Exhibit 10.3
ECONOMIC PARTICIPATION AGREEMENT
          THIS ECONOMIC PARTICIPATION AGREEMENT (this “Agreement”), dated as of
23th day of October, 2008, but effective as of February 20, 2008 (the “Effective
Date”), is entered into by and among W2007 Finance Sub, LLC, a Delaware limited
liability company (“Whitehall Finance”), Whitehall Parallel Global Real Estate
Limited Partnership 2007, a Delaware limited partnership (“Whitehall Parallel”,
and together with Whitehall Finance, “Whitehall”), and Arthur Keith, a natural
person residing at Las Vegas, NV. (“Participant”).
WITNESSETH:
          WHEREAS, Whitehall Finance, Whitehall Parallel and Strat Hotel
Investor, L.P., a Delaware limited partnership, are party to that certain
Amended and Restated Limited Liability Company Agreement of W2007/ACEP Holdings,
LLC (the “Company”), dated as of February 20, 2008 (the “Company LLC
Agreement”);
          WHEREAS, pursuant to the Company LLC Agreement, Whitehall is entitled
to receive certain Proceeds (as defined below) in respect of its membership
interests in the Company; and
          WHEREAS, Whitehall wishes to grant to Participant and Participant
wishes to accept from Whitehall, a participation in the membership interests in
the Company held by Whitehall, subject to, and in accordance with, the terms and
conditions of this Agreement.
          NOW, THEREFORE, the undersigned in consideration of the promises,
covenants and agreement contained herein, do hereby agree as follows:
     1. Definitions. As used in this Agreement, the following terms shall have
the meanings set forth below:
          “1/4 Vesting Milestone” means the first anniversary of the Effective
Date.
          “3/4 Vesting Milestone” means the third anniversary of the Effective
Date
          “1/2 Vesting Milestone” means the second anniversary of the Effective
Date.
          “Additional Cash Investment” has the meaning set forth in
Section 3(a).
          “Additional Investment” has the meaning set forth in Section 3(a).
          “Additional Participating Investment” has the meaning set forth in
Section 3(a).
          “Agreement” has the meaning set forth in the introductory paragraph
hereof.
          “Capital Event Proceeds” means (i) any proceeds received by the
Company from the sale or other disposition of any property or asset held,
directly or indirectly, by the

 

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Company or (ii) financing proceeds received by the Company from a loan or
similar financing transaction under which the repayment obligations are secured
by a pledge, directly or indirectly, of Whitehall’s interest in the Company or
any of its subsidiaries, the Company’s direct or indirect interest in any of its
subsidiaries, or any of the properties or other assets of the Company or its
subsidiaries, in the case of each of (i) and (ii) net of all out-of-pocket
transaction costs (as determined by Whitehall), which, for certainty, shall
include any such costs payable to affiliates of Whitehall. Notwithstanding the
forgoing, in no event shall the definition of “Capital Event Proceeds” hereunder
include any proceeds that are borrowed pursuant to the Initial Financing or
pursuant to a loan that is (x) fully recourse to any of Whitehall Finance,
Whitehall Parallel or Whitehall Street Global Real Estate Limited Partnership
2007 (“Whitehall Street”) or (y) is secured by a significant portion of the
assets of Whitehall Finance, Whitehall Parallel or Whitehall Street (which
significant portion, for certainty, shall not be comprised only of Whitehall’s
interest in the Company).
          “Cash Interest Entitlement” is equal to the Cash Percentage Interest
multiplied by the applicable Proceeds.
          “Cash Percentage Interest” has the meaning set forth in Section 3(b).
          “Cause” means Employees (i) failure to perform the duties assigned to
him; (ii) chronic impairment due to alcohol or substance abuse; (iii) conviction
of a Serious Crime or being charged with a felony (for purposes of this
Agreement a “Serious Crime” is a crime that the Company believes could prohibit
the Employee from obtaining or maintaining any work card, license, or finding of
compliance suitability necessary for Employee to maintain employment with
Company) ; (iv) violation of a federal or state securities law or regulation;
(v) negligent conduct, error or omission in the carrying out of his duties under
this Agreement; (vi) conduct that causes damage to the reputation of the
Company(vii) breach of the Exclusivity Obligation or any of the obligations set
forth in Section 6 or Section 7 below; (viii) any revocation or suspension by
any state or local authority of Employee’s required license(s) to serve in his
position(s) with the Company; or (ix) any act or failure to act by Employee
which causes any gaming or other regulatory authority having jurisdiction over
the Company, the Designated Affiliates or any of their affiliates to seek any
redress or remedy against Employee, the Company, any Designated Affiliate or any
of their affiliates.
          “Cause Termination” mean the circumstance wherein Participant is no
longer an employee of the Company or any subsidiary thereof for reason of
removal or termination from such employment for Cause.
          “Company” has the meaning set forth in the recitals hereof.
          “Company LLC Agreement” has the meaning set forth in the recitals
hereof.

