission to
arbitration of any dispute or controversy involving the
Joint Venture, other than in the ordinary course of
business;
(l) the cancellation or lapse of any material
insurance policy, which approval shall not be unreasonably
withheld or delayed;
(m) the selection and retention of independent
certified public accountants to audit the Joint Venture's
financial statements and prepare its tax returns;
(n) the establishment of hotel room rates for the
Facility;
(o) any expenditure by the Joint Venture in
excess of $50,000 other than in the ordinary course of
business; and
(p) except as otherwise provided in this
Agreement, the dissolution of the Joint Venture, or a
merger, consolidation or recapitalization involving the
Joint Venture.
Any matter which requires the approval of each Venturer may
be approved by an instrument signed by an authorized
representative of each Venturer. The initial authorized
representatives of Gold Strike shall be Michael Ensign, William
Richardson, Glenn Schaeffer and David Belding, and the initial
authorized representatives of MR Sub shall be Stephen A. Wynn,
Daniel R. Lee, Bruce A. Levin and Henry M. Applegate III. Either
Venturer may designate different or additional authorized
representatives by written notice to the other.
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Section 9.3 Replacement of Managing Venturer.
(a) Except as otherwise provided in this
Agreement, the Managing Venturer may only be changed with
the approval of each Venturer. In the event that (i) the
Joint Venture is in default with respect to any of its debt
obligations, whether or not any period to cure such default
has expired, (ii) an Event of Default on the part of Gold
Strike has occurred and is continuing under this Agreement,
(iii) Gold Strike ceases for any reason to own at least a
25% Interest in the Joint Venture or (iv) for any reason
none of Michael Ensign, William Richardson or Glenn
Schaeffer is serving as the chief executive officer of the
Joint Venture, MR Sub may, during the continuation of any
such event, elect by written notice delivered to Gold Strike
to become the Managing Venturer, and MR Sub shall thereupon
become the Managing Venturer and Gold Strike shall become
the Non-Managing Venturer. Upon the occurrence of any of
the events specified in Section 13.1(g) hereof with respect
to the Managing Venturer, if the business of the Joint
Venture is continued, the remaining Venturer shall become
the Managing Venturer.
(b) The Managing Venturer shall not have the
right to resign as Managing Venturer, and any such
resignation shall constitute an Event of Default under this
Agreement which shall entitle the other Venturer to exercise
all rights and remedies available under this Agreement, at
law or in equity.
Section 9.4 Meetings of the Venturers; Time and Place.
The Venturers shall meet with each other on a periodic basis, at
least quarterly. At such meetings, the Managing Venturer's
representatives shall report on the performance and condition of
the Joint Venture, give progress reports on negotiation of the
Construction Financing, capital projects including construction
of the Facility, material contracts entered into, material
litigation and other matters material to the operation of the
Joint Venture. Meetings shall be held at such time and place
within Clark County, Nevada as the Managing Venturer shall
determine or by telephone, provided that each Venturer's
representatives may simultaneously participate and hear each
other Venturer's representatives. The Venturers may take action
without a meeting if the action taken is reduced to writing
(either prior to or thereafter) and signed on behalf of each
Venturer. Any Venturer may call for a meeting of the Venturers
at any time by giving at least 48 hours' prior written notice to
the other Venturer.
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Section 9.5 Officers. The Managing Venturer shall
appoint the chief executive officer and other principal officers
of the Joint Venture, who shall serve at the direction and
pleasure of the Managing Venturer. The chief executive officer
and the other principal officers shall perform those functions of
the Managing Venturer and such other duties and responsibilities
as the Managing Venturer may assign to them. No officer of the
Joint Venture who does not devote substantially full time to the
Joint Venture shall receive any salary or other compensation from
the Joint Venture. Each officer of the Joint Venture shall be
indemnified by the Joint Venture from and against any and all
claims, losses, damages and liabilities, including reasonable
attorneys' fees which shall be reimbursed as incurred, arising
out of or relating to any act or failure to act performed or
omitted by him; provided, however, that such indemnity shall be
payable only if such officer acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best
interests of the Joint Venture and the Venturers. Any indemnity
under this Section 9.5 shall be paid from, and shall be limited
to the extent of, Joint Venture assets, and no Venturer shall
have any personal liability on account thereof. Each officer of
the Joint Venture shall be fully protected with respect to any
action or omission taken or omitted by him in good faith if such
action or omission is taken or omitted in reliance upon and in
accordance with the opinion or advice of competent legal counsel,
accountants, financial advisers or other professionals as to
matters within their professional competence.
