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MCA Metroplex LLC Agreement 04-25-2000

MEMBER CONTROL AGREEMENT OF

METROPLEX - LAKES, LLC

 

 

THIS MEMBER CONTROL AGREEMENT is made and entered into as of the 25th

day of April, 2000 (the "Effective Date"), by and among GRAND CASINOS NEVADA I,

INC., a Minnesota corporation ("GCN"); METROPLEX, LLC, a Nevada limited

liability company ("Metroplex") (the "Members"); and METROPLEX - LAKES, LLC, a

Minnesota limited liability company (the "Company").

 

INTRODUCTION

 

A. The Members have organized the Company as of the Effective Date

pursuant to Minnesota Statutes, Chapter 322B (the "LLC Act"), by filing Articles

of Organization described in Section 1.1 below and agreeing to make capital

contributions pursuant to their Joint Contribution Agreement attached hereto as

EXHIBIT A, which have been accepted by a unanimous action of the Company's Board

of Governors dated as of the Effective Date.

 

B. The Members constitute all of the initial members of the Company.

 

C. Section 322B.37 of the LLC Act (as defined in Section 3.24)

authorizes a member control agreement for a limited liability company.

 

D. Each of the Members desires to enter into such an agreement, in the

form of this Agreement, with respect to the Company.

 

E. GCN is a wholly-owned subsidiary of Lakes Gaming, Inc., a Minnesota

corporation ("Lakes"). Lakes is engaged in the management of gaming enterprises

subject to the jurisdiction of various States and other authorities, which

require that Lakes, GCN and others affiliated with them hold Gaming Licenses, as

described in Section 5.5.

 

NOW, THEREFORE, in consideration of the foregoing facts, the mutual

promises of the Members and the mutual benefits to be gained by the performance

of this Agreement, the Members hereby agree as follows:

 

AGREEMENT

 

ARTICLE 1

FORMATION OF LIMITED LIABILITY COMPANY

 

1.1 Formation. As of the Effective Date, the Members have formed the

Company as a limited liability company under the provisions of the LLC Act. The

Company's business shall be conducted to comply with the LLC Act.

 

The Members hereby adopt and approve as filed in the office of the

Secretary of State of the State of Minnesota on April 25, 2000, the Articles of

Organization with respect to the Company (the "Articles"). A copy of the

 

 

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Articles is attached hereto as EXHIBIT B and hereby made a part of this

Agreement. The Company's Board shall promptly cause to be executed and so filed

any amendments of such Articles that may be adopted by the Members or required

by law.

 

Except as otherwise provided in this Agreement, the Articles and the

Company's Bylaws adopted by the Members, the rights and liabilities of the

Members shall be as provided in the LLC Act. The purpose of the Company is set

forth in Article 4.

 

1.2 Term. The term of the Company shall begin on the Effective Date and

shall continue until the Company is dissolved upon a Liquidation Event as

provided in Article 15.

 

1.3 Name. The name of the Company shall be "Metroplex - Lakes, LLC" or

such other name as may be agreed upon in writing by the Appointing Members. The

Company shall take such action as may be necessary or desirable to become

qualified to do business in the State of Nevada, Clark County, under the assumed

name "Metroplex." Metroplex hereby consents to the Company's use of the assumed

name "Metroplex" to do business in the States of Minnesota and Nevada, and

agrees to execute and deliver such documents as may be reasonably necessary or

desirable to accomplish that purpose.

 

ARTICLE 2

PLACE OF BUSINESS AND AGENT FOR PROCESS

 

1.4 Place of Business. The principal executive office of the Company

shall be located at 130 Cheshire Lane, Minnetonka, Minnesota 55305. The Board

may from time to time change the location of the principal office of the Company

and, in such event, the Chief Manager shall give notice to the Members within

twenty (20) days of the effective date of such change. The Board may in its

discretion establish additional places of business of the Company, one of which

shall be in Las Vegas, Nevada.

 

1.5 Agent for Process. The name and address of the agent for service of

process on the Company shall be Chief Financial Manager, Metroplex - Lakes, LLC,

located at 130 Cheshire Lane, Minnetonka, Minnesota 55305.

 

ARTICLE 3

GENERAL DEFINITIONS

 

Wherever used in this Agreement, unless another meaning is explicitly

indicated by the context, the following terms shall have the meanings set forth

below:

 

1.6 "Affiliate" means, with respect to a specific Person, any of the

following other Persons: (a) any Person directly or indirectly controlling,

controlled by, or under common control with such Person; (b) any Person owning

or controlling ten percent (10%) or more of the outstanding voting interests of

such Person, unless such voting interests are publicly traded on a national

securities exchange or NASDAQ; (c) any officer, director or general partner of

such Person; or (d) any Person who is an officer, director, general partner,

trustee or holder of ten percent (10%) or more of the voting interests (unless

such voting interests are publicly traded on a national securities exchange or

NASDAQ), of any Person described in clauses (a) through (c) of this sentence.

For purposes of this definition, the terms "control," "is controlled by" or "is

under common control with" shall mean the possession, direct or indirect, of the

power to direct or cause the direction of the management and policies of a

Person, whether through the ownership of voting securities, by contract or

 

 

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otherwise. Notwithstanding the foregoing, Lyle Berman, a significant shareholder

of Lakes, shall be deemed to be an Affiliate of Lakes and GCN; and Brett Torino,

the sole owner of Metroplex shall be deemed to be an Affiliate of Metroplex,

along with Torino Companies, Inc.

 

1.7 "Agreement" or "Member Control Agreement" means this Member Control

Agreement (including all of its Exhibits and Schedules, if any), as amended from

time to time.

 

1.8 "Articles" shall mean the Articles of Organization filed on behalf

of the Company with the Minnesota Secretary of State on April 25, 2000, and are

attached hereto as Exhibit B, as they may be amended from time to time by the

Appointing Members, pursuant to the LLC Act and the Company's Bylaws.

 

1.9 "Appointing Member" shall mean any Member that is entitled to

appoint one or more Governors pursuant to Article 10, without an election by all

of the voting Members; and includes each of its successors and assigns that

becomes a Member hereunder with respect to all of the Interest held by the

Appointing Member.

 

1.10 "Board" means the Board of Governors of the Company, appointed by

the Appointing Members pursuant to Article 10 and the Bylaws.

 

1.11 "Bankruptcy" means, with respect to any Person, a "Voluntary

Bankruptcy" or an "Involuntary Bankruptcy."

 

(1) "Voluntary Bankruptcy" means, with respect to any

Person, an admission in writing by such Person of his, her or its

inability to pay such debts generally or a general assignment by such

Person for the benefit of creditors; the filing of any petition or

answer by such Person seeking to adjudicate it a bankrupt or insolvent

or seeking for such Person any liquidation, winding up, reorganization,

arrangement, adjustment, protection, relief or composition of such

Person or the debts of such Person under any law relating to

bankruptcy, insolvency or reorganization for the benefit of debtors; or

seeking, consenting to or acquiescing in the entry of an order for

relief or the appointment of a receiver, trustee, custodian or other

similar official for such Person or for any substantial part of such

Person's property; or corporate action taken by such Person to

authorize any of the actions set forth above.

 

(2) "Involuntary Bankruptcy" means, with respect to any

Person, without the consent or acquiescence of such Person, the

entering of an order for relief or approving a petition for relief or

reorganization or any other petition seeking any reorganization,

arrangement, composition, readjustment, liquidation, dissolution or

other similar relief under any present or future bankruptcy, insolvency

or similar statute, law or regulation; or the filing of any such

petition against such Person which petition shall not be dismissed

within ninety (90) days; or, without the consent or acquiescence of

such Person, the entering of any order appointing a trustee, custodian,

receiver or liquidator of such Person or of all or any substantial part

of the property of such Person, which order shall not be dismissed

within ninety (90) days.

 

1.12 "Business Day" shall mean any day on which Federal government

offices are open.

 

1.13 "Bylaws" means the Bylaws of the Company, as unanimously adopted

by the Members under the LLC Act and hereafter amended from time to time

unanimously by the Members. The initial Bylaws are attached hereto as EXHIBIT C.

 

 

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1.14 "Cable Property" means the real estate interests subject to the

Cable Options described in the Joint Contribution Agreement.

 

1.15 "Capital Account" shall have the meaning set forth in Section

6.1(b).

 

1.16 "Capital Contribution" shall have the meaning set forth in Section

6.1(c).

 

1.17 "Code" means the Internal Revenue Code of 1986, as amended from

time to time (and any corresponding provisions of succeeding law).

 

1.18 "Company" means Metroplex - Lakes, LLC, the Minnesota limited

liability company formed as of the Effective Date pursuant to this Agreement and

the Articles.

 

1.19 "Company Property" means the Joint Venture Property and the Cable

Property (as and when each parcel thereof becomes owned by the Company), and all

other real and personal property acquired and held from time to time by the

Company and any improvements thereto; and shall include both tangible and

intangible property.

 

1.20 "Contribution Agreement" means the Joint Contribution Agreement;

and any other agreement in writing, executed by the Company and a Person

desiring to become a Member after the Effective Date, setting forth the terms of

such Person's admission as a Member including, but not limited to, the agreed

value of the contribution that shall be made by such Person to the capital of

the Company and the Percentage Interest and Voting Interest to be issued by the

Company to such Person.

 

1.21 "Depreciation" shall have the meaning set forth in Section 6.1(d).

 

1.22 "Development Budget" shall have the meaning set forth in Section

8(c) of the Joint Contribution Agreement. Each such Development Budget shall be

established and approved by the Appointing Members in writing pursuant to

Section 8(c) of the Joint Contribution Agreement.

 

1.23 "Development Committee" shall have the meaning set forth in

Section 10.4.

 

1.24 "Development Costs" shall have the meaning set forth in Section

8(d) of the Joint Contribution Agreement. Except as otherwise specified herein,

Development Costs include Internal Development Costs (as defined below).

 

1.25 "Distribution" means any distribution to the Members of cash or

other assets of the Company made from time to time pursuant to Article 8 or

Section 15.3.

 

1.26 "Effective Date" means April 25, 2000, which is the effective date

of this Agreement and the formation of the Company.

 

1.27 "Financial Rights" means a Member's rights to (a) a Capital

Account; (b) a Percentage Interest in Company Profits, Losses and Distributions;

(c) payments (if any) under the terms and conditions of Article 13 upon the

Member's death or other withdrawal; and (d) the Member's limited right (if any)

to Transfer such rights according to Article 12.

 

 

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1.28 "Fiscal Year" means (a) the period commencing on the Effective

Date and ending on December 31, 2000, (b) any subsequent calendar year, or (c)

any portion of either of the periods described in clauses (a) and (b) for which

the Company is required or elects to close its books and allocate Profits,

Losses and other Company items pursuant to Article 7.

 

1.29 "Gaming Licenses" shall have the meaning set forth in Section 5.5.

 

1.30 "GCN" shall mean Grand Casinos Nevada I, Inc., a Minnesota

corporation that is one of the Appointing Members; or any successor to its

Interest in the Company.

 

1.31 "Governance Rights" means all of a Member's rights as a Member,

other than the Member's Financial Rights, and includes the Member's Voting

Interest and any rights as an Appointing Member.

 

1.32 "Governing Authority" shall have the meaning set forth in Section

9.1.

 

1.33 "Governor" shall mean any individual elected under Section 10.1 to

serve on the Board. The first Governors are the three (3) individuals named in

Section 10.2.

 

1.34 "Interest" shall have the same meaning as Membership Interest

(defined below).

 

1.35 "Internal Development Costs" shall have the meaning set forth in

Section 8(d)(ii) of the Joint Contribution Agreement. To the extent specified

herein, Internal Development Costs are treated differently from other

Development Costs.

 

1.36 "Joint Contribution Agreement" means the initial written agreement

of the first Members, dated as of the Effective Date, which is attached hereto

as EXHIBIT A and hereby made a part of this Agreement.

 

1.37 "Joint Venture Property" means the real estate interests subject

to the Company's Option described in the Joint Contribution Agreement.

 

1.38 "LLC Act" means the Minnesota Limited Liability Company Act, as

set forth in Minnesota Statutes, Chapter 322B, as amended from time to time (or

any corresponding provisions of succeeding law).

 

1.39 "Lakes" means Lakes Gaming, Inc., the Minnesota corporation that

currently owns all of the capital stock of GCN.

 

1.40 "Liquidating Event" shall have the meaning set forth in Section

15.1.

 

1.41 "Loss" and "Losses" shall have the meaning set forth in Section

7.1.

 

1.42 "Managers" means (a) the Chief Manager and the Treasurer elected

by the Board; (b) each other individual who shall hereafter be elected,

appointed, or otherwise designated as a Manager by the Board, with the written

consent of the Appointing Members, pursuant to Section 9.1 and the Bylaws; and

(c) any other person considered elected as a manager pursuant to the LLC Act.

