EXHIBIT 10.01
FACILITIES AGREEMENT
between
GENERAL ELECTRIC CAPITAL CORPORATION,
FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS,
and
ALADDIN GAMING, LLC
June 26, 1998
TABLE OF CONTENTS
1. THE FACILITIES.............................................1
(a) LEASE FACILITY...................................1
(b) TERM LOAN FACILITY...............................1
(c) FUNDINGS.........................................1
2. INTEREST...................................................1
(a) GENERAL..........................................1
(b) INTERIM FUNDING PERIOD...........................2
(c) TERM LOAN PERIOD.................................2
(d) SELECTION OF INTEREST OPTION.....................2
(e) DEFAULT RATE.....................................2
(f) USURY SAVINGS....................................2
3. PAYMENTS...................................................3
(a) TERM LOAN FACILITY...............................3
(b) RECEIPT OF PAYMENTS..............................4
(c) APPLICATION AND ALLOCATION OF PAYMENTS...........4
(d) PREPAYMENT.......................................4
(e) MONTHLY STATEMENT................................4
4. TAXES......................................................5
(a) GENERAL..........................................5
(b) CONTESTS.........................................5
(c) WITHHOLDING TAXES................................6
(d) REFUNDS..........................................7
5. CAPITAL ADEQUACY; INCREASED COSTS; ETC.....................7
(a) LIBOR RATE LENDING UNLAWFUL......................7
(b) DEPOSITS UNAVAILABLE.............................8
(c) INCREASED LIBOR RATE COSTS, ETC..................8
(d) FUNDING LOSSES...................................9
(e) INCREASED CAPITAL COSTS..........................9
(f) PARTICIPANTS.....................................9
6. SECURITY INTEREST IN THE COLLATERAL........................9
7. CONDITIONS PRECEDENT......................................10
(a) CONDITIONS TO THE INITIAL FUNDING...............10
(b) FURTHER CONDITIONS TO EACH FUNDING..............12
8. REPRESENTATIONS AND WARRANTIES............................14
(a) ORGANIZATION, ETC...............................14
i
(b) DUE AUTHORIZATION, NON-CONTRAVENTION, ETC.......14
(c) GOVERNMENT APPROVAL, REGULATION, ETC............14
(d) VALIDITY, ETC...................................14
(e) FINANCIAL INFORMATION...........................15
(f) NO MATERIAL ADVERSE CHANGE......................15
(g) LITIGATION, LABOR CONTROVERSIES, ETC............15
(h) SUBSIDIARIES....................................15
(i) OWNERSHIP OF PROPERTIES.........................15
(j) TAXES...........................................16
(k) PENSION AND WELFARE PLANS.......................16
(l) ENVIRONMENTAL WARRANTIES........................16
(m) INTELLECTUAL PROPERTY...........................17
(n) REGULATIONS U AND X.............................18
(o) ACCURACY OF INFORMATION.........................18
(p) EXISTING DEFAULTS...............................18
(q) CONTINGENT LIABILITIES..........................18
(r) BUSINESS, DEBT, CONTRACTS, ETC..................18
(s) REPRESENTATIONS AND WARRANTIES..................19
(t) IN BALANCE REQUIREMENT..........................19
(u) MAIN PROJECT BUDGET.............................19
(v) FEES AND ENFORCEMENT............................19
(w) ERISA COMPLIANCE................................19
(x) LABOR DISPUTES; ACTS OF GOD; CASUALTY AND
CONDEMNATION....................................19
(y) GOVERNMENT REGULATION...........................20
(z) NO BROKERS......................................20
(aa) INSURANCE POLICIES..............................20
(bb) REPRESENTATIONS AND WARRANTIES REGARDING THE
COLLATERAL......................................20
9. [INTENTIONALLY OMITTED]...................................21
10. AFFIRMATIVE COVENANTS.....................................21
(a) FINANCIAL INFORMATION, REPORTS, NOTICES,
ETC.............................................21
(b) COMMUNICATION WITH ACCOUNTANTS..................25
(c) COMPLIANCE WITH LAWS, ETC.......................25
(d) MAINTENANCE OF PROPERTIES; OPERATION;
RESERVES........................................26
(e) INSURANCE.......................................26
(f) BOOKS AND RECORDS...............................26
(g) SUPPLEMENTAL DISCLOSURE.........................27
(h) FISCAL YEAR.....................................27
(i) CASUALTY AND CONDEMNATION.......................27
(j) COVENANTS REGARDING THE COLLATERAL..............28
(k) CONTINUOUS PERFECTION...........................31
(l) GE CAPITAL?S APPOINTMENT AS ATTORNEY-IN-
FACT............................................31
(m) INDEMNIFICATION.................................32
(n) CONFIRMATION OF OPENING DATE....................34
ii
(o) USE OF PROCEEDS.................................34
(p) REPAYMENT OF INDEBTEDNESS.......................34
(q) DILIGENT CONSTRUCTION OF THE MAIN PROJECT.......35
(r) IN BALANCE; BORROWER EQUITY.....................35
(s) PROPER LEGAL FORMS..............................35
(t) ENVIRONMENTAL...................................35
11. NEGATIVE COVENANTS........................................36
(a) BUSINESS ACTIVITIES.............................36
(b) INDEBTEDNESS....................................36
(c) LIENS...........................................37
(d) FINANCIAL CONDITION AND OPERATIONS..............37
(1) TOTAL DEBT TO EBITDA RATIO............37
(2) INTEREST COVERAGE RATIO...............38
(3) NET WORTH.............................38
(4) EBITDA................................38
(5) MINIMUM FIXED CHARGE COVERAGE.........38
(e) INVESTMENTS.....................................38
(f) RESTRICTED PAYMENTS, ETC........................40
(g) CAPITAL EXPENDITURES, ETC.......................42
(h) RENTAL OBLIGATIONS..............................42
(i) TAKE OR PAY CONTRACTS...........................42
(j) CONSOLIDATION, MERGER, ETC......................42
(k) TRANSACTIONS WITH AFFILIATES....................43
(l) NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS,
ETC.............................................43
(m) SALE AND LEASEBACK..............................44
(n) STOCK OF SUBSIDIARIES...........................44
(o) AMENDMENT OF CONSTRUCTION BENCHMARK SCHEDULE....44
(p) HAZARDOUS SUBSTANCES............................44
(q) OPENING.........................................44
12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES....................45
(a) EVENTS OF DEFAULT...............................45
(b) REMEDIES........................................48
(c) WAIVERS BY ALADDIN GAMING.......................50
(d) CUMULATIVE REMEDIES.............................50
13. ASSIGNMENTS; PARTICIPATION................................50
(a) ASSIGNMENT BY ALADDIN GAMING....................50
(b) ASSIGNMENT AND/OR PARTICIPATION BY GE
CAPITAL.........................................50
(c) SUCCESSORS AND ASSIGNS..........................52
(d) THIRD PARTY BENEFICIARIES.......................52
14. INTENTIONALLY OMITTED.....................................52
iii
15. MISCELLANEOUS.............................................52
(a) COMPLETE AGREEMENT; MODIFICATION OF
AGREEMENT.......................................52
(b) FEES AND EXPENSES...............................52
(c) NO WAIVER.......................................53
(d) SURVIVAL OF OBLIGATIONS.........................54
(e) SEVERABILITY....................................54
(f) CONFLICT OF TERMS...............................54
(g) RIGHT OF SET-OFF................................54
(h) AUTHORIZED SIGNATURE............................55
(i) GOVERNING LAW; SUBMISSION TO JURISDICTION.......55
(j) NOTICES.........................................56
(k) SECTION TITLES..................................57
(l) COUNTERPARTS....................................57
(m) TIME OF THE ESSENCE.............................57
(n) WAIVER OF JURY TRIAL............................57
(o) FURTHER ASSURANCES..............................57
(p) RIGHT TO PERFORM................................58
(q) COMPLIANCE WITH NEVADA GAMING LAWS..............58
__________________________
Exhibit No. 1: Master Lease Agreement
Exhibit No. 2: Term Loan Note
Exhibit No. 3: Collateral Schedule
Exhibit No. 4: Intercreditor Agreement
Exhibit No. 5: Officer's Certificate re: Source of Funds
Exhibit No. 6: Engagement Letter
Exhibit No. 7: Bringdown Certificate
iv
FACILITIES AGREEMENT
THIS FACILITIES AGREEMENT (this "Agreement") is made as of
the 26th day of June, 1998, between GENERAL ELECTRIC CAPITAL
CORPORATION, FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS
("GE Capital"), and ALADDIN GAMING, LLC ("Aladdin Gaming").
The parties desire to provide for the financing of the
acquisition of certain new furniture and equipment, and certain
Gaming Equipment, for use by Aladdin Gaming in connection with
the Aladdin Hotel and Casino. Capitalized terms used herein
without definition shall have the meanings given them in Annex A
attached hereto.
NOW, THEREFORE, in consideration of the premises and mutual
covenants hereinafter contained, the parties agree as follows:
1. THE FACILITIES.
(a) LEASE FACILITY. Upon and subject to the terms and
conditions hereof and of that certain Master Lease Agreement and
related documents attached hereto as Exhibit No. 1 (the "Master
Lease Agreement"), GE Capital will purchase and lease to Aladdin
Gaming certain new furniture and equipment (other than Gaming
Equipment) selected by Aladdin Gaming for use by Aladdin Gaming
in connection with the Aladdin Hotel and Casino having an
aggregate acquisition cost not in excess of $60,000,000 (the
"Lease Facility").
(b) TERM LOAN FACILITY. Upon and subject to the terms
and conditions hereof, GE Capital will finance the acquisition by
Aladdin Gaming for use in connection with the Aladdin Hotel and
Casino of Gaming Equipment having an aggregate acquisition cost
not in excess of $20,000,000 (the "Term Loan Facility"; and
together with the Lease Facility being referred to, collectively,
as the "Facilities").
(c) FUNDINGS. Upon and subject to the terms and
conditions hereof and of the other Operative Documents, GE
Capital will make Fundings on a monthly basis commencing not more
than six (6) months prior to the date that is expected to be the
Construction Completion Date as evidenced by the certificate of
the Construction Consultant provided pursuant to Section 7(a)(18)
hereof.
2. INTEREST.
(a) GENERAL. All computations of interest hereunder
shall be made (1) on the basis of a three hundred sixty (360) day
year during any period during which interest is calculated on the
basis of 30-Day LIBOR or the Base Index, or (2) on the basis of a
three hundred sixty-five (365) day year during any period during
which interest is calculated on the basis of the Prime Rate; in
each case for the actual number of days occurring in the period
for which such interest is payable. Each
determination by GE Capital of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest
error.
(b) INTERIM FUNDING PERIOD. Interest on the
outstanding principal balance of each Funding from the date such
Funding is made through the Interim Funding Period shall be
calculated at a floating rate equal, at the option of Aladdin
Gaming exercised pursuant to Section 2(d) hereof, to either (1)
30-Day LIBOR plus four hundred seventy-eight (478) basis points,
or (2) the Prime Rate plus two hundred seventy-five (275) basis
points; and such spread shall be fixed throughout the Interim
Funding Period; and 30-Day LIBOR or the Prime Rate, as
applicable, will be adjusted monthly on the first day of each
month during the Interim Funding Period, based on changes thereto
as in effect two (2) Business Days before the first day of such
month.
(c) TERM LOAN PERIOD. Interest on the outstanding
principal balance of each Funding with respect to the Term Loan
Facility during the Term Loan Period, until such Funding is
repaid in full, shall be determined five (5) Business Days prior
to the Construction Completion Date and shall be calculated at a
floating rate equal to the sum of the Base Index plus an amount
(the "Spread") equal to four hundred seventy-eight (478) basis
points; and such Spread shall be fixed throughout the Term Loan
Period; and the Base Index will be adjusted tri-monthly on the
first day of each tri-monthly period during the Term Loan Period,
based on changes to the Base Index as in effect two (2) Business
Days before the first day of such tri-monthly period.
(d) SELECTION OF INTEREST OPTION. Aladdin Gaming
shall select the applicable interest rate with respect to the
Interim Funding Period not less than five (5) Business Days prior
to the date on which the initial Funding is made with respect to
the Facilities, by written notice to GE Capital. The interest
rate option selected by Aladdin Gaming shall remain in effect
during the Interim Funding Period.
(e) DEFAULT RATE. So long as any Event of Default
shall have occurred and be continuing, the interest rate
applicable to the Facilities shall be increased by two percentage
points (2%) per annum above the then highest rate otherwise
applicable to the Facilities (the "Default Rate").
(f) USURY SAVINGS. It is the intention of the parties
to comply with any applicable usury laws. Accordingly, it is
agreed that, notwithstanding any provision to the contrary
herein, in the Master Lease Agreement and any related document,
or in the Term Loan Note (collectively, the "Operative
Documents"), in no event shall any Operative Document require the
payment or permit the collection of interest in excess of the
maximum amount permitted by Applicable Law. If any such excess
interest is contracted for, charged or received under any
Operative Document, or in the event that all of the principal
balance shall be prepaid, so that under any of such circumstances
the amount of interest contracted for, charged or received under
any Operative Document shall exceed the maximum amount of
interest permitted by Applicable Law, then in such event (1) the
provisions of this Section shall govern and control, (2) neither
Aladdin Gaming nor any other person or entity now or hereafter
liable for the payment thereof shall be obligated to pay the
amount of such interest to the extent that it is in excess of the
maximum amount of interest permitted by Applicable Law,
(3) any such excess which may have been collected shall
be either applied as a credit against the then unpaid
2
principal balance or refunded to Aladdin Gaming, at the option of
GE Capital, and (4) the effective rate of interest automatically
shall be reduced to the maximum lawful contract rate allowed
under Applicable Law as now or hereafter construed by the courts
having jurisdiction thereof. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received under any Operative
Document which are made for the purpose of determining whether
such rate exceeds the maximum lawful contract rate, shall be
made, to the extent permitted by Applicable Law, by amortizing,
prorating, allocating and spreading in equal parts during the
period of the full stated term of the indebtedness evidenced
thereby, all interest at any time contracted for, charged or
received from Aladdin Gaming or otherwise by GE Capital in
connection with such indebtedness; provided, however, that if any
applicable state law is amended or the law of the United States
of America preempts any applicable state law, so that it becomes
lawful for GE Capital to receive a greater interest per annum
rate than is presently allowed under Applicable Law, Aladdin
Gaming agrees that, on the effective date of such amendment or
preemption, as the case may be, the lawful maximum under the
Operative Documents shall be increased to the maximum interest
per annum rate allowed by the amended state law or the law of the
United States of America (but not in excess of the applicable
interest rate contemplated under the Operative Documents).
3. PAYMENTS.
(a) TERM LOAN FACILITY. Aladdin Gaming shall make
twenty (20) tri-monthly installments, in arrears, on the first
day of each tri-monthly period commencing on the first day of the
fourth full calendar month following the Construction Completion
Date, calculated such that the principal of the aggregate
Fundings then having been made with respect to the Term Loan
Facility will be amortized during the Term Loan Period as
follows:
Tri-Monthly Period Percent Amortization
------------------ --------------------
1-4 3.25
5-8 3.5
9-12 4.0
13-16 4.5
17-19 4.75
20 24.75
Each installment shall consist of the specified principal
amortization plus interest on the outstanding principal balance
calculated at the interest rate specified in Section 2(c) hereof,
adjusted tri-monthly on the first day of each tri-monthly period,
based on changes to the Base Index as in effect two (2) Business
Days before the first day of such tri-monthly period. The
Fundings made by GE Capital with respect to the Term Loan
Facility shall be evidenced by a single promissory note of
Aladdin Gaming substantially in the form of Exhibit No. 2
attached hereto (the "Term Loan Note"), dated the date hereof,
payable to GE Capital in the principal amount of $20,000,000 and
otherwise duly completed. The date, amount and interest rate of
each Funding made by GE Capital with respect to the Term Loan
Facility and each payment of principal with respect thereto shall
be recorded on the books and records of GE Capital, which books
and records shall constitute prima facie evidence of the accuracy
of the information therein recorded.
3
(b) RECEIPT OF PAYMENTS. All payments payable by
Aladdin Gaming under the Operative Documents shall be paid to GE
Capital by wire transfer of immediately available funds to
Bankers Trust ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 50-
260-660, ABA No. ▇▇▇-▇▇▇-▇▇▇, Attention: Account Manager -
Aladdin Gaming, or to such other account as GE Capital may direct
in writing; and shall be effective upon receipt. All payments
shall be made not later than 12:00 Noon New York time on the day
when due. If any payment date is not a Business Day, the amount
otherwise due on such date shall be payable on the immediately
succeeding Business Day (provided that such delay shall be
included in calculating the interest due).
(c) APPLICATION AND ALLOCATION OF PAYMENTS. Aladdin
Gaming irrevocably waives the right to direct the application of
any and all payments at any time or times hereafter received by
GE Capital from or on behalf of Aladdin Gaming, and Aladdin
Gaming irrevocably agrees that GE Capital shall have the
continuing exclusive right to apply any and all such payments
then due and payable to Obligations of Aladdin Gaming as GE
Capital may deem advisable. In the absence of a specific
determination by GE Capital with respect thereto, the same shall
be applied in the following order: (1) then due and payable Fees
and expenses of GE Capital; (2) then due and payable interest
payments with respect to the Obligations; (3) Obligations to GE
Capital other than Fees, expenses and interest and principal
payments; and (4) then due and payable principal payments with
respect to the Obligations. Notwithstanding the foregoing, prior
to the occurrence of an Event of Default, all payments made by
Aladdin Gaming specifically identified as being made with respect
to the Lease Facility shall be applied only to those Obligations
relating to the Lease Facility.
(d) PREPAYMENT. (1) On or after the date of payment
of the fourth (4th) installment under the Term Loan Note, Aladdin
Gaming may, so long as no Event of Default exists, voluntarily
prepay the then outstanding principal balance due under the Term
Loan Note in whole (but not in part) as of a Payment Date under
the Term Loan Note upon at least thirty (30) days' prior written
irrevocable notice to GE Capital, specifying the Payment Date on
which the Term Loan Note will be prepaid (the "Prepayment Date").
On the Prepayment Date, Aladdin Gaming shall pay to GE Capital
the sum of: (i) the then outstanding principal balance under the
Term Loan Note, plus (ii) the portion of the Prepayment Premium
(if any) related to the Term Loan Facility, plus (iii) all
amounts otherwise due under the Term Loan Facility (including,
without limitation, any enforcement costs incurred by GE Capital
as a result of the occurrence of an Event of Default). (2)
Aladdin Gaming may voluntarily terminate the Term of the Master
Lease Agreement prior to its expiration in accordance with the
provisions of Section 4 of the Master Lease Agreement. (3) If
Aladdin Gaming elects to voluntarily prepay the Term Loan Note in
accordance with Section 3(d)(1) hereof, then Aladdin Gaming shall
also elect to terminate the Term of the Master Lease Agreement
prior to its expiration in accordance with the provisions of
Section 4 of the Master Lease Agreement on the Prepayment Date;
and if Aladdin Gaming elects to terminate the Term of the Master
Lease Agreement prior to its expiration pursuant to Section 4 of
the Master Lease Agreement, then Aladdin Gaming shall prepay the
Term Loan Note in accordance with Section 3(d)(1) hereof on the
Early Termination Date.
(e) MONTHLY STATEMENT. GE Capital will provide a
monthly statement of transactions under the Term Loan Facility to
Aladdin Gaming. Each and every such statement
shall (absent manifest error) be deemed final, binding
and conclusive upon Aladdin Gaming in all respects
4
as to all matters reflected therein, unless Aladdin Gaming,
within thirty (30) days after the date any such statement is
rendered, shall notify GE Capital in writing of any objection
which Aladdin Gaming may have to any such statement, describing
the basis for such objection with specificity. In that event,
only those items expressly objected to in such notice shall be
deemed to be disputed by Aladdin Gaming. GE Capital's
determination, based upon the facts available, of any disputed
item shall (absent manifest error) be final, binding and
conclusive on Aladdin Gaming.
4. TAXES.
(a) GENERAL. Aladdin Gaming shall report (to the
extent that it is legally permissible) and pay promptly all
Collateral Taxes due, imposed, assessed or levied against GE
Capital or Aladdin Gaming. Aladdin Gaming shall (i) reimburse GE
Capital on an after-tax basis upon receipt of written request for
reimbursement for any such Collateral Taxes paid by GE Capital,
(ii) on request of GE Capital, submit to GE Capital written
evidence of Aladdin Gaming's payment of Collateral Taxes, (iii)
on all reports or returns show the ownership of the Collateral by
Aladdin Gaming, and (iv) send a copy thereof to GE Capital.