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ARTICLE 10
REPRESENTATIONS AND WARRANTIES
Section 10.1 MR Sub. MR Sub hereby represents and
warrants, which representations and warranties shall survive the
execution of this Agreement, that:
(a) MR Sub is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Nevada and has the requisite corporate power and
authority to enter into and carry out the terms of this
Agreement;
(b) all of the outstanding capital stock of MR
Sub is owned directly or indirectly by MRI;
(c) all corporate action required to be taken by
MR Sub to enter into and carry out the terms of this
Agreement has been taken and no further approval of any
governmental agency, court or other body is necessary in
order to permit MR Sub to enter into and carry out the terms
of this Agreement;
(d) this Agreement has been duly executed and
delivered by MR Sub and constitutes the legal, valid and
binding obligation of MR Sub, enforceable in accordance with
its terms (subject to applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights
generally, equitable principles and judicial discretion);
(e) to the best of its knowledge, neither the
execution and delivery of this Agreement, nor the
performance of its obligations hereunder, has resulted or
will result in any violation of, or constitute a default
under, the charter or bylaws of MR Sub or any indenture,
trust agreement, mortgage or other agreement or any permit,
judgment, decree or order to which MR Sub is a party or by
which it is bound, and there is no default and no event or
omission has occurred which, with the passage of time or the
giving of notice or both, would constitute a default on the
part of MR Sub under this Agreement;
(f) to the best of its knowledge, there is no
action, proceeding or investigation, pending or threatened,
which questions the validity or enforceability of this
Agreement as to MR Sub;
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(g) no representation, warranty or covenant of MR
Sub in this Agreement, or in any document or certificate
furnished or to be furnished to Gold Strike pursuant hereto,
contains or will contain any untrue statement of material
fact or omits or will omit to state a material fact
necessary to make the statements or facts contained therein
not misleading; all such representations, warranties or
statements of MR Sub are based, to the best of MR Sub's
knowledge, upon accurate and complete information as of the
time of their making, and there have been, to the best of MR
Sub's knowledge, no material changes in such information
subsequent thereto; and
(h) MR Sub has no reason to believe that it or
its Affiliates will not receive any gaming license, approval
or permit necessary for the consummation of the transactions
contemplated by this Agreement.
Section 10.2 Gold Strike. Gold Strike hereby represents and
warrants, which representations and warranties shall survive the
execution of this Agreement, that:
(a) Gold Strike is a general partnership duly
organized, validly existing and in good standing under the
laws of the State of Nevada and has the requisite
partnership power and authority to enter into and carry out
the terms of this Agreement;
(b) at least 75% of the capital, profits and
voting interests in Gold Strike are owned in the aggregate
directly or indirectly by Michael Ensign, William
Richardson, Glenn Schaeffer, David Belding and Peter Simon;
(c) all partnership action required to be taken
by Gold Strike to enter into and carry out the terms of this
Agreement has been taken and no further approval of any
governmental agency, court or other body is necessary in
order to permit Gold Strike to consummate this Agreement;
(d) this Agreement has been duly executed and
delivered by Gold Strike and constitutes the legal, valid
and binding obligation of Gold Strike, enforceable in
accordance with its terms (subject to applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors'
rights generally, equitable principles and judicial
discretion);
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(e) to the best of its knowledge, neither the
execution and delivery of this Agreement, nor the
performance of its obligations hereunder, has resulted or
will result in any violation of, or constitute a default
under, the partnership agreement of Gold Strike or any
indenture, trust agreement, mortgage or other agreement or
any permit, judgment, decree or order to which Gold Strike
is a party or by which it is bound, and there is no default
and no event or omission has occurred which, with the
passage of time or the giving of notice or both, would
constitute a default on the part of Gold Strike under this
Agreement;
(f) to the best of its knowledge, there is no
action, proceeding or investigation, pending or threatened,
which questions the validity or enforceability of this
Agreement as to Gold Strike;
(g) No representation, warranty or covenant of
Gold Strike in this Agreement, or in any document or
certificate furnished or to be furnished to MR Sub pursuant
hereto, contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact
necessary to make the statements or facts contained therein
not misleading; all such representations, warranties or
statements of Gold Strike are based, to the best of Gold
Strike's knowledge, upon accurate and complete information
as of the time of their making, and there have been, to the
best of Gold Strike's knowledge, no material changes in such
information subsequent thereto; and
(h) Gold Strike has no reason to believe that it
or its Affiliates will not receive any gaming license,
approval or permit necessary for the consummation of the
transactions contemplated by this Agreement.
Section 10.3 Brokers. The parties each represent to the
other that they have not retained any broker, finder or agent in
connection with the transactions contemplated hereby or the
negotiation thereof. Each party shall indemnify and hold the
other party harmless from and against all losses, claims, damages
and liabilities, including reasonable attorneys' fees, arising
out of or relating to any claim of brokerage or other commissions
relative to this Agreement or the transactions contemplated
hereby insofar as any such claim arises by reason of services
alleged to have been rendered to or at the request of the
indemnifying party.
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ARTICLE 11
TRANSFER OF INTERESTS
Section 11.1 Restrictions on Transfers. Except as
otherwise expressly provided in this Agreement, no Venturer
shall, without the approval of each of the Venturers, sell,
transfer, assign, pledge, encumber or otherwise dispose of (each
a "Transfer") all or any portion of its Interest in the Joint
Venture or any rights therein. Any purported Transfer in
violation of the preceding sentence shall be null and void and of
no force or effect. Each Venturer acknowledges the
reasonableness of the restrictions on Transfers imposed by this
Agreement in view of the Joint Venture purposes and the
relationship of the Venturers. The Venturers acknowledge and
agree that they are relying on the experience, reputation and
financial condition of each other in entering into this
Agreement, that the nature of the relationship between the
Venturers is personal and that the amount of damages that would
be sustained by the Venturers in the event of a breach of the
restrictions on Transfers imposed by this Agreement would not be
readily ascertainable. Accordingly, upon any breach of this
Article 11 by any Venturer, the other Venturer (in addition to
all rights and remedies it may have under this Agreement, at law
or in equity) shall be entitled to a decree or order from a court
of competent jurisdiction specifically enforcing the restrictions
on Transfers contained herein. Each Venturer further agrees to
hold the Joint Venture and the other Venturer (and its successors
and assigns) harmless from and against any and all costs,
liabilities and damages (including, without limitation,
liabilities for income taxes and costs of enforcing this
indemnity) incurred by any of such indemnified parties as a
result of a Transfer or purported Transfer in violation of this
Agreement.