 

1.43 "Member" or "Members" shall have the meaning set forth in Section

5.1.

 

 

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1.44 "Membership Interest" or "Interest" means the Percentage Interest

and the Voting Interest of a Member in the Company and the appurtenant rights,

powers and privileges, including both the Financial Rights and Governance Rights

of such Member with respect to the Company.

 

1.45 "Metroplex" shall mean Metroplex, LLC, a limited liability company

organized under the laws of the State of Nevada; or any successor to its

Interest in the Company.

 

1.46 "Net Cash From Operations" means the gross cash proceeds from

Company operations other than sales of real estate, less the portion thereof

used to pay or establish fair and reasonable reserves for all Company expenses,

lease rentals or debt payments (excluding any debt service or lease payments due

more than one year in the future), capital improvements, replacements and

contingencies, all as determined in good faith by the Board. "Net Cash From

Operations" shall not be reduced by depreciation, amortization, cost recovery

deductions or similar allowances, but shall be increased by any reduction of

reserves previously established pursuant to the preceding sentence.

 

1.47 "Net Cash From Sales or Re-financing" means the net cash proceeds

from (a) all sales and other dispositions of Company Property, other than (i) a

sale of all or substantially all of the Company Property or (ii) sales and other

dispositions of tangible personal property in the ordinary course of business;

and (b) all re-financing of Company Property; less any portion of either used to

establish fair and reasonable reserves for the purposes described in the

definition of Net Cash From Operations, all as determined in good faith by the

Board.

 

1.48 "Percentage Interest" means the percentage interest of a Member in

the Company and shall be the percentage set forth as its Percentage Interest in

Section 6.2, subject to adjustment in accordance with Section 6.3.

 

1.49 "Person" means any individual, partnership, limited liability

company, corporation, trust or other entity.

 

1.50 "Profits" shall have the meaning set forth in Section 7.1.

 

1.51 "Regulations" means the Income Tax Regulations, including

Temporary Regulations, promulgated under the Code, as such regulations may be

amended from time to time (including corresponding provisions of succeeding

regulations).

 

1.52 "Required Records" are the financial records and other records

(including this Agreement) required to be kept at the principal executive office

of the Company under Section 322B.373 of the LLC Act.

 

1.53 "Transfer" means, as a noun, any voluntary or involuntary transfer

(by operation of law, Bankruptcy, court order or otherwise), sale, exchange,

assignment, pledge or other encumbrance, foreclosure of a security interest

upon, or other disposition of an item; or, as a verb, to voluntarily or

involuntarily cause a Transfer of an item. "Transferred" means, as an adjective,

that an item has been the subject of a Transfer.

 

1.54 "Voting Interest" means a Member's relative voting power as a

Member and shall be the percentage set forth as such Member's Voting Interest

set forth in Section 6.2, as amended from time to time pursuant hereto.

 

ARTICLE 4

PURPOSES

 

 

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The Company has been formed (a) to develop, acquire, finance,

refinance, contract for construction of improvements, build upon, lease, manage

and sell one or more parcels of the Joint Venture Property and the Cable

Property and any related personal property (including without limitation), in

fee or by lease, or any rights therein as may be necessary or appropriate for

such purposes, to the extent that each of the Appointing Members first approve

in writing the acquisition of each such parcel, the development plan and any

related agreements to lease or sell such parcel as in the best interests of the

Company; (b) to exercise any rights therein as may be necessary or appropriate

for such purposes; to borrow funds for such purposes and to mortgage or

otherwise encumber any or all of the Company Property to secure such borrowings;

(c) to sell or otherwise dispose of the Company's rights or ownership interests

in such Company Property; and (d) to undertake and carry on all activities

necessary or advisable in connection with such purposes.

 

The approval of the Appointing Members with respect to any real estate

acquisition, development plan and related agreement described in clause (a) of

the preceding paragraph shall not be unreasonably withheld or delayed if the

development plan satisfies each of the criteria set forth in Section 2(b) of the

Joint Contribution Agreement.

 

The Company may not engage in any other business incompatible with such

purposes without the consent of the Appointing Members.

 

ARTICLE 5

MEMBERS, NEW MEMBERS AND GAMING LICENSES

 

1.55 Members. The full names and addresses of the Members are set

forth below:

 

(1) Grand Casinos Nevada I, Inc.

130 Cheshire Lane

Minnetonka, MN 55305

 

(2) Metroplex, LLC

5710 East Tropicana

Las Vegas, NV 89122

 

For all purposes of this Agreement, the terms "Member" or "Members"

means the Persons initially signing this Agreement as Members of the Company

under the LLC Act, in their capacity as Members, and each other Person who shall

hereafter be admitted to the Company as a Member, or is otherwise properly

reflected in the Required Records of the Company as the owner of any Governance

Rights of a Membership Interest of the Company.

 

1.56 Terms of Membership Interests. The Original Capital

Contribution (as defined in Section 6.1) and the Percentage Interest and Voting

Interest included in the original Membership Interest of each of the Members are

reflected below and are ordinary membership interests of one class, without

series, and shall have the rights provided by the LLC Act, subject to any

statements and limitations in the Articles or this Agreement of the specific

rights or terms of such Membership Interests:

 

 

 

<CAPTION>

 

----------------------------------------------------------------------------------------------------------------

 

Member Original Capital Percentage Voting

Contribution Interests Interests

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

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----------------------------------------------------------------------------------------------------------------

Metroplex $10,000 (in cash) 50%* 49%**

----------------------------------------------------------------------------------------------------------------

 

GCN $10,000 (the value of the Company's 50%* 51%**

Option and the Cable Options, as

described in the Joint Contribution

Agreement)

----------------------------------------------------------------------------------------------------------------

 

Total $20,000 100% 100%

----------------------------------------------------------------------------------------------------------------

 

 

* Subject to certain variations set forth in Sections 7.2 and 7.3.

 

** Members shall be entitled to vote on all matters in proportion to their

Voting Interests, except as may be provided otherwise in Article 10, elsewhere

in this Agreement or pursuant to the following paragraph. A Member's right to

vote is a Governance Right.

 

With the written consent of the Appointing Members, the Board may enter

into Contribution Agreements with prospective Members providing for one or more

classes of Interests having either Governance Rights that are limited (as

compared with the original Interests) or Financial Rights that are limited or

preferred (as compared with the original Interests), or any combination of such

rights. If any such new class of Interests is issued, this Agreement shall be

amended to state the rights of such Interests.

 

1.57 Additional Members. Additional Members may be admitted to the

Company by the Board only upon such terms and conditions as may be established

by written approval of the Appointing Members, effective as of any prospective

date established by such consent or, if none is stated, by the Board. Except as

otherwise expressly provided herein, the Company may not issue additional

Interests, Financial Rights or Governance Rights, to existing Members or

otherwise, without the prior written consent of Members holding at least

two-thirds of the Voting Interests. Upon such consent and issuance of additional

Membership Interests, Section 5.2 shall be appropriately amended. Nothing in

this Section 5.3 shall be construed to limit the effect of Articles 12 and 13

with respect to the Transfer of Membership Interests by Members.

 

Each additional Member admitted to the Company shall execute this

Agreement and, if making a Capital Contribution, shall execute and perform a

Contribution Agreement delivered to and accepted on behalf of the Company by the

Managers pursuant to the terms and conditions approved by the required number of

Members as required by the preceding paragraph.

 

Any Person who is admitted to the Company as a Member shall be subject

to and bound by all the provisions of this Agreement (as a party to this

Agreement), including specifically the requirements of Article 6 relating to

Capital Contributions.

 

The Board may authorize the Managers to enter into contribution

allowance agreements with current Members or prospective Members pursuant to

section 322B.43 of the LLC Act, providing for the right, but not the obligation,

to make a specified Capital Contribution in the future and thereby purchase a

specified Interest, upon such terms and conditions as may be established by the

Board, but only with the written approval of the Appointing Members.

 

1.58 Agreement Not to Resign. During initial two (2) years of the

Company's existence, each Appointing Member agrees not to withdraw or otherwise

voluntarily resign from membership in the Company for any reason whatsoever

without the consent of each remaining Appointing Member, if the Company then

owns

 

 

 

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any of the Company Property purchased by exercising the Company's options to

acquire any of the Joint Venture Property or the Cable Property.

 

If an Appointing Member nevertheless withdraws or otherwise voluntarily

resigns from membership in the Company in violation of the preceding paragraph,

without the consent of each remaining Appointing Member, the Appointing Member

who resigns shall be liable to the Company for any damages resulting from that

action. Such damages shall include without limitation the expenses (including

reasonable attorneys' fees) of (a) admitting a new Member, if desired by the

remaining Appointing Member; and (b) if applicable, purchasing the terminating

Member's Membership Interest under Article 13 (excluding the purchase price and

any interest payable thereunder).

 

5.5 Gaming Licenses and Effect of Adverse Finding. Each Member

(other than GCN, Lakes or any of their Affiliates) acknowledges that the

primary business of Lakes and certain of its subsidiaries and other Affiliates

is the operation and management of gaming facilities; and that Lakes and certain

of its subsidiaries and other Affiliates must obtain and maintain in effect

various approvals, findings of suitability, licenses, permits and registrations

(collectively "Gaming Licenses") from various gaming authorities. The provisions

of this Section 5.5, as they apply to each current Member other than GCN, Lakes

or any of their Affiliates (a "Non-Lakes Member"), shall also apply in the same

manner to any other additional or substituted Member that becomes a Non-Lakes

Member.

 

If (a) any Non-Lakes Member or any of its Affiliates, or any other

Person who directly or indirectly owns or has any interest in a Non-Lakes Member

or is otherwise affiliated with a Non-Lakes Member, is found by any gaming

authority with competent jurisdiction to be unsuitable or unqualified to be

associated with Lakes or any subsidiary or other Affiliate of Lakes; or (b) the

Board of Directors of Lakes determines in good faith that the continued

association of Lakes with the Non-Lakes Member may reasonably be expected to

result in (i) the disapproval, adverse modification or non-renewal of any

contract or agreement under which Lakes or any subsidiary or other Affiliate of

Lakes has sole or shared authority to manage any gaming facility; or (ii) the

loss or non-reinstatement of any Gaming License, then Lakes shall give the

Non-Lakes Member written notice of such finding or determination. Such notice

shall describe the situation or relationship that is the basis for such finding

or determination.

 

Such Non-Lakes Member shall, promptly after its receipt of the written

notice from Lakes specifying such finding or determination, take all actions

required to terminate or discontinue or otherwise cure, to the satisfaction of

the Board of Directors of Lakes and any gaming authority having jurisdiction

over Lakes or any subsidiary or other Affiliate of Lakes, the situation or

relationship described in the notice given by Lakes. If, within thirty (30) days

after such Non-Lakes Member's receipt of the notice given by Lakes (or such

shorter period of time as may be required or requested by any gaming authority),

such Non-Lakes Member fails or is unable to take such actions to the

satisfaction of the Board of Directors of Lakes and any gaming authority having

jurisdiction, such Non-Lakes Member may at any time within such period give

Lakes, GCN and the Company written notice of such failure or inability or, if

such Non-Lakes Member has not already given such notice, GCN or Lakes may at the

end of such period give a notice of such failure or inability to such Non-Lakes

Member and the Company. In the event any notice of such failure or inability is

given (whether or not on a timely basis), then:

 

(1) if the Company has not yet acquired any of the Joint Venture

Property or any of the Cable Property, the Company shall then have the

right and option to purchase such Non-Lakes Member's entire Interest in

 

 

 

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the Company pursuant to the applicable provisions of Article 13, except

that the purchase price shall be equal to the remaining balance of the

Capital Account of such Non-Lakes Member, less the cumulative sum of

any Internal Development Costs that have been allocated thereto; and,

if the Company does not exercise such option, first GCN and then Lakes

shall each have such a right and option; or

 

(2) if the Company has acquired any of the Joint Venture

Property or any of the Cable Property, the Company shall then have the

right and option to purchase such Non-Lakes Member's entire Interest in

the Company pursuant to the applicable provisions of Article 13 and, if

the Company does not exercise such option, first GCN and then Lakes

shall each have such a right and option.

 

ARTICLE 6

MEMBERS' CAPITAL

 

1.59 Definitions Relating to Capital.

 

(1) "Additional Capital Contributions" means, with

respect to each Member, the Capital Contributions made by such Member

pursuant to Section 6.3, reduced by the amount of any liabilities of

such Member assumed by the Company in connection with such Capital

Contribution or which are secured by any property contributed by such

Member as a part of such Capital Contribution.

 

(2) "Capital Account" means, with respect to any

Member, the Capital Account maintained for such Member in accordance

with the following provisions:

 

(1) To each Member's Capital Account there shall be

credited such Member's Capital Contributions, such Member's

distributive share of Profits and any items in the nature of

income or gain which are specially allocated pursuant to

Section 7.5 or Section 7.6, and the amount of any Company

liabilities assumed by such Member or which are secured by any

Company Property distributed to such Member.

