EXHIBIT 99.6
SETTLEMENT AGREEMENT AND RELEASES
by and among
ALADDIN GAMING, LLC,
a Nevada limited liability company
NORTHWIND ALADDIN, LLC,
a Nevada limited liability company
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY,
a Massachusetts life insurance company
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY,
a Massachusetts life insurance company
▇▇▇▇ ▇▇▇▇▇▇▇ REASSURANCE COMPANY, LTD.,
a Bermuda limited company
STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company
and
ALADDIN BAZAAR, LLC,
a Delaware limited liability company
TABLE OF CONTENTS
Page
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1 Definitions...................................................................................................... 2
1.1 Terms................................................................................................... 2
1.2 Terminology............................................................................................. 9
2 Settlement....................................................................................................... 9
2.1 Agreement to Settle..................................................................................... 9
2.2 Incorporation of Preliminary Statements................................................................. 9
2.3 Incorporation of Exhibits and Schedules................................................................. 9
3 Gaming Bankruptcy Court Filings and Approvals.................................................................... 9
3.1 Motion to Approve Settlement Agreement and Assume Gaming/Northwind Agreements........................... 9
3.2 Intentionally Omitted................................................................................... 10
3.3 Intentionally Omitted................................................................................... 10
3.4 Dismissal of ▇▇▇▇▇▇▇ Title.............................................................................. 10
3.5 Dismissal of Adversary Proceeding....................................................................... 10
3.6 Individual Billing for Electric Service................................................................. 10
3.7 Northwind Proofs of Claim............................................................................... 10
3.8 Plan Approval........................................................................................... 10
3.9 Contingent Revival and Reinstatement of Northwind Claims................................................ 11
4 Conditions to Effectiveness of this Agreement.................................................................... 11
5 Payments......................................................................................................... 12
5.1 Payment of Cure Amount.................................................................................. 12
5.2 Calculation of Cure Amount.............................................................................. 13
5.3 Distribution of Cure Amount............................................................................. 14
5.4 Payments by Gaming in the Ordinary Course............................................................... 15
5.5 Procedures/Remedies..................................................................................... 15
6 Amendments to the ESA............................................................................................ 15
6.1 Return on Equity Amount................................................................................. 16
6.2 Payment of Return on Equity Amounts..................................................................... 16
6.3 Reduction of Operating Costs............................................................................ 16
6.4 Reduction of Notice Period for Customer's Option to Purchase............................................ 16
6.5 Profit from Operations.................................................................................. 17
6.6 No Amendments to Bazaar ESA............................................................................. 17
6.7 Bazaar Consent to Amendments; Restoration of Rights..................................................... 17
7 Amendments to ▇▇▇▇▇▇▇/State Street Loan Documents................................................................ 17
7.1 Note Purchase Agreement................................................................................. 17
7.2 Accelerated Amortization................................................................................ 18
7.3 Agency and Disbursement Agreement....................................................................... 19
8 Standstill by the ▇▇▇▇▇▇▇ Entities, State Street and the Noteholders............................................. 19
9 Estoppel Certificate............................................................................................. 20
10 Notice of Default under the ▇▇▇▇▇▇▇/State Street Loan Documents; Gaming's Right to Cure.......................... 20
11 Protections in the Event of Future Bankruptcy.................................................................... 21
12 Releases......................................................................................................... 21
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12.1 Release by Gaming....................................................................................... 21
12.2 Release by Northwind.................................................................................... 22
12.3 Release by the ▇▇▇▇▇▇▇ Entities......................................................................... 22
12.4 Release by State Street................................................................................. 23
12.5 Release by Bazaar....................................................................................... 23
12.6 Limitations on Releases................................................................................. 23
13 Representations and Warranties................................................................................... 24
13.1 Representations and Warranties of Gaming................................................................ 24
13.2 Representations and Warranties of Northwind............................................................. 25
13.3 Representations and Warranties of the ▇▇▇▇▇▇▇ Entities.................................................. 26
13.4 Representations and Warranties of State Street.......................................................... 28
13.5 Representations and Warranties of Bazaar................................................................ 29
14 Covenants........................................................................................................ 30
14.1 Filings and Authorizations.............................................................................. 30
14.2 Intentionally Omitted................................................................................... 30
14.3 EBITDA Reporting........................................................................................ 30
15 Default of Settlement Agreement; Rights and Remedies............................................................. 31
15.1 Settlement Agreement Default Event...................................................................... 31
15.2 Rights and Remedies..................................................................................... 31
15.3 Collection Charges...................................................................................... 31
16 Assignment....................................................................................................... 31
17 Fees and Expenses................................................................................................ 32
18 Miscellaneous.................................................................................................... 32
18.1 Notices................................................................................................. 32
18.2 Governing Law........................................................................................... 34
18.3 Binding Effect.......................................................................................... 34
18.4 Effectiveness of Agreement and Findings and Conclusions if Approval and Assumption Order Does Not Become
a Final Order........................................................................................... 35
18.5 Waiver.................................................................................................. 35
18.6 Entire Agreement........................................................................................ 35
18.7 Attorneys' Fees......................................................................................... 35
18.8 Amendment and Waiver.................................................................................... 35
18.9 Counterparts............................................................................................ 35
18.10 Further Assurances...................................................................................... 35
18.11 Survival of Representations and Warranties.............................................................. 35
18.12 Severability............................................................................................ 36
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EXHIBITS
A Form of Approval and Assumption Order
B Form of Estoppel Certificate
C Form of ETT Stipulated Order of Settlement and Dismissal
D Form of Stipulated Findings of Fact and Conclusions of Law in
Support of Settlement Agreement and Request for Dismissal with
Prejudice
E Form of First Amendment to Agency and Disbursement Agreement
F Form of First Amendment to Note Purchase Agreement
G Form of Fourth Amendment to ESA
H Description of Property and Equipment Owned by Northwind
I Form of Dismissal of ▇▇▇▇▇▇▇ Title
J Form of Dismissal of Adversary Proceeding
K Form of Demand for the Deferred Cure Payment
SCHEDULES
6.1 Debt Service Amounts
6.2 Return on Equity Amounts
13.2(g) Defaults or Events of Default under the Note Purchase Agreement
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SETTLEMENT AGREEMENT AND RELEASES
This Settlement Agreement and Releases (this "Agreement") is made and
entered into as of the 6th day of November, 2002, by and among (i) Aladdin
Gaming, LLC, a Nevada limited liability company; (ii) Northwind Aladdin, LLC, a
Nevada limited liability company; (iii) ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, a
Massachusetts life insurance company, ▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life Insurance
Company, a Massachusetts life insurance company and ▇▇▇▇ ▇▇▇▇▇▇▇ Reassurance
Company, Ltd., a Bermuda limited company; (iv) State Street Bank and Trust
Company, a Massachusetts trust company, in its capacity as Collateral Agent for
the ▇▇▇▇▇▇▇ Entities and the other Noteholders (all such terms as hereinafter
defined); and (v) Aladdin Bazaar, LLC, a Delaware limited liability company.
Capitalized terms used herein are defined in SECTION 1 of this Agreement.
PRELIMINARY STATEMENTS AND RECITALS OF FACT
A. Gaming is the owner of the Aladdin Hotel and Casino (the
"Hotel/Casino") which is the centerpiece of a 35-acre resort, casino and
entertainment complex located at the center of Las Vegas Boulevard in Las Vegas,
Nevada (the "Resort"). The Hotel/Casino includes a 2,567-room hotel, a
116,000-square foot casino, a 7,000-seat theatre for the performing arts and
90,000-square feet of convention and conference facilities. Adjacent to the
Hotel/Casino is a themed shopping mall containing approximately 460,000-square
feet of retail space known as the Desert Passage Mall ("Desert Passage") and a
4,800-space parking garage. Desert Passage and the parking garage are both owned
separately by Bazaar.
B. On December 3, 1997, Gaming and Northwind entered into the
Development Agreement pursuant to which Gaming and Northwind contemplated the
construction, operation and maintenance of primary and secondary onsite AC
electrical generators, water heater and chillers commonly known as the central
utility plant (the "CUP") and a 12,500-volt power distribution grid throughout
the Hotel/Casino and Desert Passage.
C. Contemporaneous with the execution of the Development
Agreement, Gaming entered into the Lease pursuant to which Northwind leased from
Gaming an approximately .62-acre parcel of land within the perimeter of the
Resort for the purpose of constructing the CUP.
D. On September 24, 1998, as contemplated by both the Development
Agreement and Lease, Gaming and Northwind entered into the ESA.
E. The Development Agreement, the Lease and the ESA were amended
three times, the first such amendment being dated as of September 25, 1998 and
the second and third such amendments being dated as of May 28, 1999. Among other
things, the amendments relieved Northwind of its obligation to generate primary
AC electricity and ultimately resulted in Gaming purchasing power directly from
Nevada Power for use by the Hotel/Casino, Desert Passage and the CUP.
F. All electricity used by the Hotel/Casino, Desert Passage and
the CUP is measured by a single set of three power meters. Because the meters
are in its name, Gaming receives the monthly billing statements from Nevada
Power reflecting all energy consumption by the Hotel/Casino, Desert Passage and
the CUP. Each month, Gaming forwards Nevada Power's
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monthly billing statements to Northwind which prepares a written report
allocating power consumption among Gaming, Bazaar and Northwind. Subsequently,
Northwind delivers to Gaming its allocation report, which, in turn, Gaming uses
to ▇▇▇▇ Bazaar and Northwind for power consumption used by Desert Passage and
the CUP.
G. On September 28, 2001, Gaming filed a petition for relief
under Chapter 11 of the Bankruptcy Code and is now a debtor and
debtor-in-possession under the Bankruptcy Code before the Gaming Bankruptcy
Court.
H. On January 15, 2002, Gaming commenced the Adversary Proceeding
seeking, among other things, to recharacterize the nature of the parties'
interests in the CUP and related infrastructure.
I. The parties hereto have agreed to settle their disputes on the
terms and conditions set forth herein.
AGREEMENT
Now, therefore, in consideration of the payments, mutual promises,
covenants, representations and warranties, and conditions hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agree as follows:
1. Definitions.
1.1 Terms.
"Additional Amounts" shall have the meaning set forth
in Section 10.1 of the Note Purchase Agreement.
"Adequate Protection Order" shall mean that certain
Order on Motion to Compel Debtor to Assume or Reject the Executory Contract and
Lease with Northwind Aladdin, LLC or, in the Alternative, Granting Northwind
Aladdin, LLC Adequate Protection entered May 31, 2002 by the Gaming Bankruptcy
Court.
"Adversary Proceeding" shall mean that certain
adversary proceeding filed in the Gaming Bankruptcy Case, bearing Adv. No.
02-1012-RCJ, commenced by Gaming on January 15, 2002 against Northwind, the
▇▇▇▇▇▇▇ Entities, Bazaar, State Street, Embassy & Co. and ▇▇▇▇▇▇▇ Title seeking,
among other things, to recharacterize the nature of the parties' interests in
the CUP and related infrastructure.
"Affiliate" shall have the meaning set forth in
Section 101(2) of the Bankruptcy Code, except that all references in such
section to a "debtor" shall be deemed to be applicable to any Person and not
just a Person which is a debtor under the Bankruptcy Code.
"Agency and Disbursement Agreement" shall mean that
certain Agency and Disbursement Agreement, dated as of June 7, 1999, by and
among Northwind, the
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Noteholders, State Street (as Collateral Agent and as Depositary Bank), and
other secured parties named therein (as amended pursuant to the First Amendment
to Agency and Disbursement Agreement), and as may be further amended, modified
and/or supplemented and in effect from time to time.
"Agreement" shall mean this Settlement Agreement and
Releases, including all of the exhibits and schedules attached hereto.
"Approval and Assumption Motion" shall mean that
Motion to (i) Approve Settlement Agreement and Releases Respecting Central
Utility Plant Litigation Pursuant to Fed. R. Bankr. P. 9019 and (ii) Assume
Certain Agreements Respecting the Central Utility Plant in a form reasonably
satisfactory to each of the Parties to this Agreement to be filed in the Gaming
Bankruptcy Case pursuant to SECTION 3.1 hereof.
"Approval and Assumption Order" shall mean the order
approving the Approval and Assumption Motion in its entirety in substantially
the same form as attached as EXHIBIT "A" to this Agreement.
"Assumed Contracts" shall have the meaning set forth
in SECTION 3.1 of this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United
States Code, 11 U.S.C. Section 101, et seq., as amended from time to time.
"Bankruptcy Rules" shall mean the Federal Rules of
Bankruptcy Procedure and the local rules of the Gaming Bankruptcy Court, as
applicable to the Gaming Bankruptcy Case, as now in effect or hereinafter
amended.
"Bazaar" shall mean Aladdin Bazaar, LLC, a Delaware
limited liability company.
"Bazaar ESA" shall mean that certain Energy Service
Agreement dated as of September 24, 1998 by and between Northwind and Bazaar, as
amended.
"Billing Report" shall have the meaning set forth in
SECTION 5.5 of this Agreement.
"Business Day" shall mean any day other than a
Saturday, Sunday or other day on which commercial banks in ▇▇▇▇▇ County, Nevada
are authorized or required by law to close.
"Consumption Charges" shall have the meaning as set
forth in Section 2.5(b) of the ESA, determined in accordance with Section II
("Consumption Charges") of Exhibit C to the ESA.
"CUP" shall have the meaning set forth in the
Preliminary Statements.
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"Cure Amount" shall have the meaning set forth in
SECTION 5.1 of this Agreement.
"Debt Amount" shall have the meaning set forth in
Annex A of the ESA (under the definition of "Make Whole Amount").
"Debt Service Amounts" shall have the meaning, as
applicable, (a) with respect to the ESA, as set forth in Section I(D) of Exhibit
C ("Contract Capacity Charges and Consumption Charges") to the ESA, and (b) with
respect to the Bazaar ESA, as set forth in Exhibit C ("Contract Capacity
Charge") to the Bazaar ESA.
"Default Notice" shall have the meaning set forth in
SECTION 10 of this Agreement.
"Deferred Cure Payment" shall have the meaning set
forth in SECTION 5.1 of this Agreement.
"Desert Passage" shall have the meaning set forth in
the Preliminary Statements.
"Development Agreement" shall mean that certain
Development Agreement, dated December 13, 1997, by and between Northwind and
Gaming, as amended.
"EBITDA" shall have the meaning set forth in SECTION
5.1 of this Agreement.
"Effective Date" shall have the meaning set forth in
SECTION 12.1 of this Agreement.
"ESA" shall mean that certain Energy Service
Agreement, dated as of September 24, 1998, by and between Northwind and Gaming,
as amended (including as amended pursuant to the Fourth Amendment to ESA).
"ESCA" shall mean that certain Energy Services
Coordination Agreement, dated as of May 28, 1999, by and between Gaming and
Bazaar.
"Estoppel Certificate" shall mean that certain
Estoppel Certificate in substantially the same form as attached as EXHIBIT "B"
to this Agreement to be executed by each of the ▇▇▇▇▇▇▇ Entities and State
Street and delivered to Northwind, Gaming and Bazaar.
"ETT" shall mean ETT Nevada Inc., a Nevada
corporation, the holder of a 75% membership interest in Northwind.
"ETT Bankruptcy Case" shall mean the Chapter 11
bankruptcy case filed by ETT in the ETT Bankruptcy Court styled In re ETT
Nevada, Inc., Case No. 02-13225.
"ETT Bankruptcy Court" shall mean the United States
Bankruptcy Court for the Northern District of Illinois, Eastern Division.
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"ETT Stipulated Order of Settlement and Dismissal"
means that certain ETT Stipulated Order of Settlement and Dismissal, in the form
attached hereto as EXHIBIT "C" providing for (i) the immediate dismissal of the
ETT Bankruptcy Case and (ii) the release by ETT and Northwind, jointly and
severally, of and from any and all claims, actions, causes of action and
liabilities in any way relating to the ETT Bankruptcy Case, any acceleration by
the ▇▇▇▇▇▇▇ Entities and/or State Street of amounts due under the Note Purchase
Agreement, any putative violation of 11 U.S.C. Section 362 or any other
provision of the Bankruptcy Code, and/or any position taken by the ▇▇▇▇▇▇▇
Entities or State Street in connection with ETT or the ETT Bankruptcy Case.