Section 11.2 Permitted Transfers.
(a) A Venturer shall be entitled to make the
following Transfers (each a "Permitted Transfer") without
the approval of the other Venturer: (i) a pledge or
encumbrance of its Interest in favor of one or more
commercial banks or other institutional lenders to secure a
loan provided by such lender(s) to such Venturer or its
Affiliates, provided that a foreclosure upon such pledge or
encumbrance shall not be a Permitted Transfer; (ii) a
Transfer to an Affiliate of such Venturer, subject to the
provisions of Section 11.3; (iii) a Transfer to MR Sub or
Gold Strike; (iv) a Transfer pursuant to the right of first
refusal provisions of Section 11.4; or (v) a Transfer by
Gold Strike to a corporation or other business entity in
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exchange for voting securities of such entity in connection
with an initial public equity offering by such entity, or a
merger or consolidation of Gold Strike with or into, or
Transfer by Gold Strike to, a publicly traded corporation or
other business entity in exchange for voting securities of
such entity, provided that immediately following such public
offering, merger, consolidation or Transfer and at all times
thereafter Gold Strike or its existing equity owners have
control of the management of the Joint Venture.
(b) Except with respect to Permitted Transfers
described in clause (ii), (iii), (iv) or (v) of Section
11.2(a), a transferee of an Interest in the Joint Venture
shall be admitted as a Venturer only upon the agreement of
each Venturer. The rights of a Transferee who is not
admitted as a Venturer shall be limited to the right to
receive allocations and distributions from the Joint Venture
with respect to the Interest transferred, as provided in
this Agreement. A transferee that is not admitted as a
Venturer shall not be a Venturer with respect to such
Interest and, without limiting the foregoing, shall not have
the right to inspect the Joint Venture's books or assets,
grant or withhold approvals, act for or bind the Joint
Venture or otherwise participate in its operations.
(c) The Venturers intend that a Permitted
Transfer shall not cause the dissolution of the Joint
Venture under the Act; however, if a court of competent
jurisdiction determines that a dissolution has occurred, the
Venturers shall continue to hold the Joint Venture's assets
and operate its business in joint venture form pursuant to
this Agreement as if no such dissolution had occurred.
(d) In the event of a Permitted Transfer, the
Venturer making the Transfer shall notify the other Venturer
of the Transfer and shall furnish the Joint Venture with the
transferee's taxpayer identification number and sufficient
information to determine the transferee's Interest and tax
basis in the Joint Venture and any other information
reasonably necessary to permit the Joint Venture to file all
required tax returns. All Transfers shall be by instrument
in form and substance reasonably satisfactory to counsel for
the Joint Venture and shall contain an agreement of the
transferee to accept the Transfer and to accept and adopt
all of the applicable provisions of this Agreement. The
Venturer making a Permitted Transfer shall execute,
acknowledge and deliver all such documents and instruments,
in form and substance reasonably satisfactory to counsel for
the Joint Venture, as may be necessary or desirable to
effectuate such Transfer, and shall pay all costs and
expenses incurred by the Joint Venture in connection with
such Transfer.
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(e) Notwithstanding anything to the contrary in
this Agreement, no Venturer shall be permitted to Transfer
its Interest or any portion thereof to the extent such
Transfer would be in violation of applicable law (including
securities laws) or would cause a default under any
agreement to which the Joint Venture is a party or by which
it is bound.
Section 11.3 Limitation on Ownership of Venturers.
(a) Unless otherwise agreed by Gold Strike, MR
Sub shall at all times be controlled directly or indirectly
by MRI.
(b) Except as otherwise agreed by MR Sub, at
least 75% of the capital, profits and voting interests in
Gold Strike (and in any Affiliate that is a transferee of
Gold Strike's Interest pursuant to Section 11.2(a)(ii))
shall at all times be owned in the aggregate directly or
indirectly by Michael Ensign, William Richardson, Glenn
Schaeffer, David Belding and Peter Simon. Nothing contained
herein shall prohibit or limit Gold Strike's ability to
become a publicly traded entity, or to be owned by a
publicly traded entity, in accordance with and subject to
the provisions of Section 11.2(a)(v).
Section 11.4 Right of First Refusal.
(a) Commencing on the first anniversary of the
opening of the Facility to the public, either Venturer shall
have the right to Transfer all or any part of its Interest
in the Joint Venture to a person who is not an Affiliate of
any Venturer in consideration for cash and/or a promissory
note, provided that (i) the Joint Venture is not in default
under the terms of the Construction Financing, (ii) the
Venturer wishing to Transfer its Interest (the "Initiating
Venturer") is not in default under any of the provisions of
this Agreement and (iii) the Initiating Venturer first
offers the Interest (or portion thereof) to the other
Venturer as provided in this Section 11.4.