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          “Current Portion” is equal to the vesting percentage as of such date
(as determined in accordance with the vesting provisions set forth in Section 4
hereof) multiplied by the Participating Investment Entitlement.
          “Effective Date” has the meaning set forth in the introductory
paragraph hereof.
          “Employment Agreement” means that certain Employee Agreement between
Participant and American Casino & Entertainment Properties, LLC, dated as of
October 23, 2008.
          “Full Vesting Milestone” mean the earlier of (i) the fourth (4th)
anniversary of the Effective Date and (ii) the date on which Whitehall no longer
owns any direct or indirect interest in the Company.
          “Funding Portion” has the meaning set forth in Section 5(a) or 5(b),
as applicable.
          “Incentive Distributions” has the meaning set forth in Section 6.
          “Initial Financing” means the first, and only the first, financing
entered into by one or more of the Company’s subsidiaries and secured by a
pledge of such subsidiaries’ assets.
          “Initial Investment” has the meaning set forth in Section 2(b).
          “Initial Participating Investment” has the meaning set forth in
Section 2(b).
          “Internal Rate of Return” means, with respect to any investment, a
return of all capital invested in such investment plus a cumulative, quarterly
compounded, return on such invested capital at a rate per annum equal to the
applicable percentage specified herein. An investment shall be deemed to have
produced a specified Internal Rate of Return when the total cash in-flows
invested from time to time in such investment produces cash out-flows in amount
sufficient to cover the cash in-flows together with an annual return equal to
such specified percentage calculated commencing on the date such cash in-flows
are funded and compounded quarterly to the extent not paid on a current basis,
and all previous cash out-flows produced by such investment. For purposes of
computing such Internal Rate of Return, any cash in-flows invested in such
investment, any forfeiture of any capital invested and any cash out-flows from
such investment at any time during a month shall be deemed to be invested,
forfeited or produced on the first day of such month.
          “Investment” has the meaning set forth in Section 3(a).
          “Operating Proceeds” means proceeds received by the Company and from
the operation of property and assets held, directly or indirectly, by the
Company, net of interest and other finance charges paid by Whitehall under any
financing(s).
          “Participant” has the meaning set forth in the introductory paragraph
hereof.