"Excluded Claims" shall have the meaning set forth in
SECTION 12.6 of this Agreement.
"Final Order" shall mean a docketed order, judgment
or other decree of the Gaming Bankruptcy Court (or, with reference to the ETT
Stipulated Order of Settlement and Dismissal, the ETT Bankruptcy Court) that has
not been vacated, reversed, modified, amended or stayed and for which the time
to appeal or seek review or rehearing has expired.
"Findings and Conclusions" shall mean the Stipulated
Findings of Fact and Conclusions of Law in Support of Settlement Agreement and
Request for Dismissal with Prejudice in substantially the same form as attached
as EXHIBIT "D" to this Agreement, which Findings and Conclusions are to be
signed by each of the parties hereto and filed with the Gaming Bankruptcy Court
concurrently with the filing of the Approval and Assumption Order.
"First Amendment to Agency and Disbursement
Agreement" shall mean that certain First Amendment to Agency and Disbursement
Agreement substantially in the same form as attached as EXHIBIT "E" to this
Agreement.
"First Amendment to Note Purchase Agreement" shall
mean that certain First Amendment to Note Purchase Agreement in substantially
the same form as attached as EXHIBIT "F" to this Agreement.
"Fourth Amendment to ESA" shall mean that certain
Fourth Amendment to Energy Service Agreement in substantially the same form as
attached as EXHIBIT "G" to this Agreement.
"Gaming" shall mean Aladdin Gaming, LLC, a Nevada
limited liability company.
"Gaming Bankruptcy Case" shall mean the Chapter 11
bankruptcy case filed by Gaming in the Gaming Bankruptcy Court styled In re
Aladdin Gaming, LLC, Case No. BK-S-01-20141-RCJ.
"Gaming Bankruptcy Court" shall mean the United
States Bankruptcy Court for the District of Nevada, Southern Division.
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"Gaming/Northwind Agreements" shall mean,
collectively, the Development Agreement, the Lease and the ESA, each as amended
(including as amended by the Fourth Amendment to ESA).
"GECC" shall mean, collectively, General Electric
Capital Corporation and General Motors Acceptance Corporation.
"▇▇▇▇▇▇▇ Entities" shall mean, collectively, JHL,
JHRC and JHVL, together with their respective nominee holders, if any.
"▇▇▇▇▇▇▇/State Street Loan Documents" shall mean (i)
the Agency and Disbursement Agreement, (ii) the Note Purchase Agreement, (iii)
the Notes (as defined in Section 1.2 of the Note Purchase Agreement), (iv) the
Security Agreement, dated as of June 7, 1999, between Northwind and State
Street, (v) the Leasehold Deed of Trust, Assignment of Leases and Rents and
Security Agreement, dated as of April 5, 1999, among Northwind as Trustor,
▇▇▇▇▇▇▇ Title as Trustee and State Street as Beneficiary, (vi) the Pledge
Agreement, dated as of June 7, 1999, between UTT Nevada, Inc. (now ETT Nevada,
Inc.) and State Street, (vii) the Pledge Agreement, dated as of June 7, 1999,
between NEICO and State Street, (viii) the SNDA, (ix) the Bazaar Consent (as
defined in the Note Purchase Agreement), (x) the UTT Nevada and Nevada Electric
Consent (as defined in the Note Purchase Agreement), (xi) the Bazaar Lenders'
Consent (as defined in the Note Purchase Agreement) and (xii) all UCC financing
statements relating to any of the foregoing, in each case as such agreements may
have been or may be amended, modified, supplemented and/or assigned and in
effect from time to time.
"Hotel/Casino" shall have the meaning set forth in
the Preliminary Statements.
"Impositions" shall have the meaning set forth in
Section I(D) of Exhibit C ("Contract Capacity Charges and Consumption Charges")
to the ESA.
"Initial Term" shall have the meaning set forth in
Annex A to the ESA.
"Interim Equity Return Period" shall have the meaning
set forth in SECTION 6.1 of this Agreement.
"JHL" shall mean the ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance
Company, a Massachusetts life insurance company.
"JHRC" shall mean the ▇▇▇▇ ▇▇▇▇▇▇▇ Reassurance
Company, Ltd., a Bermuda limited company.
"JHVL" shall mean the ▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life
Insurance Company, a Massachusetts life insurance company.
"Lease" shall mean that certain Lease, dated December
3, 1997, by and between Northwind and Gaming, as amended.
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"Leased Premises" shall mean that certain
approximately .62-acre parcel of real property leased by Gaming to Northwind
pursuant to the Lease.
"Make Whole Amount" shall mean, except as otherwise
provided herein, (a) with respect to the ESA, as set forth in Annex A of the ESA
(as amended pursuant to the Fourth Amendment to ESA), and (b) with respect to
the Bazaar ESA, as set forth in Annex A of the Bazaar ESA (which incorporates by
reference the definition of "Make Whole Amount" as set forth in the ESA).
"Motion to Dismiss" shall have the meaning set forth
in SECTION 8 of this Agreement.
"NEICO" shall mean Nevada Electric Investment
Company, a Nevada corporation and the holder of a 25% membership interest in
Northwind.
"Nevada Power" shall mean Nevada Power Company, a
Nevada corporation and an Affiliate of NEICO.
"Nevada Power ▇▇▇▇" shall have the meaning set forth
in SECTION 5.5 of this Agreement.
"Northwind" shall mean Northwind Aladdin, LLC, a
Nevada limited liability company.
"Northwind Facilities" shall mean the energy facility
(including, without limitation, the CUP) constructed and/or located on the
Leased Premises, together with all of the Supplier Interconnection Equipment.
The Northwind Facilities include, without limitation, all of the equipment,
property, buildings and other assets described on EXHIBIT "H" attached to this
Agreement.
"Northwind Proofs of Claim" shall mean those certain
proofs of claim filed by Northwind in the Gaming Bankruptcy Case on February 1,
2002, one claiming a debt in the amount of $1,018,350.91 and the other showing
the debt as "unknown."
"Note Purchase Agreement" shall mean that certain
Note Purchase Agreement, dated as of March 31, 1999, between Northwind and the
Purchasers party thereto (as amended pursuant to the First Amendment to Note
Purchase Agreement), and as may be further amended, modified and/or supplemented
and in effect from time to time.
"Noteholder Majority" shall have the meaning set
forth in SECTION 5.1 of this Agreement.
"Noteholders" shall mean any person or entity that at
any time is a "Purchaser" as defined in the Note Purchase Agreement or a holder
(including any nominee holder) of any interest or participation interest in any
of the Notes (as defined in the Note Purchase Agreement).
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"Operational Charges" shall have the meaning set
forth in Section I(D) of Exhibit C ("Contract Capacity Charges and Consumption
Charges") to the ESA.
"Payment Date" shall mean the date that is the first
Business Day that is at least five days after the date the Approval and
Assumption Order becomes a Final Order.
"Person" shall mean any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or governmental authority or regulatory body.
"Petition Date" shall mean September 28, 2001.
"Post-Petition" shall mean the period commencing on
September 28, 2001 and continuing thereafter.
"Preliminary Statements" shall mean the Preliminary
Statements and Recitals of Fact commencing on page 1 of this Agreement.
"Pre-Petition" shall mean the period prior to
September 28, 2001.
"Resort" shall have the meaning set forth in the
Preliminary Statements.
"Return on Equity Amounts" shall have the meaning set
forth in Section I(D) of Exhibit C ("Contract Capacity Charges and Consumption
Charges") to the ESA.
"Settlement Agreement Default Event" shall have the
meaning set forth in SECTION 15.1 of this Agreement.
"Settlement Term Sheet" shall mean that certain
Settlement Term Sheet, dated as of July 24, 2002, by and between the parties
hereto, as revised pursuant to that certain revised Settlement Term Sheet, dated
as of September 13, 2002, each as may be amended.
"Side Letter" shall mean that certain Settlement Side
Letter dated as of July 16, 2002 by and among Northwind, the ▇▇▇▇▇▇▇ Entities
and State Street, as amended.
"SNDA" shall mean that certain Subordination,
Non-Disturbance and Attornment Agreement and Consent, dated as of June 7, 1999,
by and among Gaming, Northwind, State Street and the other parties thereto, as
may be amended.
"State Street" shall mean State Street Bank and Trust
Company, solely in its capacity as Collateral Agent for the ▇▇▇▇▇▇▇ Entities
under the Security Agreement, dated as of June 7, 1999, the Agency and
Disbursement Agreement, the Pledge Agreement, dated as of June 7, 1999, the
Leasehold Deed of Trust, Assignment of Leases and Rents and Security Agreement,
dated as of April 5, 1999, and all other agreements for which State Street Bank
and Trust Company serves as Collateral Agent with respect to the Northwind
Aladdin, LLC, Floating Rate Series A Senior Secured Notes and Fixed Rate Series
B Senior Secured Notes.
"▇▇▇▇▇▇▇ Title" shall mean ▇▇▇▇▇▇▇ Title of Nevada, a
Nevada corporation.
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"Supplier Interconnection Equipment" shall have the
meaning set forth in Annex A of the ESA and in Annex A of the Bazaar ESA.
"Total Debt Service" shall have the meaning set forth
in SECTION 5.1 of this Agreement.
1.2 Terminology. Unless the context otherwise requires,
all personal provisions used in this Agreement, whether masculine, feminine or
neuter gender, shall include all other genders, and the singular shall include
the plural and vice versa. Titles of Articles, Sections and Subsections are for
convenience only, and neither limit nor amplify the provisions of this Agreement
itself. The use herein of the word "including" when following any general
statement, term or matter shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, but shall be deemed to refer to all other
items and matters that could reasonably fall within the broadest possible scope
of such general statement, term or matter.
2. Settlement.
2.1 Agreement to Settle. The parties hereto agree to
settle all of their respective disputes and controversies with respect to the
subject matter of this Agreement, including those asserted in the Adversary
Proceeding, on the terms and conditions set forth herein.
2.2 Incorporation of Preliminary Statements. The
Preliminary Statements are incorporated by reference as though more fully set
forth herein.
2.3 Incorporation of Exhibits and Schedules. Each of the
exhibits and schedules to this Agreement are incorporated herein by reference as
though more fully set forth herein.
3. Gaming Bankruptcy Court Filings and Approvals.
3.1 Motion to Approve Settlement Agreement and Assume
Gaming/Northwind Agreements. Within five Business Days after execution of this
Agreement, Gaming shall cause to be filed with the Gaming Bankruptcy Court the
Approval and Assumption Motion (which shall be in form and substance reasonably
satisfactory to each of the Parties to this Agreement), pursuant to which Gaming
shall seek an order of the Gaming Bankruptcy Court (i) approving this Agreement
in its entirety and (ii) authorizing the assumption of the ESA, the Lease, the
SNDA and the ESCA (in each case as amended on the terms described in this
Agreement) (collectively, the "Assumed Contracts"). Payment of the Cure Amount
shall be deemed to constitute "cure" pursuant to Section 365(b)(1)(A) of the
Bankruptcy Code, and Gaming shall not be required to compensate any party for
any actual pecuniary loss pursuant to Section 365(b)(1)(B) of the Bankruptcy
Code or demonstrate adequate assurance of future performance pursuant to Section
365(b)(1)(C) of the Bankruptcy Code. The other parties hereto shall cooperate
with one another and with Gaming with respect to the filing of the Approval and
Assumption Motion, and, if requested by Gaming, shall file joinders in support
of the Approval and Assumption Motion. In no event shall any party to this
Agreement file an opposition to the Approval and Assumption Motion.
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3.2 Intentionally Omitted.
3.3 Intentionally Omitted.
3.4 Dismissal of ▇▇▇▇▇▇▇ Title. ▇▇▇▇▇▇▇ Title shall be
dismissed from the Adversary Proceeding with prejudice prior to or upon the
Approval and Assumption Order becoming a Final Order, pursuant to the form of
dismissal attached as EXHIBIT "I" to this Agreement.
3.5 Dismissal of Adversary Proceeding. Subject to the
Approval and Assumption Order becoming a Final Order and as an element of this
Agreement, within two Business Days after the payment of the Cure Amount on the
Payment Date, Gaming shall cause the Adversary Proceeding to be dismissed with
prejudice pursuant to the form of dismissal attached as EXHIBIT "J" to this
Agreement.
3.6 Individual Billing for Electric Service. Northwind
shall grant access to its switch equipment and make its submetering equipment
and internal metering data available to Nevada Power, either pursuant to
stipulation or order of the Gaming Bankruptcy Court (and, if such a stipulation
is not reached, Northwind agrees not to oppose any motion which may be filed by
Gaming requesting such an order), so as to facilitate (i) the allocation of
electricity charges for power consumption as among Gaming, Bazaar, Northwind and
any other customer of Northwind, (ii) the separate invoicing for such power
consumption to each of Gaming, Bazaar, Northwind and any other customer of
Northwind by Nevada Power, and (iii) Nevada Power's utilization of Northwind's
switching equipment to terminate power to any of those persons who do not pay
invoices for power. Nothing in this Agreement shall be deemed or construed to
prohibit the parties and Nevada Power from agreeing to the installation of
separate power meters to measure the electricity delivered to Gaming, Northwind
and Bazaar and, based thereon, to separately ▇▇▇▇ each of those entities for the
power delivered to such party. In the event separate power meters are installed,
the ESA and the Bazaar ESA shall be modified accordingly to reflect such
separate power metering and to delete any obligations on the part of Northwind
with respect to the allocation of electricity invoices from Nevada Power as
among Gaming, Bazaar and Northwind.
3.7 Northwind Proofs of Claim. Within five days after the
payment of the Cure Amount to Northwind by Gaming, Northwind shall cause the
Northwind Proofs of Claim to be amended to conform to this Agreement. The
consideration flowing to Northwind under this Agreement (including, without
limitation, payment of the Cure Amount) shall be deemed to constitute agreed
treatment with respect to the Northwind Proofs of Claim, as so amended.
3.8 Plan Approval. In its plan of reorganization to be
filed in the Gaming Bankruptcy Case, Northwind's claims shall be treated as set
forth in this Agreement. Northwind, the ▇▇▇▇▇▇▇ Entities and State Street,
solely in its capacity as Collateral Agent as defined above in SECTION 1.1,
agree that they shall not object to (and to the extent permitted by applicable
law shall vote in favor of) confirmation of such plan of reorganization provided
that such plan of reorganization is fully consistent with this Agreement and
does not contain any provisions which would materially and adversely affect any
of those entities' rights and remedies under any of the
10
Assumed Contracts or the ▇▇▇▇▇▇▇/State Street Loan Documents, relating to the
Northwind Facilities.
3.9 Contingent Revival and Reinstatement of Northwind
Claims. In the event that a court of competent jurisdiction shall at any time
require Northwind to return to Gaming, reorganized Gaming or any assignee of or
successor-in-interest to Gaming or reorganized Gaming all or any portion of the
consideration received or to be received in the future by Northwind under this
Agreement (including, without limitation, all or any portion of the Cure Amount)
pursuant to any legal theory whatsoever (including, without limitation, any
state or federal fraudulent transfer, preference or other law or equitable
principle), all of Northwind's claims as set forth in the Northwind Proofs of
Claim (as originally filed) shall automatically revive and be reinstated in
full, and Northwind shall be entitled to (but shall not be required to) further
amend the Northwind Proofs of Claim to assert such revived and reinstated claims
against Gaming's bankruptcy estate or the bankruptcy estate of reorganized
Gaming or any assignee of or successor-in-interest to Gaming, and shall also be
entitled to assert all such revived and reinstated claims against any
successor-in-interest to Gaming pursuant to any plan of reorganization or
pursuant to any future assignment of the Gaming/Northwind Agreements pursuant to
Section 365(f) of the Bankruptcy Code.