(b) Prior to becoming legally obligated to
Transfer its Interest or any portion thereof (the "Relevant
Interest") to a person who is not an Affiliate of any
Venturer (the "Third Party"), the Initiating Venturer
shall deliver written notice (the "Offering Notice") to
the other Venturer (the "Responding Venturer") offering to
Transfer the Relevant Interest to the Responding Venturer on
the same terms and for the same price as the Initiating
Venturer proposes to Transfer to the Third Party. The
Offering Notice shall specify the name of the Third Party,
the Relevant Interest proposed to be Transferred and the
material terms on which the Transfer is to be consummated,
including without limitation the Transfer price, terms of
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payment and the time and place of the closing. The
Responding Venturer shall thereupon have the right and
option to purchase from the Initiating Venturer all (but
not less than all) of the Relevant Interest at the purchase
price set forth in the Offering Notice by delivering written
notice (the "Acceptance Notice") to the Initiating
Venturer within 30 days after delivery of the Offering
Notice. If the Responding Venturer delivers the Acceptance
Notice, it shall be legally obligated to purchase the
Relevant Interest on the same terms as specified in the
Offering Notice at a closing to be held as specified in the
Offering Notice (but in no event earlier than 60 days after
delivery of the Offering Notice) or such other time as may
be directed by the Nevada Gaming Authorities. At the
closing, the Initiating Venturer shall deliver to the
Responding Venturer good title to the Relevant Interest,
free and clear of any liens, claims or other encumbrances.
If the Responding Venturer does not elect to purchase the
Relevant Interest, it may, within the 30-day period referred to
above, deliver to the Initiating Venturer written notice (the
"Disapproval Notice") stating that it does not elect to
purchase the Relevant Interest and that it disapproves of the
proposed Transfer to the Third Party. In the event that the
Responding Venturer delivers the Disapproval Notice within such
30-day period, and the Disapproval Notice sets forth the
existence of specific facts which reasonably demonstrate that the
Third Party would not be suitable as a Venturer due to its
background, reputation or lack of financial capability, the
Initiating Venturer may not consummate the proposed Transfer. If
the Responding Venturer does not deliver the Acceptance Notice or
the Disapproval Notice within the 30-day period referred to
above, or if the Disapproval Notice does not satisfy the
requirements of the immediately preceding sentence, the
Initiating Venturer may, within 90 days after the expiration of
such 30-day period, consummate the proposed Transfer to the Third
Party on the terms set forth in the Offering Notice or on
substantially similar terms. If the Initiating Venturer does not
consummate the proposed Transfer within such 90-day period, the
proposed Transfer may not be effected unless the Initiating
Venturer again complies with the provisions of this Section 11.4.
Section 11.5 Buy-Out on Default. At any time during the
continuance of an Event of Default under this Agreement, the non-
defaulting Venturer, without limiting any other rights or
remedies it may have under this Agreement, at law or in equity,
may, upon written notice (the "Appraisal Notice") delivered to
the Defaulting Venturer, elect to purchase all (but not less than
all) of the Interest of the Defaulting Venturer for cash in an
amount equal to 80% of the Appraised Value of the Defaulting
Venturer's Interest. The "Appraised Value" shall be an amount
equal to the Defaulting Venturer's Interest multiplied by the
fair market value of the Joint Venture, which shall represent the
amount that a single purchaser unrelated to any Venturer would
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reasonably be expected to pay for the Joint Venture business and
assets as a going concern, subject to all existing indebtedness,
liens and encumbrances, in a single cash purchase, taking into
account the current condition, use and net income of the
Facility. If the Venturers are unable to mutually agree upon the
Appraised Value within 30 days after delivery of the Appraisal
Notice, each Venturer shall select a reputable MAI appraiser to
determine the Appraised Value. The two appraisers shall furnish
the Venturers with their written appraisals within 45 days of
their selection, setting forth their determinations of the
Appraised Value as of the date of the Appraisal Notice. If the
higher of such appraisals does not exceed the lower of such
appraisals by more than 10%, the Appraised Value shall be the
average of the two appraisals. If the higher of such appraisals
exceeds the lower of such appraisals by more than 10%, the two
appraisers shall, within 20 days, mutually select a third
reputable MAI appraiser. The third appraiser shall furnish the
Venturers with its written appraisal within 45 days of its
selection, and the Appraised Value shall be the average of the
three appraisals. The cost of the appraisals shall be borne
equally by the Defaulting Venturer and the non-defaulting
Venturer. The determination of the Appraised Value in accordance
with this Section 11.5 shall constitute a final and non-
appealable arbitration. The closing of the purchase and sale of
the Interest of the Defaulting Venturer pursuant to this Section
11.5 shall occur not later than 90 days after determination of
the Appraised Value, or such other time as may be directed by the
Nevada Gaming Authorities. At the closing, the Defaulting
Venturer shall deliver to the non-defaulting Venturer good title
to its Interest, free and clear of any liens, claims or other
encumbrances.