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          “Participating Investment” means, as of any date, the Initial
Participating Investment plus the aggregate of all Additional Participating
Investments.
          “Participating Investment Entitlement”:
          (X) with respect to Operating Proceeds is equal to (i)
(A) Participant’s Participating Percentage Interest multiplied by the applicable
Proceeds minus (B) the Unfunded Carry multiplied by (ii) if the Unfunded
Participating Investment is greater than zero, 75%; and
(Y) with respect to Capital Event Proceeds is equal to (i) (A) Participant’s
Participating Percentage Interest multiplied by the applicable Proceeds minus
(B) the Unfunded Carry.
          “Participating Percentage Interest” has the meaning set forth in
Section 3(b).
          “Percentage Interest” has the meaning set forth in Section 3(b).
          “Proceeds” means, collectively, Capital Event Proceeds and Operating
Proceeds.
          “Qualifying Circumstance” means the circumstance wherein Participant
is no longer an employee of the Company or any subsidiary thereof for any reason
whatsoever except for a Cause Termination, including, without limitation, any
removal from such employment without Cause, any resignation by Participant or
Participant’s ceasing to be an employee due to Participant’s death or
disability.
          “Redemption Price” means a cash amount (determined as of the date of
redemption) equal to the Participant’s Initial Cash Investment less the amount
of any Cash Distributions received by the Participant.
          “Redemption Right” has the meaning set forth in Section 7.
          “Tax Shortfall Amount” has the meaning set forth in Section 8.
          “Total Whitehall Contribution” means, as of any date, the total amount
Whitehall has contributed to the Company’s common equity, net of the financing
proceeds, if any, received by Whitehall prior to such date pursuant to the
Initial Financing.
          “Unfunded Carry” as of any date means an amount, when added to all
other amounts attributed to Unfunded Carry, is sufficient to cover a return of
7% p.a. on the Unfunded Participating Investment calculated commencing on the
date such Unfunded Participating Investment is funded and compounded quarterly
to the extent not paid on a current basis.
          “Unfunded Participating Investment” as of any date means an amount
(which shall not be less than zero) equal to the Initial Participating
Investment plus all Additional

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Participating Investment minus the cumulative amounts of all Funding Portions
previously credited pursuant to Section 5(a) and 5(b).
          “Vesting Milestone” means each of the 1/4 Vesting Milestone, the 1/2
Vesting Milestone, the 3/4 Vesting Milestone and the Full Vesting Milestone.
          “Whitehall” has the meaning set forth in the introductory paragraph
hereof.
          “Whitehall Finance” has the meaning set forth in the introductory
paragraph hereof.
          “Whitehall Parallel” has the meaning set forth in the introductory
paragraph hereof.
     2. Initial Investment.
          (a) Within five business days of the date of this Agreement,
Participant shall make a payment in cash to Whitehall in the amount of $0.00 (no
Cash Investment to be made) (the “Cash Investment”). For all purpose herein,
Participant will be treated as having made the Cash Investment as of the
Effective Date.
          (b) Upon receipt of the Cash Investment, subject to the vesting
provisions set forth in Section 4, Participant shall be credited with an
additional investment in the amount of 200% of the Cash Investment (such
additional investment, the “Initial Participating Investment”, and the Cash
Investment together with the Initial Participating Investment, the “Initial
Investment”). For example, if Participant’s Cash Investment is $50,000, his or
her Initial Participating Investment would be $100,000 and his or her Initial
Investment would be $150,000.
     3. Additional Investments; Percentage Interests.
          (a) If and when Whitehall contributes additional common equity capital
to the Company, so long as no Qualifying Circumstance or Cause Termination has
occurred, Participant will have the right to elect to make an additional
investment (such additional investment, together with the Additional
Participating Investment (defined below) in respect of such additional
investment, an “Additional Investment”) in the amount required to maintain
Participant’s then-current Percentage Interest (as defined below), it being
understood that Participant may only exercise this option with respect to the
full amount contemplated herein and Participant will not be entitled to make a
partial election. Whitehall shall give Participant written notice of an upcoming
contribution to the Company’s common equity and Participant shall have five
business days from the date of that notice to advise Whitehall in writing
whether or not Participant will make the Additional Investment (and failure to
respond within that time period will be deemed to be an election to not make the
Additional Investment). If Participant timely elects to make an Additional
Investment, Participant shall, within five business days of the date on which he
or she notified Whitehall of his or her election, make a payment in cash to
Whitehall in an amount equal to one-third of the Additional Investment (an
“Additional Cash