 

(2) To each Member's Capital Account there shall be

debited the amount of cash and the Gross Asset Value of any

Company Property distributed to such Member pursuant to any

provision of this Agreement, such Member's distributive share

of Losses and any items in the nature of deductions or

expenses that are specially allocated pursuant to Section 7.5

or Section 7.6, and the amount of any liabilities of such

Member that are assumed by the Company or secured by any

property contributed by such Member to the Company.

 

(3) In the event all or any portion of an Interest

is Transferred in accordance with the terms of this Agreement,

the transferee shall succeed to the Capital Account of the

transferor to the extent it relates to the Transferred

Interest.

 

(4) In determining the amount of any liability for

purposes of Sections 6.1(a), 6.1(b)(i), 6.1(b)(ii), and

6.1(f), there shall be taken into account Code section 752(c)

and any other applicable provisions of the Code and

Regulations.

 

The foregoing provisions and the other provisions of this

Agreement relating to the maintenance of Capital Accounts are intended to comply

 

 

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with Regulations Section 1.704-1(b), and shall be interpreted and applied in a

manner consistent with such Regulations. In the event that the Appointing

Members shall determine that it is prudent to modify the manner in which the

Capital Accounts, or any debits or credits thereto (including, without

limitation, debits or credits relating to liabilities that are secured by

contributed or distributed property, or are assumed by the Company or any

Member), are computed in order to comply with such Regulations, they may make

such modification; provided, however, that it is not likely to have a material

effect on the amounts allocable to any Member pursuant to Article 7, or

distributable to any Member pursuant to Article 7 or Article 15. The Board shall

(i) make any adjustments that are necessary or appropriate to maintain equality

between the sum of the Capital Account balances of the Members and the total

amount of capital reflected on the Company's balance sheet, as computed for book

purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q); and (ii)

make any appropriate modifications in the event unanticipated events (for

example, the acquisition by the Company of oil or gas properties) might

otherwise cause this Agreement not to comply with Regulations Section

1.704-1(b), to the extent those modifications do not cause any material adverse

effect on the Financial Rights of any Member.

 

(3) "Capital Contribution" means, with respect to any Member, the

amount of money and the initial Gross Asset Value of any property (other than

money) contributed to the Company with respect to the Interest held by such

Member, and includes an Original Capital Contribution under Section 6.1(f) and

any Additional Capital Contribution under Section 6.1(a). The principal amount

of a promissory note that is not readily traded on an established securities

market and is contributed to the Company by the maker of the note (or a Member

related to the maker of the note within the meaning of Regulations Section

1.704-1(b)(2)(ii)(c)) shall not be included in the Capital Account of any Member

until the Company makes a taxable disposition of the note or until (and to the

extent) principal payments are made on the note, all in accordance with

Regulations Section 1.704-1(b)(2)(iv)(d)(2).

 

(4) "Depreciation" means, for each Fiscal Year, an amount equal to

the depreciation, amortization or other cost recovery deduction allowable with

respect to an asset for such Fiscal Year, except that if the Gross Asset Value

of an asset differs from its adjusted basis for Federal income tax purposes at

the beginning of such Fiscal Year, Depreciation shall be an amount which bears

the same ratio to such beginning Gross Asset Value as the Federal income tax

depreciation, amortization or other cost recovery deduction for such Fiscal Year

bears to such beginning adjusted tax basis; provided, however, that if the

adjusted basis for Federal income tax purposes of an asset at the beginning of

such Fiscal Year is zero, Depreciation shall be determined with reference to

such beginning Gross Asset Value using any reasonable method selected by the

Board.

 

(5) "Gross Asset Value" means, with respect to any asset, the

asset's adjusted basis for Federal income tax purposes, except as follows:

 

(1) The initial Gross Asset Value of any asset contributed by a

Member to the Company shall be the gross fair market value of such

asset, as determined by the contributing Member and the Board;

 

(2) The Gross Asset Values of all items of Company Property

shall be adjusted to equal their respective gross fair market values,

as determined by the Board, as of one of the following times: (A) the

acquisition of an additional Interest by any new or

 

 

 

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existing Member in exchange for more than a de minimis Capital

Contribution; (B) the Distribution by the Company to a Member

of more than a de minimis amount of Company Property as

consideration for an Interest; and (C) the liquidation of the

Company within the meaning of Regulations Section

1.704-1(b)(2)(ii)(g); provided, however, that adjustments

pursuant to clauses (A) and (B) above shall be made only if the

Board reasonably determines that such adjustments are necessary

or appropriate to reflect the relative economic interest of the

Members in the Company;

 

(3) The Gross Asset Value of any item of Company Property

(other than cash) distributed to any Member shall be adjusted

to equal the gross fair market value of such asset on the date

of Distribution as determined by the distributee and the Board;

and

 

(4) The Gross Asset Values of Company Property shall be

increased (or decreased) to reflect any adjustments to the

adjusted basis of such assets pursuant to Code section 734(b)

or Code section 743(b), but only to the extent that such

adjustments are taken into account in determining Capital

Accounts pursuant to Regulation Section 1.704-1(b)(2)(iv)(m)

and Sections 7.1(f) and 7.5(a); provided, however, that Gross

Asset Values shall not be adjusted pursuant to this paragraph

(iv) to the extent the Board determines that an adjustment

pursuant to 6.1(e)(ii) is necessary or appropriate in

connection with a transaction that would otherwise result in an

adjustment pursuant to this paragraph.

 

If the Gross Asset Value of an asset has been determined or

adjusted pursuant to Section 6.1(e)(i), Section 6.1(e)(ii), or

this Section 6.1(e)(iv), such Gross Asset Value shall

thereafter be adjusted by the Depreciation taken into account

with respect to such asset for purposes of computing Profits

and Losses.

 

(6) "Original Capital Contribution" means, with respect to each

Member, the Capital Contribution made by such Member pursuant to

Section 6.2, reduced by the amount of any liabilities of such Member

that are (i) assumed by the Company in connection with such Capital

Contribution or (ii) secured by any property contributed by such Member

to the Company as a part of such Capital Contribution.

 

1.60 Initial Capital and Interests of Members. The initial capital

of the Company shall be contributed by the Members and accepted by the Board at

the respective values set forth in Section 5.2. As of the Effective Date, each

Member shall contribute to the capital of the Company the amount specified

following its name in Section 5.2 as its Original Capital Contribution, and

shall be credited with the Interest set forth therein, including without

limitation the Percentage Interest and Voting Interest specified therein.

 

1.61 Additional Capital Contributions. The Appointing Members shall

make the following payments, which shall be treated as Additional Capital

Contributions to the limited extent provided below:

 

(1) Carrying Costs of Joint Venture Property.

 

 

 

 

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<PAGE> 13

 

(1) Payment of Carrying Costs by GCN. During the

development of the Joint Venture Property, GCN shall pay all of the

ownership and other carrying costs with respect to each parcel of the

Joint Venture Property, as such costs are described in Section 8(a) of

the Joint Contribution Agreement ("Carrying Costs"), until GCN's rights

in such parcel are purchased by the Company; such Carrying Costs shall

not be treated as Additional Capital Contributions or loans to the

Company; and GCN shall not be entitled to be reimbursed for such

Carrying Costs by the Company or Metroplex, because such Carrying Costs

have been taken into account on an estimated basis in establishing the

Aggregate Purchase Price for the Joint Venture Property under the

Company's Option described in the Joint Contribution Agreement.

Nevertheless, GCN shall report to the Company in writing the amount and

a description of all of such Carrying Costs paid after the Effective

Date, for purposes of paragraph (iii) of this Section 6.3(a).

 

(2) Remedies Upon GCN Default. If GCN does not timely pay

any Carrying Costs it is required to pay under the preceding paragraph,

that failure would materially and adversely affect the right of the

Company to purchase any parcel of the Joint Venture Property, and GCN

does not pay such Carrying Costs within ten (10) Business Days after

receiving written notice of such delinquency from the Company or

Metroplex (a "Carrying Cost Default"), then the Company shall use its

best efforts to obtain debt financing for such unpaid amount of

Carrying Costs. In the event any such financing is obtained, fifty

percent (50%) of the sum of all interest and other costs of such

financing shall, unless and until paid by GCN, be treated as if it were

a Carrying Cost Loan described in the following paragraph, for purposes

of subsection (iii) of this Section 6.3(a). No payment by GCN of any

amount treated as a Carrying Cost Loan under the preceding sentence

shall be treated as a Capital Contribution hereunder.

 

If a Carrying Cost Default occurs and such financing is not

obtained, Metroplex shall have the right and option to either (A)

exercise its right to terminate the Joint Contribution Agreement and

dissolve the Company pursuant to Section 9 of the Joint Contribution

Agreement, or (B) advance the unpaid Carrying Costs as a secured loan

to the Company that would be guaranteed in writing by GCN, upon GCN's

receipt of a written notice of such loan, and repaid with interest at

the rate set forth in Section 13.8(c) (a "Carrying Cost Loan"), on the

following terms, whether or not Metroplex makes a further election to

shift Percentage Interests under the next paragraph. If any Carrying

Cost Loan has not been paid to the Company by GCN (on account of such

guarantee) for repayment to Metroplex before the Company's next

purchase of Joint Venture Property from GCN, the Company shall repay

each outstanding Carrying Cost Loan (with interest) from the proceeds

of the financing obtained to pay the purchase price to GCN with respect

to such property, and the purchase price otherwise due GCN from the

Company shall be reduced by the balance due on each such Carrying Cost

Loan. No payment of a Carrying Cost Loan by GCN, whether made in cash

or indirectly as a purchase price reduction, shall be treated as a

Capital Contribution hereunder.

 

(3) Election to Shift Percentage Interest from GCN to

Metroplex. If one or more Carrying Cost Loans remain unpaid by GCN on

the last day of any Fiscal Year (a "Determination Date"),

 

 

 

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<PAGE> 14

 

Metroplex may elect in writing to treat the unpaid balance of all such

Carrying Cost Loans as an Additional Capital Contribution (excluding

any amounts so treated on any prior Determination Date), which shall

have the following effect on the Percentage Interests of GCN and

Metroplex for each following Fiscal Year until such Percentage

Interests are again adjusted pursuant to this paragraph or otherwise.

In any such event, the Percentage Interest of GCN shall be adjusted by

multiplying its original Percentage Interest (50%) by the number one

(1), less a fraction determined as of that Determination Date, of which

the numerator shall be the cumulative total of the unpaid balances of

all Carrying Cost Loans treated as Additional Capital Contributions

under this paragraph; and the denominator shall be the cumulative sum

of (A) all Capital Contributions and Carrying Costs paid by GCN on and

after the Effective Date, and (B) the unpaid balances of all Carrying

Cost Loans treated as Additional Capital Contributions under this

paragraph. To the extent that GCN pays the amount of any such Carrying

Cost Loan either in cash to the Company, or indirectly as a purchase

price reduction under the preceding paragraph, that payment amount

shall be removed from the numerator and denominator of such fraction

as of the next Determination Date, and such amount shall be distributed

to Metroplex from its Capital Account. Any such payment by GCN shall

not be treated as a Capital Contribution by GCN, but rather as the

performance of its obligation to pay Carrying Costs.

 

(2) Maintenance of Cable Property Options. During any period of time in

which the Company holds one or more purchase options to acquire the Cable

Property, each of the Appointing Members shall pay or advance to the Company a

portion of Company's periodic carrying costs for retaining such options, as and

when such costs are incurred, which portion shall be equal to the Appointing

Member's Percentage Interest; provided, however, that Metroplex shall not be

required by pay its share of such costs while its obligation to do so is

suspended pursuant to Section 2(b)(iv) of the Contribution Agreement. All of

such costs paid or advanced to the Company by each Appointing Member shall be

promptly reported to the Company and, upon review and approval by the Board,

accounted for by the Company as Additional Capital Contributions by such

Appointing Member, which shall not affect the Percentage Interest or Voting

Interest of any Members in the Company, if such additional contributions are

made by the Appointing Members in proportion to their Percentage Interests.

 

If either of the Appointing Members does not timely contribute its

required share of the monthly cost to maintain the purchase options to acquire

the Cable Property, and the delinquent Member does not pay such costs within ten

(10) Business Days after receiving written notice of such delinquency from the

Company or the other Appointing Member, the other Appointing Member shall have

the right to either terminate the Joint Contribution Agreement and dissolve the

Company pursuant to Section 9 of the Joint Contribution Agreement or purchase

such purchase options from the Company for a price equal to the amount of the

delinquent payment amount, which shall be payable to the grantor of such

options.