4. Conditions to Effectiveness of this Agreement. Except where
the context indicates that a particular provision is intended to be immediately
operative from and after the date of execution of this Agreement, the
effectiveness of this Agreement shall be subject to the satisfaction of, or
written waiver of (pursuant to a writing signed by each party to this Agreement
affected by such condition), each of the following conditions:
(a) Entry of the Approval and Assumption Order
by the Gaming Bankruptcy Court, in form and substance acceptable to each party
to the Agreement;
(b) The Approval and Assumption Order having
become a Final Order;
(c) Execution of this Agreement by each party to
this Agreement and each exhibit or schedule to the Agreement to which it is a
party;
(d) Approval by the Gaming Bankruptcy Court of
the Findings and Conclusions pursuant to a Final Order;
(e) Payment of the Cure Amount on the Payment
Date;
(f) Payment (i) by Gaming to Northwind of all
Debt Service Amounts, Consumption Charges, Operational Charges and Impositions
required to be paid on or before the date the Approval and Assumption Order
becomes a Final Order and (ii) by Northwind to the ▇▇▇▇▇▇▇ Entities, in their
capacity as the current Noteholders, of all principal and interest payments
required to be paid under the Note Purchase Agreement on or before the date the
Approval and Assumption Order becomes a Final Order;
(g) ETT, the ▇▇▇▇▇▇▇ Entities and State Street
shall have submitted to the ETT Bankruptcy Court for entry the ETT Stipulated
Order of Settlement and Dismissal; and
11
(h) No material breach of any of the covenants
set forth in SECTION 14 of this Agreement through and including the Payment
Date.
5. Payments.
5.1 Payment of Cure Amount. The parties hereto
acknowledge and agree that the amount to cure the defaults under the ESA is
$2,573,771.61 calculated as of August 15, 2002 (the "Cure Amount"). Of the Cure
Amount, the sum of $1,861,898.50 (calculated as of August 15, 2002, and subject
to adjustment as set forth herein) shall be paid by Gaming to Northwind in
immediately available funds on the Payment Date. The Cure Amount shall be
increased by (i) all Post-Petition Consumption Charges, Debt Service Amounts (at
the non-default rate), Operational Charges and Impositions which become due and
are invoiced by Northwind to Gaming between August 16, 2002 and the date of this
Agreement in accordance with the ESA and which have not previously been paid by
Gaming as of the Payment Date plus (ii) (but without duplication of any amounts
described in this SECTION 5.1) all amounts which become due and are invoiced by
Northwind to Gaming from and after the date of this Agreement as set forth in
SECTION 5.4 below which have not been paid prior to the Payment Date plus (iii)
the per diem amounts as set forth in SECTION 5.2(e) below in respect of Return
on Equity Amounts owed by Gaming for each day from August 16, 2002 through the
end of the Interim Equity Return Period. The remaining portion of the Cure
Amount which exceeds $1,861,898.50 (the "Deferred Cure Payment") shall be
payable only in the event that either the Gaming Bankruptcy Case is converted to
a proceeding under Chapter 7 of the Bankruptcy Code or (x) the Gaming Bankruptcy
Court has entered a Final Order approving the assignment of the Gaming/Northwind
Agreements to a third-party assignee or confirming a plan of reorganization or
liquidation for Gaming and (y) for not less than four consecutive fiscal
quarters, the EBITDA (as defined herein) of such third-party assignee (or the
portion of such EBITDA derived from assets purchased from Gaming) or Gaming
itself, as the case may be, equals or exceeds 125% of the Total Debt Service (as
defined herein) of such third-party assignee (or the portion of such EBITDA
derived from assets purchased from Gaming) or Gaming itself, as the case may be,
tested quarterly for the period of four fiscal quarters then ending and (z) a
majority of the Noteholders measured by principal amount (the "Noteholder
Majority"), in its discretion, shall have delivered written notice in
substantially the form attached as EXHIBIT "K" to this Agreement to Gaming or
its assignee demanding payment of the Deferred Cure Payment or such lesser
amount as is specified by the Noteholder Majority in its discretion in such
notice, provided that interest shall accrue on the Deferred Cure Payment at the
rate of 6% per annum from the Payment Date until the Deferred Cure Payment is
paid in full. In the event that condition (y) above is not satisfied within the
five years immediately following the Gaming Bankruptcy Court's entry of a Final
Order approving the assignment of the Gaming/Northwind Agreements to a
third-party assignee or confirming a plan of reorganization or liquidation for
Gaming, the obligation to pay the Deferred Cure Payment shall terminate. For
purposes of the foregoing provisions, all Return on Equity Amounts payable under
the ESA shall be counted as debt in calculating Total Debt Service pursuant to
clause (y) above.
For purposes of this Agreement, "EBITDA" shall mean, for Gaming or any
purchaser of Gaming's assets pursuant to a sale conducted under Section 363 of
the Bankruptcy Code or pursuant to a plan of reorganization or any secured
creditor which acquires assets pursuant to a credit bid under Section 363(k) of
the Bankruptcy Code or pursuant to judicial or non-judicial
12
foreclosure or deed in lieu of foreclosure, for any applicable period, the sum
(without duplication) of: (a) net income for such period; plus (b) the amount
deducted in determining net income for such period, representing: (i) interest
expense (whether paid in cash or deferred); plus (ii) the amount deducted, in
determining net income, of all federal, state and local income taxes (whether
paid in cash or deferred); plus (iii) depreciation of assets; plus (iv)
amortization; plus (v) any non-cash, non-recurring asset or liability valuation
adjustments recorded by Gaming to comply with accounting principles generally
accepted in the United States. For purposes of this Agreement, "Total Debt
Service" shall mean (a) with respect to any applicable period, prior to
confirmation of a plan of reorganization in the Gaming Bankruptcy Case, the sum
of all payments made by or on behalf of Gaming permitted by either the
Bankruptcy Code or order of the Gaming Bankruptcy Court to Gaming's senior
secured lenders, GECC (or any lender who provides substitution or replacement
financing in respect of the obligations due those entities) and all payments of
Debt Service Amounts and the Cure Payment due to Northwind under this Agreement,
or (b) with respect to any applicable period, subsequent to the entry of a Final
Order confirming a plan of reorganization in the Gaming Bankruptcy Case, either
(i) the sum of all payments made by reorganized Gaming respecting the
reorganized indebtedness of Gaming's senior secured lenders and GECC (and all
replacement or substitution financing in respect of the obligations due those
entities), payments on all capitalized leases and payments of Debt Service
Amounts and Return on Equity Amounts due to Northwind, or (ii) in the event of a
sale of all or substantially all of Gaming's assets (whether pursuant to
Sections 363 and 365 of the Bankruptcy Code, a confirmed plan of reorganization
in the Gaming Bankruptcy Case or both), the sum of all payments made by such
purchaser to lenders of indebtedness secured by liens and security interests
encumbering the Hotel/Casino and other acquired assets, payments due on all
capitalized leases, and payments of Debt Service Amounts and Return on Equity
Amounts due to Northwind.
5.2 Calculation of Cure Amount. The Cure Amount is
calculated as follows:
(a) All Post-Petition Consumption Charges,
inclusive of all Post-Petition "true-up" amounts as calculated by Northwind in
accordance with the ESA. Gaming and Northwind agree that, as of August 15, 2002,
there remains outstanding the sum of $178,347.44 in respect of Post-Petition
Consumption Charges.
(b) All Post-Petition Debt Service Amounts,
calculated at the non-default rate. Gaming and Northwind agree that, as of
August 15, 2002, there remains outstanding the sum of $1,066,057.21 in respect
of Post-Petition Debt Service Amounts.
(c) All Post-Petition Operational Charges,
inclusive of all Post-Petition "true-up" amounts as calculated by Northwind in
accordance with the ESA. Gaming and Northwind agree that, as of August 15, 2002,
there remains outstanding the sum of $89,522.48 in respect of Post-Petition
Operational Charges.
(d) All Post-Petition Impositions. Gaming and
Northwind agree that, as of August 15, 2002, there are no amounts outstanding in
respect of Post-Petition Impositions.
(e) With respect to Post-Petition Return on
Equity Amounts, Gaming shall pay to Northwind the sum of $1,282,880.91, which
represents a 10% annual return
13
(calculated for the period from October 2001 through August 15, 2002) on the
agreed outstanding equity balance of $14,724,884.89 allocated to Gaming as of
the Petition Date, together with an additional per diem amount of $4,034.22 for
each day from August 16, 2002 through the end of the Interim Equity Return
Period.
(f) The Cure Amount is net of a credit in
Gaming's favor, representing all Pre-Petition and Post-Petition power charges
(Northwind's allocated share of Nevada Power Bills) not previously paid by
Northwind to Gaming or otherwise credited by Northwind in Gaming's favor on
invoices. Gaming and Northwind agree that, as of August 15, 2002, the sum of
($335,949.95) in respect of Northwind's allocated share of Post-Petition Nevada
Power Bills remained outstanding from Northwind to Gaming (which amount is net
of all credits previously taken by Gaming against amounts otherwise required to
be paid by Gaming to Northwind pursuant to the Adequate Protection Order). The
amount of this credit shall be increased, and thus the Cure Amount shall be
decreased, to the extent of Northwind's allocated share of all post-August 16,
2002 Nevada Power Bills if not otherwise paid by Northwind.
(g) The Cure Amount is net of a credit in
Gaming's favor in the amount of ($43,919.64), representing Gaming's share of
Pre-Petition and Post-Petition interest earned on bank reserves credited by
Northwind in Gaming's favor.
(h) The Cure Amount includes the additional sum
of $336,833.16 in respect of all Pre-Petition amounts owing by Gaming to
Northwind, as set forth in the Northwind Proofs of Claim, and as compromised by
such payment by way of additional Cure Amount.
(i) The Cure Amount does not include the
additional sum of $584,089.41, which amount represents an agreed reduction in
the amount of the claim set forth in the Northwind Proofs of Claim in respect of
all Pre-Petition Return on Equity Amounts which have not been paid by Gaming.
5.3 Distribution of Cure Amount. The Cure Amount shall be
used and distributed as follows: (a) the sum of $1,561,898.50 (calculated as of
August 15, 2002, and subject to adjustment as provided herein) payable by Gaming
to Northwind on the Payment Date shall be available exclusively to Northwind and
may be utilized by Northwind for any lawful purpose, including, without
limitation, for the purposes of (i) first, to replenish all reserves required
under the Agency and Disbursement Agreement and/or the Note Purchase Agreement
to their required levels (and Northwind hereby agrees to utilize such portion of
the Cure Amount as is necessary for such purpose); provided, however, that the
amount of such reserves shall be calculated based upon Schedule III of the Note
Purchase Agreement and shall not be subject to increase by virtue of the
provisions of this Agreement, including the accelerated amortization provided
for in the First Amendment to Note Purchase Agreement; and provided further,
however, that Northwind may withdraw funds as provided in the First Amendment to
Agency and Disbursement Agreement and SECTION 7.3 hereof; (ii) second, to make
any and all payments required to be made by Northwind to the ▇▇▇▇▇▇▇ Entities
and/or State Street under the ▇▇▇▇▇▇▇/State Street Loan Documents, and payment
or reimbursement of the ▇▇▇▇▇▇▇ Entities' and State Street's reasonable
attorneys' fees and expenses pursuant to the ▇▇▇▇▇▇▇/State Street Loan Documents
to the extent not previously paid or reimbursed (and Northwind hereby agrees to
utilize such portion of the Cure Amount as is necessary for such purpose); (iii)
third, to pay
14
any and all attorneys' fees and expenses incurred by Northwind in connection
with the Adversary Proceeding and the Gaming Bankruptcy Case, or reimbursing
Northwind's Affiliated entities to the extent such Affiliated entities have
heretofore advanced funds for the purpose of paying such attorneys' fees and
expenses; and (iv) fourth, to pay or make provision for all expenses incurred
and to be incurred by Northwind in connection with the ongoing operation of its
business, including for working capital necessary for Northwind to conduct its
business on a going-forward basis; (b) the sum of $300,000 of that portion of
the Cure Amount which is payable by Gaming to Northwind on the Payment Date
shall be utilized by Northwind exclusively for the purpose of accelerated
amortization of the outstanding principal balance owed by Northwind to the
Noteholders under the Note Purchase Agreement, and shall be payable to the
Noteholders immediately upon Northwind's receipt of that portion of the Cure
Amount which is payable by Gaming to Northwind on the Payment Date; and (c) the
Deferred Cure Payment, together with any and all interest paid or payable
thereon as set forth in SECTION 5.1 of this Agreement, shall be utilized by
Northwind exclusively for the purpose of accelerated amortization of the
outstanding principal balance owed by Northwind to the Noteholders under the
Note Purchase Agreement, and shall be payable by Northwind to the Noteholders
for such purpose within five Business Days following the receipt by Northwind
from Gaming of the Deferred Cure Payment.
5.4 Payments by Gaming in the Ordinary Course. From the
date of execution of this Agreement through the date the Approval and Assumption
Order becomes a Final Order, Gaming shall pay all amounts invoiced by Northwind
to Gaming in the ordinary course for continuing Consumption Charges, Debt
Service Amounts (at the non-default rate), Operational Charges and Impositions
in accordance with the Adequate Protection Order. All amounts required to be
paid to Northwind pursuant to the ESA (as modified) shall continue to be so
paid, without diminution, notwithstanding any future transfer by the ▇▇▇▇▇▇▇
Entities (or any of them), ETT or NEICO of their respective claims against or
interests in Northwind.
5.5 Procedures/Remedies. The parties (other than the
▇▇▇▇▇▇▇ Entities and State Street) share a single set of three power meters in
respect of which Gaming receives monthly invoices from Nevada Power. Unless
otherwise specified by a Final Order of the Gaming Bankruptcy Court, upon
receipt of monthly power ▇▇▇▇▇▇▇▇ ("Nevada Power ▇▇▇▇"), consistent with the
past dealings between the parties, Gaming shall forward the monthly power
invoices to Northwind for an allocation of payment between Gaming, Northwind and
Bazaar within five Business Days of receipt. Within five Business Days of
receipt of each monthly Nevada Power ▇▇▇▇, Northwind shall deliver to Gaming a
detailed billing report (the "Billing Report") specifying the power consumption
allocated between the parties for such month. Within five Business Days of
receipt of the Billing Report, Gaming shall invoice both Northwind and Bazaar
for their actual power usage without ▇▇▇▇-up or profit. Within 30 days of being
invoiced, Northwind shall reimburse Gaming for its invoiced power consumption.
Within 30 days of being invoiced, Bazaar shall pay Nevada Power directly for its
invoiced power consumption.
6. Amendments to the ESA. The parties hereto agree that the ESA
shall be amended as set forth herein and in substantially the form of the Fourth
Amendment to ESA attached hereto.
15
6.1 Return on Equity Amount. Exhibit "C" to the ESA shall
be amended to provide that, for all periods from and after the Petition Date
through the earlier of (i) the date the Cure Amount is paid or (ii) December 24,
2002 (the "Interim Equity Return Period"), the required equity rate of return
shall be reduced from 20% to 10%. From and after the conclusion of the Interim
Equity Return Period, the Return on Equity Amounts shall continue to be
calculated based upon a 10% equity rate of return. All other provisions of the
ESA that are affected by this agreed change in the equity rate of return shall
be similarly modified. As more fully set forth in SECTION 7 of this Agreement,
the First Amendment to Note Purchase Agreement and the First Amendment to Agency
and Disbursement Agreement, no modification of the Note Purchase Agreement or
any of the other ▇▇▇▇▇▇▇/State Street Loan Documents (including, without
limitation, with respect to the accelerated amortization payments to be made
pursuant to the First Amendment to Note Purchase Agreement) or payment of the
Deferred Cure Payment shall operate or be deemed to operate to reduce, modify or
otherwise affect Debt Service Amounts under the ESA or the Bazaar ESA, or
Gaming's and Bazaar's respective obligations to pay such amounts in accordance
with the ESA and the Bazaar ESA, respectively, nor the calculation of the Make
Whole Amounts under the ESA or the Bazaar ESA, which Debt Service Amounts shall
be payable as set forth in SCHEDULE 6.1 to this Agreement and Schedule 2 to the
Fourth Amendment to ESA notwithstanding any such modification to the Note
Purchase Agreement or any of the other ▇▇▇▇▇▇▇/State Street Loan Documents
(including, without limitation, with respect to such accelerated amortization
payments and notwithstanding payment of the Deferred Cure Payment).