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Investment”). Upon receipt of the Additional Cash Investment, subject to the
vesting provisions set forth in Section 4, Participant shall be credited with an
additional investment in the amount of 200% of the Additional Cash Investment
(such additional investment, the “Additional Participating Investment”). If
Participant does not timely elect to make an Additional Investment or does not
have the right to make such Additional Investment due to the occurrence of a
Qualifying Circumstance or Cause Termination, Participant recognizes that his or
her Percentage Interest will be diluted as a result of the additional investment
made by Whitehall to fund the capital call. The “Investment” means the Initial
Investment together with any Additional Investment(s).
          (b) Participant’s “Percentage Interest” means, as of any date of
determination, the percentage obtained by dividing Participant’s aggregate
Investment as of such date by the Total Whitehall Contribution. Participant’s
“Cash Percentage Interest” means, as of any date of determination, the
percentage obtained by dividing Participant’s aggregate Cash Investment as of
such date by the Total Whitehall Contribution. Participant’s “Participating
Percentage Interest” means, as of any date of determination, the percentage
obtained by dividing Participant’s Participating Investment as of such date by
the Total Whitehall Contribution. As of the date hereof, the Total Whitehall
Contribution is $___ and Participant’s initial Percentage Interest, Cash
Percentage Interest and Participating Percentage Interest are, respectively,
0.___%, 0.___% and 0.___%.
4. Vesting.
          (a) Participant’s rights hereunder with respect to the Cash Investment
are fully vested as of the Effective Date. Provided that no Qualifying
Circumstance or Cause Termination has occurred on or prior to the applicable
Vesting Date, Participant’s rights hereunder with respect to the Participating
Investment and the Incentive Distributions shall vest in accordance with the
following schedule:
          (i) between the Effective Date and the 1/4 Vesting Milestone,
Participant’s vesting percentage shall be 0%;
          (ii) from and after the 1/4 Vesting Milestone up to the 1/2 Vesting
Milestone, Participant’s vesting percentage shall be 25%;
          (iii) from and after the 1/2 Vesting Milestone up to the 3/4 Vesting
Milestone, Participant’s vesting percentage shall be 50%;
          (iv) from after the 3/4 Vesting Milestone up to the Full Vesting
Milestone, Participant’s vesting percentage shall 75% and
          (v) from and after the Full Vesting Milestone, Participant’s vesting
percentage shall be 100%.
          (b) Notwithstanding Section 4(a) above, if a Qualifying Circumstance
occurs, Participant shall be entitled to retain the vesting percentage with
respect to the