 

(3) Development Costs. Metroplex shall pay or advance to the Company

all of the Development Costs incurred for developing each parcel of the Joint

Venture Property and the Cable Property, to the extent provided in Section 8(c)

of the Joint Contribution Agreement, until such parcel is subject to a binding

commitment to be sold or leased (to a primary tenant) by the Company (a

"Commitment").

 

 

 

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<PAGE> 15

 

 

All Development Costs paid or advanced to the Company by

Metroplex with respect to a parcel before it is subject to a Commitment

shall be promptly reported to the Company and, if such Development

Costs (when added to previously reported and approved Development

Costs) are within the total amount of expenditures contemplated for the

relevant line item category of expenditures in the relevant Development

Budget, or are otherwise approved in writing by GCN, they shall be

accounted for by the Company as Additional Capital Contributions by

Metroplex; provided, however, that no such contributions shall affect

the Percentage Interest or Voting Interest of Metroplex in the Company.

In all such reports and requests for approval, Internal Development

Costs shall be identified by Metroplex as separate line item components

of its Development Costs. Notwithstanding any contrary provision of

this Agreement or the Joint Contribution Agreement, Metroplex shall not

be required to incur any Development Costs that either (i) are not

included in such a Development Budget; or (ii) would generally be

incurred, under commonly accepted practices for similar developments in

Clark County, Nevada, with respect to a parcel after it is subject to a

Commitment.

 

Each Member may contribute from time to time as an Additional Capital

Contribution such additional money or other property as the Appointing Members

may agree in writing; provided, however, that any Additional Capital

Contribution of property (other than money) made pursuant to this paragraph

shall be subject to the terms and provisions of a Contribution Agreement

approved by the Board and the Appointing Members and executed by the

contributing Member and a Manager prior to delivery of such property.

 

Except as otherwise provided in the paragraphs (a), (b) and (c) of this

Section 6.3, if Additional Capital Contributions are not made equally by all

Members, the Percentage Interests and Capital Accounts of each Member shall be

equitably adjusted to account for any non-pro-rata Additional Capital

Contributions on terms that shall be set forth in a Contribution Agreement

approved by the Board and Members holding at least two-thirds of the Voting

Interests (including at least any Member whose Interest would be adversely

affected), and signed as provided in the preceding paragraph, which agreement

shall serve as an amendment to Section 5.2. Any such agreement may also

equitably adjust the Members' Voting Interests.

 

Additional Membership Interests may be granted only as permitted by

Section 5.3. If an additional Membership Interest is granted, Section 5.2 shall

be appropriately amended.

 

1.62 Other Capital Matters.

 

(1) Except as otherwise provided in this Agreement, no Member

shall demand or receive a return of the Member's Capital Contributions

or withdraw them from the Company without the consent of the Appointing

Members. Under circumstances allowing or requiring a return of any

Capital Contributions, no Member shall have the right to receive

Company Property other than cash except as may be specifically provided

herein.

 

(2) No Member shall receive any interest, salary or draw with

respect to the Member's Capital Contributions or the Member's Capital

Account.

 

(3) The Members shall not be liable for the debts,

liabilities, contracts or any other obligations of the Company. Except

as otherwise expressly provided by any other agreements among the

Members or mandatory provisions of applicable state law, a Member shall

not be liable to make

 

 

 

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any Capital Contributions other than the Member's Original Capital

Contribution and any Additional Capital Contributions required by

Section 6.5. No Member shall be required to lend any funds to the

Company.

 

1.63 Other Contribution Defaults by Member. In the event that a

Member fails to make any payment, or any installment thereof, of any Capital

Contribution or other obligation expressly required hereunder or under the Joint

Contribution Agreement (or any other Contribution Agreement), and the delinquent

Member does not satisfy such obligation within ten (10) Business Days after

receiving written notice of such delinquency from the Company or any other

Member, the Board or any non-breaching Member may enforce such obligation in

such manner as may be permitted by Section 9 of the Joint Contribution Agreement

or applicable law, subject to a Member's election of other remedies specified in

Section 6.3, elsewhere in this Agreement and/or in the Contribution Agreement.

Without limiting the generality of the foregoing, the Board or the non-breaching

Member may, in its discretion:

 

(1) bring an action at law or in equity to enforce such

obligation;

 

(2) assess interest on the unpaid amount at the highest rate

of interest then being charged to the Company by any lender; and

 

(3) if the unpaid obligation is a Capital Contribution

required by this Agreement, neither of the remedies specified in

paragraph (a) or paragraph (b) of Section 6.3 has been elected, and the

non-breaching Appointing Member does not elect to terminate the Joint

Contribution Agreement pursuant to Section 9 thereof, the Board or the

non-breaching Member, as applicable, may require the defaulting Member

to unconditionally and irrevocably assign to one or more of the

remaining Members (determined in accordance with the next following

sentence) that portion of its Interest which bears the same ratio to

all of such defaulting Member's Interest as the remaining amount of

unpaid contributions then due from such defaulting Member bears to the

sum of such remaining amount and the total amount of Capital

Contributions made by such defaulting Member; provided, however, that

such default shall not theretofore have been cured.

 

If the Board requires assignment of all or a portion of a defaulting

Member's Interest pursuant to clause (c) above, each remaining Member shall have

the right to acquire such Interest, determined as provided in clause (c), in the

proportion that its Interest bears to the aggregate Interests of the remaining

Members who desire to participate in such purchase, by paying the Company a cash

amount equal to such proportion of the unpaid Capital Contributions, at a price

set pursuant to Section 13.8.

 

1.64 Transferee Succeeds to Transferor's Capital Account. If any

Member Transfers all or a part of its Financial Rights in the Company, whether

or not such Transfer is permitted under Article 12, any transferee from the

Member shall succeed to the Capital Account (including any remaining Capital

Contributions) of the transferor Member to the extent of the Interest

Transferred, in accordance with Regulations Section 1.704-1(b)(2)(iv)(1).

 

1.65 Loans to Company. Unless authorized in writing by the

Appointing Members, no Member or any of its Affiliates may lend money to the

Company; provided, however, that any loan made by Metroplex to the Company

pursuant to Section 6.3 shall not require the consent of the Appointing Members

or the Board. No such loan, whether or not permitted hereunder, may be treated

as a Capital Contribution for any purpose or entitle such Member to any increase

in the

 

 

 

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<PAGE> 17

 

 

Member's share of the Profits, Losses, deductions, credits or Distributions of

the Company. The Company shall be obligated to such Member for the amount of any

such loan permitted hereunder, with interest thereon at such rate as may have

been agreed upon by the Appointing Members, or otherwise expressly provided

herein.

 

ARTICLE 7

ALLOCATIONS

 

1.66 Definitions of Profits and Losses. "Profits" and "Losses,"

respectively, shall mean, for each Fiscal Year, an amount equal to the Company's

taxable income or loss (as the case may be) for such Fiscal Year, determined in

accordance with Code section 703(a) (for this purpose, all items of income,

gain, loss, or deduction required to be stated separately pursuant to Code

section 703(a)(1) shall be included in taxable income or loss) with the

following adjustments:

 

(1) any income of the Company that is exempt from Federal

income tax and not otherwise taken into account in computing Profits or

Losses pursuant to this Section 7.1 shall be added to such taxable

income or loss;

 

(2) any nondeductible expenditures of the Company described in

Code section 705(a)(2)(B) or treated as Code section 705(a)(2)(B)

expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and

not otherwise taken into account in computing Profits or Losses

pursuant to this Section 7.1, shall be subtracted from such taxable

income or loss;

 

(3) in the event the Gross Asset Value of any Company asset is

adjusted pursuant to Section 6.1(e)(ii) or Section 6.1(e)(iii), the

amount of such adjustment shall be taken into account as gain or loss

from the disposition of such asset for purposes of computing Profits or

Losses;

 

(4) gain or loss resulting from any disposition of Company

Property with respect to which gain or loss is recognized for Federal

income tax purposes shall be computed by reference to the Gross Asset

Value of the Company Property disposed of, notwithstanding that the

adjusted tax basis of such Company Property differs from its Gross

Asset Value;

 

(5) in lieu of the depreciation, amortization and other cost

recovery deductions taken into account in computing such taxable income

or loss, there shall be taken into account Depreciation for such Fiscal

Year, computed in accordance with Section 6.1(d);

 

(6) to the extent an adjustment to the adjusted tax basis of

any Company Property pursuant to Code section 734(b) or Code section

743(b) is required pursuant to Regulations Section

1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital

Accounts as a result of a Distribution other than in liquidation of a

Member's Interest, the amount of such adjustment shall be treated as an

item of gain (if the adjustment increases the basis of the asset) or

loss (if the adjustment decreases the basis of the asset) from the

disposition of the asset and shall be taken into account for purposes

of computing Profits or Losses; and

 

(7) Notwithstanding any other provisions of this Section 7.1,

any items that are specially allocated pursuant to Section 7.5 or

Section 7.6 shall not be taken into account in computing Profits or

Losses.

 

 

 

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The amounts of the items of Company income, gain, loss or deduction

available to be specially allocated pursuant to Sections 7.5 and 7.6 shall be

determined by applying rules analogous to those set forth in Sections 7.1(a)

through 7.1(f) above.

 

1.67 Allocation of Profits. After giving effect to the special

allocations set forth in Sections 7.5 and 7.6, the Profits of the Company for

each Fiscal Year for book purposes, whether taxable or nontaxable, shall be

allocated to the Members as follows, and their Capital Accounts shall be

increased in accordance with Section 6.1(b):

 

(1) First, to each Member to whom Losses have previously been

allocated pursuant to Section 7.3, to the extent that such Losses have

not been fully offset by allocations of Profits pursuant to this

paragraph (a) ("Unrecovered Losses"), until the cumulative amount of

Profits allocated to each such Member pursuant to this paragraph (a) is

equal to the cumulative amount of Losses that have been allocated to

such Member pursuant to Section 7.3. Profits allocated pursuant to this

paragraph (a) shall be allocated to the Members in proportion to their

respective Unrecovered Losses; and

 

(2) Thereafter, to the Members, ratably in proportion to their

Percentage Interests.

 

1.68 Allocation of Losses. After giving effect to the special

allocations set forth in Sections 7.5 and 7.6, the Losses, deductions and

credits of the Company for each Fiscal Year for book purposes, whether taxable

or nontaxable, shall be allocated to the Members as follows, and their Capital

Accounts shall be reduced in accordance with Section 6.1(b):

 

(1) To the Members, ratably in proportion to their respective

Percentage Interests, except as otherwise provided in the following

paragraph (b).

 

(2) The Losses allocated pursuant to the preceding paragraph

(a) shall not exceed the maximum amount of Losses that can be so

allocated without causing any Member to have a deficit balance in its

Capital Account at the end of any Fiscal Year. If one or more, but not

all, of the Members would have a deficit balance in its Capital Account

as a result of any allocation of Losses pursuant to the preceding

paragraph (a), the limit set forth in the preceding sentence shall be

applied on a Member by Member basis, so as to allocate the maximum

permissible amount of Losses to each Member under Regulations Section

1.704-1(b)(2)(ii)(d). All Losses in excess of the limits set forth in

this paragraph (b) shall be allocated to the Members in proportion to

their respective positive Capital Account balances (if any) until no

Member has a positive Capital Account; and thereafter to all of the

Members, ratably in proportion to their respective Percentage

Interests.

 

1.69 Pro-ration of Allocations. All Profits, Losses, deductions and

credits for a Fiscal Year allocable with respect to any Member whose Interest

may have been Transferred, forfeited, reduced or changed during such year shall

be allocated based upon the varying Interests of the Members throughout the

year. The precise manner in which such allocation shall be made shall be

determined by the Board, shall be a manner of allocation permitted to be used

for Federal income tax purposes under the Code and, once adopted, shall be

consistently applied.

 

 

 

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1.70 Special Allocations. Notwithstanding anything to the contrary

in this Article 7, the following special allocations shall be made in the

following order:

 

(1) Section 754 Adjustments. To the extent an adjustment to

the adjusted tax basis of any Company Property pursuant to Code section

734(b) or Code section 743(b) is required pursuant to Regulations

Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section

1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital

Accounts as the result of a Distribution to a Member in complete

liquidation of the Member's Interest, the amount of such adjustment to

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 specially allocated to the

Members in accordance with their Interests in the Company in the event

Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member

to whom such Distribution was made in the event Regulations Section

1.704-1(b)(2)(iv)(m)(4) applies.