(b) CONTESTS. If any claim shall be made against GE
Capital or if any proceeding shall be commenced against GE
Capital (including by written notice of such proceeding) for any
Collateral Taxes which Aladdin Gaming is obligated to pay
pursuant to this Section 4, or if GE Capital shall reasonably
determine that any Collateral Taxes which Aladdin Gaming may have
an obligation to pay under this Section 4 may be payable, GE
Capital shall promptly (and in any event within 30 days) notify
Aladdin Gaming in writing (provided that failure to so notify
shall not alter GE Capital's rights under Section 4 except to the
extent (and then only to the extent that) such failure precludes
or materially adversely affects the ability to conduct a contest
of such Collateral Taxes) and shall not take any action with
respect to such claim without written consent of Aladdin Gaming
(and such consent shall not be unreasonably withheld or
unreasonably delayed) for 30 days after receipt of such notice by
Aladdin Gaming; provided, however, that in the case of any such
claim or proceeding, if GE Capital shall be required by law or
regulation to take action prior to the end of such 30 day period,
GE Capital shall in such notice to Aladdin Gaming, so inform
Aladdin Gaming, and GE Capital shall not take any action with
respect to such claim, proceeding or Collateral Taxes without the
consent of Aladdin Gaming (such consent shall not be unreasonably
withheld or unreasonably delayed) for 10 days after the receipt
of such notice by Aladdin Gaming unless GE Capital shall be
required by law or regulation to take action prior to the end of
such 10 day period.
Provided that no Event of Default has occurred and is
continuing, Aladdin Gaming shall be entitled for a period of 30
days from receipt of such notice from GE Capital (or such shorter
period as GE Capital has notified Aladdin Gaming is required by
law or regulation for GE Capital to commence such contest), to
request in writing that GE Capital contest the imposition of such
Collateral Tax, at Aladdin Gaming's expense. In its sole
discretion, GE Capital shall either (i) control the contest,
acting through counsel reasonably acceptable to Aladdin Gaming,
or (ii) take all reasonable steps to enable Aladdin Gaming to
control the contest.
The party controlling the contest shall consult
in good faith with the other party and its counsel
with respect to the contest of such claim for
Collateral Taxes (or claim for refund) but the
5
decision regarding what actions to be taken shall be made by the
controlling party in its sole judgment; provided, however, that
if GE Capital is the controlling party and Aladdin Gaming
recommends the acceptance of a settlement offer made by the
relevant taxing authority and GE Capital rejects the settlement
offer, then the portion of the Collateral Taxes at issue in the
claim which are payable by Aladdin Gaming shall not exceed the
amount which would have been owed if the settlement offer would
have been accepted. In addition, the controlling party shall
keep the noncontrolling party reasonably informed as to the
progress of the contest and shall provide the noncontrolling
party with a copy of (or appropriate excepts from) any reports or
claims issued by the relevant taxing authority to the controlling
party thereof, in connection with such claim or contest thereof.
Notwithstanding anything contained herein to the contrary,
GE Capital shall not be required to contest (and Aladdin Gaming
shall not be permitted to contest) a claim with respect to the
imposition of Collateral Taxes if GE Capital waives its right to
payment from Aladdin Gaming for such Collateral Taxes (and any
claim with respect to such year or any other taxable year the
contest of which is materially adversely affected as a result of
such waiver).
(c) WITHHOLDING TAXES. Any and all payments by or on
behalf of Aladdin Gaming hereunder or under any other Operative
Document, shall be made free and clear of and without deduction
for any and all present or future Taxes (other than Taxes imposed
by any taxing authority which are imposed on or measured by the
net income of, or which constitute franchise taxes imposed on, GE
Capital, any entity to which GE Capital assigns an interest under
this Agreement or any Participant). If Aladdin Gaming shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any other Operative Document to GE
Capital, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this
Section) GE Capital receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Aladdin
Gaming shall make such deductions, and (iii) Aladdin Gaming shall
pay the full amount deducted to the relevant taxing or other
authority in accordance with Applicable Law.
Aladdin Gaming and GE Capital acknowledge and
agree that Aladdin Gaming shall have no obligation under this
Agreement to withhold and pay any sums to any taxing authority if
GE Capital informs Aladdin Gaming that GE Capital believes that
there is a basis to challenge the withholding/payment
requirements that more likely than not would render invalid the
withholding/payment requirement. Aladdin Gaming shall have the
right to contest in good faith the imposition of any such
withholding/payment requirement.
GE Capital (including any party to whom GE Capital
assigns a portion of its interest under this Agreement), or any
Participant organized under the laws of a jurisdiction other than
the United States or a State thereof (for purposes of this
Section 4, a "Non-US Lender") shall, prior to the date that any
payment is made by Aladdin Gaming pursuant to the terms of this
Agreement or any other Operative Document (or in the case of any
other Person that becomes a party to this Agreement pursuant to
Section 13 hereof, before it becomes a party
hereto), execute and deliver to Aladdin Gaming
one or more (as Aladdin Gaming reasonably requests)
(i) United States Internal Revenue Service Form 4224
or Form 1001 or such other forms or documents (or successor
6
forms or documents), appropriately completed, certifying in each
case that such Non-US Lender is entitled to receive payments
hereunder and under any other Operative Documents without
deduction or withholding of any United States Federal income
taxes, and (ii) applicable Internal Revenue Service Form W-8 or
Form W-9 or successor applicable forms (if required by law), as
the case may be, to establish an exemption from United States
backup withholding tax. GE Capital (including any party to whom
GE Capital assigns a portion of its interest under this
Agreement), or any Participant which is organized under the laws
of the United States or a State thereof (for purposes of this
Section 4, "US-Lenders") shall, prior to the date any payment is
made by Aladdin Gaming pursuant to the terms of this Agreement or
other Operative Document (or in the case of any other Person that
becomes a party to this Agreement pursuant to Section 13 hereof,
before it becomes a party hereto), execute and deliver to Aladdin
Gaming one or more copies (as Aladdin Gaming reasonably requests)
of applicable Internal Revenue Service Form W-9 or successor
applicable forms (if required by law), as the case may be, to
establish an exemption from United States backup withholding tax.
Each Person which undertakes to deliver to Aladdin
Gaming a Form 4224, Form 1001, Form W-8 or Form W-9 pursuant to
the preceding paragraph shall further undertake to deliver to
Aladdin Gaming two further copies of said Form 4224, Form 1001,
Form W-8 or Form W-9 (if required by law), or successor
applicable forms, or other manner of certification, as the case
may be, on or before the date that such form expires or becomes
obsolete or after the occurrence of an event requiring a change
in the most recent form delivered by it to Aladdin Gaming, and
such extensions or renewals thereof as may be reasonably
requested by Aladdin Gaming, certifying in the case of a Form
4224 or Form 1001 that such Person is entitled to receive
payments hereunder and under any other Operative Documents
without deduction or withholding of any United States Federal
income taxes, unless in any case an event (including, without
limitation, any change in treaty, law or regulation) has occurred
prior to the date on which such delivery would otherwise be
required which renders all forms inapplicable or which would
prevent such Person from duly completing and delivering any such
form with respect to it and such Person advises Aladdin Gaming
that it is not capable of receiving payments without any
deduction or withholding of United States Federal income tax, and
in the case of a Form W-8 or Form W-9, establishing an exemption
from backup withholding.
(d) REFUNDS. If GE Capital subsequently realizes a
refund (or credit in lieu of a refund) of any Tax previously paid
by Aladdin Gaming and for which Aladdin Gaming has indemnified GE
Capital pursuant to this Section, if no Event of Default has then
occurred and is continuing GE Capital shall promptly, and to the
extent permitted by Applicable Law, pay to Aladdin Gaming the net
amount of any such refund or credit after deducting taxes and
expenses attributable thereto. GE Capital agrees to take such
action as Aladdin Gaming may reasonably request and to otherwise
act in good faith to claim such refunds and credits, and to take
such other actions as Aladdin Gaming may reasonably request to
minimize net payments due from Aladdin Gaming pursuant to this
Section 4.
5. CAPITAL ADEQUACY; INCREASED COSTS; ETC.
(a) LIBOR RATE LENDING UNLAWFUL. If GE Capital shall
determine (which determination shall, upon notice thereof to
Aladdin Gaming, be conclusive and binding) that the
introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central
7
bank or other Governmental Authority asserts that it is unlawful,
for GE Capital to make, continue or maintain any Funding as, or
to convert any Funding into, a LIBOR Rate Funding, the
obligations of GE Capital to make, continue, maintain or convert
any such LIBOR Rate Funding shall, upon such determination,
forthwith be suspended until GE Capital shall notify Aladdin
Gaming that the circumstances causing such suspension no longer
exist, and the interest rate then applicable automatically shall
change to the interest rate specified in Section 2(b)(2) hereof,
at the end of the then current Interest Periods with respect
thereto, or sooner, if required by such law or assertion.
(b) DEPOSITS UNAVAILABLE. If GE Capital shall have
determined that:
(1) Dollar deposits in the relevant amount and
for the relevant Interest Period are not available to GE Capital
in its relevant market; or
(2) by reason of circumstances affecting GE
Capital's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR Rate
Fundings;
then, upon notice from GE Capital to Aladdin Gaming, the
obligations of GE Capital to make or continue any Fundings as, or
to convert any Fundings into, LIBOR Rate Fundings shall forthwith
be suspended until GE Capital shall notify Aladdin Gaming that
the circumstances causing such suspension no longer exist.
(c) INCREASED LIBOR RATE COSTS, ETC. Aladdin Gaming
agrees to reimburse GE Capital for any increase in the cost to GE
Capital of, or any reduction in the amount of any sum receivable
by GE Capital in respect of, making, continuing or maintaining
(or of its obligation to make, continue or maintain) any Fundings
as, or of converting (or of its obligation to convert) any
Fundings into, LIBOR Rate Fundings that arises in connection with
any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision
or request (whether or not having the force of law) of any court,
central bank, regulator or other Governmental Authority, except
for such changes with respect to increased capital costs and
taxes which are governed by Sections 5(e) and 4(b) hereof,
respectively. GE Capital shall promptly notify Aladdin Gaming in
writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate GE Capital for
such increased cost or reduced amount. Such additional amounts
shall be payable by Aladdin Gaming directly to GE Capital within
five (5) days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and
binding on Aladdin Gaming.
Without limiting the foregoing, in the event that, as a
result of any such change, introduction, adoption or the like
described above, the LIBOR Reserve Percentage decreases for GE
Capital's LIBOR Rate Fundings, GE Capital shall give prompt
notice thereof in writing to Aladdin Gaming. On the fifth day
following delivery of such notice, the 30-Day LIBOR or 90-Day
LIBOR attributable to GE Capital's LIBOR Rate Fundings shall be
adjusted to give Aladdin Gaming the benefit of such decrease (for
so long as such decrease shall remain in effect).
8
(d) FUNDING LOSSES. In the event GE Capital shall
incur any loss or expense (including any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by GE Capital to make, continue or maintain any
portion of the principal amount of any Funding as, or to convert
any portion of the principal amount of any Funding into, a LIBOR
Rate Funding) as a result of:
(1) any conversion or repayment or prepayment of
the principal amount of any LIBOR Rate Fundings on a date other
than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to Section 3(e) hereof or otherwise; or
(2) any Fundings not being made as LIBOR Rate
Fundings in accordance with Aladdin Gaming's request therefor;
then, upon the written notice of GE Capital to Aladdin Gaming,
Aladdin Gaming shall, within five (5) days of its receipt
thereof, pay directly to GE Capital such amount as will (in the
reasonable determination of GE Capital ) reimburse GE Capital for
such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on Aladdin Gaming.
(e) INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other
Governmental Authority affects or would affect the amount of
capital required or expected to be maintained by GE Capital or
any Person controlling GE Capital, and GE Capital determines (in
good faith but in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a
consequence of the Commitment or the Fundings made by GE Capital
is reduced to a level below that which GE Capital or such
controlling Person could have achieved but for the occurrence of
any such circumstance, then, in any such case upon notice from
time to time by GE Capital to Aladdin Gaming, Aladdin Gaming
shall immediately pay directly to GE Capital additional amounts
sufficient to compensate GE Capital or such controlling Person
for such reduction in rate of return. A statement of GE
Capital as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence
of manifest error, be conclusive and binding on Aladdin Gaming.
In determining such amount, GE Capital may use any method of
averaging and attribution that it (in its sole and absolute
discretion) shall deem applicable.
(f) PARTICIPANTS. In this Section 5, each reference
to GE Capital shall be deemed to include reference to GE Capital
and each Participant, and all determinations pursuant to this
Section 5 shall be made by GE Capital and each affected
Participant.
6. SECURITY INTEREST IN THE COLLATERAL. To secure the
prompt and complete payment, performance and observance of all of
the Obligations, and to induce GE Capital to enter into this
Agreement and to make the Fundings hereunder, Aladdin Gaming
hereby grants to GE Capital a first priority security interest in
all of Aladdin Gaming's right, title and interest in, to and
under the following, whether now owned or hereafter acquired, and
wherever located: (a) the Equipment leased under and described on
the Equipment Schedules; (b) the Gaming Equipment
9
described on the Collateral Schedules; (c) all additions,
attachments, accessories and accessions thereto, and all
substitutions, replacements or exchange therefor; and (d) all
Proceeds thereof; provided, however, that the foregoing grant of
security interest shall not cover, create a security interest in
or attach to any income generated by the property described in
clauses (a) through (c) above except to the extent resulting from
the disposition of such property.
7. CONDITIONS PRECEDENT.
(a) CONDITIONS TO THE INITIAL FUNDING.
Notwithstanding any other provision of this Agreement, GE Capital
shall not be obligated to make any Funding or to take, fulfill,
or perform any other action hereunder, until the following
conditions have been fulfilled to the reasonable satisfaction of
GE Capital:
(1) This Agreement and the Master Lease Agreement
or counterparts thereof, and the Term Loan Note, shall have been
duly executed by, and delivered to, Aladdin Gaming and GE Capital
on or before June 30, 1998 (the "Closing Date").
(2) GE Capital shall have received the documents,
instruments, certificates, opinions, agreements and other
materials listed in the Schedule of Documents attached hereto,
each in form and substance satisfactory to GE Capital.
(3) Aladdin Gaming shall have obtained consents
and acknowledgments of all Persons whose consents and
acknowledgments are required, including, but not limited to, all
requisite Governmental Authorities, to the terms and to the
execution and delivery, of this Agreement and the other Operative
Documents and the consummation of the transactions contemplated
hereby and thereby, including (without limitation) all permits,
licenses and similar governmental authorizations then required to
have been obtained in connection with the development and
construction of the Aladdin Hotel and Casino, and any other
required permits, licenses or governmental authorizations which
have not then been obtained other than Gaming Licenses are of a
type that are routinely granted on application and no facts or
circumstances exist which indicate that any such required permit,
license or governmental authorization will not be timely
obtainable by Aladdin Gaming without material difficulty, expense
or delay prior to the time that it is required to have been
obtained; and the Aladdin Hotel and Casino shall be in compliance
with any and all applicable gaming and regulatory requirements.
(4) Insurance certificates evidencing that the
insurance policies provided for in Section 8(jj) are in full
force and effect, showing loss payable and/or additional insured
clauses or endorsements, as appropriate, in favor of GE Capital,
in form and substance satisfactory to GE Capital.
(5) Payment by Aladdin Gaming to GE Capital, as
the case may be, of all Fees, costs, and expenses of closing
(including reasonable fees and expenses of consultants and
counsel to GE Capital presented as of the Closing Date).
10
(6) Except as disclosed in Item 7(a)(6) in the
Disclosure Schedule, no action, proceeding, investigation, regula
tion or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative
body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of this
Agreement or any of the other Operative Documents or the consumma
tion of the transactions contemplated hereby and thereby, or
would reasonably be expected to have a Material Adverse Effect,
on the Aladdin Hotel and Casino, or on the financial condition,
operations, assets, business, properties or prospects of Aladdin
Gaming, London Clubs International PLC ("LCI"), Aladdin Bazaar
Holdings, LLC ("Bazaar Holdings"), or Aladdin Gaming Holdings,
LLC ("Holdings"), and which, in GE Capital?s sole judgment,
would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Operative
Documents.
(7) GE Capital shall be satisfied, in its sole
judgment, with the corporate, capital (debt and equity), tax,
legal and management structure of Aladdin Gaming, the final
sources and uses of funds to be used to construct and operate the
Aladdin Hotel and Casino, and shall be satisfied, in its sole
judgment exercised reasonably, with the nature and status of all
contractual obligations, securities, labor, tax, ERISA, employee
benefit, environmental, health and safety matters, in each case,
involving or affecting Aladdin Gaming or the Aladdin Hotel and
Casino.
(8) That certain senior credit facility in the
amount of $410,000,000 (the "Senior Credit Facility"), pursuant
to the Senior Credit Agreement, shall be in full force and effect
and no Event of Default (as defined therein) or event which, with
the giving of notice or the lapse of time, or both, would become
an Event of Default thereunder shall then have occurred and be
continuing.
(9) Aladdin Gaming shall have received a cash
equity contribution from Holdings of $107,000,000, accomplished
by the sale of Membership Interests of Aladdin Gaming, on the
terms and conditions contained in the Holdings' offering
memorandum dated February 18, 1998 (the "Offering Memorandum").
(10) LCI shall have contributed $50,000,000 to
Holdings, which shall then have contributed $50,000,000 in cash
equity to Aladdin Gaming, on the terms and conditions contained
in the Offering Memorandum.
(11) Aladdin Gaming shall have contributed land as
equity in the amount of $75,500,000, in the Aladdin Hotel and
Casino, on the terms and conditions contained in the Offering
Memorandum.
(12) The Keep-Well Agreement, the Guaranty of
Performance and Completion, and the Guaranty of Performance and
Completion (Noteholders), shall be in full force and effect
(provided, however, that it is acknowledged that GE Capital is
not a direct beneficiary thereof and has no rights with respect
thereto, including no right to bring a cause of action with
respect thereto).
11
(13) Execution of an Intercreditor Agreement in
substantially the form attached hereto as Exhibit No. 4, among GE
Capital and the lenders with respect to the Senior Credit
Facility.
(14) A certificate in substantially the form
attached hereto as Exhibit No. 5, signed by an officer of Aladdin
Gaming, certifying that the funds then available to Aladdin
Gaming from all sources shall be sufficient to pay all remaining
costs anticipated to be incurred in connection with the
completion of the Aladdin Hotel and Casino, including (without
limitation) interest payments, Interim Rent and Fees due to GE
Capital with respect to the Facilities during the Interim Funding
Period.
(15) The transaction contemplated by this
Agreement and the other Operative Documents shall not violate
any law, governmental rule or regulation, including (without
limitation) Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System.
(16) There shall have been no material adverse
change in the financial condition, business, properties or
prospects of Aladdin Gaming, Holdings or LCI since the date of
their most recent audited financial statements delivered to GE
Capital.
(17) The Construction Consultant shall have
been engaged pursuant to the engagement letter in substantially
the form attached hereto as Exhibit No. 6, and GE Capital shall
have been authorized by the Construction Consultant to rely on
the reports of the Construction Consultant.
(18) The Construction Consultant shall have
certified that the Construction Completion Date is reasonably
anticipated to occur not more than six (6) months after the date
on which the initial Funding is to be made hereunder.
(19) Aladdin Gaming and Holdings shall satisfy in
all material respects the conditions precedent as set forth in
Section 3.1 of the Disbursement Agreement.
(20) GE Capital shall have received prior to the
Closing Date, with counterparts for each Participant, audited
financial statements of each of Aladdin Gaming, Holdings and LCI,
in each case as at December 31, 1997, except in the case of LCI
which audited financial statements shall have been prepared as at
March 30, 1997.
(b) FURTHER CONDITIONS TO EACH FUNDING . It shall be
a further condition to the funding of the initial and each
subsequent Funding that the following statements shall be true on
the date of each such funding, advance or occurrence, as the case
may be:
(1) Aladdin Gaming's representations and
warranties contained herein or in any of the Operative Documents
shall be true and correct on and as of the Closing Date and the
date on which each such Funding is made, as though
made on or incurred on and as of such date,
12
except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes
therein permitted or contemplated by this Agreement.
(2) No event shall have occurred and be
continuing, or would result from the making of any Funding which
constitutes an Event of Default or event which, with the giving
of notice or the lapse of time, or both, would constitute an
Event of Default.
(3) Each of the conditions specified in Section
7(a) hereof shall have been, and shall continue to be, satisfied
on and as of the date of each subsequent Funding.
(4) Aladdin Gaming shall have timely delivered to
GE Capital the written election of the applicable interest rate,
pursuant to Section 2(d) hereof.