6.2 Payment of Return on Equity Amounts. The Initial Term
of the ESA shall not be modified, and the ESA and the Lease shall remain subject
to the renewal provisions set forth therein upon the conclusion of the Initial
Term. The monthly Return on Equity Amounts required to be paid by Gaming from
and after the date the Approval and Assumption Order becomes a Final Order shall
be recalculated based upon the agreed reduction in the equity rate of return to
10%, with the entire agreed outstanding equity balance of $14,724,884.89
allocated to Gaming, together with the agreed 10% equity rate of return on the
outstanding equity balance during the Interim Equity Return Period, plus the
agreed 10% equity rate of return on the outstanding equity balance from and
after the Payment Date shall be repayable over the remainder of the Initial Term
as set forth on SCHEDULE 6.2 to this Agreement and Schedule 1 to the Fourth
Amendment to the ESA.
6.3 Reduction of Operating Costs. The ESA shall be
amended to provide that Gaming and Northwind, with the cooperation and support
of the other parties to this Agreement, shall collectively use their
commercially reasonable best efforts to reduce operational costs of the
Northwind Facilities through negotiation and implementation of a joint
value-engineering plan that takes into consideration that Gaming has idle
facilities personnel from time to time that can provide services to Northwind at
no additional cost to Northwind.
6.4 Reduction of Notice Period for Customer's Option to
Purchase. The ESA shall be amended, and the Bazaar ESA is hereby similarly
amended, to reduce the period required to notice Gaming's or Bazaar's option (as
applicable) to purchase the Northwind Facilities to six months pursuant to
Section 9.3 of the ESA or Section 9.3 of the Bazaar ESA (as applicable).
16
6.5 Profit from Operations. The ESA shall be amended to
provide that Northwind's only profit from operations, as applicable to Gaming,
is and shall be derived from the Return on Equity Amounts. For purposes of this
SECTION 6.5 and Section 2.5 of the ESA, "profit from operations" is not intended
to and does not include either (a) any benefit that Northwind may derive from
amortization of the debt owed by Northwind to the Noteholders under the Note
Purchase Agreement (and related promissory notes), including any accelerated
amortization of the Noteholders' debt, or (b) any tax benefits that Northwind
derives from or related to the Northwind Facilities.
6.6 No Amendments to Bazaar ESA. Except as set forth in
SECTION 6.4, all of the existing agreements between Northwind, on the one hand,
and Bazaar, on the other hand, including, without limitation, the Bazaar ESA
shall remain in full force and effect and shall not be adversely affected by
this Settlement Agreement. Northwind and Bazaar shall continue to have all of
their respective rights and obligations under the Bazaar ESA from and after the
date of execution of this Agreement and from and after the date of the entry of
the Approval and Assumption Order. In the event of any inconsistency between the
terms of this Agreement and the terms of the Bazaar ESA (or any other existing
agreement between Northwind, on the one hand, and Bazaar, on the other hand),
this Agreement shall control.
6.7 Bazaar Consent to Amendments; Restoration of Rights.
To the extent required by Section 7 or any other provision of the ESCA, Bazaar
hereby consents to the amendments to the ESA pursuant to this Agreement and
shall not assert the existence of any breach of or default under the ESCA by
virtue of this Agreement or the amendments to the ESA contemplated by this
Agreement. All rights of Gaming which were revoked due to Gaming's default under
the ESA, including, but not limited to, the loss of voting rights and rights to
control contained in Section 4.1 of the ESCA are restored in full pursuant to
and concurrent with the assumption of the ESCA and the agreed cure of all
defaults under the ESA pursuant to this Agreement and the Approval and
Assumption Order.
7. Amendments to ▇▇▇▇▇▇▇/State Street Loan Documents. The parties
hereto agree that the Note Purchase Agreement (and the related promissory notes)
and the Agency and Disbursement Agreement shall be amended as set forth herein
and in substantially the forms of the First Amendment to Note Purchase Agreement
and First Amendment to Agency and Disbursement Agreement attached hereto.
7.1 Note Purchase Agreement. The Note Purchase Agreement
(and the related promissory notes) shall be amended to provide that 77% of all
Return on Equity Amounts payable by Gaming pursuant to the ESA which are
actually received by Northwind from and after the date the Approval and
Assumption Order becomes a Final Order shall be paid by Northwind to the
Noteholders on the last Business Day of each month in respect of Return on
Equity Amounts paid by Gaming and received by Northwind on or before the 20th
day of such month as early amortization of the principal due to the Noteholders
under the Note Purchase Agreement, exclusive of any Additional Amounts (as
defined in the Note Purchase Agreement), "Make-Whole Amounts" (as defined in
Annex I to the Note Purchase Agreement) or any other amount due by virtue of the
acceleration effected by the April 10, 2002 correspondence from Hunton &
▇▇▇▇▇▇▇▇, counsel to the ▇▇▇▇▇▇▇ Entities, to Northwind, which acceleration
shall be and hereby is reversed and of no further force and effect; provided,
however, that the Noteholder
17
Majority may at any time and in its sole discretion elect to terminate the
allocation of the Return on Equity Amounts set forth above and revert to the
terms of the Note Purchase Agreement (and the related promissory notes) as in
effect immediately prior to such amendments by providing written notice of such
election to Northwind and Gaming. In addition, any portion of the Cure Payment
or the Deferred Cure Payment that is actually received by Northwind on or after
the date the Approval and Assumption Order becomes a Final Order and is payable
by Northwind to the Noteholders under this Settlement Agreement shall be paid to
the Noteholders immediately after receipt by Northwind as early amortization of
the principal due to the Noteholders hereunder as set forth on Schedule III to
the Note Purchase Agreement (or such lesser amount as shall then be
outstanding). Each payment received from Northwind as early amortization of the
principal due to the Noteholders shall be applied to the last principal payment
set forth on Schedule III to the Note Purchase Agreement that remains unpaid as
of the date such early amortization payment is received.
7.2 Accelerated Amortization. Neither the accelerated
amortization of amounts due to the Noteholders under the Note Purchase Agreement
(as amended pursuant to the First Amendment to Note Purchase Agreement), nor the
payment of any such accelerated amortization or of the Deferred Cure Payment to
the Noteholders pursuant to the provisions hereof shall give rise to any
Additional Amounts, "Make-Whole Amounts" (as defined in Annex I to the Note
Purchase Agreement), "Breakage Costs" (as defined in Annex I to the Note
Purchase Agreement) or any other prepayment penalty, yield maintenance payment
or any other obligation of any type or nature, and the Note Purchase Agreement
and any other applicable ▇▇▇▇▇▇▇/State Street Loan Documents shall be amended as
provided in the First Amendment to Note Purchase Agreement; provided, however,
that the Noteholders expressly retain the right to such amounts and costs
arising from other optional prepayments or accelerations under the Note Purchase
Agreement. Notwithstanding the accelerated amortization of amounts due to the
Noteholders under the Note Purchase Agreement (as modified pursuant to the First
Amendment to Note Purchase Agreement) or any other provision herein, none of
Gaming's or Bazaar's respective obligations to pay Debt Service Amounts under
the ESA or the Bazaar ESA (respectively) shall be reduced, modified or otherwise
affected in any way or to any extent. Notwithstanding any such accelerated
amortization of amounts due to the ▇▇▇▇▇▇▇ Entities under the Note Purchase
Agreement (as modified pursuant to the First Amendment to Note Purchase
Agreement), each of Gaming and Bazaar shall continue to be obligated to pay to
Northwind their full respective payments of Debt Service Amounts as set forth in
SCHEDULE 6.1 to this Agreement and Schedule 2 to the Fourth Amendment to ESA,
which Debt Service Amounts owed by Gaming and Bazaar shall not be reduced,
modified or otherwise affected in any way or to any extent by virtue of such
accelerated amortization. In addition, notwithstanding any provision of the ESA
or the Bazaar ESA, the accelerated amortization of amounts due to the
Noteholders under the Note Purchase Agreement (as modified pursuant to the First
Amendment to Note Purchase Agreement) shall not in any way reduce the amount
required to be paid by either Gaming or Bazaar in the event that either Gaming
or Bazaar (or any future assignee of or successor-in-interest to either Gaming
or Bazaar) elects to exercise the purchase option with respect to the Northwind
Facilities pursuant to the ESA or the Bazaar ESA (as applicable), including,
without limitation, pursuant to Section 9.3 of the ESA and/or Section 9.3 of the
Bazaar ESA (or if either Gaming or Bazaar is compelled to exercise the purchase
option set forth in Section 6.3(b) of the ESA or Section 6.3(b) of the Bazaar
ESA, as applicable, upon the occurrence of a "Customer Default" under the ESA or
the Bazaar ESA), and the definition of
18
"Make Whole Amount" as set forth in Section 9.3 (and in Section 6.3(b) of the
ESA, as well as the definition of "Default Make Whole Amount" as set forth in
Section 6.3(b) of the Bazaar ESA) and in Annex A of each of the ESA and the
Bazaar ESA (and the definition of "Debt Amount" included as part of the
definition of "Make Whole Amount" therein) shall not be deemed under any
circumstances to give rise to any reduction in the purchase price for the
Northwind Facilities by virtue of such accelerated amortization upon any such
exercise of the purchase option set forth in Section 9.3 of the ESA and/or
Section 9.3 of the Bazaar ESA (or upon any compelled purchase of the Northwind
Facilities pursuant to Section 6.3(b) of the ESA or Section 6.3(b) of the Bazaar
ESA). (The "Return on Equity Amount" as defined in Exhibit C to the ESA shall be
amended pursuant to the Fourth Amendment to ESA, to reflect the reduction in the
required equity return percentage from 20% to 10% pursuant to SECTION 6.1 of
this Agreement with respect to the ESA only, and not with respect to the Bazaar
ESA which shall continue to reflect the existing 20% required equity return
percentage notwithstanding such amendment to the ESA.)
7.3 Agency and Disbursement Agreement. The Agency and
Disbursement Agreement shall be amended as set forth in the First Amendment to
Agency and Disbursement Agreement, to provide that, in the event the amounts in
the Revenue Account (as defined in the Agency and Disbursement Agreement) are
insufficient to pay Operating Costs (as defined in the Agency and Disbursement
Agreement) as they become due and payable and so long as there is no existing
Default or Event of Default under the ▇▇▇▇▇▇▇/State Street Loan Documents,
Northwind shall have the right, to the extent deemed necessary by Northwind for
working capital purposes, at any time after the Payment Date, to withdraw funds
from the Operating and Maintenance Account (as defined in the Agency and
Disbursement Agreement) established and maintained under the Agency and
Disbursement Agreement to pay Operating Costs, and any such withdrawal shall
not, in its own right, constitute or give rise to a Default or Event of Default
under the Agency and Disbursement Agreement or any of the other ▇▇▇▇▇▇▇/State
Street Loan Documents, nor shall any such withdrawal require the consent or
approval of any of the Noteholders.
The foregoing description of the First Amendment to the Note
Purchase Agreement and the First Amendment to Agency and Disbursement Agreement
is for descriptive purposes only, and in the event of any inconsistency between
this Agreement and such amendments, the terms of such amendments shall control.
8. Standstill by the ▇▇▇▇▇▇▇ Entities, State Street and the
Noteholders. Each of the ▇▇▇▇▇▇▇ Entities, State Street and/or the Noteholders
hereby agree to stand still, and not to exercise any further rights or remedies
under the Note Purchase Agreement, the Agency and Disbursement Agreement or any
of the other ▇▇▇▇▇▇▇/State Street Loan Documents, and the ▇▇▇▇▇▇▇ Entities
and/or the Noteholders shall request that the hearing on their motion to dismiss
the ETT Bankruptcy Case (the "Motion to Dismiss") be continued until the earlier
of (i) the date the Approval and Assumption Order becomes a Final Order and (ii)
December 24, 2002. If the Approval and Assumption Order becomes a Final Order on
or before December 24, 2002, each of the ▇▇▇▇▇▇▇ Entities and/or the Noteholders
will forbear to the extent provided in this Agreement and withdraw the Motion to
Dismiss with prejudice, subject to and conditioned upon the ETT Stipulated Order
of Settlement and Dismissal becoming a Final Order. The parties to this
Agreement shall cooperate and use their commercially reasonable best efforts to
cause the
19
prompt dismissal of the ETT Bankruptcy Case, with such dismissal to become
effective upon the date the Approval and Assumption Order becomes a Final Order.
Northwind shall use its commercially reasonable best efforts to cause ETT to
execute the ETT Stipulated Order of Settlement and Dismissal, which shall be
signed by the ▇▇▇▇▇▇▇ Entities, the Noteholders or their respective counsel in
the ETT Bankruptcy Case.
9. Estoppel Certificate. On the Effective Date, each of the
▇▇▇▇▇▇▇ Entities and State Street shall execute and deliver the Estoppel
Certificate to Northwind, Gaming and Bazaar confirming that (a) as of the
Effective Date, Northwind, ETT and NEICO are not in default under any of the
▇▇▇▇▇▇▇/State Street Loan Documents, that any and all defaults existing under
the ▇▇▇▇▇▇▇/State Street Loan Documents are deemed cured as of the Effective
Date, and that any acceleration of the indebtedness under any of the
▇▇▇▇▇▇▇/State Street Loan Documents is deemed reversed and of no further force
and effect, and (b) neither any of the ▇▇▇▇▇▇▇ Entities nor State Street shall
have any rights or remedies against Northwind, ETT and/or NEICO from and after
the Effective Date in respect of any defaults under the ▇▇▇▇▇▇▇/State Street
Loan Documents existing as of or prior to the Effective Date. Neither the
existing Gaming Bankruptcy Case nor any other existing Default or Event of
Default under the ▇▇▇▇▇▇▇/State Street Loan Documents related to Gaming which is
of a continuing nature (and only the existing Gaming Bankruptcy Case or any
other such existing Default or Event of Default under any of the ▇▇▇▇▇▇▇/State
Street Loan Documents related to Gaming which is of a continuing nature) shall
constitute a basis for the ▇▇▇▇▇▇▇ Entities or State Street to declare a further
Default or Event of Default under any of the ▇▇▇▇▇▇▇/State Street Loan Documents
at any time after the Effective Date. The foregoing description of the
provisions of the Estoppel Certificate is for descriptive purposes only, and in
the event of any inconsistency between this SECTION 9 and the Estoppel
Certificate, the terms of the Estoppel Certificate shall govern.