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Participating Investment and the Incentive Distributions that vested prior to
the occurrence of such Qualifying Circumstance, but such vesting percentage
shall not thereafter increase. For example, if a Qualifying Circumstance should
occur after the 1/2 Vesting Milestone but prior to the 3/4 Vesting Milestone,
Participant’s vesting percentage with respect to the Participating Investment
and the Incentive Distributions shall be 50% (but shall in no event increase to
75% or 100% thereafter). Notwithstanding Section 4(a) above, if a Cause
Termination occurs, effective as of the date of such Cause Termination,
Participant’s Vesting Percentage with respect to the Participating Investment
and the Incentive Distributions shall be reduced to 0%.
          (c) Provided that no Cause Termination has occurred on or prior to the
applicable Vesting Date: (i) on the 1/4 Vesting Milestone, 25% of any amounts
which Participant is entitled to receive under Sections 5 or 6 and which are
then held in escrow shall be payable to the Participant in cash (as a Cash
Distribution); (ii) on the 1/2 Vesting Milestone, 50% of any amounts which
Participant is entitled to receive under Sections 5 or 6 and which are then held
in escrow shall be payable to the Participant in cash (as a Cash Distribution);
(iii) on the 3/4 Vesting Milestone, 75% of any amounts which Participant is
entitled to receive under Sections 5 or 6 and which are then held in escrow
shall be payable to the Participant in cash (as a Cash Distribution) and (iv) on
the Full Vesting Milestone, 100% of any amounts which Participant is entitled to
receive under Sections 5 or 6 and which are then held in escrow shall be payable
to the Participant in cash (as a Cash Distribution). If a Cause Termination
occurs, Participant shall immediately forfeit all rights to all amounts which
Participant would otherwise have been entitled to receive under Sections 5 or 6
and which are then held in escrow, and all such escrowed amounts shall promptly
be returned to Whitehall.
     5. Participation in Proceeds.
          (a) Operating Proceeds. As and when Whitehall receives Operating
Proceeds, Participant shall be entitled to receive an amount equal to (i) the
Cash Interest Entitlement plus (ii) the Participating Investment Entitlement.
The Cash Interest Entitlement and the Current Portion of the Participating
Investment Entitlement will be payable to the Participant in cash within five
business days of Whitehall’s receipt of such Operating Proceeds (as a Cash
Distribution) and the remainder of the Participating Investment Entitlement will
be escrowed and distributed to Participant in accordance with the vesting
provisions set forth in Section 4 hereof. In addition, as of such date, to the
extent there is then an Unfunded Participating Investment, Participant will be
credited with a reduction of the Unfunded Participating Investment in an amount
of the Funding Portion with respect to such Operating Proceeds. If the Unfunded
Participating Investment is greater than zero, the “Funding Portion” under this
Section 5(a) shall be equal to 25% multiplied by (A) Participant’s Participating
Percentage Interest multiplied by such Operating Proceeds minus (B) the Unfunded
Carry and, if the Unfunded Participating Investment is zero, the “Funding
Portion” shall be zero.
          (b) Capital Event Proceeds. As and when Whitehall receives Capital
Event Proceeds, Participant shall be entitled to receive an amount equal to
(i) the Cash Interest Entitlement plus (ii) if the Unfunded Participating
Investment is zero, the Participating Investment Entitlement. The Cash Interest
Entitlement and the Current Portion of any

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Participating Investment Entitlement that Participant is entitled to receive
pursuant to clause (ii) above will be payable to the Participant in cash within
five business days of Whitehall’s receipt of such Capital Event Proceeds (as a
Cash Distribution) and the remainder of such Participating Investment
Entitlement will be escrowed and distributed to Participant in accordance with
the vesting provisions set forth in Section 4 hereof. In addition, as of such
date, to the extent there is then an Unfunded Participating Investment,
Participant will be credited with a reduction of the Unfunded Participating
Investment in an amount of the Funding Portion with respect to such Capital
Event Proceeds. If the Unfunded Participating Investment is greater than zero,
the “Funding Portion” under this Section 5(b) shall be equal to
(A) Participant’s Participating Percentage Interest multiplied by such Capital
Event Proceeds minus (B) the Unfunded Carry and, if the Unfunded Participating
Investment is zero, the “Funding Portion” shall be zero.
          (c) The parties agree that the provisions of Sections 5(a) and 5(b)
are intended to achieve the same economics as if Participant had borrowed an
amount equal to the Participating Investment from Whitehall on the Effective
Date (or such applicable later date with respect to an Additional Participating
Investment) and paid interest to Whitehall on such amount at a rate of 7% p.a.
until such amount was repaid in full.
6. Incentive Distributions.
(a)When and if Whitehall has achieved a 15% Internal Rate of Return with respect
to its investments in the Company, then Participant shall be entitled to a cash
payment in the amount of $750,000 to be paid to Participant within five business
days of notice from Whitehall.
(b) In addition to the foregoing, when and if Whitehall has achieved a 20%
Internal Rate of Return with respect to its investments in the Company, then
Participant shall be entitled to (b) a cash payment in the amount of $750,000 to
be paid to Participant within five business days of notice from Whitehall (the
cash payments in the foregoing clauses 6(a) and 6(b) shall be known as
“Incentive Distributions”).
     7. Redemption Rights. Each of Participant and Whitehall acknowledge and
agree that if a Cause Termination occurs, Whitehall shall have the right (but
not the obligation), at Whitehall’s election at any time after the occurrence of
such Cause Termination, to redeem the Initial Cash Investment at the Redemption
Price (such right shall be known as the “Redemption Right”). Whitehall shall pay
Participant the Redemption Price within 90 days of the date on which Whitehall
notifies Participant in writing of its intention to exercise its Redemption
Right.
     8. Tax Distributions. If the amount of Cash Distributions received by
Participant pursuant to Section 5 in any fiscal year is not sufficient to cover
Participant’s tax liabilities in respect to the amount Participant is entitled
to receive under Section 5 in such fiscal year (such difference, the “Tax
Shortfall Amount”), then Whitehall shall, subject to Participant’s execution and
delivery of a promissory note in the form of Exhibit A in favor of Whitehall in
the amount of the Tax Shortfall Amount, within 60 days after the close of the
fiscal year, lend an amount of cash to Participant equal to the Tax Shortfall
Amount.