(5) Not less than fifteen (15) Business Days
before the date on which the Funding is to be made, Aladdin
Gaming shall have delivered to GE Capital a written notice
requesting the Funding, specifying the amount of the Funding and
the date on which the Funding is to be made (provided, however,
that Fundings shall not be made more frequently than once per
calendar month), and identifying the Collateral as to which the
Funding is to be made on such date, including fixed asset lists
with complete descriptions of the Collateral, to include make
(manufacturer), model number, serial numbers (if available), and
original cost breakdown; together with purchase orders and
invoices, and evidence of delivery of such Collateral to Aladdin
Gaming.
(6) With respect to each Funding under the Lease
Facility, Aladdin Gaming shall have delivered to GE Capital an
executed Equipment Schedule and related documents relating to the
Funding to be made on such date.
(7) With respect to each Funding under the Term
Loan Facility, Aladdin Gaming shall have delivered to GE Capital
an executed Collateral Schedule relating to the Funding to be
made on such date.
(8) Aladdin Gaming shall have delivered to GE
Capital a certificate in substantially the form attached hereto
as Exhibit No. 7, signed by an officer of Aladdin Gaming,
certifying that all representations and warranties made by
Aladdin Gaming in this Agreement and in the other Operative
Documents are reaffirmed in full as of the date of such Funding,
without material modification from such representations and
warranties as originally made.
The request and acceptance by Aladdin Gaming of the proceeds of
any Funding shall be deemed to constitute, as of the date of such
request or acceptance, (i) a representation and warranty by
Aladdin Gaming that the conditions in this Section have been
satisfied, and (ii) a confirmation by Aladdin Gaming of the
granting and continuance of GE Capital?s Liens pursuant to the
Operative Documents.
13
8. REPRESENTATIONS AND WARRANTIES.
To induce GE Capital to enter into this Agreement,
Aladdin Gaming represents and warrants to GE Capital that:
(a) ORGANIZATION, ETC. Each of Aladdin Gaming,
Holdings, LCNI and the Trust, are validly organized and existing
and in good standing under the laws of the state or jurisdiction
of its organization, is duly qualified to do business and is in
good standing in each jurisdiction where the nature of its
business requires such qualification and where failure to do so
would have a Material Adverse Effect; and has full power and
authority and holds all requisite governmental licenses, permits
and other approvals to enter into and perform its Obligations
under this Agreement and each of the other Operative Documents to
which it is a party and to own, hold and, if applicable, lease
its property and to conduct its business substantially as
currently conducted by it the absence of which would have a
Material Adverse Effect; provided however, that the failure of
Aladdin Gaming to be in good standing in the State of Nevada
shall be deemed to have a Material Adverse Effect on it.
(b) DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The
execution, delivery and performance by Aladdin Gaming of this
Agreement and each of the other Operative Documents to which it
is a Party, and participation by Aladdin Gaming in the
consummation of all aspects of the Transaction, and the
execution, delivery and performance by Aladdin Gaming of the
other agreements executed and delivered in connection with the
Transaction are in each case within Aladdin Gaming's powers, have
been duly authorized by all necessary action, and do not
(1) contravene Aladdin Gaming's Organizational
Documents;
(2) contravene any contractual restriction
binding on or affecting Aladdin Gaming which contravention would
have a Material Adverse Effect;
(3) contravene (i) any court decree or order
binding on or affecting Aladdin Gaming, or (ii) any Legal
Requirement binding on or affecting Aladdin Gaming; or
(4) result in, or require the creation or
imposition of, any Lien on any of Aladdin Gaming's properties
(except as expressly permitted by this Agreement).
(c) GOVERNMENT APPROVAL, REGULATION, ETC. No
authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person (other
than those that have been, or on the Closing Date will be, duly
obtained or made and which are, or on the Closing Date will be,
in full force and effect and except for filings and registrations
of any UCC financing statements necessary to perfect GE Capital's
security interest in the Collateral) is required for the due
execution, delivery or performance by Aladdin Gaming of this
Agreement and any other Operative Document to which it is a
party, or the consummation of the Transaction (except for the
licenses and approvals required under Nevada Gaming Laws).
(d) VALIDITY, ETC. This Agreement and each other
Operative Document executed by Aladdin Gaming will, on the due
execution and delivery thereof, constitute, the legal, valid and
14
binding obligations of Aladdin Gaming, enforceable against
Aladdin Gaming in accordance with their respective terms; and
each other Operative Document executed by Aladdin Gaming will, on
the due execution and delivery thereof by Aladdin Gaming,
constitute the legal, valid and binding obligation of Aladdin
Gaming enforceable against Aladdin Gaming in accordance with its
terms (except, in any case above, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally and by
principles of equity).
(e) FINANCIAL INFORMATION. The financial statements
of Aladdin Gaming, Holdings and LCNI furnished to GE Capital
pursuant to Section 7(a)(20) hereof have been prepared in
accordance with GAAP consistently applied, and present fairly the
financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods
then ended. All balance sheets, all statements of operations,
equity amounts, cash flow and all other financial information of
Aladdin Gaming, Holdings and LCNI furnished pursuant to Section
10(a) hereof have been and will for periods following the Closing
Date be prepared in accordance with GAAP consistently applied,
and do or will present fairly the financial condition of the
Persons covered thereby as at the dates thereof and the results
of their operations for the periods then ended, except that
quarterly financial statements need not include footnote
disclosure and may be subject to ordinary year-end adjustment.
Aladdin Gaming represents that (1) all factual information that
has been or will be made available to GE Capital by or on behalf
of Aladdin Gaming, Holdings and LCNI is or will be, when
furnished, complete and correct in all material respects and does
not or will not, when furnished, contain any untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements contained therein not materially
misleading in light of the circumstances under which such
statements are made, and (2) the projections that have been or
will be made available to GE Capital by or on behalf of Aladdin
Gaming, Holdings and LCNI have been or will be prepared in good
faith based upon reasonable assumptions.
(f) NO MATERIAL ADVERSE CHANGE. No material adverse
change in (1) the financial condition, business, property,
prospects or ability of Aladdin Gaming to perform in all material
respects its obligations under any Operative Document to which it
is a party or (2) the financial condition, business, property,
prospects and ability of Holdings, LCNI or the Trust to perform
in all material respects its obligations under any Transaction
Document to which it is a party has occurred since the date of
the financial statements of such Person delivered pursuant to
Section 7(a)(20) hereof.
(g) LITIGATION, LABOR CONTROVERSIES, ETC. There is no
pending material litigation, action, proceeding, or labor
controversy which could reasonably be expected to have a Material
Adverse Effect or which purports to affect the legality, validity
or enforceability of this Agreement or any other Operative
Document, except as disclosed in Item 8(g) of the Disclosure
Schedule.
(h) SUBSIDIARIES. The Subsidiaries of Aladdin Gaming,
Holdings and LCNI are identified in Item 8(h) of the Disclosure
Schedule.
(i) OWNERSHIP OF PROPERTIES. Aladdin Gaming (x) in
the case of owned real property, has good and marketable fee
title to, and (y) in the case of leased real property, holds
valid and enforceable leasehold interests in, all of such owned
or lease real property, as the case may be,
15
free and clear in each case of all Liens or claims, except for
Liens permitted pursuant to Section 11(c) hereof and where the
failure to own or hold such title, as the case may be, will not
have a Material Adverse Effect. Except as permitted pursuant to
Section 8(m) hereof or Section 11(c) hereof, Aladdin Gaming (x)
in the case of owned personal property, has good and valid title
to, and (y) in the case of leased personal property, holds valid
and enforceable leasehold interests in, all of such material
personal properties and assets, tangible and intangible, of any
nature whatsoever, free and clear in each case of all Liens or
claims, except for Liens permitted pursuant to Section 11(c)
hereof, or where the failure to own or hold such title will not
have a Material Adverse Effect.
(j) TAXES. (1) Each of Aladdin Gaming, Holdings and
LCNI has filed, or caused to be filed, all material tax and
informational returns that are required to have been filed by it
in any jurisdiction, and has paid all material Taxes shown to be
due and payable on such returns and all other taxes and
assessments payable by it, to the extent the same have become due
and payable (other than those Taxes (i) that it is contesting in
good faith and by appropriate proceedings, with adequate,
segregated reserves established for such Taxes or (ii) with
respect to which failure to pay the same could not reasonably be
expected to have a Material Adverse Effect or to impair the
interest of GE Capital in the Collateral) and, to the extent such
Taxes are not due, has established reserves therefor by
allocating, in the Trade Detail Report, amounts that are adequate
for the payment thereof and are required by GAAP.
(2) None of Aladdin Gaming, Holdings or LCNI has
incurred any material Tax liability in connection with the Main
Project or the other transactions contemplated by the Operative
Documents which has not been disclosed in writing to, and
approved by, GE Capital, except as set forth in Item 8(j) of the
Disclosure Schedule.
(k) PENSION AND WELFARE PLANS. During the twelve
consecutive month period prior to the Closing Date and prior to
the date of any Funding hereunder, no steps have been taken to
terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA. No condition exists or
event or transaction has occurred with respect to any Pension
Plan which might result in the incurrence by Aladdin Gaming or
any member of the Controlled Group of any material liability,
fine or penalty. Except as disclosed in Item 8(k) in the
Disclosure Schedule neither Aladdin Gaming nor any member of the
Controlled Group has any Contingent Liability with respect to any
post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title
I of ERISA.
(l) ENVIRONMENTAL WARRANTIES. Except as set forth in
Item 8(l) in the Disclosure Schedule:
(1) all facilities and property (including
underlying groundwater) owned or leased by Aladdin Gaming,
Aladdin Bazaar and Aladdin Music have been, and continue to be,
owned or leased by such Person in material compliance with all
Environmental Laws;
(2) there have been no past, and there are no
pending or threatened
16
(i) claims, complaints, notices or requests
for information received by Aladdin Gaming, Aladdin Bazaar or
Aladdin Music with respect to any alleged violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to
Aladdin Gaming, Aladdin Bazaar or Aladdin Music regarding
potential liability under any Environmental Law;
(3) there have been no Releases of Hazardous
Substances at, on or under any property now or previously owned
or leased by Aladdin Gaming, Aladdin Bazaar or Aladdin Music
that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect;
(4) Aladdin Gaming, Aladdin Bazaar and Aladdin
Music have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and necessary or
desirable for their businesses;
(5) to the Knowledge of Aladdin Gaming, no
property now or previously owned or leased by Aladdin Gaming,
Aladdin Bazaar or AMH, is listed or proposed for listing (with
respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list
of sites requiring investigation or clean-up;
(6) there are no underground storage tanks,
active or abandoned, including petroleum storage tanks, on or
under any property now or previously owned or leased by Aladdin
Gaming, Aladdin Bazaar or Aladdin Music that, singly or in the
aggregate, have, or may reasonably be expected to have, a
Material Adverse Effect;
(7) neither Aladdin Gaming, Aladdin Bazaar nor
Aladdin Music has directly transported or directly arranged for
the transportation of any Hazardous Substances to any location
which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or
local enforcement actions or other investigations which may lead
to material claims against Aladdin Gaming, Aladdin Bazaar or
Aladdin Music for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA;
(8) there are no polychlorinated biphenyls or
friable asbestos present at any property now or previously owned
or leased by Aladdin Gaming, Aladdin Bazaar or Aladdin Music
that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect; and
(9) no conditions exist at, on or under any
property now or previously owned or leased by Aladdin Gaming,
Aladdin Bazaar or Aladdin Music which, with the passage of time,
or the giving of notice or both, would give rise to liability
under any Environmental Law.
(m) INTELLECTUAL PROPERTY. Aladdin Gaming, Holdings
and LCNI owns or licenses (as the case may be) or will own or
hold licenses for all such patents, patent rights, trademarks,
17
trademark rights, trade names, trade name rights, service marks,
service ▇▇▇▇ rights and copyrights as Aladdin Gaming considers
necessary for the conduct of the businesses of Aladdin Gaming
without, to the Knowledge of Aladdin Gaming, any Infringement
upon rights of other Persons, in each case except as could not
reasonably be expected to individually or in the aggregate result
in a Material Adverse Effect and there is no individual patent,
patent right, trademark, trademark right, trade name, trade name
right, service ▇▇▇▇, service ▇▇▇▇ right or copyright the loss of
which would result in a Material Adverse Effect, on Aladdin
Gaming, Holdings or LCNI, except as may be disclosed in Item 8(m)
in the Disclosure Schedule.
(n) REGULATIONS U AND X. Neither Aladdin Gaming,
Holdings or LCNI is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock, and no
proceeds of any Fundings will be used to purchase or carry margin
stock or otherwise for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or X. Terms for
which meanings are provided in F.R.S. Board Regulation U or X or
any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
(o) ACCURACY OF INFORMATION. None of the factual
information, taken as a whole (including the factual information
set forth in the Discount Note Offering Circular), heretofore or
contemporaneously furnished by or on behalf of Aladdin Gaming,
Holdings or LCI in writing to GE Capital for purposes of or in
connection with this Agreement or any transaction contemplated
hereby or with respect to the Transaction (true and complete
copies of which were furnished to GE Capital in connection with
its execution and delivery hereof), contains any untrue statement
of a material fact, and none of the other factual information,
taken as a whole, hereafter furnished in connection with this
Agreement or any other Operative Document by Aladdin Gaming,
Holdings or LCI to GE Capital will contain any untrue statement
of a material fact on the date as of which such information,
taken as a whole, is dated or certified and, as of the Closing
Date, the information delivered prior thereto (unless such
information specifically relates to a prior date) does not, and
the factual information, taken as a whole, hereafter furnished
shall not on the date as of which such information is dated or
certified, omit to state any material fact necessary to make such
information, taken as a whole, not misleading.
(p) EXISTING DEFAULTS. There is no Default or Event
of Default which has occurred and is continuing under any of the
Transaction Documents.
(q) CONTINGENT LIABILITIES. None of Aladdin Gaming,
Holdings or LCNI has any material Contingent Liabilities in
respect of Indebtedness (excluding, however, Indebtedness of the
nature referred to in clause (d) of the definition thereof) or
obligations except those authorized under or contemplated by the
Transaction Documents and not prohibited by this Agreement.
(r) BUSINESS, DEBT, CONTRACTS, ETC. None of Aladdin
Gaming, Holdings or LCNI has conducted any business other than
the business contemplated by the Transaction Documents. None of
Aladdin Gaming, Holdings or LCNI has any outstanding Indebtedness
other than Indebtedness incurred under the Transaction Documents
or permitted under the Transaction Documents or liabilities other
than those incurred under the Transaction Documents or
permitted under the Transaction Documents, and is not a
party to or bound by any contract other than as
18
contemplated by the Transaction Documents to which such Person is
a party or permitted under the Transaction Documents.
(s) REPRESENTATIONS AND WARRANTIES. As of the Closing
Date (in each case except to the extent related to a different
date), all representations and warranties of Aladdin Gaming,
Holdings, LCNI and the Trust and, to the best of Aladdin Gaming's
Knowledge, the Design/Builder, Fluor, the Architect of Record,
and each other Major Contractor and each other Person (other than
Aladdin Gaming) to a Material Main Project Document contained in
the Transaction Documents are true and correct in all material
respects (unless the failure of such representation or warranty
could not reasonably be expected to have a Material Adverse
Effect) and Aladdin Gaming hereby confirms each such
representation and warranty made by it with the same effect as if
set forth in full herein.
(t) IN BALANCE REQUIREMENT. As of the date of each
Funding the Main Project Budget shall be In Balance.
(u) MAIN PROJECT BUDGET. The Main Project Budget (1)
is consistent with the provisions of the Operative Documents in
all material respects, (2) has been and will be prepared in good
faith and with due care, (3) sets forth, for each Line Item, the
total Main Project Costs which are anticipated to be incurred
through Final Completion, and (4) fairly represents Aladdin
Gaming's expectation as to the matters covered thereby. The Main
Project Budget (including the detailed schedules thereto)
allocates the Main Project Costs to be incurred with respect to
construction and completion of each of the Hotel/Casino
Component, the Energy Project Component and the Equipment
Component.
(v) FEES AND ENFORCEMENT. Other than amounts that
have been paid in full or will have been paid in full by the
Closing Date or the date when due for same, no material fees or
Taxes, including stamp, transaction, registration or similar
taxes, are required to be paid for the legality, validity or
enforceability of the Operative Documents.
(w) ERISA COMPLIANCE. Either (1) there are no ERISA
Plans for Aladdin Gaming or any member of the Controlled Group or
(2) Aladdin Gaming and each member of the Controlled Group have
fulfilled their obligations (if any) under the minimum funding
standards of ERISA and the Code for each ERISA Plan in compliance
in all material respects with the currently applicable provisions
of ERISA and the Code and have not incurred any liability to the
PBGC or an ERISA Plan under Title IV of ERISA (other than
liability for premiums due in the ordinary course). Neither the
execution of this Agreement or the other Operative Documents nor
the consummation of the Transaction will involve a "prohibited
transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the Code which is not exempt under Section 408 of
ERISA or under Section 4975(d) of the Code.
(x) LABOR DISPUTES; ACTS OF GOD; CASUALTY AND
CONDEMNATION. Neither the business nor the properties of Aladdin
Gaming or, to the Knowledge of Aladdin Gaming, any other party to
a Material Main Project Document is affected by any fire,
explosion, accident, strike, lockout or other labor dispute
(except as set forth in Item 8(x) in the Disclosure Schedule as
in effect on the Closing Date), drought, storm, hail, earthquake,
embargo, act of God or of the public enemy, or other
19
casualty or Force Majeure Event, that could reasonably be
expected to have a Material Adverse Effect. As of the date
hereof, there is no casualty or condemnation proceeding pending
or, to the best knowledge of Aladdin Gaming, threatened,
affecting all or a portion of the Site.
(y) GOVERNMENT REGULATION. None of Aladdin Gaming,
Holdings, LCNI or the Trust is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act
or the Interstate Commerce Act or registration under the
Investment Company Act of 1940 or under any other Federal or
state statute or regulation which may limit its ability to incur
Indebtedness, other than the Nevada Gaming Laws (from and after
the date that such Person holds any Gaming License), or which may
otherwise render all or any portion of the Obligations
unenforceable. Incurrence of the Obligations under the Operative
Documents complies with all applicable provisions of the Nevada
Gaming Laws.
(z) NO BROKERS. Aladdin Gaming represents that no
broker or finder was responsible for or involved with the parties
in connection with the transactions contemplated by this
Agreement and the other Operative Documents and that there is no
obligation for the payment of any brokerage commission,
compensation or fee of any kind with respect to this Agreement or
any other Operative Document except those included as Fees.
(aa) INSURANCE POLICIES. Item 8(aa) in the Disclosure
Schedule lists all insurance of any nature maintained for current
occurrences by Aladdin Gaming, as well as a summary of the terms
of such insurance. Aladdin Gaming covenants that such insurance
complies with and shall at all times comply with the standards
set forth in Section 10(e) hereof.
(bb) REPRESENTATIONS AND WARRANTIES REGARDING THE
COLLATERAL.
(1) On the date on which the Funding is made with
respect thereto, (A) with respect to Fundings under the Term Loan
Facility, Aladdin Gaming shall be the sole owner of each item of
the Collateral with respect to which such Funding has been made,
and (B) with respect to Fundings under the Lease Facility, GE
Capital shall be the sole owner of each item of the Collateral
with respect to which such Funding has been made, having good and
marketable title thereto free and clear of any and all Liens
except (i) the security interest granted to GE Capital under this
Agreement, (ii) Permitted Encumbrances, and (iii) with respect
to the Equipment leased pursuant to the Master Lease Agreement,
Liens created by or arising through GE Capital. Aladdin Gaming
will warrant and defend the Collateral against all claims and
demands of all persons at any time claiming the same or any
interest thereon.
(2) No effective security agreement, financing
statement, equivalent security or Lien instrument or continuation
statement covering all or any part of the Collateral is on file
or of record in any public office, except (i) such as have been
filed in favor of GE Capital pursuant to this Agreement, or (ii)
such as relate to Permitted Encumbrances.
(3) As a result of the filing of appropriate
financing statements in the State of Nevada, this Agreement is
effective to create a valid and continuing Lien on and perfected
security interest in favor of GE Capital in the Collateral with
respect to which a security interest may be
20
perfected by filing pursuant to the Code, which lien and security
interest is prior to all other Liens (other than Permitted
Encumbrances), and is enforceable as such as against creditors of
and purchasers from Aladdin Gaming. All action (including,
without limitation, all filings, registrations and recordings)
necessary to create and perfect the security interest granted to
GE Capital hereby in respect of each item of the Collateral has
been duly accomplished.
(4) No authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority
(except for those by or with the Nevada Gaming Authorities when
Aladdin Gaming, the Aladdin Parties and/or LCNI are licensed or
registered under the Nevada Gaming Laws) is required for either
(i) the pledge or grant by Aladdin Gaming of the Liens purported
to be created in favor of GE Capital pursuant to any of the
Operative Documents, or (ii) the exercise by GE Capital of any
rights or remedies in respect of any Collateral (whether
specifically granted or created pursuant to any of the Operative
Documents or created or provided for by Applicable Law), except
for filings or recordings contemplated by clause (3) above.