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ARTICLE 12
EVENTS OF DEFAULT
Section 12.1 Events of Default. The occurrence of any of
the following events shall constitute an "Event of Default"
hereunder on the part of the Venturer to which such event relates
(the "Defaulting Venturer") if within 30 days following
delivery to the Defaulting Venturer of written notice of such
default by the other Venturer, or within 10 days if the default
is due solely to the non-payment of monies, whichever is
applicable, the Defaulting Venturer fails to pay such monies or,
in the case of non-monetary defaults, fails to commence
substantial efforts to cure such default or thereafter fails
within a reasonable time to prosecute to completion with
diligence the curing of such default; provided, however, that the
occurrence of any of the events described in Section 12.1(a) or
(b) shall constitute an Event of Default immediately upon such
occurrence without any requirement of notice or the passage of
time except as specifically set forth therein:
(a) the violation by a Venturer of any of the
restrictions set forth in Article 11 of this Agreement upon
the right of such Venturer to Transfer its Interest;
(b) (i) the institution by a Venturer of
proceedings under any federal or state law for the relief of
debtors wherein such Venturer is seeking relief as debtor,
(ii) a general assignment by a Venturer for the benefit of
creditors, (iii) the institution by a Venturer of a
proceeding for relief under the Federal Bankruptcy Code,
(iv) the institution against a Venturer of a proceeding
under the Federal Bankruptcy Code, which proceeding is not
dismissed, stayed or discharged within 60 days after the
filing thereof or, if stayed, which stay is thereafter
lifted without a contemporaneous discharge or dismissal of
such proceeding, (v) the admission by a Venturer in writing
of its inability to pay its debts as they mature or (vi) the
attachment, execution or other judicial seizure of all or
any substantial part of a Venturer's Interest which remains
undismissed or undischarged for a period of 15 days after
the levy thereof, if such attachment, execution or other
judicial seizure would reasonably be expected to have a
material adverse effect upon the performance by such
Venturer of its obligations under this Agreement; provided,
however, that any such attachment, execution or seizure
shall not constitute an Event of Default if such Venturer
posts a bond sufficient to fully satisfy the amount of such
claim or judgment within 15 days after the levy thereof and
the Venturer's Interest is thereby released from the lien of
such attachment (each an "Event of Bankruptcy");
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(c) any material breach by a Venturer of its
representations and warranties pursuant to Article 10 hereof
or any material default in performance of, or failure to
comply with, any other agreement, obligation or undertaking
of a Venturer contained in this Agreement;
(d) causing or permitting an event of default
under the Construction Financing or any other third-party
indebtedness incurred by the Joint Venture;
(e) the issuance of a final order or directive of
a governmental agency of any jurisdiction, including the
Nevada Gaming Authorities, disqualifying a Venturer from
holding any license, approval or permit required for the
business of the Joint Venture, or directing that the other
Venturer or any of its Affiliates terminate its relationship
with such Venturer; and
(f) the failure or inability of a Venturer or its
direct or indirect owners to obtain any license, approval or
permit required for the business of the Joint Venture or any
other event involving a Venturer which results in the Joint
Venture or such Venturer becoming unable to conduct a gaming
business.
Section 12.2 Remedies upon Default. Upon the occurrence
of any Event of Default, the non-defaulting Venturer shall have
the right, without limitation, to exercise any and all rights and
remedies set forth in this Agreement or as may be available at
law or in equity against the Defaulting Venturer.
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ARTICLE 13
DISSOLUTION AND LIQUIDATION
Section 13.1 Events of Dissolution. The Joint Venture
shall dissolve upon the occurrence of any of the following
events:
(a) the sale or other disposition (including,
without limitation, taking by eminent domain) of all or
substantially all of the assets of the Joint Venture and the
collection of the proceeds thereof;
(b) the approval of each of the Venturers;
(c) at the election of the non-defaulting
Venturer, the occurrence of an Event of Default by a
Defaulting Venturer;
(d) December 31, 2064;
(e) the election of either Venturer pursuant to
Section 4.1 hereof, or the election of MR Sub pursuant to
Section 4.2 hereof;
(f) the final and non-appealable rejection of the
Joint Venture's application for a gaming license for the
Facility or, after issuance, the final and non-appealable
revocation of such license;
(g) the death, withdrawal, bankruptcy or
dissolution of a Venturer, or the occurrence of any event
that terminates a Venturer's continued interest in the Joint
Venture or causes a Transfer of such interest by operation
of law, unless within 90 days after such event one or more
new Venturers is admitted pursuant to Section 11.2 or 13.2
hereof;
(h) the occurrence of the event specified in the
last sentence of Section 3.2 hereof; or
(i) the occurrence of any other event that makes
it unlawful or impossible to carry on the business of the
Joint Venture.
Section 13.2 Venturers' Consent to Continue Business.
Upon the occurrence of an event described in Section 13.1 which
may cause the dissolution of the Joint Venture, or subsequent
discovery of the occurrence of such an event, the Managing
Venturer shall immediately notify each of the remaining Venturers
of the occurrence of the event, and each of the remaining
Venturers shall notify the Managing Venturer whether or not it
consents to continue the business of the Joint Venture. If all
of the remaining Venturers consent to continue the Joint
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Venture's business, and there are at least two remaining
Venturers, the Joint Venture shall not be dissolved and the
remaining Venturers shall continue the Joint Venture's business.