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     9. No Admission; No Fiduciary or other Relationship. It is agreed and
understood by the parties hereto that Whitehall shall continue to hold its
membership interests in the Company, and that it is not the intention of the
parties to admit Participant as a substituted member or to otherwise admit
Participant as a member of the Company. Each of Whitehall and Participant
confirms and agrees that the relationship between Whitehall, on the one hand,
and Participant, on the other hand, is strictly limited to the contractual
arrangement set out in this Agreement, that the relationship is one of
arm’s-length contracting parties and is not one of employer and employee or of
any other similar arrangement, and further that that neither of the parties is,
or should for any purpose be construed as being, a partner or affiliate of the
other or has, or should for any purpose be construed as having, any duty
(fiduciary or otherwise) to the other or has, or should be construed as having,
any other responsibility to the other except to the extent specifically set
forth in the terms of this Agreement.
     10. Representations and Warranties. Participant represents, warrants and
acknowledges, as a material inducement to Whitehall entering into this
Agreement, as follows:
          (a) Participant is acquiring his or her Investment for his or her own
account for investment purposes only and not with a view to the distribution or
resale thereof, in whole or in part, and agrees that he or she will not
transfer, sell, pledge, hypothecate, encumber, assign or consent to any
transfer, sale, pledge, hypothecation, encumbrance, assignment, or solicit
offers to buy from or otherwise approach or negotiate in respect thereof with
any person or persons whomsoever, all or any portion of his or her Investment in
any manner that would violate or cause the Company to violate any applicable
federal or state securities laws;
          (b) Participant is financially able to bear the economic risk of his
or her investment in the Investment, including the total loss thereof;
          (c) No Person has at any time expressly or impliedly represented,
guaranteed, or warranted to Participant that a percentage of profit and/or
amount or type of consideration will be realized as a result of his or her
Investment, that past performance or experience of the Company or its
subsidiaries or assets in any way indicates the future results of the ownership
of his or her Investment or of the Company business, that any cash distributions
from Company operations or otherwise will be made by any specific date or will
be made at all, or that any specific tax benefits will accrue as a result of the
Investment;
          (d) The Investment is an illiquid investment with an indeterminate
length, and no Person has at any time expressly or impliedly represented,
guaranteed, or warranted that the Investment will be realized, redeemed or
redeemable within a specific period of time;
          (e) Participant’s execution and delivery of this Agreement and the
performance of his or her obligations hereunder will not conflict with, result
in a breach of or constitute a default (or any event that, with notice or lapse
of time, or both, would constitute a default) or result in the acceleration of
any obligation under any of the terms, conditions or provisions of any other
agreement or instrument to which Participant is a party or by which Participant
is bound or to which any of Participant’s property or assets are subject, or
violate any statute or any order, rule or regulation of any court or
governmental or regulatory agency,