10. Notice of Default under the ▇▇▇▇▇▇▇/State Street Loan
Documents; Gaming's Right to Cure. From and after the date the Approval and
Assumption Order becomes a Final Order, in the event of a Default or Event of
Default by Northwind under the ▇▇▇▇▇▇▇/State Street Loan Documents, each of the
Noteholders and State Street agrees that, so long as Gaming is not then in
default to Northwind under any of the Gaming/Northwind Agreements, it will not
cancel, terminate or suspend its obligations or accelerate the underlying
indebtedness under any of the ▇▇▇▇▇▇▇/State Street Loan Documents on account of
any such Default or Event of Default by Northwind under the ▇▇▇▇▇▇▇/State Street
Loan Documents until Northwind, the Noteholders or State Street has provided
written notice of such Default or Event of Default (a "Default Notice") to
Gaming in accordance with SECTION 18.1 hereof. Gaming shall have the same rights
and time periods (including grace periods), if any, granted to Northwind to cure
a Default or Event of Default under the ▇▇▇▇▇▇▇/State Street Loan Documents,
except that (i) if the Default or Event of Default is the failure to pay amounts
due and payable under the ▇▇▇▇▇▇▇/State Street Loan Documents, any applicable
cure or grace period shall not begin to run until the date Gaming is provided a
Default Notice in accordance with SECTION 18.1 hereof and (ii) if the Default or
Event of Default is other than the failure to pay amounts due and payable under
the ▇▇▇▇▇▇▇/State Street Loan Documents, then Gaming shall have the longer of
(a) the same time periods (including grace periods), if any, granted to
Northwind to cure such Default or Event of Default under the ▇▇▇▇▇▇▇/State
Street Loan Documents and (b) five Business Days after the date Gaming is
provided a Default Notice with respect to such Default or Event of Default. Each
of the Noteholders and State Street agrees to accept any such cure by Gaming of
a Default or
20
Event of Default by Northwind and such cure shall be binding upon the
Noteholders and State Street, provided that such cure is timely made in
accordance with this Section 10. To the extent any such cure is effected by
Gaming, Gaming shall be subrogated to the rights of the Noteholders and/or State
Street, as applicable; provided, however, that no such subrogation rights shall
be enforceable against Northwind, ETT and/or NEICO until such time as all
amounts due to the Noteholders under the Note Purchase Agreement have been
indefeasibly paid in full. Notwithstanding the foregoing, Gaming may exercise
its rights to offset amounts due to Northwind under the ESA so long as (i) the
exercise of such rights does not cause a further Default or Event of Default
under the ▇▇▇▇▇▇▇/State Street Loan Documents; (ii) there is no existing
monetary default by Gaming under the Gaming/Northwind Documents; and (iii) the
exercise of such setoff rights does not cause Northwind to otherwise be in
default under the ▇▇▇▇▇▇▇/State Street Loan Documents.
11. Protections in the Event of Future Bankruptcy. Subject to
SECTION 18.4 of this Agreement, the parties hereto intend that the provisions of
this Agreement (and each of the exhibits and schedules hereto), as well as in
the Findings and Conclusions, shall be binding not only upon each of the parties
hereto, but also upon any and all successors-in-interest to, or future assignees
of, each such party (including, without limitation, any such assignee or
successor-in-interest to Gaming pursuant to Section 365(f) of the Bankruptcy
Code or pursuant to a plan of reorganization, any secured creditor which
succeeds to Gaming's rights under any of the Gaming/Northwind Agreements, the
SNDA or the ESCA or any of Gaming's assets pursuant to Section 363(k) of the
Bankruptcy Code or pursuant to a judicial or non-judicial foreclosure or
deed-in-lieu of foreclosure, any future bankruptcy trustee of Gaming or
reorganized Gaming, or any debtor-in-possession or trustee in any future
bankruptcy proceeding of or concerning Gaming, reorganized Gaming or any such
assignee of or successor-in-interest to Gaming or reorganized Gaming). Subject
to SECTION 18.4 of this Agreement, and in addition to the provisions of SECTION
18.3 of this Agreement specifying that this Agreement and the Findings and
Conclusions, are and shall be binding upon each party's assignees and
successors-in-interest, in furtherance of such intention, it is hereby agreed
that Northwind or any of the other parties to this Agreement may cause to be
recorded in the real property records of ▇▇▇▇▇ County, Nevada, and specifically
in respect of APN #162-21-210-004, a notice referring to this Agreement (and
expressly to SECTION 10 of this Agreement), the ESA, the Findings and
Conclusions and the Approval and Assumption Order. Such notice shall be in a
form reasonably satisfactory to Gaming and Northwind and may include the
Findings and Conclusions as an exhibit thereto. Gaming and Northwind further
covenant and agree (and such notice shall also provide) that upon termination of
the Lease and/or the ESA (either by their terms or in the event of an early
termination), the parties thereto shall take any and all actions necessary and
record any and all documents necessary to cause such notice to be terminated and
of no further force and effect. It shall not be necessary for Northwind or any
other such party to seek or obtain relief from the automatic stay from the
Gaming Bankruptcy Court in order to record such notice in the real property
records, and the Approval and Assumption Order shall so provide.
12. Releases.
12.1 Release by Gaming. Subject to the limitations set
forth in SECTION 12.6 of this Agreement, Gaming, on behalf of itself and its
officers, directors, members, managers, agents, employees, representatives,
heirs, successors and assigns, hereby releases and discharges
21
Northwind, the ▇▇▇▇▇▇▇ Entities, State Street and Bazaar and each of their
respective officers, directors, members, managers, agents, employees,
representatives, heirs, successors, assigns and Affiliates, from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, controversies,
agreements, variances, trespasses, damages, judgments, executions, claims,
demands, costs, expenses and liabilities whatsoever, whether known or unknown,
at law or in equity, fixed or contingent, liquidated or unliquidated, disputed
or undisputed, of, upon or by reason of any matter, cause or theory whatsoever
arising, through and including the date all of the conditions set forth in
SECTION 4 of this Agreement are either satisfied or waived (the "Effective
Date"), out of or in connection with the Gaming/Northwind Agreements, the
▇▇▇▇▇▇▇/State Street Loan Documents, the Northwind Facilities, the ESCA, the
SNDA, the Bazaar ESA, the Settlement Term Sheet, the Side Letter and/or the
Adversary Proceeding, which Gaming and/or any of its officers, directors,
members, managers, agents, employees, representatives, heirs, successors and
assigns ever had or may have as of the Effective Date.
12.2 Release by Northwind. Subject to the limitations set
forth in SECTION 12.6 of this Agreement, Northwind, on behalf of itself and its
officers, directors, members, managers, agents, employees, representatives,
heirs, successors and assigns, hereby releases and discharges Gaming, the
▇▇▇▇▇▇▇ Entities, State Street and Bazaar and each of their respective officers,
directors, members, managers, agents, employees, representatives, heirs,
successors, assigns and Affiliates, from any and all actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, variances,
trespasses, damages, judgments, executions, claims, demands, costs, expenses and
liabilities whatsoever, whether known or unknown, at law or in equity, fixed or
contingent, liquidated or unliquidated, disputed or undisputed, of, upon or by
reason of any matter, cause, or theory whatsoever arising, through and including
the Effective Date, out of or in connection with the Gaming/Northwind
Agreements, the ▇▇▇▇▇▇▇/State Street Loan Documents, the Northwind Facilities,
the ESCA, the SNDA, the Bazaar ESA, the Settlement Term Sheet, the Side Letter
and/or the Adversary Proceeding, which Northwind and/or any of its officers,
directors, members, managers, agents, employees, representatives, heirs,
successors and assigns ever had or may have as of the Effective Date.
12.3 Release by the ▇▇▇▇▇▇▇ Entities. Subject to the
limitations set forth in SECTION 12.6 of this Agreement, the ▇▇▇▇▇▇▇ Entities
(and each of them), on behalf of themselves and their respective officers,
directors, members, managers, agents, employees, representatives, heirs,
successors and assigns, hereby release and discharge Gaming, Northwind, State
Street and Bazaar and each of their respective officers, directors, members,
managers, agents, employees, representatives, heirs, successors, assigns and
Affiliates, from any and all actions, causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, variances, trespasses, damages, judgments,
executions, claims, demands, costs, expenses and liabilities whatsoever, whether
known or unknown, at law or in equity, fixed or contingent, liquidated or
unliquidated, disputed or undisputed, of, upon or by reason of any matter,
cause, or theory whatsoever arising, through and including the Effective Date,
out of or in connection with the Gaming/Northwind Agreements, the ▇▇▇▇▇▇▇/State
Street Loan Documents, the Northwind Facilities, the ESCA, the SNDA, the Bazaar
ESA, the Settlement Term Sheet, the Side Letter and/or the Adversary Proceeding,
which the ▇▇▇▇▇▇▇ Entities (or any of them) and/or any of their respective
officers,
22
directors, members, managers, agents, employees, representatives, heirs,
successors and assigns ever had or may have as of the Effective Date.
12.4 Release by State Street. Subject to the limitations
set forth in SECTION 12.6 of this Agreement, State Street, solely in its
capacity as Collateral Agent as defined above in SECTION 1.1, on behalf of
itself and its officers, directors, members, managers, agents, employees,
representatives, heirs, successors and assigns, hereby releases and discharges
Gaming, Northwind, the ▇▇▇▇▇▇▇ Entities and Bazaar and each of their respective
officers, directors, members, managers, agents, employees, representatives,
heirs, successors, assigns and Affiliates, from any and all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, variances,
trespasses, damages, judgments, executions, claims, demands, costs, expenses and
liabilities whatsoever, whether known or unknown, at law or in equity, fixed or
contingent, liquidated or unliquidated, disputed or undisputed, of, upon or by
reason of any matter, cause, or theory whatsoever arising, through and including
the Effective Date, out of or in connection with the Gaming/Northwind
Agreements, the ▇▇▇▇▇▇▇/State Street Loan Documents, the Northwind Facilities,
the ESCA, the SNDA, the Bazaar ESA, the Settlement Term Sheet, the Side Letter
and/or the Adversary Proceeding, which State Street, solely in its capacity as
Collateral Agent as defined above in SECTION 1.1, and/or any of its officers,
directors, members, managers, agents, employees, representatives, heirs,
successors and assigns ever had or may have as of the Effective Date.
12.5 Release by Bazaar. Subject to the limitations set
forth in SECTION 12.6 of this Agreement, Bazaar, on behalf of itself and its
officers, directors, members, managers, agents, employees, representatives,
heirs, successors and assigns, hereby releases and discharges Gaming, Northwind,
the ▇▇▇▇▇▇▇ Entities and State Street and each of their respective officers,
directors, members, managers, agents, employees, representatives, heirs,
successors, assigns and Affiliates, from any and all actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, variances,
trespasses, damages, judgments, executions, claims, demands, costs, expenses and
liabilities whatsoever, whether known or unknown, at law or in equity, fixed or
contingent, liquidated or unliquidated, disputed or undisputed, of, upon or by
reason of any matter, cause, or theory whatsoever arising, through and including
the Effective Date, out of or in connection with the Gaming/Northwind
Agreements, the ▇▇▇▇▇▇▇/State Street Loan Documents, the Northwind Facilities,
the ESCA, the SNDA, the Bazaar ESA, the Settlement Term Sheet, the Side Letter
and/or the Adversary Proceeding, which Bazaar and/or any of its officers,
directors, members, managers, agents, employees, representatives, heirs,
successors and assigns ever had or may have as of the Effective Date.
12.6 Limitations on Releases. Notwithstanding SECTIONS
12.1, 12.2, 12.3, 12.4 and 12.5 of this Agreement, the releases set forth in
such Sections shall not include and shall be deemed to exclude: (a) the rights
of each of the parties against any of the other parties pursuant to this
Agreement (including, without limitation, pursuant to any and all of the
exhibits and schedules to this Agreement); (b) the rights of each of the parties
against any of the other parties pursuant to the Gaming/Northwind Agreements,
the ▇▇▇▇▇▇▇/State Street Loan Documents, the Northwind Facilities, the ESCA, the
SNDA, and/or the Bazaar ESA, in each case as the same may be amended pursuant to
this Agreement, first arising after the Effective Date or in
23
connection with amendments or actions required or contemplated by this
Agreement; or (c) any and all rights, actions, causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, variances, trespasses, damages, judgments,
executions, claims, demands, costs, expenses and liabilities whatsoever, whether
known or unknown, at law or in equity, fixed or contingent, liquidated or
unliquidated, disputed or undisputed that any party to this Agreement may have
against any other party to this Agreement which is unrelated to the
Gaming/Northwind Agreements, the ▇▇▇▇▇▇▇/State Street Loan Documents, the
Northwind Facilities, the ESCA, the SNDA, the Bazaar ESA, the Settlement Term
Sheet, the Side Letter and/or the Adversary Proceeding (collectively, "Excluded
Claims"). Excluded Claims shall include, but not be limited to, rights and
obligations arising in connection with or related to: (i) the Construction,
Operation and Reciprocal Easement Agreement, dated February 26, 1998, by and
between Gaming and Bazaar, and any amendments thereto; (ii) the Common Parking
Area Use Agreement, dated February 26, 1998, by and between Gaming and Bazaar;
(iii) the Subordinated Non-Negotiable Promissory Note for $16,666,667, dated
November 20, 2000, by Bazaar in favor of Gaming; (iv) pending claims asserted or
which may be asserted in that certain arbitration styled Aladdin Bazaar, LLC v.
Aladdin Gaming, LLC et. al., AAA Case ▇▇. ▇▇ ▇ ▇▇▇ ▇▇▇▇▇ 00 TMS; (v) those
certain rights and obligations arising out of or determined by those certain
Findings of Fact and Conclusions of Law Re: Aladdin Bazaar, LLC's Motion for
Payment of Administrative Expense, or in the Alternative, for an Order Setting a
Deadline for Debtor to Assume or Reject Common Area Parking Agreement and orders
issued in relation thereto; (vi) the Site Work Development Construction
Agreement, dated February 26, 1998, by and between Gaming and Bazaar; (vii)
Grant, Bargain, Sale Deed, dated September 5, 2000, and recorded November 20,
2000, by Gaming in favor of Bazaar; (viii) Clarification Regarding Obligations
Under Traffic Control Improvements Cost Participation Agreement Commercial
Development, dated November 3, 2000, and recorded November 20, 2000, by Gaming
in favor of Bazaar, and (ix) Proof of Claim filed by Bazaar in connection with
Gaming's bankruptcy proceedings.
13. Representations and Warranties.
13.1 Representations and Warranties of Gaming. Gaming
hereby represents and warrants to each of the other parties to this Agreement
that each of the following statements is true, correct and complete in all
material respects as of the Effective Date:
(a) Organization. Gaming is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Nevada and has all the requisite company power and authority to
carry on its business as presently conducted and to own or lease and to operate
its business.
(b) Company Power and Authority, Effect of
Agreement. Gaming has full company power and authority to execute and deliver
this Agreement and any and all related agreements and to consummate and perform
the obligations of it contemplated hereby and thereby. The execution and
delivery by Gaming of this Agreement and any and all related agreements and the
consummation and performance of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary company action required
on the part of Gaming. Assuming due execution and delivery hereof and thereof by
each other party hereto and thereto, this Agreement and any and all related
agreements constitute valid and
24
legally binding obligations of Gaming, enforceable against it in accordance with
its and their respective terms.
(c) Consents. Other than the approvals of the
Gaming Bankruptcy Court, to the best knowledge of Gaming, the execution and
delivery of this Agreement or any related agreement by Gaming and the
consummation and performance of the transactions contemplated hereby and thereby
do not require Gaming to obtain any consent, approval or action of, or make any
filing with or give notice to, any Person.
(d) Litigation. Other than the Gaming Bankruptcy
Case and the matters and adversary proceedings filed therein (including, without
limitation, the Adversary Proceeding), there are no actions, suits or
proceedings pending or, to the best knowledge of Gaming, threatened against it,
and there are no orders, judgments or court decrees against Gaming, at law or in
equity, or before or by any foreign, federal, state, municipal or other
governmental department, commission, court, board, bureau, agency or
instrumentality that individually or in the aggregate would have a material
adverse effect on its ability to perform its obligations hereunder. Gaming is
not in default with respect to any judgment, order, writ, injunction or decree
of any court or any federal, state, municipal or other government department,
commission, board, bureau, agency or instrumentality, which default would have a
material adverse effect on the ability of Gaming to perform its obligations
hereunder.
(e) No Conflicts. To the best knowledge of
Gaming, neither the execution, delivery or performance of this Agreement (and
any and all related agreements) by Gaming nor the consummation of the
transactions contemplated herein (and therein) will (i) conflict with, result in
a breach of or constitute a default under the articles of organization or
operating agreement of Gaming or (ii) conflict in any respect with, result in a
breach of or constitute a default under any court or administrative order or
process, judgment, decree, statute, law, ordinance, rule or regulation or any
agreement or commitment to which Gaming is a party or by which it (or any of its
material properties or assets) is subject or bound, except where such conflict,
breach or default would not have a material adverse effect on its ability to
perform the obligations contemplated herein.