If there is only one remaining Venturer and it consents to
continue the Joint Venture's business, such Venturer shall have
the absolute right, notwithstanding any contrary provision of
this Agreement, to Transfer a portion of its Interest to a
transferee (who may be an Affiliate of such Venturer) and to
unilaterally admit such transferee as a new Venturer in the Joint
Venture, so that such two Venturers may continue the Joint
Venture's business.
Section 13.3 Dissolution and Liquidation. Upon the
occurrence of an event of dissolution described in Section 13.1,
if the business of the Joint Venture is not continued by the
remaining Venturers pursuant to Section 13.2, the Joint Venture
shall continue solely for the purpose of winding up its affairs
in an orderly manner, liquidating its assets and satisfying the
claims of its creditors and Venturers and no Venturer shall take
any action that is inconsistent with, or not necessary to or
appropriate for, winding up the Joint Venture's business and
affairs. To the extent not inconsistent with the foregoing, all
covenants and obligations set forth in this Agreement shall
continue in effect until such time as the Joint Venture's assets
have been distributed pursuant to this Section 13.3 and the Joint
Venture has been liquidated. The Managing Venturer shall be
responsible for overseeing the winding up and liquidation of the
Joint Venture, shall take full account of the Joint Venture's
liabilities and assets, shall cause the assets to be liquidated
as promptly as is consistent with obtaining the fair market value
thereof and shall cause the proceeds therefrom, to the extent
sufficient therefor, to be applied and distributed in the
following order:
(a) first, to the payment and discharge of all of
the Joint Venture's debts and liabilities to creditors other
than Venturers, in the order of priority provided by law;
(b) second, to the payment and discharge of all
of the Joint Venture's debts and liabilities to Venturers,
other than liabilities for distributions to which Venturers
are entitled in their capacities as Venturers pursuant to
Article 6 hereof;
(c) third, to the establishment of any reserves
that may reasonably be deemed necessary by the Managing
Venturer to meet any contingent or unforeseen liabilities or
obligations of the Joint Venture not covered by insurance.
Any such reserve shall be deposited in a bank or other
financial institution. All or any portion of such reserve
no longer needed for the purpose for which it was
established shall be distributed as promptly as practicable
in accordance with Section 13.3(d) or 13.3(e), as
appropriate;
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(d) fourth, to the Venturers in accordance with
the positive balances in their respective Capital Accounts;
and
(e) fifth, to the Venturers in accordance with
their respective Interests.
The Managing Venturer shall not receive any compensation for
any services performed pursuant to this Section 13.3 but shall be
entitled to reimbursement for all out-of-pocket costs and
expenses reasonably incurred in connection therewith.
Any gains or losses on the disposition of assets of the
Joint Venture in the process of liquidation shall be credited or
charged to the Venturers in accordance with Article 5 hereof.
Any property distributed in kind in the liquidation shall be
valued by agreement of the Venturers and the Capital Accounts of
the Venturers shall be adjusted to reflect the amount of Profits
or Losses that would have been recognized by the Joint Venture
had such property been sold for such value immediately before
such distribution.
In the event that any Venturer has a negative balance in its
Capital Account after the liquidation of all of the Joint
Venture's assets, such Venturer shall contribute to the Joint
Venture cash in an amount sufficient to eliminate such negative
balance.
Section 13.4 Notice of Dissolution. Upon the occurrence
of an event of dissolution described in Section 13.1, if the
business of the Joint Venture is not continued by the remaining
Venturers pursuant to Section 13.2, the Managing Venturer shall,
within 30 days thereafter (i) provide written notice thereof to
each of the Venturers and to all other persons with whom the
Joint Venture regularly conducts business (as determined in the
discretion of the Managing Venturer) and (ii) publish notice of
such dissolution in a newspaper of general circulation in each
place in which the Joint Venture conducts business.
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ARTICLE 14
MISCELLANEOUS PROVISIONS
Section 14.1 Waiver of Partition and Covenant not to
Withdraw. Each Venturer covenants and agrees that the Venturers
have entered into this Agreement based on the mutual expectation
that both Venturers will continue as Venturers and carry out the
duties and obligations undertaken by them hereunder and, except
as otherwise expressly required or permitted by this Agreement or
approved by each of the Venturers, each Venturer covenants and
agrees not to (i) take any action to require partition or to
compel any sale with respect to its Interest, (ii) take any
action to file a certificate of dissolution or its equivalent
with respect to itself, (iii) take any action that would cause an
Event of Bankruptcy of such Venturer, (iv) withdraw or resign, or
attempt to do so, from the Joint Venture, (v) exercise any power
under the Act to dissolve the Joint Venture, (vi) transfer all or
any portion of its Interest, (vii) petition for judicial
dissolution of the Joint Venture or (viii) demand a return of its
capital contributions. Upon any breach of this Section 14.1 by
any Venturer, the other Venturer (in addition to all rights and
remedies it may have under this Agreement, at law or in equity)
shall be entitled to a decree or order from a court of competent
jurisdiction restraining and enjoining such application, action
or proceeding.