(5) The chief executive office or chief place of
business (as such terms are used in Article 9 of the Uniform
Commercial Code as in effect in the States of New York and Nevada
from time to time) of Aladdin Gaming is located in ▇▇▇▇▇ County,
Nevada. Aladdin Gaming's federal employer identification number
is ▇▇-▇▇▇▇▇▇▇. Aladdin Gaming shall not change its chief
executive office or principal place of business, without giving
written notice thereof to GE Capital within thirty (30) days
following such change and taking all actions deemed by GE Capital
necessary or appropriate to protect and perfect GE Capital?s
interest in the Collateral.
(6) All of the Collateral is, or when installed
pursuant to the Main Project Documents will be, located on the
Subject Property.
(7) Aladdin Gaming's books of accounts and
records are located at the chief executive office or the chief
place of business.
9. [INTENTIONALLY OMITTED]
10. AFFIRMATIVE COVENANTS
Aladdin Gaming covenants and agrees that, unless GE Capital
shall otherwise consent in writing, from and after the date
hereof:
(a) FINANCIAL INFORMATION, REPORTS, NOTICES, ETC.
Aladdin Gaming will furnish, or will cause to be furnished, to GE
Capital copies of the following financial statements, reports,
notices and information:
(1) as soon as available and in any event within
30 days after the end of each month other than the last month of
any Fiscal Quarter, a balance sheet of Aladdin Gaming and a
consolidated and consolidating balance sheet of Aladdin Gaming
and Subsidiaries, in each case as of the end of such month, and
consolidated and consolidating statements of earnings and cash
flow of Aladdin Gaming and Subsidiaries and statements of
earnings and cash flow of Aladdin Gaming for
21
such month and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month,
certified as complete and correct by the chief financial or
accounting Authorized Representative of Aladdin Gaming;
(2) as soon as available and in any event within
45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year, a balance sheet of Aladdin Gaming, Holdings
and LCNI and a consolidated and consolidating balance sheet of
Aladdin Gaming and Subsidiaries, and Holdings and LCNI and each
of their respective Subsidiaries, in each case as of the end of
such Fiscal Quarter, and consolidated and consolidating
statements of earnings and cash flow of Aladdin Gaming and
Subsidiaries, Holdings and LCNI and each of their respective
Subsidiaries and statements of earnings and cash flow of Aladdin
Gaming, Holdings and LCNI , in each case for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, certified as
complete and correct by the chief financial or accounting
Authorized Representative of the Person for which such
information is being delivered;
(3) as soon as available and in any event within
90 days after the end of each Fiscal Year, a copy of the annual
consolidated audited financial statements for such Fiscal Year
for such Person and for Aladdin Gaming and Subsidiaries, Holdings
and LCI and their respective Subsidiaries, including therein a
consolidated and consolidating balance sheet of Aladdin Gaming
and Subsidiaries, Holdings and LCI and their respective
Subsidiaries as of the end of such Fiscal Year and consolidated
and consolidating statements of earnings and cash flow of Aladdin
Gaming and Subsidiaries, Holdings and LCI and their respective
Subsidiaries for such Fiscal Year, in each case as audited
(without any Impermissible Qualification) by nationally
recognized independent public accountants acceptable to GE
Capital;
(4) as soon as available and in any event within
45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year and within 90 days after the end of the
Fiscal Year, a Compliance Certificate, executed by the chief
financial or accounting Authorized Representative of Aladdin
Gaming, showing (in reasonable detail and with appropriate
calculations and computations in all respects reasonably
satisfactory to GE Capital) compliance (currently and on a
proforma basis after giving effect the payments to be made in
respect of all Federal, state and local income taxes of Aladdin
Gaming or, if Aladdin Gaming is treated as a pass-through entity
or is not treated as a separate entity for United States federal
income tax purposes, the payments to be made pursuant to clause
(3) of Section 11(f) hereof) with the financial covenants set
forth in Section 11(d) hereof.
(5) as soon as possible and in any event within
90 days after the end of the fiscal year of the Trust, an annual
statement, prepared by the Trust's tax accountants and certified
by an Authorized Representative of the Trust, confirming that the
net worth of the Trust based upon the fair market value of its
assets less liabilities is more than One Hundred Million Dollars
($100,000,000.00);
(6) as soon as possible and in any event within
three days after Aladdin Gaming, Holdings or LCI obtains
Knowledge of the occurrence of a Default, a statement of the
chief executive, financial or accounting Authorized
Representative of such Person setting forth details of
22
such Default and the action which such Person has taken and
proposes to take with respect thereto; and as soon as possible
and in any event within one Business Day after Aladdin Gaming
receives notice of a Default, a copy thereof (and Aladdin Gaming
shall cause the Administrative Agent to provide to GE Capital a
copy of any notice concurrently with delivery thereof to Aladdin
Gaming);
(7) as soon as possible and in any event within
five Business Days after Aladdin Gaming, Holdings or LCI obtains
Knowledge of (x) the occurrence of any material adverse
development with respect to any litigation, action, proceeding or
labor controversy of the type and materiality described in Item
8(g) of the Disclosure Schedule, or (y) the commencement of any
litigation, action, proceeding or labor controversy of the type
and materiality described in Item 8(g) of the Disclosure
Schedule, notice thereof and, to the extent GE Capital reasonably
requests, copies of all documentation relating thereto;
(8) promptly after the sending or filing thereof,
(x) copies of all reports and registration statements which
Aladdin Gaming, Holdings or LCNI files with the SEC or any
national or foreign securities exchange, and (y) copies of all
reports required to be filed by Aladdin Gaming with any
Governmental Instrumentality, including any reports with respect
to Environmental Matters and the Permits;
(9) immediately upon becoming aware of (w) the
institution of any steps by Aladdin Gaming or any other Person to
terminate any Pension Plan, (x) the failure to make a required
contribution to any Pension Plan, if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, (y) the
taking of any action with respect to a Pension Plan which could
result in the requirement that Aladdin Gaming furnish a bond or
other security to the PBGC or such Pension Plan, or (z) the
occurrence of any event with respect to any Pension Plan which
could result in the incurrence by Aladdin Gaming, Holdings or
LCNI of any material liability, fine or penalty, notice thereof
and copies of all documentation relating thereto;
(10) promptly upon receipt thereof, copies of all
detailed management letters submitted to Aladdin Gaming by the
independent public accountants referred to in Section 10(a)(2)
hereof in connection with each audit made by such accountants of
the books of Aladdin Gaming, Holdings or LCNI ;
(11) promptly when available and in any event
no later than 45 days prior to the last day of each Fiscal Year
(commencing after the Closing Date), a budget for the next Fiscal
Year, which budget shall be prepared on a Fiscal Quarter basis
and shall contain a projected, consolidated balance sheet and
statement of earnings and cash flow of Aladdin Gaming and
Subsidiaries for such Fiscal Year, prepared in reasonable detail
by the chief accounting or financial Authorized Representative of
Aladdin Gaming (GE Capital shall have the right to request
clarifications on such budget within 20 days after delivery
thereof);
(12) promptly and in any event within five
Business Days after the receipt thereof, any material notice
received by Aladdin Gaming, any Aladdin Party or LCNI
from any Nevada Gaming Authority, including all NGC-l
Reports and all exception reports, which notice
23
relates to the construction, operation or maintenance of the Main
Project, any Permit related thereto or any Equity Interest or any
Membership Interest in any such Person;
(13) as soon as available and in any event within
30 days after the end of each month following the Opening Date, a
report detailing the occupancy rate of the Hotel, the average
room rate thereof, the win rate at the Casino and such other
information prepared by Aladdin Gaming relating to the operation
and condition of the Hotel/Casino;
(14) prior to Final Completion, within 30 days
after the end of each month, a monthly status report describing
in reasonable detail the progress of the construction of each
Construction Component and the Main Project as a whole since the
immediately preceding report hereunder, including the cost
incurred to the end of such month, an estimate of the time and
cost required to complete each Construction Component and the
Main Project as a whole, the progress of construction and how it
relates to the Construction Benchmark Schedule and such other
information and reports as GE Capital or Construction Consultant
may reasonably request; and
(15) prior to Final Completion promptly after
receipt thereof by Aladdin Gaming, all progress reports provided
by the Design/Builder pursuant to the Design/Build Contract and
the attachments thereto, if any, and such additional information
relative thereto as GE Capital or Construction Consultant may
reasonably request;
(16) as soon as possible and in any event within
three days after Aladdin Gaming obtains Knowledge thereof, notice
of any event, occurrence or circumstance which reasonably could
be expected to cause the Main Project Budget not to be In Balance
or render Aladdin Gaming, one or more of the Completion
Guarantors, the Design/Builder, Fluor, the Energy Project
Provider, or the Energy Project Guarantor incapable of, or
preventing such Person from (x) achieving the Completion Date on
or before the Outside Completion Deadline or (y) meeting any
material obligation of such Person under the Operative Documents,
the Design/Build Contract or the other Material Main Project
Documents as and when required thereunder;
(17) as soon as possible and in any event within
three days after Aladdin Gaming obtains Knowledge thereof, notice
of any termination or event of default or notice thereof or any
requests for indemnification of any other party or any other
notice relating to material rights or obligations with respect to
the Reciprocal Easement Agreement, Site Work Agreement or Common
Parking Area Use Agreement pursuant to the terms thereof under
any Material Main Project Document;
(18) any change in the Authorized Representatives
of Aladdin Gaming and such notice shall include a certified
specimen signature of any new Authorized Representative so
appointed and, if requested by GE Capital, satisfactory evidence
of the authority of such new Authorized Representative;
(19) prior to Final Completion, any proposed
material change in the nature or scope of the Main Project or the
business or operations of Aladdin Gaming, Holdings or LCNI;
24
(20) prior to Final Completion, any notice of any
schedule delay delivered under the Design/Build Contract and all
remedial plans and updates thereof;
(21) the occurrence or existence of any
Environmental Matter requiring notice to a Governmental
Instrumentality or with respect to which notice is received from
a Governmental Instrumentality;
(22) any Event of Loss or any other event or
development which could reasonably be expected to have a Material
Adverse Effect;
(23) prior to Final Completion, promptly, but in
no event later than ten days after the receipt thereof by Aladdin
Gaming, copies of (x) all Main Project Documents and Permits
obtained or entered into by Aladdin Gaming after the Closing
Date, (y) any amendment, supplement or other modification to any
Permit received by Aladdin Gaming after the Closing Date, and (z)
all notices relating to the Main Project received by or delivered
to Aladdin Gaming from any Governmental Instrumentality or any of
the other Project Parties;
(24) concurrently with delivery thereof to the
Administrative Agent, each Final Advance Request delivered
pursuant to Section 2.4.2(b) of the Disbursement Agreement; and
(25) such other information respecting the
condition or operations, financial or otherwise, of Aladdin
Gaming, Holdings or LCNI as required by the other Transaction
Documents applicable to it (including information and reports
from the chief accounting or financial Authorized Representative
of Aladdin Gaming), in such detail as GE Capital may reasonably
request.
(b) COMMUNICATION WITH ACCOUNTANTS. Aladdin Gaming
authorizes GE Capital to communicate directly with its
independent certified public accountants and tax advisors and
authorizes those accountants to disclose to GE Capital any and
all financial statements and other supporting financial documents
and schedules including copies of any management letter with
respect to the business, financial condition and other affairs of
Aladdin Gaming. At or before the Closing Date, Aladdin Gaming
shall deliver a letter addressed to such accountants and tax
advisors instructing them to comply with the provisions of this
Section. GE Capital shall inform Aladdin Gaming prior to
communicating directly with Aladdin Gaming's independent
certified public accountants and tax advisors, and Aladdin Gaming
shall be permitted to participate in such communications.
(c) COMPLIANCE WITH LAWS, ETC. Aladdin Gaming and
Subsidiaries will comply in all material respects with all
applicable Legal Requirements, including:
(1) the maintenance and preservation of the
corporate or other organizational existence of such Person; and
(2) the payment, before the same become
delinquent, of all material Taxes imposed upon it or upon its
property, except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves,
if any, in accordance with GAAP shall have been set aside on its
books.
25
(d) MAINTENANCE OF PROPERTIES; OPERATION; RESERVES.
Aladdin Gaming and Subsidiaries will maintain, preserve, protect
and keep the portion of the Site owned or leased by such Person
in good repair, working order and condition (ordinary wear and
tear excepted), and make necessary and proper repairs, renewals
and replacements so that its business carried on in connection
therewith may be properly conducted at all times. Aladdin Gaming
will operate the Aladdin Hotel and Casino as a luxury themed
casino hotel (with a separate level of the Casino catering to
premium players) in accordance with the standards which shall be
at least equivalent to the standards of the Mirage on the Closing
Date. Aladdin Gaming shall maintain adequate working capital
reserves and other reserves as set forth in the annual budget to
be delivered by Aladdin Gaming in accordance with Section
10(a)(11) hereof.
(e) INSURANCE.
(1) Aladdin Gaming shall, at its own expense,
maintain the policies of insurance in such amounts and as
otherwise described in ANNEX C. Aladdin Gaming agrees to deliver
to GE Capital evidence of insurance satisfactory to GE Capital.
No insurance shall be subject to any co-insurance clause.
Aladdin Gaming hereby directs all present and future insurers
under its "All Risk" policies of insurance to pay all proceeds
payable thereunder solely with respect to the Collateral directly
to GE Capital. Aladdin Gaming irrevocably makes, constitutes and
appoints GE Capital (and all officers, employees or agents
designated by GE Capital) as Aladdin Gaming?s true and lawful
agent and attorney in-fact for the purpose of making, settling
and adjusting claims under the "All Risk" policies of insurance,
endorsing the name of Aladdin Gaming on any check, draft,
instrument or other item of payment for the proceeds of such "All
Risk" policies of insurance solely with respect to the
Collateral, and for making all determinations and decisions with
respect to such "All Risk" policies of insurance solely with
respect to the Collateral. In the event Aladdin Gaming at any
time or times hereafter shall fail to obtain or maintain (or fail
to cause to be obtained or maintained) any of the policies of
insurance required above or to pay any premium in whole or in
part relating thereto, GE Capital, without waiving or releasing
any Obligations or Event of Default hereunder, may at any time or
times thereafter (but shall not be obligated to) obtain and
maintain such policies of insurance and pay such premium and take
any other action with respect thereto which GE Capital deems
advisable. All sums so disbursed, including attorneys? fees,
court costs and other charges related thereto, shall be payable,
on demand, by Aladdin Gaming to GE Capital and shall be
additional Obligations hereunder secured by the Collateral.
(2) Aladdin Gaming shall deliver to GE Capital
endorsements to all of its (i) "All Risk" and business
interruption insurance naming GE Capital as loss payee, and
(ii) general liability and other liability policies naming GE
Capital as an additional insured.
(f) BOOKS AND RECORDS. Aladdin Gaming shall maintain
adequate books, accounts and records with respect to its business
in compliance in all material respects with the regulations of
any Governmental Authority having jurisdiction thereof and, with
respect to financial statements, in accordance with GAAP. Subject
to reasonable safety requirements and the rights of other
Persons, and (from and after the date that Aladdin Gaming holds a
Gaming License) subject to Nevada Gaming Laws, Aladdin Gaming
shall, at its cost and expense, permit employees or agents of GE
Capital and the Construction Consultant at any reasonable times
and upon reasonable prior notice to inspect the
26
Main Project, to examine or audit all of Aladdin Gaming's books,
accounts and records pertaining or related to the Main Project,
to make copies and memoranda thereof and, with respect to any
Environmental Matters, to perform any tests or studies and
prepare any reports reasonably required by GE Capital. For all
expenditures with respect to which Fundings are made, Aladdin
Gaming shall retain, until at least five (5) years after GE
Capital has received the report specified in Section 10(a)(1)
hereof for the calendar month in which the last Funding was made
by GE Capital, all records (contracts, orders, invoices, bills,
receipts and other documents) evidencing such expenditures.
(g) SUPPLEMENTAL DISCLOSURE. At the request of GE
Capital (in the event that such information is not otherwise
delivered by Aladdin Gaming to GE Capital pursuant to this
Agreement) but not more frequently than every three (3) months,
Aladdin Gaming will supplement (or cause to be supplemented) each
Schedule hereto, or representation herein or in any other
Operative Document with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in such
Schedule or as an exception to such representation or which is
necessary to correct any information in such Schedule or
representation which has been rendered inaccurate thereby;
provided however, that such supplement to such Schedule or
representation shall not be deemed an amendment thereof unless
expressly consented to in writing by GE Capital, and no such
amendments, except as the same may be consented to in a writing
which expressly includes a waiver, shall be or be deemed a waiver
by GE Capital of any Default disclosed therein. Aladdin Gaming
shall, if so requested by GE Capital, furnish to GE Capital as
often as it reasonably requests, statements and schedules further
identifying and describing the Collateral and such other reports
in connection with the Collateral as GE Capital may reasonably
request, all in reasonable detail, and, Aladdin Gaming shall
advise GE Capital promptly, in reasonable detail, of (i) any
Lien, other than as permitted pursuant to Section 8(f), attaching
to or asserted against any of the Collateral, (ii) any material
change in the composition of the Collateral, and (iii) the
occurrence of any other event which would have a Material Adverse
Effect upon the Collateral and/or GE Capital's Lien thereon.
(h) FISCAL YEAR. Aladdin Gaming shall maintain as its
fiscal year the twelve month period ending on December 31 of each
year.
(i) CASUALTY AND CONDEMNATION.
(1) Aladdin Gaming hereby assumes and shall bear
the entire risk of any loss, theft, damage to, or destruction of,
any of the Collateral from any cause whatsoever. Aladdin Gaming
shall promptly notify GE Capital of any loss, damage, or
destruction to any Collateral having a value in excess of
$100,000.00, whether or not covered by insurance. Any such event
occurring with respect to the Collateral is hereinafter referred
to as a "Casualty Occurrence." On or before the Payment Date
next following ninety (90) days after the date of the Casualty
Occurrence with respect to any item of Collateral having a value
in excess of $100,000.00 or with respect to multiple items of
Collateral having an aggregate value in excess of $100,000.00
(the "Casualty Payment Date"), Aladdin Gaming shall either (as
selected by Aladdin Gaming):
(A) replace, repair or restore the Collateral
having suffered the Casualty Occurrence with equipment of
comparable make and model, having an equal or greater
27
value, utility and remaining useful life, in as good an operating
condition as the Collateral having suffered the Casualty
Occurrence, which is free and clear of all liens and
encumbrances; and Aladdin Gaming shall deliver to GE Capital such
documents and instruments as reasonably may be required by GE
Capital in connection with such replacement, repair or
restoration, including (without limitation) Uniform Commercial
Code financing statements or statements of amendment to be filed
at Aladdin Gaming's expense and, if the Collateral having
suffered the Casualty Occurrence was leased pursuant to the
Master Lease Agreement, a ▇▇▇▇ of sale and an amended Annex A to
the applicable Equipment Schedule with respect to such
Collateral; or
(B) prepay to GE Capital that portion of the
Term Loan attributable to the Collateral having suffered the
Casualty Occurrence or, if the Collateral having suffered the
Casualty Occurrence was leased pursuant to the Master Lease
Agreement, pay to GE Capital the sum of (i) the Stipulated Loss
Value of such Collateral calculated in accordance with Annex D
attached to the applicable Equipment Schedule as of the Rent
Payment Date next preceding such Casualty Occurrence, and (ii)
all Rent and other amounts which are due under the Master Lease
Agreement with respect to such Collateral as of the Casualty
Payment Date; and, in any event, Aladdin Gaming shall pay to GE
Capital the amount of any Breakage Loss incurred by GE Capital
(or any Participant) as a result of or in connection with such
Casualty Occurrence and such payment (if such payment is made on
a day which is not a payment date). If the Collateral having
suffered the Casualty Occurrence was leased pursuant to the
Master Lease Agreement, the Lease Term as to such Collateral
shall terminate upon payment of all sums required pursuant to
this Section and GE Capital will transfer, on an AS IS, WHERE IS
BASIS, without recourse or warranty, express or implied, of any
kind whatsoever ("AS IS BASIS") (except as provided in the
following sentence), all of GE Capital's interest in and to such
Collateral. GE Capital shall not be required to make and may
specifically disclaim any representation or warranty as to the
condition of the Collateral and other matters (except that GE
Capital shall warrant that it has conveyed whatever interest it
received in such Collateral free and clear of any lien or
encumbrance created by or arising through GE Capital).