 

(2) Minimum Gain Charge-back. "Partnership Minimum Gain"

within the meaning of Regulations Section 1.704-2(b)(2) means an amount

of gain that would be realized by the Company on the disposition of

Company property subject to nonrecourse indebtedness (within the

meaning of Regulation Section 1.704-2(b)(3)), equal to the amount by

which such nonrecourse indebtedness exceeds the adjusted tax basis (or

book value, if the property has been properly entered on the books of

the Company at a value different from its then adjusted tax basis) of

such property. If for any Fiscal Year, there is a net decrease in

Partnership Minimum Gain, each Member shall be allocated items of

Company income and gain in accordance with Regulations Section

1.704-2(f)(1) (a "Minimum Gain Charge-back") for such year (and, if

necessary, for subsequent years) in an amount equal to such Member's

share of such net decrease of Partnership Minimum Gain. For this

purpose, a Member's share of the net decrease in Partnership Minimum

Gain shall be determined under Regulations Section 1.704-2(g)(2). This

paragraph is intended to comply with Regulations Section 1.704-2(f)(1)

and shall be interpreted consistently therewith.

 

(3) Qualified Income Offset. If any Member at any time

unexpectedly receives any adjustment, allocation or Distribution

described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6),

and if such adjustment, allocation or Distribution results in a deficit

balance in such Member's Capital Account in excess of the sum of (i)

the amount such Member is obligated to restore to the Company under

this Agreement or the LLC Act, and (ii) the amount such Member is

deemed to be obligated to restore to the Company pursuant to the

penultimate sentences of Regulations Sections 1.704-2(g)(1)(ii) and

1.704-2(i)(5), then items of Company income and gain shall be specially

allocated to such Member so as to eliminate, to the extent required by

Regulations Section 1.704-1(b)(2)(ii)(d), such deficit balance in its

Capital Account as quickly as possible.

 

(4) Gross Income Allocation. If any Member would have a

deficit balance in its Capital Account at the end of any Fiscal Year in

excess of the sum of (i) the amount such Member is obligated to restore

to the

 

 

 

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<PAGE> 20

 

Company under this Agreement or the LLC Act, and (ii) the amounts such

Member is deemed to be obligated to restore to the Company pursuant to

Regulations Section 1.704-1(b)(2)(ii)(c) and the penultimate sentences

of Regulations Sections 1.704-2(g)(1)(ii) and 1.704-2(i)(5), then such

Member shall be specially allocated items of Company income (including

gross income) in the amount of such excess as quickly as possible.

 

(5) Allocations Relating to Taxable Issuance of Interests. Any

income, gain, loss or deduction realized as a direct or indirect result

of the issuance of an Interest by the Company to a Member (the

"Issuance Items") shall be allocated among the Members so that, to the

extent possible, the net amount of such Issuance Items, together with

all other allocations under this Agreement to each Member, shall be

equal to the net amount that would have been allocated to each such

Members if the Issuance Items had not been realized.

 

(6) Gain on Sale of Options to Purchase Cable Property. To the

extent required by paragraph (a) and/or paragraph (b) of Section 9 of

the Joint Contribution Agreement, special allocations of Profits or

Losses shall be made to the appropriate Appointing Member; and such

Member's Capital Account shall be increased or decreased to correspond

with any such allocation.

 

1.71 Curative Allocations. The allocations set forth in paragraphs

(a) through (d) of Section 7.5 (the "Regulatory Allocations") are intended to

comply with certain requirements of the Regulations. It is the intent of the

Members that, to the extent possible, all Regulatory Allocations shall be offset

either with other Regulatory Allocations or with special allocations of other

items of Company income, gain, loss or deduction pursuant to this Section 7.6.

Therefore, notwithstanding any other provision of this Article 7 (other than the

Regulatory Allocations), the Board shall make such offsetting special

allocations of Company income, gain, loss or deduction in whatever manner the

Board determines appropriate so that, after such offsetting allocations are

made, each Member's Capital Account balance is, to the extent possible, equal to

the Capital Account balance such Member would have had if the Regulatory

Allocations were not part of the Agreement and all Company items were allocated

pursuant to Sections 7.2, 7.3 and 7.5(e).

 

1.72 Other Allocation Rules.

 

(1) For purposes of determining the Profits, Losses or any

other items allocable to any period, those Profits, Losses and any such

other items shall be determined on a daily, monthly or other basis, as

determined by the Board using any permissible method under Code section

706 and the Regulations thereunder, which shall be consistently

applied.

 

(2) The Members are aware of the income tax consequences of

the allocations made by this Article 7 and hereby agree to be bound by

the provisions of this Article 7 in reporting their shares of Company

Profit and Loss for income tax purposes.

 

(3) Solely for purposes of determining a Member's

proportionate share of the "excess nonrecourse liabilities" of the

Company within the meaning of Section 1.752-3(a)(3) of the Regulations,

the Members' interests in Company Profits are in proportion to their

Percentage Interests.

 

 

 

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1.73 Tax Allocations under Code Section 704(c). In accordance with

Code section 704(c) and the Regulations thereunder, income, gain, loss and

deduction with respect to any property contributed to the capital of the Company

shall, solely for tax purposes, be allocated among the Members so as to take

account of any variation between the adjusted basis of such property to the

Company for Federal income tax purposes and its initial Gross Asset Value

(computed in accordance with Section 6.1(e)(i).

 

In the event the Gross Asset Value of any Company Property is adjusted

pursuant to Section 6.1(e)(ii), subsequent allocations of income, gain, loss and

deduction with respect to such asset shall take account of any variation between

the adjusted basis of such asset for Federal income tax purposes and its Gross

Asset Value in the same manner as under Code section 704(c) and the Regulations

thereunder.

 

Any elections or other decisions relating to such allocations shall be

made by the Board in any manner that reasonably reflects the purpose and

intention of this Agreement. Allocations pursuant to this Section 7.8 are solely

for purposes of Federal, state and local taxes and shall not affect, or in any

way be taken into account in computing, any Member's Capital Account or share of

Profits, Losses, other items or Distributions pursuant to any provision of this

Agreement.

 

ARTICLE 8

DISTRIBUTIONS

 

1.74 Distributions of Net Cash From Operations. The Company shall

make Distributions of Net Cash from Operations, if any, for a Fiscal Year only

as follows, but only to the extent such a Distribution is legally permitted and,

if such Distribution had been made in that Fiscal Year, would not have caused a

Member to have a deficit balance in its Capital Account at the end of that

Fiscal Year:

 

(1) first, to the Members, in proportion to their allocated

shares of the Company's net taxable income and gains for the Fiscal

Year, an amount equal to the Estimated Member Tax Liability (as defined

in the following paragraph); and

 

(2) thereafter, but only if declared by the Board in its sole

discretion, to the Members in proportion to their Percentage Interests.

 

"Estimated Member Tax Liability" for a Fiscal Year means the sum of any

Distributions described in this paragraph for the Fiscal Year. If any Member

provides the Board with satisfactory evidence that such Member must pay a

specific amount of income taxes with respect to an allocation of Profits for a

Fiscal Year of the Company (a "Member Tax Liability"), the Board shall promptly

direct the Chief Financial Manager to make Distributions from such Profits to

each of the Members (in proportion to their Percentage Interests in such

Profits) in amounts that will result in a Distribution, to the Member who

provided evidence of the highest marginal income tax rate used to compute its

Member Tax Liability for such Fiscal Year, that is equal to such Member Tax

Liability, but not to exceed the lesser of (a) such Member's Percentage Interest

in the amount of Net Cash From Operations during that Fiscal Year, and (b) forty

percent 40% of such Member's Percentage Interest in the Profits for that Fiscal

Year.

 

1.75 Other Cash Distributions and Member Debt Repayments. The

Company shall pay its debts to Members and make Distributions from sources other

than Net Cash from Operations in the following manner, unless the Appointing

Members otherwise agree in writing:

 

 

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<PAGE> 22

 

 

(1) Interim Financing. If any Company financing of a real

estate parcel (or part thereof) included in any of the Joint Venture

Property or the Cable Property acquired by the Company does not provide

Net Cash from Sales or Re-financing, Distributions from Metroplex's

Capital Account shall nevertheless be made, if reasonably practicable,

from the proceeds of such financing, but only to the extent that the

lender permits such use of the proceeds, to the extent of any

Development Costs (other than Internal Development Costs) advanced by

Metroplex with respect to such parcel and treated by the Company as

Additional Capital Contributions; provided, however, that all debts

owed to GCN by the Company for the purchase price of the parcel that is

being financed shall have been satisfied before any such Distribution,

except to the extent GCN consents in writing to permit such a

Distribution before full satisfaction of any such debt.

 

(2) Net Cash from Sales or Re-financing. Distributions of any

Net Cash from Sales or Re-financing of a real estate parcel (or part

thereof) included in any of the Joint Venture Property or the Cable

Property acquired by the Company shall be made to the Members as

follows; provided, however, that all debts owed to GCN by the Company

for the purchase price of the parcel that is being sold shall have been

satisfied before any such Distribution, except to the extent GCN

consents in writing to permit such a Distribution before full

satisfaction of any such debt:

 

(1) First, as a Distribution from Metroplex's Capital

Account, to the extent of any Development Costs (other than

Internal Development Costs) advanced by Metroplex with respect

to such parcel and required hereunder to be treated by the

Company as Additional Capital Contributions;

 

(2) Second, as a Distribution to the Members from their

Capital Accounts, in proportion to their allocated shares of

the Company's net taxable income and gains for the Fiscal

Year, an amount not to exceed the Estimated Member Tax

Liability (as defined in Section 8.1) attributable to the sale

of such parcel, but only to the extent such Distribution is

not expected to cause a Member to have a deficit balance in

its Capital Account at the end of the Fiscal Year in which

such Distribution occurs;

 

(3) Third, to the extent that the Company has not yet paid

the entire Aggregate Purchase Price (as defined in the Joint

Contribution Agreement) for the Joint Venture Property, the

balance of such Net Cash from Sales or Re-financing shall next

be used (A) to pay any debt owed to GCN by the Company for the

purchase price of any other parcel included in the Joint

Venture Property and (B), after all such debts have been paid,

to purchase any other parcel (or undivided interest therein)

of the Joint Venture Property that GCN is willing to sell to

the Company at that time; and

 

(4) Thereafter, to the Members, ratably in proportion to

their Percentage Interests.

 

(3) Disposition of Substantially All of the Company Property.

Distribution of any net proceeds upon the sale, exchange or other

disposition of all or substantially all of the Company Property shall

be made in accordance with Section 15.3 (concerning Distributions on

liquidation of the Company), subject to the purchase option set forth

in Section 15.4.

 

 

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ARTICLE 9

MANAGEMENT AND OPERATION OF BUSINESS

 

1.76 Management and Control of the Company. For purposes of this

Article 9, the Board or the Development Committee, each when acting within its

authority specified in this Agreement, is referred to as the "Governing

Authority."

 

The Appointing Members shall appoint the Board and the Development

Committee; and the Governors and members of the Development Committee shall be

removed or replaced, all pursuant to Article 10 and the Bylaws. Except as

otherwise provided in Section 10.4 (with respect to the authority of the

Development Committee) or otherwise in this Agreement, the Board shall have the

sole and exclusive control of the conduct, operations and management of the

business of the Company. The Board and the Development Committee (each when

acting within its authority) shall manage the affairs of the Company in a

prudent and businesslike fashion and shall use their best efforts to carry out

the purposes and the business of the Company. The Board shall not have any

authority with respect to matters within the authority of the Development

Committee, while the Development Committee continues to exist as provided in

Article 10.

 

Each Governing Authority shall carry out its duties through a Chief

Manager, a Manager acting as Treasurer and such other Managers as the Board

shall deem necessary or desirable. The Managers shall be elected and removed by

the Board, and their duties shall be established by the Board, all as provided

in the Bylaws.

 

Each member of the Board and the Development Committee shall devote

such of their time as the Board or the Development Committee, as applicable,

deems necessary to the management of the business of the Company. The Managers

shall devote such of their time as the Board deems necessary to the management

of the business of the Company.