(f) No Assignment. No claims or rights of Gaming
against any of the other parties to this Agreement have been sold, transferred
or assigned and no attempt to do so shall occur.
13.2 Representations and Warranties of Northwind.
Northwind hereby represents and warrants to each of the other parties to this
Agreement that each of the following statements is true, correct and complete in
all material respects as of the Effective Date:
(a) Organization. Northwind is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Nevada and has all the requisite company power and
authority to carry on its business as presently conducted and to own or lease
and to operate the Northwind Facilities and its properties.
(b) Company Power and Authority, Effect of
Agreement. Northwind has full company power and authority to execute and deliver
this Agreement and any and all
25
related agreements and to consummate and perform its obligations contemplated
hereby and thereby. The execution and delivery by Northwind of this Agreement
and any related agreement and the consummation and performance of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary company action required on the part of Northwind.
Assuming due execution and delivery hereof and thereof by each other party
hereto and thereto, this Agreement and any and all related agreements constitute
valid and legally binding obligations of Northwind, enforceable against it in
accordance with its and their respective terms.
(c) Consents. To the best knowledge of
Northwind, the execution and delivery of this Agreement or any related agreement
by Northwind and the consummation and performance of the transactions
contemplated hereby and thereby do not require Northwind to obtain any consent,
approval or action of, or make any filing with or give notice to, any Person.
(d) Litigation. Other than the Adversary
Proceeding, there are no actions, suits or proceedings pending or, to the best
knowledge of Northwind, threatened against it, and there are no orders,
judgments or court decrees against Northwind, at law or in equity, or before or
by any foreign, federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality that individually or
in the aggregate would have a material adverse effect on its ability to perform
its obligations hereunder. Northwind is not in default with respect to any
judgment, order, writ, injunction or decree of any court or any federal, state,
municipal or other government department, commission, board, bureau, agency or
instrumentality, which default would have a material adverse effect on the
ability of Northwind to perform its obligations hereunder.
(e) No Conflicts. To the best knowledge of
Northwind, neither the execution, delivery or performance of this Agreement (and
any and all related agreements) by Northwind nor the consummation of the
transactions contemplated herein (and therein) will (i) conflict with, result in
a breach of or constitute a default under the articles of organization or
operating agreement of Northwind or (ii) conflict in any respect with, result in
a breach of or constitute a default under any court or administrative order or
process, judgment, decree, statute, law, ordinance, rule or regulation or any
agreement or commitment to which Northwind is a party or by which it (or any of
its material properties or assets) is subject or bound, except where such
conflict, breach or default would not have a material adverse effect on its
ability to perform the obligations contemplated herein.
(f) No Assignment. No claims or rights of
Northwind against any of the other parties to this Agreement have been sold,
transferred or assigned and no attempt to do so shall occur.
(g) ▇▇▇▇▇▇▇/State Street Loan Documents. Other
than the Defaults or Events of Default listed on SCHEDULE 13.2(g) to this
Agreement, to the best of Northwind's knowledge, information and belief, there
are no other existing Defaults or Events of Default under the ▇▇▇▇▇▇▇/State
Street Loan Documents.
13.3 Representations and Warranties of the ▇▇▇▇▇▇▇
Entities. Each of the ▇▇▇▇▇▇▇ Entities hereby represents and warrants (as to
itself only) to each of the other parties to
26
this Agreement that each of the following statements is true, correct and
complete in all material respects as of the Effective Date:
(a) Organization of JHL. JHL is duly organized,
validly existing and in good standing under the laws of the State of
Massachusetts and has all the requisite corporate power and authority to carry
on its business as presently conducted.
(b) Organization of JHVL. JHVL is duly
organized, validly existing and in good standing under the laws of the State of
Massachusetts and has all the requisite corporate power and authority to carry
on its business as presently conducted.
(c) Organization of JHRC. JHRC is duly
organized, validly existing and in good standing under the laws of Bermuda and
has all the requisite corporate power and authority to carry on its business as
presently conducted.
(d) Corporate Power and Authority, Effect of
Agreement. Each of the ▇▇▇▇▇▇▇ Entities has full corporate power and authority
to execute and deliver this Agreement and any and all related agreements and to
consummate and perform the obligations of them contemplated hereby and thereby.
The execution and delivery by the ▇▇▇▇▇▇▇ Entities of this Agreement and any
related agreement and the consummation and performance of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action required on the part of each of the ▇▇▇▇▇▇▇ Entities.
Assuming due execution and delivery hereof and thereof by each other party
hereto and thereto, this Agreement and any and all related agreements constitute
valid and legally binding obligations of each of the ▇▇▇▇▇▇▇ Entities,
enforceable against them in accordance with its respective terms.
(e) Binding Effect. The entities comprising the
"▇▇▇▇▇▇▇ Entities" constitute holders of 100% of the outstanding principal
amount of the Notes (as defined in the Note Purchase Agreement) under the Note
Purchase Agreement. The execution of this Agreement by the ▇▇▇▇▇▇▇ Entities is
binding upon any and all nominee holders.
(f) Consents. To the best knowledge of each of
the ▇▇▇▇▇▇▇ Entities, without conducting any due diligence, the execution and
delivery of this Agreement or any related agreement by the ▇▇▇▇▇▇▇ Entities and
the consummation and performance of the transactions contemplated hereby and
thereby do not require the ▇▇▇▇▇▇▇ Entities to obtain any consent, approval or
action of, or make any filing with or give notice to, any Person.
(g) Litigation. Other than the Adversary
Proceeding, there are no actions, suits or proceedings pending or, to the best
knowledge of each of the ▇▇▇▇▇▇▇ Entities, without conducting any due diligence,
threatened against any of them and there are no orders, judgments or court
decrees against any of the ▇▇▇▇▇▇▇ Entities at law or in equity, or before or by
any foreign, federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality that individually or
in the aggregate would have a material adverse effect on the ability of any of
the ▇▇▇▇▇▇▇ Entities to perform the obligations of any of them hereunder. None
of the ▇▇▇▇▇▇▇ Entities is in default with respect to any judgment, order, writ,
injunction or decree of any court or any federal, state, municipal or other
government department, commission, board, bureau, agency or instrumentality,
which default would have a
27
material adverse effect on the ability of any of the ▇▇▇▇▇▇▇ Entities to perform
the obligations of any of them hereunder.
(h) No Conflicts. To the best knowledge of each
of the ▇▇▇▇▇▇▇ Entities, without conducting any due diligence, neither the
execution, delivery or performance of this Agreement (and any and all related
agreements) by each of the ▇▇▇▇▇▇▇ Entities nor the consummation of the
transactions contemplated herein (and therein) will (i) conflict with, result in
a breach of or constitute a default under the articles of incorporation or
bylaws of any of the ▇▇▇▇▇▇▇ Entities or (ii) conflict in any respect with,
result in a breach of or constitute a default under any court or administrative
order or process, judgment, decree, statute, law, ordinance, rule or regulation
or any agreement or commitment to which any of the ▇▇▇▇▇▇▇ Entities is a party
or by which any of them (or any of their respective material properties or
assets) is subject or bound, except where such conflict, breach or default would
not have a material adverse effect on their ability to perform the obligations
of them contemplated herein.
(i) No Assignment. No claims or rights of the
▇▇▇▇▇▇▇ Entities against any of the other parties to this Agreement have been
sold, transferred or assigned.
13.4 Representations and Warranties of State Street. State
Street hereby represents and warrants to each of the other parties to this
Agreement that each of the following statements is true, correct and complete in
all material respects as of the Effective Date:
(a) Organization. State Street is a trust
company duly organized, validly existing and in good standing under the laws of
the State of Massachusetts and has all the requisite corporate power and
authority to carry on its business as presently conducted.
(b) Corporate Power and Authority, Effect of
Agreement. State Street has full corporate power and authority to execute and
deliver this Agreement and any and all related agreements and to consummate and
perform its obligations contemplated hereby and thereby. The execution and
delivery by State Street of this Agreement and any related agreement and the
consummation and performance of the transactions contemplated hereby and thereby
has been duly and validly authorized by all necessary corporate action required
on the part of State Street. Assuming due execution and delivery hereof and
thereof by each other party hereto and thereto, this Agreement and any and all
related agreements constitute valid and legally binding obligations of State
Street, enforceable against it in accordance with its and their respective
terms.
(c) Binding Effect. The execution of this
Agreement by State Street is binding upon any and all holders (including,
without limitation any and all Persons holding any Notes as nominee) of any
Notes under the Note Purchase Agreement, including without limitation, any and
all Persons which are "Purchasers" under the Note Purchase Agreement.
(d) Consents. To the best knowledge of State
Street, the execution and delivery of this Agreement or any related agreement by
State Street and the consummation and performance of the transactions
contemplated hereby and thereby do not require State Street to obtain any
consent, approval or action of, or make any filing with or give notice to, any
Person.
28
(e) Litigation. Other than the Adversary
Proceeding, there are no actions, suits or proceedings pending or, to the best
knowledge of State Street, threatened against it, and there are no orders,
judgments or court decrees against State Street at law or in equity, or before
or by any foreign, federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality that individually or
in the aggregate would have a material adverse effect on the ability of State
Street to perform its obligations hereunder. State Street is not in default with
respect to any judgment, order, writ, injunction or decree of any court or any
federal, state, municipal or other government department, commission, board,
bureau, agency or instrumentality, which default would have a material adverse
effect on the ability of State Street to perform its obligations hereunder.
(f) No Conflicts. To the best knowledge of State
Street, neither the execution, delivery or performance of this Agreement (and
any and all related agreements) by State Street nor the consummation of the
transactions contemplated herein (and therein) will (i) conflict with, result in
a breach of or constitute a default under the articles of incorporation or
bylaws of State Street or (ii) conflict in any respect with, result in a breach
of or constitute a default under any court or administrative order or process,
judgment, decree, statute, law, ordinance, rule or regulation or any agreement
or commitment to which State Street is a party or by which it (or any of its
material properties or assets) is subject or bound, except where such conflict,
breach or default would not have a material adverse effect on its ability to
perform its obligations contemplated herein.
(g) No Assignment. No claims or rights of State
Street against any of the other parties to this Agreement have been sold,
transferred or assigned and no attempt to do so shall occur; provided, however,
that the foregoing shall not preclude State Street from selling, transferring or
assigning its status as Collateral Agent under the ▇▇▇▇▇▇▇/State Street Loan
Documents to any successor Collateral Agent.
13.5 Representations and Warranties of Bazaar. Bazaar
hereby represents and warrants to each of the other parties to this Agreement
that each of the following statements is true, correct and complete in all
material respects as of the Effective Date:
(a) Organization. Bazaar is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and has all the requisite company power and authority to
carry on its business as presently conducted and to own or lease and to operate
its respective properties.
(b) Company Power and Authority, Effect of
Agreement. Bazaar has full company power and authority to execute and deliver
this Agreement and any and all related agreements and to consummate and perform
its obligations contemplated hereby and thereby. The execution and delivery by
Bazaar of this Agreement and any related agreement and the consummation and
performance of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary company action required on the part of
Bazaar. Assuming due execution and delivery hereof and thereof by each other
party hereto and thereto, this Agreement and any and all related agreements
constitute valid and legally binding obligations of Bazaar, enforceable against
it in accordance with its and their respective terms.
29
(c) Consents. To the best knowledge of Bazaar,
the execution and delivery of this Agreement or any related agreement by Bazaar
and the consummation and performance of the transactions contemplated hereby and
thereby do not require Bazaar to obtain any consent, approval or action of, or
make any filing with or give notice to, any Person.
(d) Litigation. Other than the Adversary
Proceeding, and any and all litigation, disputes, claims and controversies
relating directly or indirectly to construction and mechanic lien claims
relating to the development and construction of the Resort and/or Desert
Passage, there are no actions, suits or proceedings pending or, to the best
knowledge of Bazaar, threatened against it, and there are no orders, judgments
or court decrees against Bazaar at law or in equity, or before or by any
foreign, federal, state, municipal or other governmental department, commission,
court, board, bureau, agency or instrumentality that individually or in the
aggregate would have a material adverse effect on the ability of Bazaar to
perform its obligations hereunder. Bazaar is not in default with respect to any
judgment, order, writ, injunction or decree of any court or any federal, state,
municipal or other government department, commission, board, bureau, agency or
instrumentality, which default would have a material adverse effect on the
ability of Bazaar to perform its obligations hereunder.
(e) No Conflicts. To the best knowledge of
Bazaar, neither the execution, delivery or performance of this Agreement (and
any and all related agreements) by Bazaar nor the consummation of the
transactions contemplated herein (and therein) will (i) conflict with, result in
a breach of or constitute a default under the articles of organization or
operating agreement of Bazaar or (ii) conflict in any respect with, result in a
breach of or constitute a default under any court or administrative order or
process, judgment, decree, statute, law, ordinance, rule or regulation or any
agreement or commitment to which Bazaar is a party or by which it (or any of its
material properties or assets) is subject or bound, except where such conflict,
breach or default would not have a material adverse effect on its ability to
perform its obligations contemplated herein.
(f) No Assignment. No claims or rights of Bazaar
against any of the other parties to this Agreement have been sold, transferred
or assigned and no attempt to do so shall occur.
14. Covenants.
14.1 Filings and Authorizations. Each party hereto, as
promptly as practicable will use its best efforts to take, or cause to be taken,
all other actions necessary, proper or advisable in order to fulfill its
obligations hereunder. The parties will coordinate and cooperate with one
another in exchanging such information and supplying such reasonable assistance
as may be reasonably requested by each in connection with the foregoing.
14.2 Intentionally Omitted.
14.3 EBITDA Reporting. Within 15 days following the end of
each calendar quarter commencing on the first calendar quarter following the
date the Approval and Assumption Order becomes a Final Order, Gaming shall
deliver to Northwind, the Noteholders and State Street a statement duly
certified by the Chief Financial Officer of Gaming as being true
30
and accurate in all material respects, setting forth the EBITDA and Total Debt
Service calculations for such quarter for the purpose of applying the formula
set forth in SECTION 5.1 of this Agreement. Upon the written request of
Northwind, the Noteholders or State Street, Gaming shall provide reasonable
back-up information and documentation supporting the EBITDA and Total Debt
Service calculations as set forth in such quarterly report.
15. Default of Settlement Agreement; Rights and Remedies.
15.1 Settlement Agreement Default Event. As used in this
Agreement, the term "Settlement Agreement Default Event" shall mean and include
each and all of the following events:
(a) Any representation or warranty made by any
party to this Agreement shall prove to be untrue or misleading in any material
respect; or
(b) Any party breaches any covenant or promise
herein or other provision hereof.
15.2 Rights and Remedies. Upon the occurrence of a
Settlement Agreement Default Event, each party hereto shall be given not less
than ten days' prior written notice and opportunity to cure such Settlement
Agreement Default Event, or such further time as may be reasonably necessary to
do so, to the extent such Settlement Agreement Default Event is of a curable
nature; provided, however, the alleged breaching conduct ceases or is suspended
after reasonable notice pending efforts to cure. In the event such Settlement
Agreement Default Event is not cured, the non-breaching party shall have the
option to proceed to exercise any rights it may have at law, in equity or
otherwise.
15.3 Collection Charges. After the occurrence of a
Settlement Agreement Default Event, in addition to the amounts owed pursuant to
this Agreement, the non-breaching party shall be entitled to recover from the
breaching party (or parties) all of its costs of collection, including, without
limitation, its reasonable attorneys' fees and costs, whether or not any
proceeding is brought to enforce such party's rights under this Agreement.