(2) Aladdin Gaming shall, promptly upon learning
of the institution of any proceeding for the condemnation or
other taking of any of the Collateral, notify GE Capital of the
pendency of such proceeding, and agrees that GE Capital may
participate in any such proceeding and Aladdin Gaming from time
to time will deliver to GE Capital all instruments reasonably
requested by GE Capital to permit such participation. GE Capital
shall (and is hereby authorized to) collect any and all awards,
payments or other proceeds of any such condemnation or taking and
apply such proceeds to the reduction of the Obligations in the
manner set forth in Section 3(d) or, at GE Capital?s option in
its sole discretion, may permit or require Aladdin Gaming to use
such proceeds, or any part thereof, to replace, repair or restore
such Collateral as provided in paragraph (A) above.
(j) COVENANTS REGARDING THE COLLATERAL.
(1) Aladdin Gaming shall keep and maintain, at
its own cost and expense, satisfactory and complete records of
the Collateral. Aladdin Gaming shall ▇▇▇▇ its books and records
pertaining to the Collateral to evidence this Agreement and the
security interests granted pursuant hereto.
28
(2) All of the Collateral is and will be used or
held for use by Aladdin Gaming in the conduct of its business and
in a manner complying with all Applicable Laws unless the failure
to comply with such Applicable Law would not have a Material
Adverse Effect, and Aladdin Gaming shall not permanently
discontinue use of the Collateral; provided that (i) Aladdin
Gaming need not comply with any Applicable Law to the extent that
such law is being contested in good faith by appropriate
proceedings which do not have a Material Adverse Effect on the
interest of GE Capital in the Collateral and do not give rise to
the risk of any criminal liability on the part of GE Capital,
(ii) Aladdin Gaming need not comply with any Applicable Law to
the extent that Aladdin Gaming shall have obtained a non-
conforming use or similar permit, and (iii) Aladdin Gaming may
store on the Subject Property indefinitely any item of Collateral
not then necessary for the operation of its business.
(3) Aladdin Gaming shall keep and maintain the
Collateral in good operating order, appearance, condition and
repair (ordinary wear and tear excepted) in a manner consistent
with customary industry practice and shall make all necessary
replacements thereof. Aladdin Gaming shall promptly inform GE
Capital of any material additions to or deletions from the
Collateral.
(4) Aladdin Gaming shall not permit any
Collateral to become an accession to other personal property,
unless GE Capital has a valid, perfected, and first priority Lien
in such personal property.
(5) Aladdin Gaming shall not, without the prior
written consent of GE Capital, (A) remove any of the Collateral
from the Subject Property (except, prior to the occurrence of an
Event of Default, (i) to be stored in the warehouse on the
Subject Property, or (ii) on a temporary basis for purposes of
repair); or (B) sell, lease as a lessor, or otherwise dispose of
any of the Collateral or any interest therein.
(6) Aladdin Gaming shall, if at any time
reasonably requested by GE Capital, affix in a prominent position
on each unit of Collateral having a value in excess of $5,000.00
plates, tags or other identifying labels showing the interest
therein of GE Capital. Aladdin Gaming will not, without GE
Capital's prior written consent, alter or remove any identifying
symbol or number on the Collateral.
(7) Aladdin Gaming will not, without the prior
consent of GE Capital, affix or install any accessory, equipment
or device on any Collateral if such addition will materially
impair the value, originally intended function or use of such
Collateral. All additions, repairs, parts, supplies,
accessories, equipment, and devices furnished, attached or
affixed to any Collateral which are not readily removable without
material damage to the Collateral shall be made only in
compliance with Applicable Law, shall be free and clear of all
Liens, encumbrances or rights of others, and shall become subject
to the security interest of GE Capital. Aladdin Gaming will not,
without the prior written consent of GE Capital and subject to
such conditions as GE Capital may impose for its protection,
affix or install any Collateral to or in any other personal or
real property unless such Collateral may be removed from such
other personal or real property without material damage to the
Collateral or the other real or personal property.
Any alterations or modifications to the Collateral
29
that are, at any time during the term of this Agreement, required
to comply with any Applicable Law, shall be made at the expense
of Aladdin Gaming.
(8) Subject to Nevada Gaming Laws, Aladdin Gaming
shall: (A) provide access to the Subject Property during normal
business hours to GE Capital and its agents as frequently as GE
Capital determines to be appropriate (except so long as no Event
of Default has occurred and is then continuing, GE Capital may
not exercise this right of access more than two (2) times per
calendar year), upon reasonable advance notice (unless an Event
of Default shall have occurred and is continuing, in which event
no notice shall be required and GE Capital shall have access at
any and all times); (B) permit GE Capital and its agents to
inspect, audit and make extracts from Aladdin Gaming's records,
files and books of account; and (C) permit GE Capital to conduct
audits to inspect, review and evaluate the Collateral, and
Aladdin Gaming agrees to provide to GE Capital (at Aladdin
Gaming's cost and expense) such clerical and other assistance as
reasonably may be requested with regard thereto. Aladdin Gaming
shall make available to GE Capital, as quickly as practicable
under the circumstances, originals or copies of all books,
records, board minutes, contracts, insurance policies,
environmental audits, business plans, files, financial statements
(actual and pro forma), filings with Federal, state and local
regulatory agencies, and other instruments and documents, which
GE Capital reasonably may request and that relate to the
Collateral or the financial condition of Aladdin Gaming. Aladdin
Gaming shall deliver any document or instrument reasonably
necessary for GE Capital, as it may from time to time request, to
obtain records from any service bureau or other Person which
maintains records for Aladdin Gaming, and shall maintain
duplicate records or supporting documentation on media, including
(without limitation) computer tapes and disks owned by Aladdin
Gaming. Aladdin Gaming shall instruct its independent certified
public accountants and its banking and other financial
institutions to make available to GE Capital such information and
records as GE Capital reasonably may request from time to time.
(9) Provided that no Event of Default shall then
have occurred and be continuing, at Aladdin Gaming's expense,
upon ten (10) Business Days' prior written notice to GE Capital,
Aladdin Gaming may elect to replace an item of the Collateral (a
"Substituted Item") with a new item of Equipment (a "Replacement
Item"), due to the obsolescence of the Substituted Item or if the
Substituted Item is rendered inoperable or unusable in Aladdin
Gaming's reasonable determination or if Aladdin Gaming reasonably
determines that such Substituted Item is no longer necessary in
the operation of its business. Replacements pursuant hereto
shall be limited to once per quarter for any number of
Substituted Items. Each Replacement Item shall be free and clear
of all liens and encumbrances and shall have at least the value,
utility and remaining useful life and be in as good an operating
condition as the Substituted Item, assuming that the Substituted
Item had been maintained in accordance with the provisions of
this Agreement. Aladdin Gaming shall pay to GE Capital an
administration fee in connection with each such substitution
(regardless of the number of the Substituted Items) of $1,000.00,
and shall execute and deliver to GE Capital such documents and
instruments with respect to each Replacement Item as reasonably
may be required by GE Capital in connection with such
replacement, including (without limitation) Uniform Commercial
Code financing statements or statements of amendment to be filed
at Aladdin Gaming's expense and (to the extent that such
Substituted Item constituted an item of Equipment leased pursuant
to the Master Lease Agreement) a ▇▇▇▇ of sale and an amended
Annex A to the applicable Equipment Schedule with respect
to each Replacement Item. Upon compliance by Aladdin
Gaming with the provisions hereof, if the
30
Substituted Item was leased pursuant to the Master Lease
Agreement, GE Capital will transfer to Aladdin Gaming, on an AS
IS BASIS (except as set forth in the following sentence), all of
GE Capital's interest in and to the Substituted Item. GE Capital
shall not be required to make and may specifically disclaim any
representation or warranty as the condition of the Substituted
Item and any other matters (except that GE Capital shall warrant
that it conveyed whatever interest it received in the Substituted
Item free and clear of any lien or encumbrance created by or
arising through GE Capital). GE Capital shall execute and
deliver to Aladdin Gaming such Uniform Commercial Code statements
of partial release as reasonably may be required in order to
terminate any interest of GE Capital in and to the Substituted
Item.
(k) CONTINUOUS PERFECTION. Aladdin Gaming shall not
change its name, identity or organizational structure in any
manner which might make any financing or continuation statement
filed in connection herewith seriously misleading within the
meaning of Section 9-402(7) of the Code or any other then
applicable provision of the Code unless Aladdin Gaming shall have
given GE Capital written notice thereof within thirty (30) days
following such change and shall have taken all action (or made
arrangements to take such action substantially simultaneously
with such change if it is impossible to take such action in
advance) necessary or reasonably requested by GE Capital to amend
such financing statement or continuation statement so that it is
not seriously misleading.
(l) GE CAPITAL'S APPOINTMENT AS ATTORNEY-IN-FACT.
Subject to Nevada Gaming Laws, effective upon the occurrence and
during the continuation of an Event of Default, Aladdin Gaming
hereby irrevocably constitutes and appoints GE Capital and any
officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of Aladdin Gaming and in the
name of Aladdin Gaming or in its own name, from time to time in
GE Capital's discretion, for the purpose of carrying out the
terms of this Agreement and any other Operative Document, to
take any and all appropriate action and to execute and deliver
any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement and any
other Operative Document and, without limiting the generality of
the foregoing, hereby grants to GE Capital the power and right,
on behalf of Aladdin Gaming, without notice to or assent by
Aladdin Gaming, and at any time, to do the following:
(1) continue any insurance existing pursuant to
and required by the terms of the Operative Documents, and pay all
or any part of the premiums therefor and the costs thereof;
(2) receive payment of any and all monies,
claims, and other amounts due or to become due at any time
arising out of or in respect of any Collateral;
(3) ask, demand, collect, receive and give
acquittances and receipts for any and all money due or to become
due under any Collateral;
(4) pay or discharge taxes, liens, security
interest, or other encumbrances levied or placed on or threatened
against the Collateral;
(5) effect any repairs or obtain any insurance
called for by the terms of this Agreement and pay all or any part
of the premiums therefor and costs thereof;
31
(6) direct any party liable for any payment under
or in respect of any of the Collateral to make payment of any and
all monies due or to become due thereunder, directly to GE
Capital or as GE Capital shall direct;
(7) sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, and notices
in connection with the Collateral;
(8) settle, compromise or adjust any suit,
action, or proceeding relating to the Collateral and, in
connection therewith, give such discharges or releases as GE
Capital may deem appropriate;
(9) commence and prosecute any suits, actions or
proceedings of law or equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral;
(10) defend any suit, action or proceeding brought
against Aladdin Gaming with respect to any Collateral if Aladdin
Gaming does not defend such suit, action or proceeding or if GE
Capital believes that Aladdin Gaming is not pursuing such defense
in a manner that will maximize the recovery with respect to such
Collateral; and
(11) sell, transfer, pledge, make any agreement
with respect to, or otherwise deal with any of the Collateral as
fully and completely as though GE Capital were the absolute owner
thereof for all purposes, and to do, at GE Capital's option and
Aladdin Gaming's expense, at any time, or from time to time, all
acts and things which GE Capital reasonably deems necessary to
perfect, preserve, or realize upon the Collateral and GE
Capital?s Lien therein in order to effect the intent of this
Agreement and the other Operative Documents, all as fully and
effectively as Aladdin Gaming might do.
Aladdin Gaming hereby ratifies, to the extent
permitted by law, all that said attorneys shall lawfully do or
cause to be done by virtue hereof. The power of attorney granted
pursuant to this Section is a power coupled with an interest and
shall be irrevocable.
The powers conferred on GE Capital hereunder are
solely to protect GE Capital's security interests in the
Collateral and shall not impose any duty upon it to exercise any
such powers. GE Capital shall be accountable only for amounts
that it actually receives as a result of the exercise of such
powers and none of its officers, directors, employees, agents or
representatives shall be responsible to Aladdin Gaming for any
act or failure to act, except for their own gross negligence or
willful misconduct as determined by a final judgment of a court
of competent jurisdiction.
(m) INDEMNIFICATION. (1) Aladdin Gaming hereby agrees
to indemnify on an after-tax basis, defend, save and keep
harmless GE Capital, the Participants, their agents, employees,
successors and assigns, (each, an "Indemnified Person"), from and
against any and all suits, actions, costs, fines, deficiencies,
penalties, proceedings, claims, damages, losses, liabilities and
expenses (including reasonable attorneys' fees and disbursements
and other costs of investigation or defense,
32
including those incurred upon any appeal) (each, a "Claim") which
may be instituted or asserted against or incurred by such
Indemnified Person as the result of credit having been extended
under this Agreement or any other Operative Document, or in
connection with or arising out of the transactions contemplated
hereunder and thereunder, of whatsoever kind and nature, in
contract or tort, and including, but not limited to, strict
liability in tort, arising out of (A) the selection, manufacture,
purchase, acceptance or rejection of Collateral, the ownership of
Collateral during the Lease Term, and the delivery, lease,
possession, maintenance, use, condition, return or operation of
the Collateral (including, without limitation, latent and other
defects, whether or not discoverable by an Indemnified Person or
Aladdin Gaming and any claim for patent, trademark or copyright
infringement or environmental damage), or (B) the condition of
Collateral sold or disposed of after use by Aladdin Gaming, or
(C) Environmental Claims or Environmental Liabilities and Costs
and, unless Aladdin Gaming is then contesting in good faith such
Environmental Claim or Environmental Liabilities and Costs and
Aladdin Gaming has set aside on its books appropriate reserves
therefor, Aladdin Gaming shall fully and promptly pay, perform
and discharge any such Environmental Claim or Environmental
Liabilities and Costs. Notwithstanding the foregoing, Aladdin
Gaming shall not be required to indemnify any Indemnified Person
for any Claim to the extent such Claim (i) arises out of or
results from the gross negligence or willful misconduct of such
Indemnified Person or any of its Affiliates; (ii) arises out of
or relates to the breach by such Indemnified Person or its
Affiliate of any provision of any Operative Document; (iii)
arises out of or results from any facts, circumstances or events
occurring (x) in the case of Collateral subject to the Master
Lease Agreement, after the later of (1) the termination of the
Master Lease Agreement with respect to such Equipment, or (2) the
return of such Equipment in accordance with the terms of the
Master Lease Agreement, and (y) in the case of all Collateral,
after the later of (1) the repossession of such Collateral by GE
Capital, or (2) the payment in full of the Obligations; (iv)
arises out of or relates to the voluntary transfer by GE Capital
of its interest in the Obligations or the Collateral prior to the
occurrence of an Event of Default; (v) arises out of or results
from a Lien on the Collateral created by or through GE Capital;
or (vi) is a Tax.
(2) No Indemnified Person shall be responsible or
liable to any other party hereto, any successor, assignee,
participant, or third-party beneficiary of Aladdin Gaming or any
person asserting claims derivatively through such party, for
indirect, punitive, exemplary or consequential damages which may
be alleged as a result of credit having been extended under the
Operative Documents. Aladdin Gaming hereby acknowledges and
agrees that the Indemnified Persons (A) are not now and never
have been in control of the Subject Property or the affairs of
Aladdin Gaming, and (B) do not have the capacity through the
provisions of the Operative Documents to influence conduct with
respect to the ownership, operation or management of the Subject
Property.
(3) If a Claim is made against an Indemnified
Person, such Indemnified Person promptly after receiving such
notice shall give notice of such Claim to Aladdin Gaming;
provided that the failure to provide such notice shall not
release Aladdin Gaming from any of its obligations to indemnify
hereunder except if Aladdin Gaming is prejudiced as a result of
the failure to give such notice in a timely fashion and then only
to the extent of such prejudice. Aladdin Gaming shall be
entitled, at its sole cost and expense, acting through counsel
reasonably acceptable to the Indemnified Person, so long as
Aladdin Gaming has acknowledged in writing its responsibility for
33
indemnification of the Indemnified Person for such Claim
hereunder, (A) in any judicial or administrative proceeding that
involves solely the Claim, to assume responsibility for and
control thereof, (B) in any judicial or administrative proceeding
involving a Claim and other claims related or unrelated to the
transactions contemplated by the Operative Documents, to assume
responsibility for and control of the Claim to the extent that
the same may be and is severed from such other claims (and such
Indemnified Person shall use its reasonable efforts, at Aladdin
Gaming's expense, to obtain such severance), (C) in any other
case, to be consulted by such Indemnified Person with respect to
judicial proceedings subject to the control of such Indemnified
Person and to be allowed, at Aladdin Gaming's sole expense, to
participate therein. The Indemnified Person may participate at
its own expense and with its own counsel in any judicial
proceeding controlled by Aladdin Gaming pursuant to the preceding
provisions. Notwithstanding any of the foregoing, Aladdin Gaming
shall not be entitled to assume responsibility for and control of
any such judicial or administrative proceedings if any Event of
Default shall have occurred and be continuing, if such
proceedings will involve a material risk of the sale, forfeiture
or loss of, or the creation of any Lien (other than a Permitted
Encumbrance) on, the Collateral, unless Aladdin Gaming shall have
posted a bond or other security reasonably satisfactory to the
Indemnified Person with respect to such risk, or if such
proceedings could entail any risk of criminal liability being
imposed on such Indemnified Person.
(4) All of GE Capital's rights, privileges and
indemnities contained in this Section shall survive the
expiration or other termination of this Agreement and the rights,
privileges and indemnities contained herein are expressly made
for the benefit of, and shall be enforceable by each Indemnified
Person and its successors and assigns.
(n) CONFIRMATION OF OPENING DATE. On the date on
which Aladdin Gaming obtains a temporary certificate of occupancy
for the Aladdin Hotel and Casino, Aladdin Gaming shall provide
telephonic notice thereof to GE Capital and shall, within two (2)
Business Days thereafter, confirm in writing to GE Capital the
Opening Date and shall confirm the amortization of the Term Loan
by executing the Amortization Schedule prepared by GE Capital, to
be attached to the Term Loan Note on the Opening Date.
(o) USE OF PROCEEDS. Aladdin Gaming shall use the
proceeds of each Funding under the Term Loan Facility to pay the
acquisition cost of, or to repay deposits funded by drawings
under the Senior Credit Facility with respect to, the acquisition
cost of the Collateral. GE Capital shall use the proceeds of
each Funding with respect to the Lease Facility to pay the
acquisition cost, or to repay deposits funded by drawings under
the Senior Credit Facility with respect to, the acquisition cost
of the Equipment specified in the applicable Schedule.
(p) REPAYMENT OF INDEBTEDNESS. Aladdin Gaming shall
repay, in accordance with its terms, all Indebtedness, including
all sums due under this Agreement and the other Operative
Documents subject, however, in the case of any such Indebtedness
(excluding, however any Obligation) the repayment of which is
limited by any term of any Operative Document, to such
limitation.
34
(q) DILIGENT CONSTRUCTION OF THE MAIN PROJECT. From
and after the initial Funding with respect to the construction
and Final Completion of each of the Hotel/Casino, the Energy
Project, and, if applicable, the renovations to the Theater,
Aladdin Gaming shall:
(1) take or cause to be taken all action, make or
cause to be made all Contracts and, if required, Subcontracts and
do or cause to be done all things necessary to construct of the
Hotel/Casino and, if applicable, the renovations to the Theater
diligently to Final Completion in accordance with the
Design/Build Contract, the Plans and Specifications and the other
Operative Documents;
(2) take or cause to be taken all action and do
or cause to be done all things necessary to enforce the
obligation of the Energy Project Provider and, if applicable, the
Energy Project Guarantor to construct or cause the construction
of the Energy Project diligently to Final Completion in
accordance with the Energy Project Ground Lease, the Energy
Service Agreement and the other Operative Documents applicable to
the Energy Project, subject to clause (c) of Section 8 1.13 of
the Senior Credit Agreement; and
(3) promptly after completing the Main Project
Punchlist Items applicable to the Hotel/Casino and the Theater,
as the case may be, request the Construction Consultant to issue
the Main Project Punchlist Completion Certificate applicable to
the Hotel/Casino and the Theater, as the case may be.
(r) IN BALANCE; BORROWER EQUITY. If at any time the
Project Budget is not In Balance, Aladdin Gaming shall deposit or
cause to be deposited into the Guaranty Deposit Account, in cash,
funds in the amount required to bring the Project Budget In
Balance. Each such deposit shall be made on the earlier of (x) 10
days after demand therefor by GE Capital, or (y) the Business Day
immediately preceding the date on which a Funding is to be made
by GE Capital pursuant to the Operative Documents or, if
applicable, an Advance is to be made by the Disbursement Agent
pursuant to the Disbursement Agreement, as the case may be.
(s) PROPER LEGAL FORMS. Aladdin Gaming shall take all
action within its control required or advisable to ensure that
each of the Operative Documents is in proper legal form.