 

1.77 Limited Authority of Each Governing Authority. Subject to the

limitations set forth in Section 9.3, each Governing Authority shall have all

necessary powers to carry out the purposes and business of the Company,

including without limitation the power to delegate appropriate authority to the

Company's Managers; provided, however, that the Managers shall at all times

remain subject to the supervision of each Governing Authority. Without limiting

the foregoing, in addition to any other rights and powers that each Governing

Authority may possess, each Governing Authority shall have all specific rights

and powers required or appropriate in the management of the business of the

Company, and each Governing Authority shall have these rights and powers,

including the following, any of which may be exercised only in furtherance of

its authority and the purposes set forth in Article 4 (as amended from time to

time), and as limited to the extent set forth in Section 9.3:

 

(1) To acquire, own, hold and dispose of items of the Company

Property, any interest therein or appurtenant thereto, whether real,

personal or mixed, including the purchase, lease, development,

improvement, maintenance, exchange, trade or sale of any Company

Property at such price, rental or amount for cash, securities or other

property and upon such other terms as the Governing Authority, in its

sole discretion, may deem to be in the best interest of the Company;

 

(2) To the extent of Company assets, to prosecute, defend,

settle or compromise actions or claims at law or in equity at the

Company's expense as may be necessary or proper to enforce or protect

the Company's

 

 

 

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<PAGE> 24

 

interests; and to satisfy any judgment, decree, decision or settlement

of any such suit or claim; first, out of any insurance proceeds

available therefor, and next, out of the Company's assets and income;

 

(3) To enter into and carry out contracts and agreements and

to do and perform all such other things as may be in furtherance of

Company purposes; and to cause the Managers to execute, acknowledge and

deliver any and all instruments that may be deemed necessary or

convenient to effect the foregoing;

 

(4) To acquire and enter into any contract of insurance that

the Governing Authority may deem necessary and proper for the

protection of the Company or for any purpose beneficial to the Company;

 

(5) To employ, engage or retain, at the expense of the

Company, such Persons (other than Affiliates of any Member, except as

authorized pursuant to Section 9.6) to perform such services as the

Governing Authority may deem necessary or advisable for the efficient

operation of the business of the Company and to pay to such Persons

(other than Managers) such compensation as the Governing Authority

shall determine; provided, however, that such compensation is at the

then prevailing rate for the type of services and materials provided;

 

(6) To cause the Managers to execute and deliver on behalf of

the Company, leases, contracts or agreements of any nature and any or

all instruments necessary or desirable to effectuate the foregoing

powers; and

 

(7) To accept and value the Capital Contributions made to the

Company by Members, pursuant to any Contribution Agreement and this

Agreement; provided, however, that this power is reserved only to the

Board and may be exercised only to the extent expressly required by

Section 322B.40 of the LLC Act.

 

1.78 Restrictions on Authority of Governing Authority. In addition

to other acts expressly prohibited or restricted by this Agreement or by law,

neither any Governing Authority, nor any Manager or Managers shall have any

authority to act as follows on behalf of the Company, and each is expressly

prohibited from the following, except to the extent specifically authorized by

the Members pursuant to the last paragraph of this Section 9.3:

 

(1) Acquiring, by purchase, exchange or otherwise, any real

property other than the Joint Venture Property and the Cable Property

(together, hereinafter called the "Project") or any interest therein;

 

(2) Selling, exchanging or otherwise disposing of any Company

Property valued at more than Twenty-Five Thousand and No/100 Dollars

($25,000.00);

 

(3) Placing a mortgage or any other lien or encumbrance on any

of the Company Property, if the debt secured by such encumbrance

exceeds Twenty-Five Thousand and No/100 Dollars ($25,000.00);

 

(4) Borrowing or committing to borrow or refinance, on behalf

of the Company, any amount in excess of Twenty-Five Thousand and No/100

Dollars

 

24

<PAGE> 25

 

 

($25,000.00), except borrowing to refinance obligations previously

consented to by the Members;

 

(5) Assigning, compromising or releasing any claim made by

the Company against any Person in excess of the sum of Twenty-Five

Thousand and No/100 Dollars ($25,000.00), or consenting to arbitrate

any disputes or controversies involving the Company and another Person

or Persons (except for arbitration described in Article 17);

 

(6) Confessing a judgment, or adjusting, settling or

compromising any claim, suit, or judgment against the Company for the

payment of funds in excess of Five Thousand and No/100 Dollars

($5,000.00);

 

(7) Making any expenditures in excess of Ten Thousand and

No/100 Dollars ($10,000.00) unless: (i) such expenditure is necessary

or advisable (A) to preserve the structural integrity of the Project,

or (B) to safeguard or protect the safety of property or Persons in or

about the Project, or (C) comply with any contracts properly made (in

accordance with this Agreement) by the Company; or (ii) unless such

expenditure, when considered with all other expenditures made in the

relevant Fiscal Year, will not be in excess of the total amount of

expenditures contemplated for the relevant category of expenditures in

any Development Budget, or any other budget for such Fiscal Year that

has been approved in writing by the Appointing Members;

 

(8) Doing any act in contravention of this Agreement;

 

(9) Doing any act that would make it impracticable to carry

on the ordinary business of the Company, other than as expressly

permitted in this Agreement;

 

(10) Seizing or possessing any Company Property, or assigning

the rights of the Company in any Company Property, for other than a

Company purpose;

 

(11) Entering into any letter of intent, or any legally

binding commitment on behalf of the Company, providing for the

development and lease or sale of any parcel included in the Project;

 

(12) Entering into any lease of space in the Project that

deviates from the tenant lease provisions (if any) (i) permitted by any

applicable loan documents or (ii) previously approved in writing by

Members holding at least two-thirds of the Voting Interests;

 

(13) Filing a petition or seeking other relief for the Company

that would constitute Voluntary Bankruptcy;

 

(14) Admitting any Person as a Member, except as expressly

provided in this Agreement;

 

(15) Performing any act (other than an act required by this

Agreement or an act taken in good faith or in reliance upon counsel's

opinion) that would, at the time such act occurred, subject any Member

to liability as a general partner in any jurisdiction;

 

 

 

 

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<PAGE> 26

(16) Lending any money on behalf of the Company, or assuming or

guaranteeing the obligations of any Person, except for obligations required to

be assumed by the Company upon the exercise of any purchase option with respect

to a parcel of the Joint Venture Property pursuant to the Company's Option

described in the Joint Contribution Agreement;

 

(17) Selecting engineers, architects or general construction

contractors or subcontractors to be retained by the Company, in the development

and/or improvement of any parcel included in the Project;

 

(18) Authorizing payment of any compensation to any Manager for

services provided to the Company;

 

(19) Purchasing or otherwise acquiring any capital stock, any other

equity interest in, or substantially all of the assets comprising the business

of, obligations of, or any interest in, any Person, except any of the following:

 

(1) investments by the Company in evidences of indebtedness

issued or fully guaranteed by the United States of America having a

maturity of not more than six (6) months from the date of acquisition;

 

(2) investments by the Company in certificates of deposit

and demand deposits with commercial banks or savings and loan

associations that have a membership in the relevant Federal insurance

fund for the protection of depositors, and in amounts not exceeding

the maximum amount of insurance thereunder;

 

(3) investments by the Company in "A"-rated or better

commercial paper having a maturity of not more than six (6) months from

the date of acquisition; or

 

(4) investments by the Company in (A) shares of any

registered investment company operating as a "money market" fund; or

(B) in "money market" deposit accounts sponsored by banks or other

financial institutions and fully insured by the relevant Federal

insurance fund for the protection of depositors, in amounts not

exceeding the maximum amount of insurance thereunder; provided,

however, that any such "money market" funds are limited to investments

of the types described in clauses (i), (ii) and/or (iii) above;

 

(20) Issuing or offer any securities in the Company, except for new

Interests approved pursuant to Section 5.3;

 

(21) Adopting, approving or modifying any architectural, engineering

or other plans relating to the improvement of real property included in the

Project; or

 

(22) Taking any action that, in the prudent exercise of business

discretion, could reasonably be expected to have a material adverse effect on

the Company or the assets or operations thereof.

 

Any and all such actions shall require the approving vote of Members

holding at least two-thirds of the Voting Interests (including each Appointing

Member), or such larger proportion of the Voting Interests or other Interests as

 

 

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<PAGE> 27

 

may be required by the LLC Act or another provision of this Agreement in a

particular case; including in any event, however, the approving vote of the

Board. Such approving vote by the Members may be given at either a special

meeting called by the Managers on at least ten (10) Business Days' prior written

notice to all Members, or by written action signed by the requisite number of

Members specified above.

 

1.79 Obligations of each Governing Authority. In addition to the

obligations expressly provided by law or this Agreement, each Governing

Authority (as applicable) shall, to the extent of Company assets:

 

(1) the Development Committee shall perform or cause the

Managers to perform all acts necessary or desirable, with respect to

the purposes of the Company, to lease, sublease and operate any real

estate acquired by the Company;

 

(2) the Board shall cause to be filed and published all

certificates, statements and other instruments required by law for the

formation, qualification and operation of the Company and for the

conduct of its business in all appropriate jurisdictions;

 

(3) the Board shall cause the Company to prepare or have

prepared all financial and tax statements and reports required under

Article 11; and

 

(4) the Board shall cause the Company to keep the Required

Records at its principal office.

 

1.80 Reimbursement of Expenses. Each Member, Governor, member of the

Development Committee and Manager shall be reimbursed for all reasonable and

necessary expenses that are incurred on behalf of the Company and, if in excess

of $1,000, approved by the Board; provided, however, that none of the following

expenses incurred by a Member shall be reimbursed under this Section:

 

(1) expenses treated as Additional Capital Contributions

under Section 6.3, because they are included in a Development Budget or

are otherwise approved in writing by the Appointing Members; or

 

(2) expenses otherwise required to be borne by a Member

under Section 6.3.

 

However, any expense reimbursement that does qualify for reimbursement

under this Section 9.5, but either exceeds $5,000 or is requested by, or is

otherwise payable to or on behalf of, a Member or any Affiliate of a Member,

shall require approval in writing by the Appointing Members.

 

1.81 Conflicts of Interest. Except with the written approval of the

Appointing Members, no Person who is a Member, Manager, member of a Governing

Authority or any of their Affiliates, may be employed or engaged by a Governing

Authority to render services to the Company, including, but not limited to,

building, financing, constructing, leasing, property management, brokerage,

accounting and legal services; provided, however, that to the extent required by

Section 6.3(c), Metroplex may provide real estate development services for the

Company without any compensation or reimbursement for expenses, except to the

extent Metroplex receives credit for any such expenses as an Additional Capital

Contribution under that Section.

 

The Appointing Members may approve the engagement of any such Person to

perform services for the Company for compensation, but only if such Person has

 

 

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<PAGE> 28

 

 

been previously engaged in the business of rendering such services or selling or

leasing such goods, independent of the Company and as an ordinary and on-going

business. If such approval is given, such Person (other than Metroplex, GCN or

Lakes) shall be entitled to, and shall be paid, compensation for such services,

except as otherwise provided in this Agreement; provided, however, that the

compensation to be received for such services is competitive with the amount and

terms charged by and paid to other non-affiliated Persons rendering comparable

services and is at the then prevailing rate for the type of services and/or

materials provided.

 

The fact that a Member, member of a Governing Authority, Manager or any

of their Affiliates is employed by, or is directly or indirectly interested in

or connected with any Person from whom or which the Company may buy services,

merchandise or other property, shall not prohibit the Board from employing such

Person or from otherwise dealing with such Person, if the Appointing Members

have approved such transaction in writing.

 

1.82 Other Activities. Any of the Members, members of a Governing

Authority, Managers and their Affiliates may engage in, possess and acquire

interests in other business ventures of any nature and description independently

or with others, including, but not limited to, the acquisition, ownership,

financing, leasing, operation, management, brokerage and development of real

property; provided, however, that neither Metroplex nor any of its Affiliates

(other than the Company) may engage in any such real estate activities with

respect to the real estate designated as Parcel E of the Cable Property (as

those terms are defined in the Joint Contribution Agreement) located in Las

Vegas, Clark County, Nevada, before the Company is dissolved.

 

Neither the Company nor the Members shall have any right by virtue of

this Agreement in and to any such independent ventures permitted by this

Agreement, or to any income or profits derived therefrom.

 

1.83 Insurance and Indemnification. Prior to the Company's purchase

of each parcel of the Joint Venture Property, GCN shall maintain comprehensive

general liability insurance providing at least a Five Million Dollars

($5,000,000) combined single limit for bodily injury, personal injury, death and

property damage liability, as well as broad form property insurance for the full

replacement value of all such Joint Venture Property that is not required to be

so insured by others pursuant to a lease. The Company shall maintain the same

types of insurance specified in the preceding sentence, with respect to all

Company Property that is acquired and held by the Company, along with all other

insurance customarily maintained by owners of similar property under similar

circumstances.

 

The Company shall indemnify the Members, the members of each Governing

Authority and the Managers against any loss, claim or liability incurred by any

of them in connection with the business of the Company, to the maximum extent

provided by the Articles and permitted by the LLC Act. However, any amounts paid

to indemnify any such Person shall be paid out of Company assets only; and

Members shall not be liable for such amount to be paid to indemnify a Person

except to the extent of any amount of a Capital Contribution of a Member that is

due and owing to the Company hereunder and remains unpaid. Neither the Company

nor any Member shall have any claim against the members of a Governing Authority

or any of the Managers based upon or arising out of any act or omission of the

members of a Governing Authority or any of the Managers; provided, however, that

such Manager or member of a Governing Authority acted in good faith and was not

grossly negligent or guilty of willful misconduct.

 

 

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With respect to any acts or omissions by GCN (or any of its Affiliates)

or Metroplex (or any of its Affiliates) prior to the Effective Date, each of

them agrees to indemnify the other against, and hold the other harmless from (in

advance), any and all claims, losses, costs and liabilities incurred by the

other in connection with any such prior act or omission, whether related to the

purposes of this Agreement or otherwise.