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body or official, that would materially and adversely affect the performance of
his or her duties hereunder; and Participant has obtained any consent, approval,
authorization or order of any court or governmental agency or body required for
the execution, delivery and performance by Participant of his or her obligations
hereunder;
          (f) There is no action, suit or proceeding pending against Participant
or, to Participant’s knowledge, threatened in any court or by or before any
other governmental agency or instrumentality which would prohibit Participant
from entering into or performing his or her obligations under this Agreement;
          (g) Neither Participant nor any of Participant’s affiliates has
employed any broker or finder, or incurred any liability therefor, in connection
with this Agreement or the transactions contemplated hereby;
          (h) This Agreement is a binding agreement on the part of Participant
enforceable in accordance with its terms against Participant;
          (i) Participant acknowledges and agrees that Sullivan & Cromwell LLP
serves as counsel to Whitehall, and that Sullivan & Cromwell LLP does not serve
as counsel to any other Party. Participant acknowledges and agrees that he or
she does not have an attorney-client relationship with Sullivan & Cromwell LLP,
and that no such relationship will arise in the course of the Company’s
existence or dissolution by any means. Participant represents and warrants that,
in the event of litigation or arbitration between Whitehall and Participant,
Participant will not seek the removal of Sullivan & Cromwell LLP as counsel to
Whitehall for any purported conflict of interest or attorney-client relationship
allegedly existing between Sullivan & Cromwell LLP and Participant. Participant
has been advised to and has engaged his or her own counsel and any other
advisers Participant deems necessary and appropriate. By reason of Participant’s
business or financial experience, or by reason of the business or financial
experience of Participant’s own attorneys, accountants and financial advisors,
Participant is capable of evaluating the risks and merits of the Investment and
of protecting his or her own interests in connection with Investment; and
          (j) Participant has consulted with his or her own accountants and
financial advisors regarding all tax and financial matters concerning the
Investment and the tax consequences of the Investment. Participant acknowledges
that the tax consequences of the Investment will depend on Participant’s
particular circumstances, and neither the Company, Whitehall, nor the partners,
shareholders, members, managers, fiduciaries, agents, officers, directors,
employees, affiliates, or consultants of any of them will be responsible or
liable for the legal, tax, or financial consequences to Participant of the
Investment. Participant will solely look to, and rely upon, his or her own
advisers with respect to the legal, tax, and financial consequences of the
Investment.
     11. Tax Treatment. Whitehall and Participant agree that (a) Participant’s
Investment pursuant to this Agreement shall be treated for U.S. federal income
tax purposes as (i) a sale of a portion of the membership interests in the
Company equal to Participant’s Cash Percentage Interest to Participant and
(ii) a grant of a profits interest in the Company equal to Participant’s

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Participating Percentage and Incentive Distributions, with Whitehall holding
such membership and profits interests as a nominee on behalf of Participant,
(b) Participant shall be treated for U.S. federal income tax purposes in the
same manner as if he or she (i) had purchased and is holding a common equity
membership interest in the Company equal to Participant’s Percentage Interest,
and (ii) is holding a profits interest in the Company equal to Participant’s
Participating Percentage and Incentive Distributions, (c) Whitehall shall timely
deliver to the Company the statement described in Treas. Regs.
Section 1.6031(c)-1T(a)(1)(ii) with respect to the portion of the membership
interests in the Company that is treated as purchased by Participant pursuant to
this Agreement, (d) Participant shall provide Whitehall with a properly
completed IRS Form W-9 or W-8, as applicable, and any other information, forms
or documents as may be reasonably requested by Whitehall acting in its role as
nominee and (e) Participant shall make a Section 83(b) election in respect of
his or her Investment.
     12. Confidentiality. Participant agrees to hold the terms of this Agreement
and any information relating to the Company or Whitehall that Participant
obtains during the term of this Agreement strictly confidential and not to
disclose the same to any third party, provided, however, that Participant may
disclose such information only (a) as required by applicable law and then only
to the extent required by such law, (b) at the express direction of any court or
other governmental authority with jurisdiction over Participant or (c) pursuant
to subpoena or other process of a court or other governmental authority having
jurisdiction over Participant.
     13. Future Cooperation. Each of the parties hereto agrees to cooperate at
all times from and after the date hereof with respect to all of the matters
described herein, and to execute such further assignments, releases,
assumptions, notifications and other documents as may be reasonably requested
for the purpose of giving effect to, or evidencing or giving notice of, the
transaction contemplated by this Agreement.
     14. Termination. Participant’s rights under this Agreement automatically
shall terminate and expire upon the sooner of (i) the closing of the exercise of
Whitehall’s Redemption Rights as provided in Section 7 above and (ii) the date
that Whitehall no longer owns any direct or indirect interest in the Company.
     15. Notice. Unless otherwise expressly agreed in writing, any notice,
consent or other document required to be sent pursuant to this Agreement shall
be in writing and shall be deemed to be validly given by the delivery thereof to
its recipient, either personally with a receipt, by registered mail, via
reputable overnight courier, or via facsimile transmission if such facsimile
provides confirmation of sending followed by a reputable overnight courier that
provides confirmation of delivery to the sender. Notices shall be sent as
follows:
     If to the Company, then to:
W2007/ACEP Holdings, LLC
c/o Goldman, Sachs & Co.
85 Broad St.
New York, NY 10004