(t) ENVIRONMENTAL. Aladdin Gaming and Subsidiaries
will:
(1) construct, use and operate all of its
facilities and properties in material compliance with all
Environmental Laws, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Substances in material
compliance with all applicable Environmental Laws;
(2) promptly notify GE Capital and provide copies
upon receipt of all material written claims, complaints, notices
or inquiries relating to potential liability under
or non-compliance with, Environmental Laws, and shall
promptly resolve any material non-compliance
35
with Environmental Laws and keep its property free of any Lien
imposed by any Environmental Law; and
(3) provide such information and certifications
which GE Capital may reasonably request from time to time to
evidence compliance with this Section, including certificates
confirming (i) removal of asbestos in the existing building on or
before June 30, 1998, (ii) removal of asbestos from the Theater
within 30 days after such removal has been completed, and (iii)
removal of all underground storage tanks within 30 days after
such removal has been completed.
11. NEGATIVE COVENANTS.
Aladdin Gaming covenants and agrees that, without GE
Capital's prior written consent, from and after the date hereof:
(a) BUSINESS ACTIVITIES. Aladdin Gaming and
Subsidiaries will not engage in any business activity, except
those described in the recitals to the Senior Credit Agreement
and such activities as are reasonably incidental or substantially
similar thereto.
(b) INDEBTEDNESS. Aladdin Gaming and Subsidiaries
will not directly or indirectly, create, incur, assume or suffer
to exist or otherwise become or be liable in respect of any
Indebtedness or issue any shares of Preferred Stock, other than,
without duplication, the following:
(1) Indebtedness in respect of the Credit
Extensions and other Obligations under the Senior Credit
Facility;
(2) Existing Indebtedness;
(3) Indebtedness of Aladdin Gaming comprised of
Hedging Liabilities; provided, however, that the notional
principal amount of any such Hedging Liabilities does not exceed
the principal amount of Indebtedness to which such Hedging
Liabilities relate;
(4) Indebtedness of Aladdin Gaming incurred under
this Agreement;
(5) Indebtedness (to the extent that the
incurrence thereof does not result in incurrence by Aladdin
Gaming of any obligation for the payment of borrowed money of
others) solely in respect of performance bonds; provided, that
such Indebtedness was incurred in the ordinary course of business
of Aladdin Gaming and in an aggregate principal amount
outstanding under this clause (e) at any one time of not more
than $10,000,000;
(6) Indebtedness of Aladdin Gaming comprised of
(x) at any time prior to the Outside Completion Deadline,
additional Indebtedness under clause (4) of this Section in an
aggregate amount not to exceed $40,000,000, plus (y) after a
Default of the "In Balance" requirements in Section 10(r) hereof
and at any time prior to the Outside Completion
Deadline, additional Indebtedness under clause (4) in an
aggregate amount not to exceed $50,000,000 provided that
Indebtedness incurred pursuant to this clause (6)(y)
is matched, dollar for dollar, by additional
36
equity investments; provided, however, that the foregoing amounts
shall be reduced by any amounts which the lenders under the
Senior Credit Facility have agreed by amendment to this Agreement
to lend pursuant to clause (1);
(7) Aladdin Gaming may incur Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refinance, renew, replace, substitute or
refund, Indebtedness that was permitted to be incurred under
clauses (2), (4) and (8) of this covenant;
(8) after the Hotel/Casino is Operating,
Indebtedness of Aladdin Gaming under any Working Capital Facility
in an aggregate amount at any time outstanding not to exceed
$20,000,000; and
(9) Indebtedness of Aladdin Music in respect of
the construction of the Music Project, the terms of which and the
Instruments which evidence and secure such Indebtedness shall be
satisfactory to GE Capital as determined in good faith in its
sole discretion.
Accrual of interest, the accretion of the accredited value or
principal and the payment of interest in the form of additional
Indebtedness and the issuance of Aladdin Gaming Series A
Preferred Membership Interests, will not be deemed to be an
incurrence of Indebtedness for purposes of this covenant.
(c) LIENS. Aladdin Gaming shall not create or permit
to exist any Lien on any of the Collateral except for (i)
presently existing or hereafter created Liens in favor of GE
Capital to secure the Obligations; and (ii) Permitted
Encumbrances (other than Permitted Encumbrances described in
Clause (iii) of the definition thereof).
(d) FINANCIAL CONDITION AND OPERATIONS. Aladdin
Gaming will not, as of the close of any Fiscal Quarter,
commencing with the close of the Fiscal Quarter in which the
Conversion Date occurs, permit:
(1) TOTAL DEBT TO EBITDA RATIO. The Total Debt
to EBITDA Ratio at the close of any such Fiscal Quarter set forth
below to exceed the ratio set forth opposite such Fiscal Quarter:
Such FQ Closing Total Debt to EBITDA
after Conversion Date Ratio
FQ1 4.1:1
FQ2 4.0:1
FQ3 4.0:1
FQ4 3.75:1
FQ5 3.75:1
FQ6 3.60:1
FQ7 3.60:1
FQ8 3.25:1
37
FQ9 3.25:1
FQ 10 2.85:1
FQ 11 2.85:1
FQ 12 2.55:1
FQ 13 2.55:1
FQ 14 2.40:1
FQ 15 2.40:1
FQ 16 2.25:1
FQ 17 2.25:1
FQ 18 2.15:1
FQ 19 2.15:1
FQ 20 and thereafter 2.00:1
(2) INTEREST COVERAGE RATIO. The Interest
Coverage Ratio as of the close of any such Fiscal Quarter to be
less than 2.0:1.0.
(3) NET WORTH. Net Worth as of the close of any
such Fiscal Quarter to be less than the sum of $100,000,000 plus
85% of positive Net Income (after giving effect to the amount of
Restricted Payments made by Aladdin Gaming in cash in accordance
with clauses (1) and (3) of Section 11(f) hereof, subject to the
terms thereof for the period, treated as one accounting period)
from the Closing Date through the close of such Fiscal Quarter.
(4) EBITDA. EBITDA at the close of any such
Fiscal Quarter (determined for such Fiscal Quarter and the three
immediately preceding such Fiscal Quarters or such lesser number
of Fiscal Quarters to have elapsed since the Conversion Date)
during any period set forth below to be less than the amount set
forth below opposite such period:
Period of FQs after
Conversion Date Amount
FQI through FQ4 $105,000,000
FQ5 through FQ8 $110,000,000
FQ9 through FQI2 $120,000,000
FQ13 through FQI6 $125,000,000
FQI7 through FQ2O $130,000,000
FQ2l and each Fiscal Quarter thereafter $140,000,000
(5) MINIMUM FIXED CHARGE COVERAGE. The Minimum
Fixed Charge Coverage Ratio as of the close of any such Fiscal
Quarter to be less than 1.10:1.0.
(e) INVESTMENTS. Aladdin Gaming and Subsidiaries will
not make, incur, assume or suffer to exist any Investment in any
other Person, except:
38
(1) Ongoing Investments;
(2) Cash Equivalent Investments;
(3) without duplication, Investments to the
extent permitted as Indebtedness pursuant to Section 11(b)
hereof;
(4) without duplication, Investments permitted as
Capital Expenditures pursuant to Section 11(g) hereof;
(5) Investments by way of contributions to
capital or purchases of interests (directly or indirectly) (i) by
Aladdin Gaming in AMH and Aladdin Music or by such Subsidiary in
any of its Subsidiaries, subject to the limitations and the
satisfaction of the conditions set forth in Section 2.2.7 of the
Disbursement Agreement,
(6) Investments constituting (x) accounts
receivable arising, (y) trade debt granted, or (z) deposits made
in connection with the purchase price of goods or services, in
each case in the ordinary course of business;
(7) the grant by Aladdin Gaming to Bazaar of the
Mall Project Ground Lease and, upon the subdivision of the Site,
the transfer by Aladdin Gaming to Aladdin Bazaar of the fee
interest in the Mall Project Parcel and the Mall Project
Easements; subject however, to subsection (b) of Section 7.1.21
of the Senior Credit Agreement;
(8) the grant of the Energy Project Ground Lease;
(9) (x) the grant by Aladdin Gaming to AMH of the
Music Project Ground Lease by Aladdin Gaming to Aladdin Music,
(y) upon the subdivision of the Site, the transfer by Aladdin
Gaming to Aladdin Music of the fee interest in the Music Project
Parcel and the Music Project Easements, subject, however, to
subsection (c) of Section 7.1.19 of the Senior Credit Agreement,
and (z) upon consummation of the Music Project financing, an
Investment not to exceed $21,250,000 in consideration for
preferred Membership Interests in Aladdin Music pursuant to the
Organizational Documents of Aladdin Music;
provided, however, that
(10) any Investment which when made complied with
the requirements of clauses (w), (x) or (y) of the definition of
the term "Cash Equivalent Investment" may continue to be held
notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(11) no Investment otherwise permitted by clauses
(3), (4), (5), (6) or (9) shall be permitted to be made if any
Default has occurred and is continuing or would result therefrom.
39
(f) RESTRICTED PAYMENTS, ETC. On and at all times
after the date hereof:
(1) Aladdin Gaming will not declare, pay or make
any dividend or distribution (in cash, property or obligations)
on any Membership Interests (now or hereafter outstanding) of
Aladdin Gaming or on any warrants, options or other rights with
respect to any shares of any Membership Interests (now or
hereafter outstanding) of Aladdin Gaming (other than dividends or
distributions payable in its Membership Interests or warrants to
purchase its Membership Interests or splitups or
reclassifications of its Membership Interests into additional or
other shares of its Membership Interests ) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or
assets to the purchase, redemption, sinking fund or other
retirement of, or agree or permit any of its Subsidiaries to
purchase or redeem, any shares of any Membership Interests (now
or hereafter outstanding) of Aladdin Gaming, or warrants, options
or other rights with respect to any shares of any Membership
Interests (now or hereafter outstanding) of Aladdin Gaming;
(2) Aladdin Gaming will not, and will not permit
any of its Subsidiaries to
(i) make any payment or prepayment of
principal of, or make any payment of interest on, (x) any
subordinated debt on any day other than the stated, scheduled
date for such payment or prepayment set forth in the documents
and instruments memorializing such subordinated debt, or which
would violate the subordination provisions of such subordinated
debt or (y) any Discount Note; or
(ii) redeem, purchase or defease, any
subordinated debt or any Discount Note or make any payment for
purposes of funding any of the foregoing;
(the foregoing prohibited acts referred to in clauses (1) and (2)
being herein collectively referred to as "Restricted Payments");
provided however, that
(3) notwithstanding the provisions of clause (1)
above, for so long as Aladdin Gaming is treated as a pass-through
entity, or Aladdin Gaming is not treated as a separate entity,
for United States federal income tax purposes (as evidenced by an
opinion of counsel subject to usual qualifications and in
reliance on customary representations, at least annually),
Aladdin Gaming shall be permitted to make Restricted Payments to
equity holders of Aladdin Gaming, in an amount not to exceed the
Tax Amount for such period; provided, however, that (x) prior to
any distributions of Tax Amounts, Aladdin Gaming shall deliver an
officers' certificate to GE Capital to the effect that Aladdin
Gaming is a limited-liability company taxable as a partnership or
other substantially similarly treated pass-through entity, or
Aladdin Gaming is not treated as a separate entity, for United
States federal income tax purposes and, after giving effect to
any such distribution of such Tax Amount, Aladdin Gaming will
continue to be in compliance with the covenants in Section 11(d)
hereof, and (y) at the time of such distributions, the most
recent audited financial statements of Aladdin Gaming required to
have been furnished pursuant to clause (3) of Section 10(a)
hereof reflect that Aladdin Gaming is treated as a
limited-liability company taxable as a partnership or other
substantially similarly treated pass-through entity or Aladdin
Gaming, is not treated as a separate entity for United States
federal income tax purposes for the period covered by such
financial statements;
40
(4) notwithstanding the provisions of clause (1)
above, from and after March 1, 2003, Aladdin Gaming shall be
permitted to make Restricted Payments on Aladdin Gaming Series A
Preferred Membership Interests to Holdings from time to time in
an amount sufficient to enable Holdings to make payments of
interest on the Discount Notes which are then due and payable,
such amount not to exceed the amount payable thereunder in
accordance with the terms thereof in effect on the Closing Date;
(5) notwithstanding the provisions of clause (1)
above, Aladdin Gaming shall be permitted to make Restricted
Payments in respect of the Salle Privee Agreement as in effect on
the Closing Date to LCNI;
(6) notwithstanding the provisions of clause (1),
Aladdin Gaming shall be permitted to make Restricted Payments on
the Closing Date in respect of a fee equal to 1% of the amount of
Indebtedness supported and enhanced by the Keep-Well Agreement on
the Closing Date (such amount of Indebtedness being $265,000,000)
and thereafter payment of an annual fee equal to 1.5% of the
annual average Indebtedness outstanding under the Bank Credit
Facility which is supported and enhanced by the Keep-Well
Agreement, in each case as set forth in the London Clubs Purchase
Agreement as in effect on the Closing Date, to LCI;
(7) notwithstanding the provisions of clause (1),
Aladdin Gaming shall be permitted to make Restricted Payments
with respect to the Employment Agreements in an aggregate amount
not exceeding $2,000,000 in any Fiscal Year;
(8) notwithstanding the provisions of clause (1)
above, Aladdin Gaming shall be permitted to make Restricted
Payments as dividends or distributions to its members in any
Fiscal Quarter following the Conversion Date, so long as
(i) Aladdin Gaming shall have delivered to GE
Capital
(A) financial statements prepared on a
proforma basis to give effect to such Restricted Payment for the
Fiscal Quarter (the "Base Fiscal Quarter") then last ended for
which financial statements and the Compliance Certificate
relating thereto have been delivered to GE Capital pursuant to
Section 10(a) hereof, and
(B) a certificate of Aladdin Gaming executed
by its chief financial or accounting Authorized Representative
demonstrating that the financial results reflected in such
financial statements would result in a Total Debt to EBITDA Ratio
at the Close of any such Base Fiscal Quarter occurring during any
period set forth below to be less than the ratio set forth
opposite such period:
Period of FQs Total Debt to
After Conversion Date EBITDA Ratio
FQl through FQ4 3.50:1
FQ5 through FQ8 3.25:1
41
FQ9 and thereafter 3.00:l; and
(ii) the aggregate amount of such
Restricted Payment to be made by Aladdin Gaming pursuant to this
clause (8), when added to the aggregate amount of all such
Restricted Payments during the Fiscal Quarter in which such
Restricted Payment would be made, does not exceed the lesser of
(A) the sum of (l) 50% of Net Income for the Base Fiscal Quarter,
plus (2) the amount of Cash Contributions to Capital, and (B) an
amount equal to the excess of (1) Excess Cash Flow for the Base
Fiscal Quarter, over (2) the amount of Mandatory Prepayments
required to have been made pursuant to (c) of Section 3.1.1 of
the Senior Credit Agreement (without giving effect to the proviso
to such Section) for the Base Fiscal Quarter; and
(9) no Restricted Payments otherwise permitted by
clauses (3), (4), (5), (6),(7) or (8) shall be made if a Default
shall have occurred and be continuing or if a Default will result
after giving effect thereto.
(g) CAPITAL EXPENDITURES, ETC. From and after the
Conversion Date, Aladdin Gaming will not make or commit to make
Capital Expenditures, except Capital Expenditures set forth in a
budget delivered by Aladdin Gaming in accordance with clause (11)
of Section 10(a) hereof; provided however, in no event shall
Aladdin Gaming make or commit to make any Capital Expenditures
during any Fiscal Year occurring (a) during the period from the
Closing Date through the fourth anniversary thereof in excess of
$12,000,000, or (b) after such anniversary in excess of
$18,000,000, in each case whether or not funded from the FF&E
Reserve.
(h) RENTAL OBLIGATIONS. Aladdin Gaming will not, and
will not permit any Subsidiary to, enter into at any time any
arrangement (other than pursuant to this Agreement) which
involves the leasing by Aladdin Gaming from any lessor of any
real or personal property (or any interest therein), which does
not create a Capitalized Lease Liability and except arrangements
which, together with all other such arrangements which shall then
be in effect, will not require the payment of an aggregate amount
in any Fiscal Year of rentals by Aladdin Gaming and Subsidiary in
excess of; in the case of any such arrangements entered into
prior to the 90th day following the Final Completion Date,
$1,000,000 per annum and, in the case of any such arrangement
entered into on or subsequent to such date, $5,000,000 per annum.
(i) TAKE OR PAY CONTRACTS. Except for the Energy
Project Service Agreement, Aladdin Gaming and Subsidiaries will
not enter into or be a party to any arrangement for the purchase
of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made by
Aladdin Gaming or such other Person regardless of whether such
materials, supplies, other property or services are in fact or
can be required to be delivered or furnished to it.
(j) CONSOLIDATION, MERGER, ETC. Aladdin Gaming and
Subsidiaries will not sell all or substantially all of its
assets as an entirety to, liquidate or dissolve, consolidate
with, or merge into or with, any other Person, or purchase or
otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof).
42
(k) TRANSACTIONS WITH AFFILIATES. Aladdin Gaming will
not sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to Aladdin Gaming than
those that would have been obtained in a comparable transaction
by Aladdin Gaming with an unrelated Person and (ii) Aladdin
Gaming delivers to GE Capital (A) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1,000,000, a certificate
from an Authorized Representative of Aladdin Gaming certifying
that such Affiliate Transaction complies with clause (i) above,
(B) with respect to any Affiliate Transaction or series of
Affiliate Transactions involving aggregate consideration in
excess of $5,000,000, a resolution of the Management Committee
set forth in a certificate from an Authorized Representative of
Aladdin Gaming certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate
Transaction has been approved unanimously by the Management
Committee, and (C) with respect to any Affiliate Transactions
involving aggregate consideration in excess of $10,000,000, an
opinion as to the fairness to GE Capital of such Affiliate
Transaction from a financial point of view issued by an
accountant, appraisal or investment banking firm of national
standing. The foregoing provisions will not apply to any
payments, transfers or dispositions pursuant to the following:
(i) any employment, indemnification, non-competition or
confidentiality agreement entered into by Aladdin Gaming in the
ordinary course of business on terms customary in the
hotel/casino business including the Employment Agreement; (ii)
Restricted Payments permitted by the provisions of Section 11(f)
hereof; (iii) the Noteholder Completion Guaranty; (iv) the
Keep-Well Agreement; (v) the Salle Privee Management Agreement;
(vi) the Reciprocal Easement Agreement as in effect on the
Closing Date; (vii) the Common Parking Area Use Agreement; (viii)
any amendments, modifications, restatements,. renewals,
supplements and replacements to the Reciprocal Easement Agreement
or the Common Parking Area Use Agreement approved by GE Capital
in its sole discretion; (ix) the Theater Lease after GE Capital
has approved the form and content thereof; (x) the payment by
Aladdin Bazaar to Aladdin Gaming of up to $14,200,000 pursuant to
Section 4.5(a) of the Site Work Agreement, (xi) loans or advances
to employees of Aladdin Gaming to fund the exercise price of
options granted under employment agreements or stock option plans
or agreements of Aladdin Gaming, in each case, as in effect on
the Closing Date, not to exceed $500,000 outstanding at any one
time; (xii) the Investments described in clauses (7), (8) and (9)
of Section 11(e) hereof; and (xiii) the payment of reasonable
fees to members of the Board of Managers or the Board of
Directors, as the case may be, of Aladdin Gaming who are not
employees of Aladdin Gaming.
(l) NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC.
Aladdin Gaming will not enter into any agreement (excluding;
however, (i) this Agreement and any other Loan Document, or (ii)
in the case of clause (1) below, any agreement governing any
Indebtedness permitted by clause (4) of Section 11(b) hereof as
to the assets financed with the proceeds of such Indebtedness)
governing any Indebtedness prohibiting
(1) the creation or assumption of any Lien upon
its properties, revenues or assets, whether now owned or
hereafter acquired, to the extent that any such negative pledge
would prohibit the creation or first priority perfection of any
Liens of the type described in clause (x) of Section 11(c)
hereof;
43
(2) the ability of Aladdin Gaming or Subsidiaries
to amend or otherwise modify any Operative Document; or
(3) the ability of any Subsidiary to make any
payments, directly or indirectly, to Aladdin Gaming by way of
dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any
such Subsidiary to make any payment, directly or indirectly, to
Aladdin Gaming.
(m) SALE AND LEASEBACK. Aladdin Gaming will not, and
will not permit any of its Subsidiaries to, enter into any
agreement or arrangement with any other Person providing for the
leasing by Aladdin Gaming or any of its Subsidiaries of real or
personal property which has been or is to be sold or transferred
by Aladdin Gaming or any of its Subsidiaries to such other Person
or to any other Person to whom funds have been or are to be
advanced by Aladdin Gaming on the security of such property or
rental obligations of Aladdin Gaming or any of its Subsidiaries.
(n) STOCK OF SUBSIDIARIES. Aladdin Gaming will not
permit any Subsidiary to issue any Capital Stock (whether for
value or otherwise) to any Person other than (x) to Aladdin
Gaming or another wholly-owned Subsidiary, or (y) up to 50% of
the common Membership Interests of AMH to Planet Hollywood.