 

1.84 Liability Under Other Agreements. The obligations of the

Members, the Managers and the members of each Governing Authority and their

Affiliates, pursuant to any agreement or contract entered into in their personal

capacity with the Company and permitted by Sections 6.7 or 9.6 of this Agreement

(whether or not such agreements are referred to herein) shall be separate and

distinct from their obligations hereunder. Any default or failure of performance

with respect to such separate agreements or contracts, unless otherwise

specified in this Agreement, shall have the consequences provided for in such

separate agreements or contracts or by applicable law and shall not constitute a

breach hereunder.

 

1.85 Mandatory Offer and Buyout. If the Appointing Members, the Board

or the Development Committee is deadlocked for a period of at least sixty (60)

days, with respect to a proposed discretionary action or a substantial policy

issue involving management of the Company's affairs, and the Appointing Members

are unable to break the deadlock, then any Appointing Member (hereinafter called

the "Initiating Member") may offer in writing all (but not less than all) of its

Interest to the other Appointing Member (the "Other Member") at a price and upon

the terms stated in the offer. The Other Member shall have the option for a

period of sixty (60) days after receipt of such offer to purchase from the

Initiating Member all (but not less than all) of the Interest owned by the

Initiating Member. If the Other Member does not timely exercise its option, then

the Initiating Member shall be obligated to purchase from the Other Member, and

the Other Member shall be obligated to sell to the Initiating Member, all (but

not less than all) of its Interest at the price and upon the terms stated in the

Initiating Member's offer. Any offer and sale pursuant to this Section 9.10

shall be made on terms and conditions (other than the price) no less favorable

to the prospective purchaser than those specified in Article 13.

 

Notwithstanding any contrary provision of this Agreement or the Joint

Contribution Agreement, this Section 9.10 shall not apply to (a) any condition

or event for which a purchase option is provided in Article 13, (b) any

controversy or claim subject to arbitration under Section 17.14 or (c) any

condition or event for which termination of the Joint Contribution Agreement is

a remedy under Section 9 thereof.

 

ARTICLE 10

ELECTION, RESIGNATION OR REMOVAL OF GOVERNORS;

ADDITIONAL OR SUCCESSOR GOVERNORS

 

1.86 Election of Governors. Before all of the Joint Venture Property

and Cable Property has been acquired by the Company, the Board shall consist of

three (3) individuals. At all times, GCN shall be an Appointing Member with the

power to appoint two (2) Governors to serve on the Board. Before all of the

Joint Venture Property and Cable Property has been acquired by the Company,

Metroplex shall be an Appointing Member with the power to appoint one (1)

Governor to serve on the Board.

 

After all of the Joint Venture Property and Cable Property has been

acquired by the Company, the Board shall consist of four (4) individuals, two

(2) of which shall be appointed by GCN and the other two (2) of which shall be

appointed by Metroplex.

 

 

 

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1.87 First Governors. The first Governors of the Company are the

following individuals named by the Organizer of the Company; and each of the

Appointing Members hereby confirms that each of the initial Governor(s)

designated below under the Appointing Member's name has been appointed on behalf

of such Appointing Member, to hold office until his or her successor is elected

and qualified pursuant to Section 10.1 and the Bylaws:

 

Governors Appointed by GCN Governor Appointed by Metroplex

-------------------------- -------------------------------

 

Lyle Berman Brett Torino

Stanley M. Taube

 

1.88 Removal, Resignation and Replacement of Governors. The

Appointing Member(s) who appointed any Governor under this Article 10 shall have

the power to remove and replace that Governor, upon written notice to that

Governor and the Company, without the consent of the other Members. Any Governor

may resign at any time by giving written notice to the Board and each Member

appointing the Governor.

 

1.89 Development Committee. During the period after the Company

exercises its option to purchase any parcel of the Joint Venture Property or the

Cable Property and before all of the Joint Venture Property and Cable Property

has been acquired by the Company, the Board shall be deemed to have appointed a

committee of the Board pursuant to Section 322B.66 of the LLC Act, comprised of

the three (3) members of the Board and one other individual to be appointed at

that time (or replaced) by Metroplex in the manner provided above in this

Article 10. That committee shall be known as the Development Committee and shall

have the power and authority to make all decisions concerning the development,

leasing, financing and sale of such parcel and any other parcels of the Joint

Venture Property or the Cable Property that are acquired by the Company. In this

respect, the Development Committee shall have all of the control, power and

authority of the Board.

 

After all of the Joint Venture Property and Cable Property has been

acquired by the Company, the Development Committee shall cease to exist and its

authority shall be revoked.

 

ARTICLE 11

BOOKS OF ACCOUNT AND REPORTS

 

1.90 Books of Account. The Board shall cause to be kept complete and

accurate accounts of all transactions of the Company in proper books of account

and shall enter or cause to be entered therein a full and accurate account of

each and every Company transaction in accordance with accounting principles as

set forth in Section 11.2. The books and records of the Company shall be closed

and balanced as of the end of each Fiscal Year. The books of account and other

records of the Company shall at all times be kept at the place of business of

the Company. Each of the Members and Governors shall have access to and may

inspect and copy any of such books and records at all reasonable times.

 

1.91 Accounting Practices. The books of account of the Company shall

be kept on the accrual basis, according to generally accepted accounting

principles consistently applied. Such principles shall be applied by the Board

upon the advice of the Company's accountants. The Board shall have the authority

to designate and retain a firm of independent certified public accountants to

assist in the maintenance and preparation of such books, records and reports as

the Board deems desirable; and, if requested by the Board, to review or audit

such books and records and the annual financial statements of the Company.

 

 

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1.92 Bank Accounts. The Company shall maintain bank accounts in such

bank or banks as may be selected by the Board. All withdrawals from such bank

accounts shall be made by check or other instrument, signed by such Person or

Persons as the Board may designate.

 

1.93 Report to Members. Not later than one hundred eighty (180) days

after the end of each Fiscal Year of the Company, the Chief Manager shall caused

to be prepared a report of the business and operations of the Company during

such Fiscal Year, which report shall constitute the accounting of the Board for

such Fiscal Year. The report shall contain financial statements, including

statements of assets and liabilities, of income and expenses, of Members' equity

and changes in financial position, of cash flow and of the amount and nature of

any compensation paid to the Members, Governors, Managers or their Affiliates

during the period, including a description of the services performed in relation

thereto, and shall otherwise be in such form and have such content as the Board

deems proper. Such report shall state income from every source, including net

gains from disposition or sale of Company Property.

 

Each such report shall be delivered to each Appointing Member in

preliminary draft form at least thirty (30) days before it becomes final, so

that each Appointing Member shall have the opportunity to review the draft

report and make comments before it is delivered to the Members in final form.

 

1.94 Partnership Tax Status and Information. The Members acknowledge

that the Company will be treated as a "partnership" for income tax purposes.

 

Not later than two hundred seventy (270) days after the end of each

Fiscal Year of the Company, the Manager acting as Treasurer shall cause to be

prepared a Form K-1 and such other information, if any, with respect to the

Company for that Fiscal Year as may be necessary for the preparation of such

Person's Federal, state and local income tax (or information) returns, including

a statement showing such Person's share of income, gain or loss and credits for

such Fiscal Year, as determined for Federal, state and local income tax

purposes.

 

Each such Form K-1 and other information shall be delivered to each

Appointing Member in preliminary draft form at least thirty (30) days before it

becomes final, so that each Appointing Member shall have the opportunity to

review the draft Form K-1 and other information and make comments before it is

delivered in final form to the Persons who were Members at any time during such

Fiscal Year.

 

In addition, the Chief Manager shall from time to time cause to be

delivered to each Member adequate information relating to the Company's

operations to enable each Member to complete and file all Federal, state and

local estimated tax returns for which the Member may be liable.

 

1.95 Tax Basis Elections. In the event of a Transfer or a repurchase

by the Company or Distribution of Company Property by the Company in exchange

for all or part of the Interest of any Member, the Company may elect, pursuant

to Section 754 of the Code (or any successor provision), to adjust the basis of

the assets of the Company. Such election must be agreed to by the Appointing

Members.

 

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ARTICLE 12

RESTRICTIONS ON TRANSFERS OF MEMBERSHIP INTERESTS

 

1.96 General Restriction. Except to the limited extent permitted

under this Article 12, no part of a Member's Interest may be Transferred during

lifetime or at death, whether voluntarily or involuntarily, and whether with or

without consideration; nor may a Member enter into a binding agreement to

Transfer all or any part of the Member's Interest. Any Transfer or attempted

Transfer of all or any portion of an Interest in violation of this Agreement

shall nevertheless be subject to the applicable purchase options and rights of

Article 13. The Required Records and other appropriate records of the Company

shall be noted to prevent the Transfer of Interests except in accordance with

this Article 12 and Article 13.

 

1.97 Permitted Transfers. The following Transfers are permitted to

the extent provided in this Section 12.2 (a "Permitted Transfer"); provided,

however, that any such Transfer and the parties thereto comply with all of the

applicable conditions pertaining to Permitted Transfers under this Article 12:

 

(1) A Member may voluntarily Transfer (as defined in Section

13.2) all or any portion of the Member's Financial Rights as follows:

 

(1) GCN may pledge its Financial Rights as a pledge

of collateral security for a debt of GCN or any of its

Affiliates; provided, however, that the transferee shall

thereafter continue to be subject to the options and rights of

first refusal set forth in Article 13; or

 

(2) at any time after all of the Joint Venture

Property and Cable Property has been developed, as a pledge of

collateral security for a debt of any Member or any of its

Affiliates; provided, however, that the transferee shall

thereafter continue to be subject to the options and rights of

first refusal set forth in Article 13.

 

(2) A Member's Interest may be Transferred, without the

consent of any other Member, in whole or in part, to another person

already a Member at the time of the Transfer.

 

(3) All or any portion of GCN's Interest may be Transferred

to another entity that is an Affiliate of GCN or Lakes.

 

(4) Except as permitted by the preceding clause (c), all or

any portion of GCN's Interest may be Transferred to another entity

without the consent required by the following Section 12.3, but only

after such Interest or such portion has been offered to the Company and

Metroplex pursuant to Article 13.

 

(5) If applicable, a Member may complete a Transfer pursuant

to Section 13.7.

 

(6) All of any portion of a Member's Interest may be

Transferred to the extent permitted by Section 12.3, but only if any

consent required for such Transfer is obtained pursuant to Section

12.3.

 

1.98 Consent to Certain Transfers.

 

(1) Consent Rules. Subject to Section 12.4, any Transfer of

Financial or Governance Rights not otherwise permitted by this Article

12

 

 

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may be completed only upon the written consent of either (i) all of the

Appointing Members; or (ii) if the Company has no Appointing Members,

Members holding at least two-thirds of the Voting Interests; excluding

in either case the Member seeking to make the Transfer; which consent

may in either case be granted or withheld, as the applicable Members

may determine in their sole discretion. Notwithstanding the prior

sentence, no consent is required for a Transfer pursuant to Section

13.7.

 

(2) Request for Consent. Any Member desiring to Transfer, in

whole or in part, any Financial or Governance Rights pursuant to this

Section 12.3, shall notify the Board in writing of such desire.

 

(3) Member Approval. In the event that the Interest sought

to be Transferred requires the consent of any Member or Members, and

the Board decides not to exercise the Company's purchase option under

Section 13.5 (if applicable), the Board shall so notify such Members

and, by special meeting called on thirty (30) days' written notice, or

by solicitation of signatures on thirty (30) days' written notice, or

during the thirty (30) day period specified in Section 13.6, shall

request in writing the decision of each Member to exercise the Members'

purchase option under Section 13.6 (if applicable) and, if such

decision is negative, to grant or withhold consent pursuant to Section

12.3(a); provided, however, that notwithstanding any contrary provision

of this Agreement, failure of a Member to respond either affirmatively

or negatively to such request within sixty (60) days of such written

notice shall be construed as a negative purchase decision and the

withholding of such consent.

 

1.99 Conditions to Permitted Transfers. Any Permitted Transfer of all

or any portion of a Member's Membership Interest under this Agreement shall be

effective only if each of the following conditions is satisfied:

 

(1) Governance Rights. If the Transfer will include any

Governance Rights, the Member shall Transfer all such Governance

Rights, coupled with a simultaneous Transfer to the same transferee of

all of the Member's Financial Rights relating to such Interest.