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Attention: Whitehall Chief Financial Officer & Whitehall General Counsel
with a copy to:
Whitehall Street Global Real Estate Limited Partnership 2007
c/o Goldman, Sachs & Co.
85 Broad St.
New York, NY 10004
Attention: Whitehall Chief Financial Officer & Whitehall General Counsel
and a copy to:
Sullivan & Cromwell, LLP
125 Broad Street
New York, NY 100004
Attention: Anthony J. Colletta, Esq.
     If to Participant, then to:
Arthur Keith
2000 Las Vegas Blvd, South
Las Vegas, NV 89104
Any written notice is deemed to have been received: (a) if sent by personal
delivery, registered mail or prepaid overnight courier, at the time of its
delivery; (b) if sent by prepaid mail, on the fifth (5th) business day following
its sending; or (c) if transmitted by facsimile transmission or other electronic
means as may be permitted by this Agreement or otherwise mutually agreed, on the
first business day following its sending.
     16. Rights Personal to Participant. The rights and privileges described in
this Agreement are personal to Participant and may not be sold, assigned,
pledged or otherwise transferred or encumbered (other than testamentary
transfers to Participant’s spouse or heirs), directly or indirectly, by
Participant without Whitehall’s prior written consent, which consent Whitehall
may grant or withhold in Whitehall’s sole and absolute discretion. Any pledge or
other transfer of all or any portion of Participant’s rights under this
Agreement without Whitehall’s prior written consent shall be void ab initio, and
if Participant attempts to effect any such transfer then at any time following
such attempt Whitehall shall have the right to redeem Participant’s interest at
a redemption price equivalent to the Redemption Price provided for in Section 7
above.
     17. Binding Effect. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns.
     18. Execution in Counterparts. This Agreement may be (a) executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one

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and the same instrument and (b) transmitted by telecopy or other facsimile
signature (which shall be deemed an original for all purposes).
     19. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, and all rights and remedies
hereunder shall be governed by such laws without regard to principles of
conflict of law.
[signature page follows]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

                  By:   /s/ ARTHUR KEITH         Arthur Keith          WHITEHALL
PARALLEL GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, a Delaware limited
partnership

By:  WH PARALLEL ADVISORS, L.L.C. 2007,
        its General Partner
            By:   /s/ Jonathan A Langer         Name:   Jonathan A Langer       
Title:   Manager        W2007 FINANCE SUB, LLC, a Delaware limited
liability company

By:  WHITEHALL STREET GLOBAL REAL         ESTATE LIMITED PARTNERSHIP
        2007, its Managing Member
      By:   WH ADVISORS, L.L.C. 2007, its General Partner             By:  
Jonathan A Langer         Name:   Jonathan A Langer        Title:   Manager     

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