(o) AMENDMENT OF CONSTRUCTION BENCHMARK SCHEDULE.
Aladdin Gaming shall not directly or indirectly amend (by Change
Order or otherwise), modify (by Change Order or otherwise),
allocate, reallocate or supplement or permit or consent to the
amendment (by Change Order or otherwise), modification (by Change
Order or otherwise), allocation, reallocation or supplementation
of the Construction Benchmark Schedule in any manner that would
extend the Completion Date, except that Aladdin Gaming may, from
time to time, amend the Construction Benchmark Schedule to extend
the Completion Date, but not beyond the Outside Completion
Deadline, by delivering to GE Capital a Main Project
Budget/Schedule Amendment Certificate (x) containing a revised
Construction Benchmark Schedule reflecting the new Completion
Date and (y) complying with the applicable provisions of this
Section with respect to the changes in the Main Project Budget
that will result from the extension of the Completion Date. If a
Force Majeure Event occurs, then Aladdin Gaming shall be
permitted to extend the Completion Date for up to one year to the
extent that (w) Aladdin Gaming certifies the occurrence and
continuation of such Force Majeure Event in writing, (x) the
Construction Consultant confirms that such extension is
reasonably necessary to overcome any delays cawed by the Force
Majeure Event, (y) Aladdin Gaming has satisfied the conditions to
such extension as set forth in the definition of "Force Majeure
Event", and (z) such extension is permitted by the Design/Build
Contract.
(p) HAZARDOUS SUBSTANCES. Aladdin Gaming and
Subsidiaries shall not release, emit or discharge into the
environment any Hazardous Substances in material violation of any
Environmental Law, Legal Requirement or Permit.
(q) OPENING. Aladdin Gaming shall not begin Operating
the Aladdin Hotel and Casino unless each of the Opening
Conditions has been satisfied and Aladdin Gaming has delivered
44
to GE Capital a certificate in the form of Exhibit T-I to the
Senior Credit Agreement and the Construction Consultant has
delivered to GE Capital a certificate in the form of Exhibit T-2
to the Senior Credit Agreement.
12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.
(a) EVENTS OF DEFAULT. The occurrence of any one or
more of the following events (regardless of the reason therefor)
shall constitute an "Event of Default" hereunder:
(1) Aladdin Gaming shall fail to make any payment
in respect of any payment of principal or interest under the Term
Loan Note or payment of Interim Rent or Basic Rent under the
Master Lease Agreement, as and when due; or Aladdin Gaming shall
fail to make any other payment hereunder or under any of the
other Operative Documents when due and payable or declared due
and payable and such failure shall continue for five (5) days
after the due date therefor.
(2) Aladdin Gaming shall fail or neglect to
perform, keep or observe any of the provisions of Sections 10(j)
or 11 hereof.
(3) Aladdin Gaming shall fail or neglect to
perform, keep or observe any term or provision of this Agreement
(other than any such term or provision referred to in paragraphs
(1) or (2) above) or of any of the other Operative Documents, and
the same shall remain unremedied for a period ending on the first
to occur of thirty (30) days after Aladdin Gaming shall receive
written notice of any such failure from GE Capital or thirty (30)
days after a Responsible Officer of Aladdin Gaming shall become
aware thereof.
(4) A default shall occur in the payment when due
(subject to any applicable grace period or, whether by
acceleration or otherwise, of any Indebtedness of Aladdin Gaming
or any of its Subsidiaries (other than Aladdin Music and AMH)
(other than Indebtedness described in Section 11(b) hereof or
unsecured Indebtedness of Aladdin Gaming or any such Subsidiary
incurred in the ordinary course of business (including open
accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services, but excluding,
however, (x) Indebtedness incurred through the borrowing of
money, and (y) Contingent Liabilities in respect of Indebtedness
other than Indebtedness of the nature referred to in clause (d)
thereof)) having a principal amount, individually or in the
aggregate, in excess of $2,000,000, or a default shall occur in
the performance or observance of any obligation or condition with
respect to such Indebtedness (subject to any applicable grace
period) if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or
agent for such holders, to cause or declare such Indebtedness to
become due and payable or to require such Indebtedness to be
prepaid, redeemed, purchased or defeased, or to cause an offer to
purchase or redeem such Indebtedness to be required to be made)
prior to its expressed maturity.
(5) Any representation or warranty herein or in
any other Operative Document or in any written statement pursuant
thereto or hereto, any report, financial statement or
certificate made or delivered to GE Capital by
Aladdin Gaming shall be untrue or incorrect in any
45
material respect as of the date when made or deemed made
(including those made or deemed made pursuant to Section 7(b)).
(6) Assets of Aladdin Gaming having an aggregate
fair market value in excess of $1,000,000 shall be attached,
seized, levied upon, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of
creditors of Aladdin Gaming and shall remain unstayed or
undismissed for sixty (60) consecutive days; or any Person other
than Aladdin Gaming shall apply for the appointment of a
receiver, trustee or custodian for Aladdin Gaming?s assets and
shall remain unstayed or undismissed for sixty (60) consecutive
days; or Aladdin Gaming shall have concealed, removed or
permitted to be concealed or removed, any part of its property,
with intent to hinder, delay or defraud its creditors or any of
them or made or suffered a transfer of any of its property or the
incurring of an obligation which may be fraudulent under any
bankruptcy, fraudulent conveyance or other similar law.
(7) Aladdin Gaming or Holdings shall:
(a) become insolvent or generally
fail to pay, or admit in writing its
inability or unwillingness generally to pay,
debts as they become due;
(b) apply for, consent to, or
acquiesce in the appointment of a trustee,
receiver, sequestrator or other custodian for
any substantial part of the property of any
thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such
application, consent or acquiescence, permit
or suffer to exist the appointment of a
trustee, receiver, sequestrator or other
custodian for a substantial part of the
property of any thereof, and such trustee,
receiver, sequestrator or other custodian
shall not be discharged within 60 days;
provided, however, that Aladdin Gaming and
Subsidiaries each hereby expressly authorizes
GE Capital to appear in any court conducting
any relevant proceeding during such 60-day
period to preserve, protect and defend their
rights under this Agreement and the other
Operative Documents;
(d) permit or suffer to exist the
commencement of any bankruptcy,
reorganization, debt arrangement or other
case or proceeding under any bankruptcy or
insolvency law, or any dissolution, winding
up or liquidation proceeding, in respect
thereof, and, if any such case or proceeding
is not commenced by the Person which is the
subject of such case or proceeding, such case
or proceeding shall be consented to or
acquiesced in by Aladdin Gaming or shall
result in the entry of an order for relief or
shall remain for 60 days undismissed;
provided, however, that Aladdin Gaming and
Subsidiaries each hereby expressly
authorizes GE Capital to appear in
46
any court conducting any such case or
proceeding during such 60-day period to
preserve, protect and defend their rights
under the Operative Documents and the other
Operative Documents; or
(e) take any action authorizing, or
in furtherance of, any of the foregoing.
(8) Any Operative Document shall (except in
accordance with its terms), in whole or in part, terminate, cease
to be effective or cease to be the legally valid, binding and
enforceable obligation of any Obligor party thereto; or any Lien
created under any Operative Document shall cease to be a valid
and perfected Lien having the first priority in such of the
Collateral purported to be covered thereby; or Aladdin Gaming,
any other Obligor or any other Person shall, directly or
indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or, except as permitted under
any Operative Document, any Lien securing any Obligation shall,
in whole or in part, cease to be a perfected first priority Lien.
(9) Final judgment or judgments (after the
expiration of all times to appeal therefrom) for the payment of
money in excess of $1,000,000 individually or in the aggregate
shall be rendered against Aladdin Gaming, unless the same shall
be (i) fully covered by insurance in accordance with
Section 10(e), or (ii) vacated, stayed, bonded, paid or
discharged within a period of forty-five (45) days from the date
of such judgment.
(10) There shall occur a Change in Control.
(11) An event or condition specified in
Section 11(j) hereof shall occur or exist with respect to any
Plan or Multiemployer Plan and, as a result of such event or
condition, together with all other such events or conditions,
Aladdin Gaming or any ERISA Affiliate shall incur or could
reasonably expect to incur a liability to a Plan, a Multiemployer
Plan or PBGC (or any combination of the foregoing) in excess of
$1,000,000 in the aggregate.
(12) The occurrence of a default (and any
applicable grace period with respect thereto shall have expired
and such default shall not have timely been cured) under the
provisions of any of the other Operative Documents.
(13) The liquidation, termination or dissolution
of Aladdin Gaming without the prior written consent of GE
Capital.
(14) The occurrence of an Event of Default under
the Senior Credit Agreement.
(15) Any Operative Document, or any Lien granted
thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the
legally valid, binding and enforceable obligation of any Obligor
party thereto; Aladdin Gaming, any other Obligor or any other
Person shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability;
or, except as permitted under any Operative
47
Document, any Lien securing any Obligation shall, in whole or in
part, cease to be a perfected first priority Lien.
(b) REMEDIES. If any Event of Default shall have
occurred and be continuing the rate of interest applicable to the
Obligations may, at GE Capital's sole discretion, be increased,
effective as of the date of the occurrence of the Event of
Default, to the Default Rate as provided in Section 2(e). If any
Event of Default shall have occurred and be continuing, GE
Capital may (subject to Nevada Gaming Laws), upon written notice
to Aladdin Gaming (except in the case of the Event of Default
described in clause (7) above, in which case no notice shall be
required), take any one or more of the following actions: (a)
terminate the Commitment, whereupon GE Capital's obligation to
make further Fundings shall terminate; and/or (b) declare all or
any portion of the Term Loan to be forthwith due and payable
whereupon the principal amount of the Term Loan and all accrued
and unpaid interest thereon shall become and be immediately due
and payable; and/or (c) in the case of Obligations arising under
the Master Lease Agreement, require Aladdin Gaming to pay, as
liquidated damages for loss of a bargain and not as a penalty,
the Stipulated Loss Value of the Equipment (calculated in
accordance with Annex D attached to the Schedule as of the Rent
Payment Date next preceding the Event of Default, together with
all Rents and other sums then due under the Master Lease
Agreement; and/or (d) exercise any rights and remedies provided
to GE Capital under the Operative Documents and/or at law or
equity, including all remedies provided under the Code; provided,
however, that upon the occurrence of an Event of Default
specified in Sections 12(a)(6), (7) or (8), the rate of interest
applicable to all Obligations shall be increased automatically to
the Default Rate as provided in Section 2(e), and the Commitment
immediately shall terminate and the Obligations immediately shall
become due and payable, in each case, without declaration, notice
or demand by any Person.
Without limiting the generality of the foregoing,
subject to Nevada Gaming Laws, Aladdin Gaming expressly agrees
that in any such event GE Capital without demand of performance
or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private
sale) to or upon Aladdin Gaming or any other Person (all and each
of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the Code and other
Applicable Law), may forthwith enter upon the premises of Aladdin
Gaming where any Collateral is located through self-help, without
judicial process, without first obtaining a final judgment or
giving Aladdin Gaming notice and opportunity for a hearing on GE
Capital's claim or action, and without paying rent to Aladdin
Gaming, and collect, receive, assemble, process, appropriate and
realize upon the Collateral, or any part thereof, and may
forthwith sell, lease, assign, give an option or options to
purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange
at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. GE
Capital shall have the right upon any such public sale or sales,
and, to the extent permitted by Applicable Law, upon any such
private sale or sales, to purchase for its benefit the whole or
any part of said Collateral so sold, free of any right or equity
of redemption, which equity of redemption Aladdin Gaming hereby
releases. Such sales may be adjourned or continued from time to
time with or without notice. GE Capital shall have the right to
use the Subject Property to store the Collateral, to operate the
Collateral or to conduct such sales on the Subject
Property or elsewhere and shall have the right to use
the Subject Property without charge for such
48
purposes for such time (not to exceed twelve (12) months after
the commencement of the exercise of remedies hereunder by GE
Capital after the occurrence of an Event of Default hereunder) as
GE Capital reasonably deems necessary or advisable.
Aladdin Gaming further agrees, at GE Capital's request,
to assemble the Collateral and make it available to GE Capital at
places which GE Capital shall reasonably select, whether at
Aladdin Gaming's premises or elsewhere. Until GE Capital is able
to effect a sale, lease, or other disposition of the Collateral,
GE Capital shall have the right to use or operate the Collateral
on behalf of GE Capital, or any part thereof, to the extent that
it deems appropriate for the purpose of preserving the Collateral
or its value or for any other purpose deemed appropriate by GE
Capital. GE Capital shall have no obligation to Aladdin Gaming
to maintain or preserve the rights of Aladdin Gaming as against
third parties with respect to the Collateral while the Collateral
is in the possession of GE Capital. GE Capital may, if it so
elects, seek the appointment of a receiver or keeper to take
possession of the Collateral and to enforce any of GE Capital's
remedies with respect to such appointment without prior notice or
hearing. GE Capital shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or
sale, as provided in this paragraph (d) below, Aladdin Gaming
remaining liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and
after the payment by GE Capital of any other amount required by
any provision of law, including Section 109.9504 (1)(c) of the
Code (but only after GE Capital has received what GE Capital
considers reasonable proof of a subordinate party's security
interest), need GE Capital account for the surplus, if any, to
Aladdin Gaming. To the maximum extent permitted by Applicable
Law, Aladdin Gaming waives all claims, damages, and demands
against GE Capital arising out of the repossession, retention or
sale of the Collateral except such which may arise out of the
gross negligence or willful misconduct of GE Capital or its
employees, independent contractors, agents or designees. Aladdin
Gaming agrees that ten (10) Business Days' prior notice by GE
Capital of the time and place of any public sale or of the time
after which a private sale may take place is reasonable
notification of such matters. Aladdin Gaming shall remain liable
for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all amounts to which GE
Capital is entitled, Aladdin Gaming also being liable for
reasonable attorneys' fees incurred by GE Capital to collect such
deficiency.
(1) Aladdin Gaming agrees to pay any and all
reasonable costs of GE Capital, including, without limitation,
reasonable attorneys' fees, incurred in connection with the
enforcement of any of its rights and remedies hereunder.
(2) Except as otherwise specifically provided
herein, Aladdin Gaming hereby waives presentment, demand, protest
or any notice (to the maximum extent permitted by Applicable Law)
of any kind in connection with this Agreement or any Collateral.
(3) The proceeds of any sale, disposition or
other realization upon all or any part of the Collateral shall be
distributed by GE Capital upon receipt, in the following order of
priorities:
FIRST, to payment in full of all
reasonable expenses of GE Capital incurred in connection
with such sale, disposition or other
realization, including all expenses, liabilities
49
and advances incurred or made by GE Capital in connection
therewith, including reasonable attorney's fees;
SECOND, to the ratable payment of accrued but
unpaid interest on the Obligations;
THIRD, to the ratable payment of unpaid
principal of the Obligations;
FOURTH, to the ratable payment of all other
Obligations until all other Obligations shall have been paid in
full; and
FINALLY, to payment to Aladdin Gaming, or its
successors or assigns, or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
(c) WAIVERS BY ALADDIN GAMING. Except as otherwise
provided for in this Agreement and Applicable Law to the full
extent permitted by Applicable Law, Aladdin Gaming waives (i)
presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Operative
Documents, notes, commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time
held by GE Capital on which Aladdin Gaming may in any way be
liable, and Aladdin Gaming hereby ratifies and confirms whatever
GE Capital may do in this regard, (ii) all rights to notice and a
hearing prior to GE Capital's taking possession or control of, or
to GE Capital's replevin, attachment or levy upon, the Collateral
or any bond or security which might be required by any court
prior to allowing GE Capital to exercise any of their remedies,
and (iii) the benefit of any right of redemption and all
valuation, appraisal and exemption laws. Aladdin Gaming acknow
ledges that it has been advised by counsel of its choice with
respect to this Agreement, the other Operative Documents and the
transactions contemplated by this Agreement and the other
Operative Documents.
(d) CUMULATIVE REMEDIES. The rights and remedies of
GE Capital under this Agreement and the other Operative Documents
shall be cumulative and nonexclusive of any other rights and
remedies which GE Capital may have under any other agreement,
including, without limitation, the Operative Documents, by
operation of law or otherwise. Recourse to the Collateral shall
not be required.
13. ASSIGNMENTS; PARTICIPATION.
(a) ASSIGNMENT BY ALADDIN GAMING. Aladdin Gaming may
not assign, delegate, transfer, hypothecate or otherwise convey
its rights, benefits, obligations or duties hereunder or under
any of the other Operative Documents without the prior express
written consent of GE Capital (at its sole discretion). Any such
purported assignment, transfer, hypothecation or other conveyance
by Aladdin Gaming without such prior express written consent
shall be void.
(b) ASSIGNMENT AND/OR PARTICIPATION BY GE CAPITAL.
GE Capital (without Aladdin Gaming's consent
but with notice thereof) may assign and
grant participations in all or a portion of
50
its rights and obligations under this Agreement and the other
Operative Documents (including, without limitation, all or a part
of its Fundings and its Commitment) to an Affiliate or to any
other Person (provided, however, that such Affiliate or other
Person is not a direct competitor of Aladdin Gaming and is not
determined to be an unacceptable lender to a gaming licensee by
any Nevada Gaming Authority).
(1) In the case of an assignment by GE Capital
under this Section 13(b), the assignee shall have, to the extent
of such assignment, the same rights, benefits and obligations as
it would if it were GE Capital hereunder. Upon execution by the
assignor and the assignee of an instrument pursuant to which the
assignee assumes such rights and obligations, payment by such
assignee to such assignor of an amount equal to the purchase
price agreed between such assignor and such assignee and delivery
to GE Capital and Aladdin Gaming of an executed copy of such
instrument, such assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights
and benefits as it would have if it were GE Capital hereunder and
the assignor shall be, to the extent of such assignment (unless
otherwise provided therein) released from its obligations under
this Agreement. Aladdin Gaming hereby acknowledges and agrees
that any assignment will give rise to a direct obligation of
Aladdin Gaming to the assignee and that the assignee shall be
considered to be "GE Capital." Upon any such assignment, Aladdin
Gaming, at its own expense, shall execute and deliver such
documents and instruments as reasonably may be requested by GE
Capital or by the assignee to effectuate the assignment. Aladdin
Gaming hereby waives and agrees not to assert against any such
assignee any defense, set-off, recoupment or counterclaim which
Aladdin Gaming has or may at any time have against GE Capital or
any other Person for any reason whatsoever.
(2) Aladdin Gaming acknowledges that it has been
advised that GE Capital is acting hereunder for itself and as
agent for certain third parties (each being herein referred to as
a "Participant" and, collectively, as the "Participants"); that
the interest of GE Capital in this Agreement, the other Operative
Documents and any other related instruments and documents may be
conveyed to, in whole or in part, and may be used as security for
financing obtained from, one or more third parties without the
consent of Aladdin Gaming. Aladdin Gaming agrees reasonably to
cooperate with GE Capital in connection with the syndication of
this transaction, including prompt assistance in the preparation
of an information memorandum to include any and all information
pertinent to the syndication, and the verification of the
completeness and accuracy of the information contained therein,
preparation of offering materials and projections by Aladdin
Gaming and its advisors, taking into account the proposed
transaction; providing GE Capital with all information reasonably
deemed necessary by GE Capital successfully to complete the
syndication; confirmation as to the accuracy and completeness of
all offering materials, information and projections required in
connection with the syndication; participation of the senior
management of Aladdin Gaming and its Affiliates in meetings and
conference calls with potential Participants at such times and
places as GE Capital reasonably may request; using best efforts
to insure that the syndication efforts benefit from existing
lending relationships of Aladdin Gaming and its Affiliates; and
the execution and delivery of such other documents, instruments,
notices, opinions, certificates and acknowledgments as reasonably
may be required by GE Capital or such Participant in order to
effectuate the Syndication; provided, however, in no event shall
Aladdin Gaming be required to consent to any
51
change that would adversely affect any of the economic terms of
the transactions contemplated herein.
(c) SUCCESSORS AND ASSIGNS. This Agreement and the
other Operative Documents shall be binding on and shall inure to
the benefit of Aladdin Gaming and GE Capital and their respective
successors and assigns, except as otherwise provided herein or
therein.
(d) THIRD PARTY BENEFICIARIES. The terms and
provisions of this Agreement and the other Operative Documents
are for the purpose of defining the relative rights and obliga
tions of Aladdin Gaming, GE Capital and the Participants with
respect to the transactions contemplated hereby and there shall
be no third party beneficiaries (other than the Participants to
the extent provided in Section 13(b) hereof) of any of the terms
and provisions of this Agreement or any of the other Operative
Documents.
14. INTENTIONALLY OMITTED.
15. MISCELLANEOUS.
(a) COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT.