16. Assignment. Northwind, the ▇▇▇▇▇▇▇ Entities and State Street
each agree that, from and after the date the Approval and Assumption Order
becomes a Final Order, Gaming may assign the Assumed Contracts (each as
modified) to any purchaser of all or substantially all of Gaming's assets
(whether pursuant to Section 363 of the Bankruptcy Code or a confirmed plan of
reorganization in the Gaming Bankruptcy Case) pursuant to Section 365(f) of the
Bankruptcy Code, if such purchaser is approved by order of the Gaming Bankruptcy
Court. For purposes of this SECTION 16, the reference to "purchaser" in the
preceding sentence shall be deemed to include any Person with a security
interest in any of the assets of Gaming which acquires such assets from Gaming,
either pursuant to Section 363(k) of the Bankruptcy Code or pursuant to judicial
or non-judicial foreclosure or deed-in-lieu of foreclosure. Northwind, the
▇▇▇▇▇▇▇ Entities and State Street agree not to object to such assignment if (i)
such purchaser is approved by the Gaming Bankruptcy Court, (ii) the Cure Amount
has previously been paid in full and (iii) Gaming is not otherwise in default of
its obligations under the Assumed Contracts (each as modified) or this Agreement
from and after the Effective Date. In the event that Gaming sells
31
substantially all of its assets to a third-party purchaser (including any
secured creditor of Gaming which acquires assets pursuant to Section 363(k) of
the Bankruptcy Code or pursuant to judicial or non-judicial foreclosure or
deed-in-lieu of foreclosure) at any time after the date hereof, the provisions
of this Agreement that refer to Gaming shall be deemed to include any such
third-party purchaser, who shall be entitled to all of the benefits of and shall
be bound by all of the burdens of this Agreement as if an original signatory
hereto or thereto. The obligations provided in this SECTION 16 shall expressly
not be applicable to Bazaar.
17. Fees and Expenses. Each of the parties hereto shall pay its
own fees, costs and expenses in connection with the Adversary Proceeding, the
Settlement Term Sheet, the Side Letter, this Agreement or otherwise related to
any of the disputes resolved hereby; provided, however, that nothing herein
shall preclude the ▇▇▇▇▇▇▇ Entities and/or State Street from seeking payment or
reimbursement of its or their attorneys' fees and expenses from Northwind
pursuant to the ▇▇▇▇▇▇▇/State Street Loan Documents to the extent not previously
paid.
18. Miscellaneous.
18.1 Notices. All notices, demands, payments or other
communications under this Agreement shall be in writing and telecopied (with a
confirmation copy sent by overnight courier), mailed or delivered to the
appropriate party at its telecopy number or address set forth below (subject to
change from time to time by written notice to all other parties to this
Agreement). All such notices and communications shall be effective (a) upon
receipt, when delivered by hand or overnight delivery service, or if mailed,
upon the first to occur of receipt or the expiration of three days after the
deposit in the United States Postal Service mail, postage prepaid and addressed
to the address of the party to receive such notice at the address specified;
provided, however, that non-receipt of any communication as the result of any
change of address of which the sending party was not notified or as the result
of a refusal to accept delivery shall be deemed receipt of such communication,
and (b) upon transmission, when delivered by telecopy to the specified telecopy
number (if a confirmation copy is also sent by overnight courier).
If to Gaming: Aladdin Gaming, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & Silver, Ltd.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
32
If to Northwind: Northwind Aladdin, LLC
c/o Exelon Thermal Technologies, Inc.
Bank One Plaza
10 South Dearborn Street, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Mailing Address:
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Director of Finance and Accounting
with copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Associate General Counsel - Corporate &
Commercial
Exelon Business Services Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company
Entities: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to: Hunton & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
33
If to State Street: State Street Bank and Trust Company
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
with a copy to: Peabody & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Bazaar: Aladdin Bazaar, LLC
c/o TH Bazaar Centers Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
18.2 Governing Law. This Agreement has been entered into
in the State of Nevada and shall be governed by the laws of the State of Nevada
without regard to conflict of laws principles. Any disputes that arise under
this Agreement will be heard in the Gaming Bankruptcy Court (or, if the Gaming
Bankruptcy Court lacks jurisdiction, in the State or Federal courts located in
▇▇▇▇▇ County, Nevada) and all parties hereby consent to such jurisdiction.
18.3 Binding Effect. Except where the context indicates
that a particular provision is intended to be immediately operative from and
after the date of the execution of this Agreement, upon the satisfaction or
waiver of each of the conditions precedent set forth in SECTION 4 of this
Agreement, this Agreement (including, without limitation, the releases set forth
in SECTION 12 of this Agreement) shall be binding upon (a) each of the parties
to this Agreement, (b) all parties in interest in the Gaming Bankruptcy Case,
including any trustee appointed in the Gaming Bankruptcy Case or any subsequent
converted bankruptcy case of Gaming, and (c) each of the parties' respective
successors-in-interest and/or assigns (including, without limitation, any
assignee of Gaming's rights under the Assumed Contracts pursuant to Section
365(f) of the
34
Bankruptcy Code, any purchaser of Gaming's assets pursuant to a sale conducted
under Section 363 of the Bankruptcy Code or pursuant to a plan of
reorganization, any debtor-in-possession or trustee in any future bankruptcy
case of any such assignee or purchaser, and any secured creditor which acquires
assets pursuant to a credit bid under Section 363(k) of the Bankruptcy Code or
pursuant to judicial or non-judicial foreclosure or deed-in-lieu of
foreclosure).
18.4 Effectiveness of Agreement and Findings and
Conclusions if Approval and Assumption Order Does Not Become a Final Order. Any
terms in this Agreement to the contrary notwithstanding, neither the existence
of this Agreement or exhibits and schedules attached hereto (including the
Findings and Conclusions) nor the contents hereof and thereof shall be
admissible in any proceeding by or for the benefit of any party against any
other party if the Approval and Assumption Order does not become a Final Order,
and in such event, this Agreement and each of the exhibits and schedules hereto
shall be void and of no further force and effect.
18.5 Waiver. No waiver of any term, provision or condition
of this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, provision or condition, or of any other term, provision
or condition of this Agreement.
18.6 Entire Agreement. This Agreement, together with the
exhibits and schedules attached hereto, constitute the entire agreement between
the parties hereto with regard to the subject matter hereof, and there are no
prior agreements, understandings, restrictions, warranties or representations
between the parties with regard thereto. This Agreement supersedes and replaces
in full the Settlement Term Sheet and Side Letter.
18.7 Attorneys' Fees. In the event of litigation arising
from this Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and expenses.
18.8 Amendment and Waiver. Neither this Agreement nor any
provision hereof may be amended, revised, altered, changed, waived, discharged
or terminated orally, and no such amendment, revision, alteration, change,
waiver, discharge or termination shall be effective except pursuant to a written
instrument signed by the party against whom enforcement of the amendment,
revision, alteration, change, waiver, discharge or termination is sought.
18.9 Counterparts. This Agreement may be executed in
multiple counterparts, and all of such counterparts shall, when taken together,
constitute one and the same agreement.
18.10 Further Assurances. All parties to this Agreement
shall cooperate with each of the other parties and shall take such actions as
may be reasonably requested (and which actions are consistent with the
provisions of this Agreement) to obtain for the requesting party the benefit of
the transaction contemplated hereby.
18.11 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made pursuant
hereto or pursuant to any exhibit, schedule, certificate, instrument or document
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement, any examination by or on behalf of the parties
35
hereto and the completion of the transactions contemplated herein until the
expiration of the applicable statute of limitations for any claims made in
respect of the matters referred to therein.
18.12 Severability. If any provision of this Agreement, or
the application of any such provision to any person or circumstance, is held to
be inconsistent with any present or future law, ruling, rule or regulation of
any court or governmental or regulatory authority having jurisdiction over the
subject matter of this Agreement, such provision shall be deemed to be modified
to the minimum extent necessary to comply with such law, ruling, rule or
regulation, and the remainder of this Agreement, or the application of such
provision to Persons or circumstances other than those as to which it is held
inconsistent, shall not be affected. If any provision is determined to be
illegal, unenforceable or void, which provision does not relate to any payments
made hereunder and the payments made hereunder shall not be affected by such
determination and this Agreement is capable of substantial performance, then
such void provision shall be deemed rescinded and each provision not so affected
shall be enforced to the maximum extent permitted by law. Notwithstanding
anything in this Agreement or under law to the contrary, so long as the payments
contemplated hereunder are current (or the parties have mutually agreed to some
other arrangement), the parties shall use best efforts to pursue every course
available to protect and preserve the substance of this Agreement and the intent
of the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GAMING: NORTHWIND:
Aladdin Gaming, LLC, a Nevada limited Northwind Aladdin, LLC, a Nevada limited
liability company, Debtor and liability company
Debtor-in-Possession
By: __________________________________ By: __________________________________
Name: ________________________________ Name: ________________________________
Title: _______________________________ Title: _______________________________
▇▇▇▇▇▇▇ ENTITIES: STATE STREET:
▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, State Street Bank and Trust Company, in
a Massachusetts life insurance its capacity as Collateral Agent for the
company ▇▇▇▇▇▇▇ Entities under the Security
Agreement dated as of June 7, 1999, the
By: __________________________________ Agency and Disbursement Agreement dated
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as of June 7, 1999, the Pledge Agreement
Title: Managing Director dated as of June 7, 1999, the Leasehold
Deed of Trust, Assignment of Leases and
Rents and Security Agreement dated as of
April 5, 1999, and all other agreements
for which State Street Bank and Trust
Company serves as Collateral Agent with
▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life Insurance respect to the Northwind Aladdin, LLC,
Company, Floating Rate Series A Senior Secured
a Massachusetts life insurance Notes and Fixed Rate Series B Senior
company Secured Notes
By: __________________________________ By: __________________________________
Name: ________________________________ Name: ________________________________
Title: _______________________________ Title: _______________________________
First Signature Page to
Settlement Agreement and Releases
BAZAAR:
▇▇▇▇ ▇▇▇▇▇▇▇ Reassurance Company, Aladdin Bazaar, LLC, a Delaware limited
Ltd., a Bermuda limited company liability company
By: TH Bazaar Centers, Inc., a Delaware
corporation, Member
By: __________________________________
Name: ________________________________
Title: _______________________________ By: __________________________________
Name: ________________________________
Title: _______________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
Second Signature Page to
Settlement Agreement and Releases
FIRST AMENDMENT TO
SETTLEMENT AGREEMENT AND RELEASES
This FIRST AMENDMENT TO SETTLEMENT AGREEMENT AND RELEASES (this "First
Amendment") is made and entered into on December 23, 2002 by and among (i)
Aladdin Gaming, LLC, a Nevada limited liability company; (ii) Northwind Aladdin,
LLC, a Nevada limited liability company; (iii) ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance
Company, a Massachusetts life insurance company, ▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life
Insurance Company, a Massachusetts life insurance company and ▇▇▇▇ ▇▇▇▇▇▇▇
Reassurance Company, Ltd., a Bermuda limited company; (iv) State Street Bank and
Trust Company, a Massachusetts trust company, in its capacity as Collateral
Agent for the ▇▇▇▇▇▇▇ Entities and the other Noteholders; and (v) Aladdin
Bazaar, LLC, a Delaware limited liability company. Capitalized terms used herein
and not otherwise defined shall have the same meanings ascribed to such terms in
the Settlement Agreement (as defined herein).
PRELIMINARY STATEMENTS
A. The parties hereto are parties to that certain Settlement
Agreement and Releases dated as of November 6, 2002 (the "Settlement
Agreement"), pursuant to which the parties hereto had agreed to settle their
disputes on the terms and conditions set forth therein.
B. The parties hereto desire to amend the Settlement Agreement as
set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants,
agreements, understandings, undertakings, representations, warranties and
promises, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and consistent with (i) the
stipulations put on the record by counsel for the undersigned parties at the
hearing on the Approval and Assumption Motion, (ii) the Gaming Bankruptcy
Court's rulings at that hearing and (iii) the Approval and Assumption Order, the
parties hereto covenant and agree as follows:
1. The definition of "Nevada Power ▇▇▇▇" contained in Section 1.1
of the Settlement Agreement is deleted in its entirety.
2. Section 3.6 of the Settlement Agreement is deleted in its
entirety.
3. The parties hereto agree to waive the condition contained in
Section 4(d) of the Settlement Agreement. In lieu thereof, the parties hereby
agree, on behalf of themselves and their respective privies,
successors-in-interest and assigns, to be contractually bound to the additional
covenants attached hereto as Exhibit "A".
1
4. The first paragraph of Section 5.1 of the Settlement Agreement
shall be amended to read in full as follows:
The parties hereto acknowledge and agree that the amount to
cure the defaults under the ESA is $2,895,772.25 calculated as
of December 20, 2002 (the "Cure Amount"). Of the Cure Amount,
the sum of $1,861,898.50 shall be paid by Gaming to Northwind
in immediately available funds on the Payment Date. The
remaining portion of the Cure Amount which exceeds
$1,861,898.50 (the "Deferred Cure Payment") shall be payable
only in the event that either the Gaming Bankruptcy Case is
converted to a proceeding under Chapter 7 of the Bankruptcy
Code or (x) the Gaming Bankruptcy Court has entered a Final
Order approving the assignment of the Gaming/Northwind
Agreements to a third-party assignee or confirming a plan of
reorganization or liquidation for Gaming and (y) for not less
than four consecutive fiscal quarters, the EBITDA (as defined
herein) of such third-party assignee (or the portion of such
EBITDA derived from assets purchased from Gaming) or Gaming
itself, as the case may be, equals or exceeds 125% of the
Total Debt Service (as defined herein) of such third-party
assignee (or the portion of such EBITDA derived from assets
purchased from Gaming) or Gaming itself, as the case may be,
tested quarterly for the period of four fiscal quarters then
ending and (z) a majority of the Noteholders measured by
principal amount (the "Noteholder Majority"), in its
discretion, shall have delivered written notice in
substantially the form attached as EXHIBIT "K" to this
Agreement to Gaming or its assignee demanding payment of the
Deferred Cure Payment or such lesser amount as is specified by
the Noteholder Majority in its discretion in such notice,
provided that interest shall accrue on the Deferred Cure
Payment at the rate of 6% per annum from the Payment Date
until the Deferred Cure Payment is paid in full. In the event
that condition (y) above is not satisfied within the five
years immediately following the Gaming Bankruptcy Court's
entry of a Final Order approving the assignment of the
Gaming/Northwind Agreements to a third-party assignee or
confirming a plan of reorganization or liquidation for Gaming,
the obligation to pay the Deferred Cure Payment shall
terminate. For purposes of the foregoing provisions, all
Return on Equity Amounts payable under the ESA shall be
counted as debt in calculating Total Debt Service pursuant to
clause (y) above.
2
5. Section 5.2 of the Settlement Agreement shall be amended to
read in full as follows:
5.2 Calculation of Cure Amount. The Cure Amount is
calculated as follows:
(a) All Post-Petition Consumption Charges, inclusive
of all Post-Petition "true-up" amounts as calculated by
Northwind in accordance with the ESA. Gaming and Northwind
agree that there are no Post-Petition Consumption Charges
included in the Cure Amount. However, the sum of $62,088.99 in
respect of Post-Petition Consumption Charges is due and
payable on December 31, 2002.
(b) All Post-Petition Debt Service Amounts,
calculated at the non-default rate. Gaming and Northwind agree
that, as of December 20, 2002, there remains outstanding the
sum of $807,635.28 in respect of Post-Petition Debt Service
Amounts. In addition to the Post-Petition Debt Service amounts
included in the Cure Amount, Gaming and Northwind agree that
the sum of $268,280.50 is due and payable on December 31,
2002.
(c) All Post-Petition Operational Charges, inclusive
of all Post-Petition "true-up" amounts as calculated by
Northwind in accordance with the ESA. Gaming and Northwind
agree that there are no Post-Petition Operational Charges
including in the Cure Amount. However, the sum of $89,522.48
in respect of Post-Petition Operational Charges is due and
payable on December 31, 2002.
(d) All Post-Petition Impositions. Gaming and
Northwind agree that, as of December 20, 2002, there are no
amounts outstanding in respect of Post-Petition Impositions.