 

(2) Investment Representations. The Member or the proposed

transferee shall provide the following documentation to the Board: (i)

an opinion of counsel (whose fees and expenses shall be borne by such

Member or transferee), satisfactory in form and substance to the Board,

to the effect that either (A) the Transfer constitutes an exempt

transaction and does not require registration under applicable

securities laws, or (B) the Interest to be Transferred is duly and

properly registered under all applicable securities laws; (ii) evidence

satisfactory to the Board that the transferee is eligible to become a

Member pursuant to this Article 12 and of the transferee's agreement to

comply with and be bound by the terms of this Agreement and to execute

any and all documents that the Board may deem necessary in connection

with his, her or its becoming a Member; (iii) evidence satisfactory to

the Board that the Transfer will not impair the ability of the Company

to be taxed as a partnership for Federal income tax purposes under the

Code or to take advantage of accelerated depreciation under the Code;

(iv) representations in form and substance satisfactory to the Board

that the transferee is acquiring the Interest for his, her or its own

account for investment and not with a view to the distribution thereof;

and (v) a written agreement signed by the transferee that the Interest

being acquired will in no event be resold unless properly registered

under all applicable securities laws or exempt therefrom.

 

 

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(3) Other Documents and Expenses. As a condition to

admission as a Member, any transferee of all or part of the Interest of

any Member shall execute and acknowledge such instruments, in form and

substance satisfactory to the Board, as the Board shall deem necessary

or advisable to effect such admission and to confirm the agreement of

the person being admitted as such Member to be bound by all the terms

and provisions of this Agreement. Such transferee shall also pay all

reasonable expenses in connection with such admission as a Member,

including, but not limited to, legal fees and costs of the preparation

of any amendment to this Member Control Agreement, if necessary or

desirable in connection therewith.

 

(4) Effective Date of Transfer. All Transfers of Interests

occurring during any month shall be deemed effected on the first day of

the month next following the month in which the Transfer occurs.

 

1.100 Acquit Company. In the absence of written notice to the Company

of any Transfer of a Membership Interest, any payment by the Company to the

transferring Member or his or its executors, administrators or representatives

shall acquit the Company of liability, to the extent of such payment, to any

other Person who may have an interest in such payment by reason of a Transfer by

the Member or by reason of such Member's death or otherwise.

 

1.101 Prohibition of Involuntary Transfers. Except as expressly

permitted by the LLC Act, a Member's Governance Rights shall not be subject to

involuntary Transfer (as that term is defined in Article 13), by operation of

law or otherwise, and any attempted involuntary Transfer shall be void and of no

effect. If such a Transfer is attempted, whether or not permitted by applicable

law, the affected portion of the Member's Interest shall thereupon be subject to

the options and rights of first refusal set forth in Article 13.

 

If all or any portion of a Member's Financial Rights are the subject of

a foreclosure of pledge or involuntary Transfer (as those terms are defined in

Article 13), or if the Member becomes insolvent (as that term is defined in

Article 13), the affected portion of the Member's Financial Rights shall

thereupon be subject to the options and rights of first refusal set forth in

Article 13.

 

1.102 Effect of Attempts to Make Prohibited Transfers. Any purported

Transfer (of all or any portion of an Interest) that is not permitted under this

Article 12 shall be null and void and of no force or effect whatever; provided,

however, that, if the Company is required by applicable law to recognize a

Transfer that is not so permitted (or if the Board, in its sole discretion,

elects to recognize a Transfer that is not so permitted), the Transferred

Interest shall be strictly limited to the transferor's Financial Rights as

provided by this Agreement with respect to the Transferred Interest, which may

be applied (without limiting any other legal or equitable rights of the Company)

to satisfy any debts, obligations or liabilities for damages (including without

limitation the Company's expenses relating to the Transfer) that the transferor

or transferee of such Interest may have to the Company.

 

In the case of a Transfer or attempted Transfer of an Interest that is

not permitted hereunder, the parties engaging or attempting to engage in such

Transfer shall be liable to indemnify and hold harmless the Company and the

other Members from all cost, liability and damage that any of such indemnified

Persons may incur (including, without limitation, incremental tax liabilities,

lawyers' fees and expenses) as a result of such Transfer or attempted Transfer

and efforts to enforce the indemnity required hereby.

 

 

 

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1.103 Limited Rights of Unadmitted Transferees. A Person who acquires

any part of an Interest, but is not admitted as a substitute Member: (a) shall

be subject to the restrictions of Section 12.1, (b) shall be entitled only to

allocations and Distributions with respect to such Interest in accordance with

this Agreement, (c) shall have no right to any information or accounting of the

affairs of the Company, (d) shall not be entitled to inspect the books or

records of the Company, (e) shall not be entitled to exercise any Governance

Rights and (f) shall not have any of the other rights of a Member under the LLC

Act or this Agreement.

 

ARTICLE 13

RIGHTS, OPTIONS AND VALUATION

RESULTING FROM TRANSFERS OR WITHDRAWALS

 

1.104 Definitions. Wherever used in this Article 13, unless another

meaning is explicitly indicated by the context, the following terms shall have

the meanings set forth below:

 

(1) "Affected Interests" shall mean any of the following:

 

(1) all or any portion of a Member's Financial

Rights Transferred (including proposed or attempted Transfers)

by any Person in violation of this Agreement;

 

(2) a Member's entire Membership Interest in the

event of either (A) a Transfer (including a proposed or

attempted Transfer) by any Person of all or any portion of the

Member's Governance Rights in violation of this Agreement; or

(B) a termination of the Member's membership, whether or not a

dissolution of the Company occurs; or

 

(3) a Member's entire Membership Interest in the

event such Interest becomes subject to the right of the Company

or any other Member to purchase such Interest under this Article

13 for any other reason.

 

(2) "Change of Metroplex Control" means that any of the

following events has occurred: (i) any person, as defined in Sections

3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended

(the "Securities Act"), has become the "beneficial owner" (as defined

in Rule 13d-3 promulgated pursuant to the Securities Act), directly or

indirectly, of 50% or more of combined voting power of Metroplex's then

outstanding securities, unless such person was such a beneficial owner

on the Effective Date; (ii) Metroplex has sold or exchanged

substantially all of its assets (other than its Interest in the

Company) outside the ordinary course of business; or (iii) within any

twelve-month period a change has occurred in the individual or

individuals who have ultimate policy-making authority with respect to

Metroplex (the "Metroplex Board"), with the result that the Incumbent

Members do not constitute a majority of the Metroplex Board. "Incumbent

Members," with respect to any twelve-month period, shall mean the

individuals comprising the Metroplex Board on the date immediately

preceding the commencement of such twelve-month period; provided,

however, that if a person first becomes one of the individuals

comprising the Metroplex Board during such twelve-month period and his

or her election or nomination for election was supported by a majority

of the individuals who, on the date of such election or nomination for

election, comprised the Incumbent Members, such member of the Metroplex

Board shall be considered one of the Incumbent Members with respect to

such twelve-month period.

 

 

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(3) "Transferring Holder" shall mean any of the following

Persons: (i) a Member whose Affected Interest is being terminated or is

the subject of any other event that caused such Interest to become an

Affected Interest; (ii) any non-Member transferee holding an Affected

Interest as a result of a Transfer or attempted Transfer that made it

an Affected Interest; and (iii) any legal representative of either.

 

1.105 Events Creating Option To Buy. If any of the following events

occurs or is attempted or proposed, the Company and the Members shall have the

option and the right to buy the Affected Interest of the Transferring Holder and

that Transferring Holder shall be obligated to sell the Affected Interest

pursuant to the terms and conditions of this Article 13:

 

(1) "Voluntary Transfer." A voluntary Transfer shall occur

if (i) an Affected Interest is sold, exchanged, pledged, encumbered,

given, gifted or otherwise voluntarily Transferred, with or without

full consideration, to a Person who is a not a Member; or (ii) an

agreement is entered into to do any of the foregoing; provided,

however, that if a Transfer is permitted by Section 12.2, the Transfer

shall not be an event creating an immediate option to buy the Affected

Interest, except in the case of a proposed Transfer described in

Section 12.2(d).

 

(2) "Foreclosure of Pledge." Foreclosure of a pledge shall

occur if (i) any Person who is not a Member attempts to gain absolute

rights to an Affected Interest as a result of default under a security

interest, whether pursuant to the Uniform Commercial Code or otherwise

and regardless of whether the security interest is termed as a pledge,

collateral, a conditional assignment, an outright assignment, or in any

equivalent manner, and regardless of whether the security interest is

perfected; (ii) an agreement is entered into to do any of the foregoing

except as permitted by Section 12.2; or (iii) the foreclosure is

otherwise treated under applicable law as a repossession, cancellation,

enforcement, foreclosure or similar action.

 

(3) "Involuntary Transfer." An involuntary Transfer shall

occur if Person who is not a Member attempts to gain absolute rights to

an Affected Interest by (i) sale pursuant to a levy of execution, (ii)

garnishment, (iii) attachment, (iv) property division or settlement in

a marriage dissolution proceeding, (v) the dissolution of a Member that

is a corporation, partnership, limited liability company, trust or

other business entity or (vi) other legal process, including without

limitation Bankruptcy or receivership proceedings intended to Transfer

the Affected Interest to a non-Member.

 

(4) "Insolvency." A Transferring Holder shall be considered

insolvent upon filing a petition for Voluntary Bankruptcy or being the

subject of a petition for Involuntary Bankruptcy (which involuntary

petition is not dismissed within ninety (90) days of filing), or if a

receiver, whether permanent or temporary, of a Transferring Holder's

property or any part thereof, shall be appointed by a court of

competent authority, or if a Transferring Holder shall make a general

assignment for the benefit of creditors, or if any material judgment

against a Transferring Holder remains unsatisfied or unbonded of record

for thirty (30) days or longer.

 

(5) "Withdrawal." A withdrawal from the Company shall occur

if (i) Metroplex ceases its good faith efforts to develop the Joint

Venture Property; (ii) a Change of Metroplex Control, as defined in

Section

 

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13.1(b), shall have occurred without the written consent of each other

Appointing Member; or (iii) any Member resigns or otherwise declares in

writing an intention to withdraw from the Company, whether or not such

withdrawal is permitted by Section 5.4.

 

(6) "Gaming Rights Purchase Option." If the Company and

Lakes become entitled to purchase the Interest of any Member (other

than Lakes or one of its Affiliates) under Section 5.5, the Interest

subject to such purchase options shall be an Affected Interest and the

holder thereof shall become a Transferring Holder obligated to sell

such Affected Interest pursuant to the terms and conditions of this

Article 13.

 

1.106 Notice To Company and Members. Each Transferring Holder shall

give written notice to the Company and to the other Members within thirty (30)

days of the occurrence of any event described in Section 13.2. Such notice shall

be sent, return receipt requested, to a Manager of the Company other than the

Transferring Holder, at the Company's principal administrative office. The

Company's Secretary shall also send the notice to each Member at the most recent

address reflected on the Company's Required Records or such other address as the

party giving notice has reason to know is more current. If the Transferring

Holder fails or refuses to give such notice, the Company or any Member may do so

as soon as it has the information required to be given in such notice. Each such

notice shall contain the following information:

 

(1) Notice of Voluntary Transfer. Any notice of voluntary

Transfer shall identify the transferee to whom the Transferring Holder

desires to sell, exchange or give an Affected Interest, a description

of the Affected Interest and the consideration, if any, for the

Transfer. The notice shall also identify all pertinent terms of the

Transfer. A copy of all agreements and documents pertinent to the

Transfer shall be attached to the notice.

 

(2) Notice of Foreclosure of Pledge. The notice of

foreclosure of pledge of an Affected Interest shall identify to whom

the Member pledged the Affected Interest, a description of the Affected

Interest, the reason for the foreclosure, and shall identify all

material terms of the pledge agreement and the foreclosure. A copy of

all agreements and documents relating to the pledge shall be attached

to the notice.

 

(3) Notice of Involuntary Transfer. Any notice of

involuntary Transfer shall identify: the order, decree or directive

requiring the involuntary Transfer of an Affected Interest, a

description of the Affected Interest, the reason for the involuntary

Transfer, and the pertinent terms of the involuntary Transfer. A copy

of the relevant order, decree or directive shall be attached to the

notice.

 

(4) Notice of Insolvency. Any notice of insolvency shall

identify the manner in which the Transferring Holder is deemed

insolvent (as defined in Section 13.2(d)) and shall identify any

trustee or fiduciary appointed with regard to the Transferring Holder.

A copy of any petition for bankruptcy, petition for involuntary

bankruptcy, order appointing a receiver, whether permanent or

temporary, order creating an assignment for the benefit of the

Transferring Holder's creditors, and/or any judgment against the

Transferring Holder that has remained unsatisfied or unbonded for a

period of thirty (30) days or longer shall be attached to the notice.

 

(5) Notice of Withdrawal. A notice of withdrawal shall

identify all pertinent details of the event of withdrawal including, if

applicable,

 

 

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all pertinent details of the Change of Metroplex Control. If a Member

has withdrawn from the Company (as defined in Section 13.2) without

giving such a notice, the Board or any other Member may give such a

notice to the withdrawing Member; provided, however, that the Member

alleged to be withdrawing shall be permitted to continue as a Member if

it demonstrates that such alleged withdrawal has not occurred.

 

(6) Notice of Gaming Rights Purchase Option. If the Company