Section 14.2 Notices. Unless otherwise provided herein,
all notices or other communications required or permitted by this
Agreement shall be in writing and shall be deemed to have been
duly given on the date of delivery if delivered personally to the
party to whom notice is given, on the next business day if sent
by confirmed facsimile transmission or on the date of actual
delivery if sent by overnight commercial courier or by first-
class mail, registered or certified, with postage prepaid and
properly addressed to the party at its address set forth below,
or at any other address that any party may from time to time
designate by written notice to the others:
If to MR Sub or MRI:
MRGS Corp.
c/o Mirage Resorts, Incorporated
3400 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
Facsimile: (702) 791-5787
If to Gold Strike:
Gold Strike L.V.
P.O. Box 19278
Jean, Nevada 89019
Attention: Glenn Schaeffer
Facsimile: (702) 874-1056
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Section 14.3 Amendments. The provisions of this Agreement
may not be waived, amended or repealed, in whole or in part,
except with the written consent of each of the Venturers and,
with respect to Section 14.20, 14.21, 14.22, 14.23, 14.24 or
14.25 hereof, the written consent of MRI.
Section 14.4 Successors and Assigns. This Agreement shall
be binding on, and inure to the benefit of, the parties hereto
and their respective heirs, legal representatives, successors,
transferees and assigns.
Section 14.5 Time. Time is of the essence with respect to
this Agreement.
Section 14.6 Severability. Each provision of this
Agreement is intended to be severable. If any term or provision
hereof is held to be illegal or invalid for any reason, such
illegality or invalidity shall not affect the legality or
validity of the remainder of this Agreement.
Section 14.7 Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
Section 14.8 Attorneys' Fees. Should any action or
proceeding be commenced (including without limitation any
proceeding in bankruptcy) by or against the Joint Venture or a
Venturer to enforce any of the terms of this Agreement or that in
any other way pertains to Joint Venture affairs or this
Agreement, the prevailing party in such action or proceeding (as
determined by the presiding official(s)) shall be entitled to
receive from the opposing party or parties the prevailing party's
reasonable costs and attorneys' fees incurred in investigating,
prosecuting, defending or appearing in any such action or
proceeding.
Section 14.9 Entire Agreement. This Agreement constitutes
the complete and exclusive statement of the agreement between the
Venturers. This Agreement supersedes all prior negotiations and
agreements of the parties, written or oral, with respect to the
subject matter hereof, including without limitation that certain
letter of intent dated May 10, 1994, as subsequently amended.
Section 14.10 Further Assurances. Each Venturer agrees to
perform any further acts and execute, acknowledge and deliver any
documents or instruments which may be reasonably necessary or
appropriate to carry out the provisions of this Agreement.
Section 14.11 Headings. Article and section headings
contained in this Agreement are for convenience of reference only
and shall not be deemed a part of this Agreement or have any
binding legal effect.
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Section 14.12 Exhibits. Each of the Exhibits referred to
herein and attached hereto is hereby incorporated by reference
and made a part hereof for all purposes. Unless the context
otherwise expressly requires, any reference to "this Agreement"
shall mean and include all such Exhibits.
Section 14.13 Approvals and Consents. Whenever the
approval or consent of a Venturer is required by this Agreement,
such Venturer shall have the right to give or withhold such
approval or consent in its sole discretion, unless otherwise
expressly provided herein.
Section 14.14 Estoppels. Each Venturer shall, upon the
written request of the other Venturer, promptly execute and
deliver to the other Venturer a statement certifying that this
Agreement is unmodified and in full force and effect (or, if
modified, the nature of the modification) and whether or not
there are, to such Venturer's knowledge, any uncured defaults on
the part of the other Venturer, specifying such defaults if any
exist. Any such statement may be relied upon by third parties.
Section 14.15 Compliance with Laws. Each Venturer shall
at all times act in accordance with all applicable laws and
regulations and shall indemnify and hold harmless the other
Venturer from and against any and all claims, losses, damages and
liabilities, including reasonable attorneys' fees which shall be
reimbursed as incurred, arising out of or relating to any breach
of such laws or regulations.
Section 14.16 Remedies Cumulative. Each right, power and
remedy provided for in this Agreement or now or hereafter
existing at law, in equity, by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other
right, power or remedy provided for in this Agreement or now or
hereafter existing at law, in equity, by statute or otherwise,
and the exercise by any party of any one or more of such rights,
powers or remedies shall not preclude the simultaneous or later
exercise by such party of any or all of such other rights, powers
or remedies.
Section 14.17 Waiver. No consent or waiver, express or
implied, by any party to or of any breach or default by any other
party in the performance of obligations under this Agreement
shall be deemed or construed to be a consent or waiver to or of
any other breach or default in the performance by such party.
Failure on the part of any party to complain of any act or
failure to act by any other party or to declare any other party
in default, irrespective of how long such failure continues,
shall not constitute a waiver by any party of its rights under
this Agreement.
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Section 14.18 Gaming Licensing Matters. The Venturers
shall provide all reasonable cooperation with any investigation
by any gaming authority having jurisdiction over any Venturer or
any Affiliate of any Venturer. Each Venturer shall cause any
transferee of any portion of its Interest likewise to so
cooperate. Each Venturer agrees that it shall not take any
action or omit to take any action that would have the effect of
adversely affecting any gaming license, approval or permit held
by any Venturer. Each Venturer acknowledges that monetary
damages alone would not be adequate compensation for a breach of
this Section 14.18 and the Venturers agree that a non-breaching
Venturer shall be entitled to seek a decree or order from a court
of competent jurisdiction for specific performance to restrain a
breach or threatened breach of this Section 14.18 or to require
compliance by a Venturer with this Section 14.18.