(e) With respect to Post-Petition Return on Equity
Amounts, Gaming shall pay to Northwind the sum of
$1,795,223.45, which represents a 10% annual return
(calculated for the period from October 2001 through December
20, 2002) on the agreed outstanding equity balance of
$14,724,884.89 allocated to Gaming as of the Petition Date,
together with an additional per diem amount of $4,034.22 for
each day from December 20, 2002 to be paid on December 31,
2002. In addition to the Post-Petition Return on Equity
Amounts included in the Cure Amount, Gaming and Northwind
agree that the sum of $44,376,31 is due and payable on
December 31, 2002.
3
(f) The Cure Amount is net of a credit in Gaming's
favor, representing all Pre-Petition and Post-Petition power
charges (Northwind's allocated share of Nevada Power bills)
not previously paid by Northwind to Gaming or otherwise
credited by Northwind in Gaming's favor on invoices. Gaming
and Northwind estimate that, as of December 20, 2002, the sum
of ($110,000) in respect of Northwind's allocated share of
Post-Petition Nevada Power bills will be outstanding from
Northwind to Gaming (which amount is net of all credits
previously taken by Gaming against amounts otherwise required
to be paid by Gaming to Northwind pursuant to the Adequate
Protection Order).
(g) The Cure Amount is net of a credit in Gaming's
favor in the amount of ($43,919.64), representing Gaming's
share of Pre-Petition and Post-Petition interest earned on
bank reserves credited by Northwind in Gaming's favor.
(h) The Cure Amount includes the additional sum of
$336,833.16 in respect of all Pre-Petition amounts owing by
Gaming to Northwind, as set forth in the Northwind Proofs of
Claim, and as compromised by such payment by way of additional
Cure Amount.
(i) The Cure Amount does not include the additional
sum of $584,089.41, which amount represents an agreed
reduction in the amount of the claim set forth in the
Northwind Proofs of Claim in respect of all Pre-Petition
Return on Equity Amounts which have not been paid by Gaming.
6. Section 5.5 of the Settlement Agreement is deleted in its
entirety.
7. Schedule 6.2 to the Settlement Agreement is replaced with
Schedule 6.2 attached hereto.
8. Schedule 1 to Exhibit G (Form of Fourth Amendment to ESA) is
replaced with Schedule 1 attached hereto.
9. This First Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same Settlement
Agreement.
10. If there is any conflict between any of the provisions of this
First Amendment and any of the provisions of the Settlement Agreement, the
provisions of this First Amendment shall control. Except as amended by this
First Amendment, all of the terms and conditions of the Settlement Agreement
shall remain unchanged and in full force and effect.
4
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their respective officers thereunto to be authorized, as of
the date first written above.
GAMING: NORTHWIND:
Aladdin Gaming, LLC, a Nevada limited Northwind Aladdin, LLC, a Nevada limited
liability company, Debtor and Debtor-in liability company
-Possession
By: __________________________________ By: __________________________________
Name: ________________________________ Name: ________________________________
Title: _______________________________ Title: _______________________________
▇▇▇▇▇▇▇ ENTITIES: STATE STREET:
▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, State Street Bank and Trust Company, in
a Massachusetts life insurance company its capacity as Collateral Agent for the
▇▇▇▇▇▇▇ Entities under the Security
By: __________________________________ Agreement dated as of June 7, 1999, the
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Agency and Disbursement Agreement dated
Title: Managing Director as of June 7, 1999, the Pledge Agreement
dated as of June 7, 1999, the Leasehold
Deed of Trust, Assignment of Leases and
Rents and Security Agreement dated as of
April 5, 1999, and all other agreements
for which State Street Bank and Trust
Company serves as Collateral Agent with
respect to the Northwind Aladdin, LLC,
▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life Insurance Floating Rate Series A Senior Secured
Company, a Massachusetts life Notes and Fixed Rate Series B Senior
insurance company Secured Notes
By: __________________________________ By: __________________________________
Name: ________________________________ Name: ________________________________
Title: _______________________________ Title: _______________________________
First Signature Page to First
Amendment to Settlement Agreement and
Releases
BAZAAR:
▇▇▇▇ ▇▇▇▇▇▇▇ Reassurance Company, Ltd., Aladdin Bazaar, LLC, a Delaware limited
a Bermuda limited company liability company
By: TH Bazaar Centers, Inc., a Delaware
corporation, Member
By: __________________________________ By: __________________________________
Name: ________________________________ Name: ________________________________
Title: _______________________________ Title: _______________________________
Second Signature Page to First By: __________________________________
Amendment to Settlement Agreement and Name: ________________________________
Releases Title: _______________________________
EXHIBIT A
ADDITIONAL COVENANTS
A. The Energy Project Agreements
1. Aladdin Gaming, LLC ("Gaming") developed and built a resort,
casino, and entertainment complex called the Aladdin Hotel and Casino (the
"Resort").
2. As part of the Resort project, Gaming requested bids to
develop, construct, own and operate an energy production and distribution
facility in Las Vegas, Nevada, to supply hot water, chilled water and
electricity to the Resort (the "Services").
3. Gaming selected Northwind Aladdin, LLC ("Northwind") to
develop, construct, own and operate the energy production facility (the
"Northwind Facilities") to serve the Resort, a retail shopping complex that
would become the Desert Passage Mall, as well as a music themed hotel and casino
to be owned and operated by Aladdin Music, LLC.
4. The energy project was memorialized in the following series of
integrated agreements (collectively, the "Energy Project Agreements"):
a. On or about December 3, 1997, Gaming and Northwind
signed a development agreement (the "Development Agreement") with respect to the
development, construction, ownership and installation of the Northwind
Facilities.
b. On or about December 3, 1997, Gaming and Northwind
signed a lease (the "Lease") for an initial twenty-year term, subject to limited
renewal rights, for the lease of certain real property by Gaming to Northwind on
which the Northwind Facilities were to be constructed.
c. The Services are provided by Northwind to the Resort
pursuant to an Energy Services Agreement dated September 24, 1998 (as
subsequently amended, the "ESA"). The ESA is an executory services contract that
sets forth the monetary obligations of Gaming to Northwind as well as the
executory obligations owed by Northwind to Gaming.
d. The Development Agreement, the Lease, and the ESA
were amended three times - in September 25, 1998, May 28, 1999, and May 28,
1999.
e. In June 1999, Gaming, Northwind, the Bank of Nova
Scotia as Administrative Agent for Gaming's secured lenders, State Street Bank
and Trust Company as Collateral Agent for Northwind's secured lenders, and
certain affiliates of Gaming signed the Subordination, Non-Disturbance and
Attornment Agreement ("SNDA") to memorialize the various parties' agreement to
Northwind's assignment of a security interest in the Northwind Facilities to
certain third-party lenders, among other matters.
5. Gaming and Northwind intended, and continue to intend, the
Energy Project Agreements to be construed together to evidence their agreement
regarding the development, construction, ownership and operation of the
Northwind Facilities.
6. The Energy Project Agreements are clear and unambiguous on
their face in that they reflect that Gaming and Northwind intended that
Northwind would own, and Northwind in fact owns, the Northwind Facilities.
B. Contractual References to Northwind's Ownership of the Northwind
Facilities
7. The Development Agreement states in the First Recital that
Gaming "requested bids to construct, own and operate an energy facility in Las
Vegas, Nevada, to supply hot water, chilled water and electricity to the Aladdin
Project . . . ."
8. In Section 2(b) of the Development Agreement, the parties
specifically agreed that "[t]he plant shall be located on Aladdin Lands and
shall be constructed, owned and operated by Northwind . . . ."
9. The Lease states in the First Recital thereof that Gaming "has
selected [Northwind] to develop, construct, own and operate an energy production
facility to supply hot water, chilled water and electricity to said complex."
10. Article 4.1 of the Lease reiterates Northwind's ownership
interest by providing that "[t]itle to the Improvements [defined as the
improvements being constructed by Northwind in accordance with the terms of the
Development Agreement and ESA] and to all of the personal property owned by
[Northwind] and used in connection with the construction, operation and
maintenance of the Project is now and shall be and remain in [Northwind] from
and after the date hereof . . . ."
11. In Section 1.8 of the SNDA, Gaming (as well as all other
signatories) specifically acknowledged that "Northwind is the sole owner of the
Energy Project and certain related personal property, machinery and equipment
(the `Equipment') to be constructed, installed and located at the Energy Project
Site [defined as a portion of the Aladdin property, as further legally described
in Exhibit A to the SNDA]."
C. Additional Contractual Terms Reflecting Northwind's Ownership
Multiple End Users
12. The Energy Project Agreements contemplate that there will be
multiple end users of the hot water, chilled water and electrical generation
capacity to be supplied by the Northwind Facilities.
13. In the course of negotiations between Gaming and Northwind,
Gaming and Northwind anticipated that the chilled water and electrical
generation capacity supplied by the Northwind Facilities would be provided to
the Desert Passage Mall, and that the hot water, chilled water and electrical
generation capacity supplied by the Northwind Facilities would be provided to
another hotel being planned by Aladdin Music, LLC in addition to the Resort.
14. Northwind built the Northwind Facilities with extra capacity,
namely, space for a seventh chiller and a fourth boiler, so that Northwind would
be able to service additional customer(s) beyond Gaming, the Desert Passage Mall
and Aladdin Music, LLC property.
Gaming's Purchase Rights
15. The ESA in Sections 5.5 and 9.3 sets forth terms for Gaming to
purchase the Northwind Facilities; for example, Section 5.5 pertains to the
"Transfer of Information to Customer Pursuant to Sale" and Section 9.3 addresses
"The Customer's Option to Purchase."
The Northwind Facilities As Security for Third-Party Financing
16. Gaming and Northwind understood from the beginning of the
Northwind Facilities project that Northwind intended to grant a lender security
interests in and liens on the personal property, machinery, equipment, fixtures
and other property of the Northwind Facilities and certain related supplier
distribution and interconnection equipment in order to obtain financing for the
construction of the Northwind Facilities.
17. The Lease specifically provides in Article 11.2 that Northwind
may grant a lender "security interests in and liens on the personal property,
machinery, and equipment of [Northwind] located at the Project Site."
18. Section 10.2(v) of the ESA provides that Northwind may "assign
its right, title, and interest in this Agreement to any lender or lenders to
whom [Northwind] provides a security interest in . . . the Northwind
Facilities."
19. The SNDA in Section 1.8 sets forth the acknowledgement of
Scotiabank as Administrative Agent "for itself and the Aladdin Lenders that
neither the Equipment on the Project Site nor the Distribution System (as
defined in the Note Purchase Agreement) shall be subject to or encumbered by the
Aladdin Deed of Trust, including, without limitation, where such Equipment or
Distribution System is or is deemed to be a fixture on the Aladdin Property or
the Project Site and that the security interest of the Collateral Agent granted
pursuant to the Northwind Deed of Trust and the Northwind Security Agreement in
the Energy Project shall encumber the Equipment and the Distribution System
shall be encumbered thereby."
Northwind's Assumption of the Economic Risks of Ownership
20. The Development Agreement makes clear in Sections 2(e) and (f)
that Gaming is not responsible for the acts of Northwind with regard to the
construction and operation of the facility and assumes no responsibility for
injury or claims resulting from regulatory non-compliance or facility defects.
21. The Lease specifies Northwind's obligations to purchase and
maintain a variety of insurance, including all-risk property insurance and a
liability umbrella policy of at least $50,000,000, in Section 6.1 thereof.
22. Section 8.1 of the ESA requires Northwind to indemnify Gaming
for claims incurred as a result of the maintenance and operation of the
Northwind Facilities as well as any personal injury or property damage suffered
by a third party.
Control of the Northwind Facilities
23. Gaming and Northwind intended Northwind to have, and Northwind
in fact has, complete operational and physical control of the Northwind
Facilities.
Northwind's Abandonment of the Northwind Facilities
24. Section 9.2 of the ESA provides that upon expiration or
termination of the agreement, unless Gaming purchases the Northwind Facilities
pursuant to Section 9.3 or directs Northwind to remove the Northwind Facilities
pursuant to Section 9.2(b), Northwind "shall abandon the Northwind Facilities as
is and where is and shall have no further obligations under" the ESA or Lease.
Recharacterization Analysis
25. In construing a written contract to determine if
recharacterization is appropriate, a court must discern the true intent of the
parties and look to the economic substance of the transaction. Swallow Ranches
▇. ▇▇▇▇▇▇, 525 F.2d 995, 998 (9th Cir. 1975).
26. To evaluate the parties' intent, a court should look first to
the written agreement itself; a court may refer to parol evidence only if the
agreement is ambiguous on its face. E.g., Trans W. Leasing Corp. ▇. ▇▇▇▇▇▇
Constr. Co., Inc., 652 P.2d 1181, 1183 (Nev. 1982).
Integration of Contracts
27. Whether two or more agreements constitute a single contract is
a question of law. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 781 P.2d 1136, 1140 (Nev. 1989).
28. Where there are several agreements relating to the same
transaction, the agreements should be construed as a whole. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
620 P.2d 1251, 1253 (Nev. 1980).
29. To determine whether the parties intended multiple agreements
to be construed as one contract, a court must look to the language employed and
the subject matter of the contract. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, 781 P.2d at 1140.
30. Gaming and Northwind intended the Development Agreement, the
Lease, the ESA (together with the three amendments thereto) and the SNDA to be
construed together to evidence their agreement regarding the development,
construction, ownership and operation of the Northwind Facilities.
Contract Interpretation
31. In interpreting a contract, a court must ascertain the
intention of the parties. If the intent is clear from the contract, the court
does not look outside the contract. Great Am. Airways, Inc. v. Airport Auth. of
Washoe County, ▇▇▇ ▇.▇▇ ▇▇▇, ▇▇▇ (Nev. 1987).
32. Whether a contract is ambiguous on its face is a question of
law for a court to resolve. Union Building Materials Corp. ▇. ▇▇▇▇ and ▇▇▇▇▇▇
Corp., 577 F.2d 568, 571 (9th Cir.
1978); Insurance Company of North America ▇. ▇▇▇▇▇▇ Hotels U.S.A., Inc., 908 F.
Supp. 809, 814 (D. Nev. 1995), aff'd, 110 F.3d 715 (9th Cir. 1997).
33. "If no ambiguity exists, the words of the document must be
taken in their usual and ordinary meaning." Insurance Company of North America
▇. ▇▇▇▇▇▇ Hotels U.S.A., Inc., 908 F. Supp. at 814.
34. Where "a written contract is clear and unambiguous on its
face, extraneous evidence cannot be introduced to explain its meaning." Geo. ▇.
▇▇▇▇▇ Chem. ▇. ▇▇▇▇▇, 555 P.2d 216 (Nev. 1976).
35. Only when a contract is reasonably susceptible to more than
one interpretation or when terms of a contract directly contradict each other is
extrinsic evidence permitted to resolve the ambiguity and determine the true
intent of the parties. See Trans W. Leasing Corp. ▇. ▇▇▇▇▇▇ Constr. Co., Inc.,
supra, 652 P.2d at 1182-3; Lagrange Constr., Inc. ▇. ▇▇▇▇ Corp., ▇▇▇ ▇.▇▇ ▇▇▇,
768-9 (Nev. 1972).
36. Northwind owns the central utility plant building, the
fixtures, and certain equipment, including portions of the supplier distribution
and interconnection equipment, necessary to the operation of the Northwind
Faciltiies and the provision of hot and chilled water and back-up emergency
power, including without limitation the property, fixtures, equipment and
personal property set forth on the Schedule attached hereto as Exhibit "1" and
incorporated herein by reference.
Preclusive Effect of Covenants
37. These covenants shall have preclusive effect under the
principles of res judicata, collateral estoppel, and law of the case, against
the parties in this adversary proceeding, their privies and their
successors-in-interest in any and all subsequent litigation (including, without
limitation, any subsequent bankruptcy proceeding, or in the Gaming Bankruptcy
Case upon any conversion to chapter 7) that pertains in any way to Northwind's
ownership interest in the Northwind Facilities or any of the issues more
specifically set forth above.