Section 14.19 Liquidated Damages. The provisions of
Section 3.5 hereof, which in certain circumstances could result
in the reduction of a Venturer's Interest, constitute an
agreement by the Venturers upon a liquidated amount as to the
damages sustained by the other Venturer upon the failure of a
Venturer to contribute to the capital of the Joint Venture. Each
Venturer acknowledges that the amount of damages sustained by the
Venturers in the event of such a failure is not readily
ascertainable and that the provisions of Section 3.5 hereof
establishing such liquidated amount are reasonable under the
circumstances existing at the time of the execution of this
Agreement and, to the extent permitted by law, each Venturer
waives any and all rights of any nature whatsoever to challenge
the reasonableness of such provisions as of the date of this
Agreement. In the event that the non-defaulting Venturer
contributes the full amount of capital that the defaulting
Venturer shall have failed to contribute, the reduction in the
defaulting Venturer's Interest shall be the sole measure of
damages resulting from the occurrence of such a failure. If the
non-defaulting Venturer does not contribute the full amount of
the deficit, the Joint Venture and the non-defaulting Venturer
shall have all other rights and remedies that may be available
under this Agreement, at law or in equity against the defaulting
Venturer with respect to the portion of the deficit not
contributed by the non-defaulting Venturer.
Section 14.20 Roll-up of MR Sub Interest. In the event
that Gold Strike or an entity controlled by the owners of Gold
Strike determines to make an initial public equity offering, Gold
Strike shall consider allowing MR Sub the opportunity to
contribute its Interest in the Joint Venture to such entity
immediately prior to the public offering in exchange for the
issuance of equity interests in such entity to MR Sub, but Gold
Strike shall have no obligation to do so.
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Section 14.21 Transportation System. The Joint Venture
and MRI shall cooperate to develop a themed transportation system
between the Facility and the adjacent property owned by an
Affiliate of MRI at the intersection of Las Vegas Boulevard South
and Flamingo Road. Such transportation system may include a pre-
loading station for customers at or near such intersection. Any
new luxury hotel-casino resort which may be constructed by MRI or
its Affiliate at the intersection of Las Vegas Boulevard South
and Flamingo Road shall incorporate such permanent themed
transportation system between the Facility and such new hotel-
casino resort, the costs of which shall be borne equally by MRI
and the Joint Venture.
Section 14.22 Vehicular Access. The Joint Venture and MRI
shall cooperate with each other to develop a master plan of
vehicular access between the Property, the adjacent property
owned by an Affiliate of MRI and adjacent public streets. MRI
shall consider providing the Joint Venture with shared access to
any future extension of Harmon Avenue, but shall have no
obligation to do so.
Section 14.23 Off-Site Improvements. MRI shall consider
allowing the Joint Venture to make temporary improvements to the
property owned by an Affiliate of MRI adjacent to the Property in
order to enhance the appearance or logistics of the Facility, but
shall have no obligation to do so.
Section 14.24 The Mirage Golf Club. MRI and the Joint
Venture shall cooperate to allow MRI or its Affiliate to continue
operating The Mirage Golf Club as long as possible, at MRI's sole
cost and expense and for MRI's sole benefit. As long as The
Mirage Golf Club remains open to the public, the current owners
of Gold Strike shall be afforded complimentary playing privileges
for themselves and up to one guest accompanying such owner at The
Mirage Golf Club, other than during special events and other
restricted periods specified by MRI. Notwithstanding that an
Affiliate of MRI continues to operate The Mirage Golf Club on a
portion of the Property, upon the transfer and conveyance of the
Property to the Joint Venture the Joint Venture shall immediately
become and shall thereafter remain responsible for all real
estate taxes and other expenses not specifically associated with
the operations of The Mirage Golf Club.
Section 14.25 Recreational Lake. If MRI or an Affiliate
develops a recreational lake on its property adjacent to the
Property, MRI will consider extending the recreational lake to
the vicinity of the Property, but shall have no obligation to do
so.
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IN WITNESS WHEREOF, the parties have executed this Joint
Venture Agreement as of the date first above written.
MRGS CORP., a Nevada corporation
By: DANIEL R. LEE
___________________________________
Daniel R. Lee
Chief Financial Officer
GOLD STRIKE L.V., a Nevada general
partnership
By: M.S.E. Investments, Inc., a Nevada
corporation
Title: General Partner
By: MICHAEL S. ENSIGN
______________________________
Michael S. Ensign
President
The undersigned is executing this Joint Venture Agreement
solely with respect to Sections 14.20, 14.21, 14.22, 14.23, 14.24
and 14.25, but by virtue of such execution shall not be deemed to
be a Venturer or otherwise a party to this Joint Venture
Agreement.
MIRAGE RESORTS, INCORPORATED,
a Nevada corporation
By: DANIEL R. LEE
___________________________________
Daniel R. Lee
Chief Financial Officer
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