This Agreement and the other Operative Documents constitute the
complete agreement between the parties with respect to the
subject matter hereof and supersede all prior agreements,
commitments, understandings or inducements (oral or written,
expressed or implied). Neither this Agreement nor any other
Operative Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the
parties hereto; provided that no such change, waiver, discharge
or termination shall, without the consent of the Participants,
(i) extend the scheduled final maturity of any Funding, or any
portion thereof, or reduce the rate or extend the time of payment
of interest (other than as a result of waiving the applicability
of any post-default increase in interest rates) thereon or fees
or reduce the principal amount thereof, or increase the
Commitment of GE Capital over the amount thereof then in effect
(it being understood that a waiver of any Event of Default shall
not constitute a change in the terms of any Commitment of GE
Capital), (ii) release all or substantially all of the Collateral
(except as expressly permitted by the Operative Documents),
(iii) amend, modify or waive any provision of this Section, or
(iv) consent to the assignment or transfer by Aladdin Gaming of
any of its rights and obligations under this Agreement.
(b) FEES AND EXPENSES.
(1) Aladdin Gaming shall pay the fees specified
in that certain fee letter dated January 23, 1998, between
Aladdin Gaming and GE Capital.
(2) Aladdin Gaming shall pay within forty-five
(45) days of demand therefor prior to the Opening Date (or ten
(10) days of demand therefor on or after the Opening Date), all
reasonable costs and expenses (including, without limitation,
reasonable fees of counsel) of GE Capital in connection with the
preparation, negotiation, approval, execution, delivery,
administration, modification, amendment (other than any
such amendment requested by GE Capital),
52
waiver and enforcement (whether through negotiations, legal
proceedings or otherwise) of the Operative Documents, and
commitments relating thereto, and the other documents to be
delivered hereunder or thereunder and the transactions
contemplated hereby and thereby and the fulfillment or attempted
fulfillment of conditions precedent hereunder, whether before or
after the initial Funding hereunder, and all costs and expenses
incurred in connection with the syndication hereof by GE Capital
and its Affiliates, including, without limitation: (i) wire
transfer fees and other costs of forwarding to Aladdin Gaming or
any other Person on behalf of Aladdin Gaming by GE Capital of the
proceeds of Fundings; (ii) any amendment (other than amendments
requested by GE Capital in connection with an assignment of its
interest hereunder), modification or waiver of, or consent with
respect to, any of the Operative Documents or advice in
connection with the administration of the advances made pursuant
hereto or its rights hereunder or thereunder; (iii) any
litigation, contest, dispute, suit, proceeding or action (whether
instituted by GE Capital, Aladdin Gaming or any other Person) in
any way relating to the Collateral, any of the Operative
Documents or any other agreements to be executed or delivered in
connection therewith or herewith, whether as party, witness, or
otherwise, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Aladdin Gaming or
any other Person that may be obligated to GE Capital by virtue of
the Operative Documents; (iv) any attempt to enforce any rights
of GE Capital against Aladdin Gaming or any other Person that may
be obligated to GE Capital by virtue of any of the Operative
Documents; or (v) after the occurrence and during the continuance
of any Event of Default, any effort to (A) evaluate, observe,
assess Aladdin Gaming or its affairs, or (B) verify, protect,
evaluate, assess, appraise, collect, sell, liquidate or otherwise
dispose of the Collateral.
(3) Aladdin Gaming shall pay within ten (10) days
of demand therefor, all reasonable costs and expenses (including,
without limitation, reasonable counsels' fees) of GE Capital and
the Participants in connection with any Event of Default and any
enforcement or collection proceedings resulting therefrom or any
amendment, modification or waiver of, or consent with respect to,
any of the Operative Documents in connection with any Event of
Default.
(4) Without limiting the generality of
paragraphs (2) and (3) above, Aladdin Gaming's obligation to
reimburse GE Capital and the Participants for costs and expenses
shall include the reasonable fees and expenses of counsel (and
local, foreign or special counsel, advisors, consultants and
auditors retained by such counsel), accountants, environmental
advisors, appraisers, investment bankers, management and other
consultants and paralegals; court costs and expenses;
photocopying and duplicating expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express
charges; telegram charges; secretarial overtime charges; expenses
for travel, lodging and food; and all other out-of-pocket costs
and expenses of every type and nature paid or incurred in
connection with the performance of such legal or other advisory
services (but shall exclude internal overhead charges).
(c) NO WAIVER. No failure on the part of GE Capital,
at any time or times, to require strict performance by Aladdin
Gaming, of any provision of this Agreement and any of the other
Operative Documents shall waive, affect or diminish any right of
GE Capital thereafter to demand strict compliance and performance
therewith. Any suspension or waiver of any Event of
Default shall not suspend, waive or affect any other
Event of Default whether the same is prior or
53
subsequent thereto and whether of the same or of a different
type. None of the undertakings, agreements, warranties,
covenants and representations of Aladdin Gaming contained in this
Agreement or any of the other Operative Documents and no Event of
Default by Aladdin Gaming shall be deemed to have been suspended
or waived by GE Capital, unless such waiver or suspension is by
an instrument in writing signed by an officer of or other
authorized employee of GE Capital if required hereunder and
directed to Aladdin Gaming specifying such suspension or waiver.
(d) SURVIVAL OF OBLIGATIONS. Except as otherwise
expressly provided for in the Operative Documents, no termination
or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way
affect or impair the Obligations, duties, indemnities, and
liabilities of Aladdin Gaming, or the rights of GE Capital
relating to any Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring
prior to such termination, or any transaction or event, the
performance of which is not required until after the date of such
termination or cancellation. Except as otherwise expressly
provided herein or in any other Operative Document, all
undertakings, agreements, covenants, warranties and repre
sentations of or binding upon Aladdin Gaming, and all rights of
GE Capital, all as contained in the Operative Documents shall not
terminate or expire, but rather shall survive such termination or
cancellation and shall continue in full force and effect until
such time as all of the Obligations have been indefeasibly paid
in full in accordance with the terms of the agreements creating
such Obligations.
(e) SEVERABILITY. Any provision of this Agreement and
the other Operative Documents which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(f) CONFLICT OF TERMS. Except as otherwise provided
in this Agreement or any of the other Operative Documents by
specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the
other Operative Documents, the provisions contained in this
Agreement shall govern and control.
(g) RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default, GE Capital is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by GE Capital to or for the credit or the account of Aladdin
Gaming against any and all of the Obligations now or hereafter
existing irrespective of whether or not GE Capital shall have
made any demand under this Agreement or any other Operative
Document and although such Obligations may be unmatured. GE
Capital agrees promptly to notify GE Capital and Aladdin Gaming
after any such set-off and application made by GE Capital;
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights
of GE Capital under this Section are in addition to the other
rights and remedies (including, without limitation, other rights
of set-off) which GE Capital may have.
54
(h) AUTHORIZED SIGNATURE. Until GE Capital shall be
notified by Aladdin Gaming to the contrary, the signature upon
any document or instrument delivered pursuant hereto and believed
by GE Capital or any of GE Capital's officers or employees to be
that of an officer or duly authorized representative of Aladdin
Gaming listed on in Item 15(h) in the Disclosure Schedule shall
bind Aladdin Gaming and be deemed to be the act of Aladdin Gaming
affixed pursuant to and in accordance with resolutions duly
adopted by Aladdin Gaming's managers, and GE Capital shall be
entitled to assume the authority of each signature and authority
of the person whose signature it is or appears to be unless the
person acting in reliance of such signature shall have actual
knowledge of the fact that such signature is false or the person
whose signature or purported signature is presented is without
authority.
(i) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, AND TO THE MANDATORY PROVISIONS OF THE NEVADA GAMING LAWS
AND THE CODE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. ALADDIN GAMING HEREBY CONSENTS AND AGREES THAT THE
STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER
OPERATIVE DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR ANY OF THE OTHER OPERATIVE DOCUMENTS, PROVIDED,
THAT GE CAPITAL AND ALADDIN GAMING ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE
OF NEW YORK CITY AND, PROVIDED, FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE GE CAPITAL FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF GE CAPITAL.
ALADDIN GAMING EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND ALADDIN GAMING HEREBY WAIVES ANY OBJECTION WHICH ALADDIN
GAMING MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. ALADDIN GAMING HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY
SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY CERTIFIED MAIL
ADDRESSED TO ALADDIN GAMING AT THE ADDRESS SET FORTH IN
SECTION 15(j) AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF ALADDIN GAMING?S ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID.
55
(j) NOTICES. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or
may be given to or served upon either of the parties by the other
party, or whenever either of the parties desires to give or serve
upon the other party any communication with respect to this
Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall
be deemed to have been validly served, given or delivered (i)
upon actual receipt when delivered by United States certified
mail, return receipt requested, with proper postage prepaid, (ii)
upon confirmation of transmission, when sent by telecopy or other
similar facsimile transmission (with such telecopy or facsimile
promptly confirmed by delivery of a copy by personal delivery or
United States mail as otherwise provided in this Section 15(j),
(iii) upon actual receipt when delivered by a reputable overnight
courier with all charges prepaid, or (iv) when delivered, if
hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile
number indicated below or to such other address (or facsimile
number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or
delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to any
Person (other than Aladdin Gaming or GE Capital) designated below
to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
(1) If to GE Capital, at:
WITH COPIES TO:
General Electric Capital Corporation
Capital Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Risk Manager - Aladdin Gaming
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Ober, Kaler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
A Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
56
(2) If to Aladdin Gaming, at:
Aladdin Gaming, LLC
Project Development ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
(k) SECTION TITLES. The Section titles and Table of
Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not
a part of this Agreement.
(l) COUNTERPARTS. This Agreement may be executed in
any number of separate counterparts, each of which shall,
collectively and separately, constitute one agreement.
(m) TIME OF THE ESSENCE. Time is of the essence of
this Agreement and each of the other Operative Documents. GE
Capital's failure at any time to require strict performance by
Aladdin Gaming of any of the provisions hereof shall not waive or
diminish GE Capital's right thereafter to demand strict
compliance therewith.
(n) WAIVER OF JURY TRIAL. ALADDIN GAMING HEREBY
UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS, ANY
DEALINGS BETWEEN ALADDIN GAMING AND GE CAPITAL RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN ALADDIN
GAMING AND GE CAPITAL. The scope of this waiver is intended to
be all encompassing of any and all disputes that may be filed in
any court (including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and
statutory claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, ANY OPERATIVE DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION
OR ANY RELATED TRANSACTION. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the
court.
(o) FURTHER ASSURANCES. (1) At any time and from time
to time, upon the written request of GE Capital and at the sole
expense of Aladdin Gaming, Aladdin Gaming shall promptly and duly
execute and deliver any and all such further instruments and
documents and take such further action as GE Capital may
reasonably deem desirable to obtain the full benefits
of this Agreement and of the rights and powers
herein granted, including (i) using all commercially
reasonable efforts to secure all consents and
approvals necessary or appropriate for the assignment
57
to or for the benefit of GE Capital of any license or contract
held by Aladdin Gaming or in which Aladdin Gaming has any rights
not heretofore assigned, (ii) filing any financing or
continuation statements under the Code with respect to the liens
and security interests granted hereunder or under any other
Operative Document, (iii) using all commercially reasonable
efforts to obtain waivers of liens from landlords and mortgagees
(it being understood that GE Capital in its discretion may
establish a reasonable reserve against availability under this
Agreement until the same have been obtained). Aladdin Gaming
also hereby authorizes GE Capital to file any such financing or
continuation statement without the signature of Aladdin Gaming to
the extent permitted by Applicable Law.
(2) GE Capital and the Participants agree to
cooperate with Aladdin Gaming and the Nevada Gaming Authorities
in connection with the administration of the Nevada Gaming
Authorities' regulatory jurisdiction over Aladdin Gaming,
including the provision of such documents and information as may
be requested by the Nevada Gaming Authorities relating to Aladdin
Gaming, this Agreement and the other Operative Documents.
(p) RIGHT TO PERFORM. If Aladdin Gaming shall fail to
comply with any provision of this Agreement or of the other
Operative Documents, GE Capital shall have the right (but shall
not be obligated) to effect such compliance, in whole or in part;
and all monies spent and expenses and obligations incurred or
assumed by GE Capital in effecting such compliance (together with
interest thereon at the Default Rate) shall constitute part of
the Obligations and shall be payable upon demand. GE Capital's
effecting such compliance shall not be a waiver of Aladdin
Gaming's default.
(q) COMPLIANCE WITH NEVADA GAMING LAWS. If Aladdin
Gaming is licensed by the Nevada Gaming Authorities at any time
during the term of this Agreement, (i) the parties agree and
understand that they will comply with and will be subject to the
Nevada Gaming Laws, and (ii) GE Capital acknowledges that (A) it
will be subject to being called forward by the Nevada Gaming
Authorities, in their sole discretion, for licensing or a finding
of suitability as a lender to a gaming licensee, and (B) to the
extent the prior approval of the Nevada Gaming Authorities is
required pursuant to Nevada Gaming Laws for the exercise,
operation and effectiveness of any remedy hereunder or under any
of the Operative Documents, or for the taking of any action that
may be taken by GE Capital hereunder or under any of the
Operative Documents, such remedy or action shall be subject to
such prior approval.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
58
IN WITNESS WHEREOF, this Facilities Agreement has been duly
executed as of the date first written above.
ALADDIN GAMING, LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Senior Vice President
--------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, FOR ITSELF AND AS
AGENT FOR CERTAIN PARTICIPANTS
By:_____________________________
Name:___________________________
Title:__________________________
ALADDIN GAMING, LLC
By:_____________________________
Name:___________________________
Title:__________________________
GENERAL ELECTRIC CAPITAL
CORPORATION, FOR ITSELF AND AS
AGENT FOR CERTAIN PARTICIPANTS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Sr. Risk Manager
--------------------------
EXHIBIT NO. 1 TO FACILITIES AGREEMENT
MASTER LEASE AGREEMENT
Dated as of
June 26, 1998
Between
GENERAL ELECTRIC CAPITAL CORPORATION,
FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS,
Lessor
and
ALADDIN GAMING, LLC
Lessee
MASTER LEASE AGREEMENT
TABLE OF CONTENTS
Page
1. PURCHASE AND LEASING.......................................1
2. TERM, RENT AND PAYMENT.....................................2
3. DELIVERY AND USE...........................................5
4. EARLY TERMINATION..........................................5
5. END OF LEASE OPTIONS.......................................5
(a) RENEWAL................................................5
(b) PURCHASE...............................................6
(c) RETURN.................................................6
(d) EXTENSION..............................................6
(e) NOTICE OF ELECTION.....................................7
6. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY INTEREST.....7
7. MISCELLANEOUS..............................................7
(a) COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT..........7
(b) NO WAIVER..............................................8
(c) SEVERABILITY...........................................8
(d) CONFLICT OF TERMS......................................8
(e) GOVERNING LAW; SUBMISSION TO JURISDICTION..............8
(f) SECTION TITLES.........................................9
(g) COUNTERPARTS...........................................9
(h) TIME OF THE ESSENCE....................................9
(i) WAIVER OF JURY TRIAL...................................9
(j) FURTHER ASSURANCES.....................................9
(k) NOTICES................................................9
(l) SURVIVAL...............................................9
(m) QUIET ENJOYMENT........................................9
8. CHATTEL PAPER..............................................9
EXHIBIT NO. 1 - EQUIPMENT SCHEDULE
ANNEX A - DESCRIPTION OF EQUIPMENT
ANNEX B - PURCHASE ORDER ASSIGNMENT AND CONSENT
ANNEX C - CERTIFICATE OF ACCEPTANCE
ANNEX D - STIPULATED LOSS AND TERMINATION VALUE TABLE
ANNEX E - AMORTIZATION SCHEDULE
ANNEX F - RETURN PROVISIONS
ANNEX G - ESTOPPEL/WAIVER AGREEMENT
EXHIBIT NO. 2 TO MASTER LEASE AGREEMENT
i
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (as amended, modified or
supplemented from time to time, this "AGREEMENT") is made as of
the 26th day of June, 1998, between GENERAL ELECTRIC CAPITAL
CORPORATION, FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS
(hereinafter called, together with its successors and assigns, if
any, "LESSOR"), and ALADDIN GAMING, LLC, a Nevada limited
liability company (hereinafter called, together with its
successors and permitted assigns, "LESSEE").
This Agreement is executed pursuant to that certain
Facilities Agreement dated as of the date hereof (as amended,
modified or supplemented from time to time, the "FACILITIES
AGREEMENT"), between Lessor and Lessee. Capitalized terms used
herein without definition shall have the meaning given them in
Annex A to the Facilities Agreement.
1. PURCHASE AND LEASING:
(a) This Agreement shall be effective from and after the
date of execution hereof. Subject to the terms and conditions
set forth below, Lessor agrees to purchase from the manufacturer
or supplier thereof ("SUPPLIER") and to lease to Lessee, and
Lessee agrees to lease from Lessor, the equipment (individually
an "UNIT OF EQUIPMENT" and, collectively, the "EQUIPMENT")
described in Annex A to any schedule hereto in substantially the
form attached hereto as Exhibit No. 1 ("SCHEDULE" or "EQUIPMENT
SCHEDULE").
(b) The obligation of Lessor to purchase any Unit of
Equipment from the Supplier thereof and to lease the same to
Lessee under any Schedule shall be subject to receipt by Lessor,
prior to the Lease Commencement Date (with respect to such Unit
of Equipment), of each of the following documents in form and
substance satisfactory to Lessor: (i) a Schedule relating to
such Unit of Equipment, (ii) a Purchase Order Assignment and
Consent in the form of Annex B to the applicable Schedule, or an
Agency Agreement in substantially the form attached hereto as
Exhibit No. 2 with respect to such Unit of Equipment, (iii)
evidence of insurance which complies with the requirements of
Section 10(e) of the Facilities Agreement,
and (iv) satisfaction of the conditions precedent specified in
Section 7 of the Facilities Agreement. As a further condition to
such obligations of Lessor, Lessee shall, upon delivery of such
Unit of Equipment (but not later than the Last Delivery Date
specified in the applicable Schedule) execute and deliver to
Lessor a Certificate of Acceptance (in the form of Annex C to the
applicable Schedule) covering such Unit of Equipment, and deliver
to Lessor evidence of the transfer of title to such Unit of
Equipment from the Supplier (in form and substance satisfactory
to Lessor). Notwithstanding the foregoing, Units of Equipment
having an aggregate Capitalized Lessor's Cost not more than ten
(10) percent of the aggregate Capitalized Lessor's Cost of all
Equipment leased hereunder, may be delivered to and accepted by
Lessee as aforesaid within sixty (60) days after the Last
Delivery Date.
Upon execution by Lessee of any Certificate of Acceptance,
the Equipment described thereon shall be deemed to have been
delivered to, and irrevocably accepted by, Lessee for lease
hereunder.
(C) LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE
EQUIPMENT WITHOUT ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR
EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT MADE, NOR SHALL BE
DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH
SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP,
MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION,
SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee, are to
be borne by Lessee. Without limiting the foregoing,
Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the
following (i) any liability, loss or damage caused or
alleged to be caused directly or indirectly by any Equipment, any
inadequacy thereof, any deficiency or defect (latent or
otherwise) therein, or any other circumstance in connection
therewith; (ii) the use, operation or performance of any
Equipment or any risks relating thereto; (iii) any interruption
of service, loss of business or anticipated profits or
consequential damages; or (iv) the delivery, operation,
servicing, maintenance, repair, improvement or replacement of any
Equipment. If, and so long as, no Event of Default exists,
Lessee shall be, and hereby is, authorized during the Term (as
hereinafter defined) to assert and enforce, at Lessee's sole cost
and expense, from time to time, in the name of and for the
account of Lessor and/or Lessee, as their interests may appear,
whatever claims and rights Lessor may have against any Supplier
of the Equipment.
2. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder (the "RENT") and Lessee's
right to use any Unit of Equipment shall commence on the date of
execution by Lessee of the Certificate of Acceptance for such
Unit of Equipment (each such date, a "LEASE COMMENCEMENT DATE").
The term of this Agreement with respect to any Unit of Equipment
(the "TERM") shall be the period specified in the applicable
Schedule. If any Term is extended or renewed, the word "Term"
shall be deemed to refer to all extended or renewed terms, and
all provisions of this Agreement shall apply during any extended
or renewed terms, except as otherwise may be specifically
provided in writing.
(b) Payments of Rent shall be in the amount set forth in,
and due in accordance with, the provisions of the applicable
Schedule. In no event shall any Rent payments be refunded to
Lessee unless such Rent Payments were made in error. Any Rent or
other amount not paid to Lessor when due hereunder shall bear
interest, both before and after any judgment or termination
hereof, at the lesser of the Default Rate or the maximum rate
allowed by law.
(c) This Agreement is a net lease. Lessee's obligation to
pay Rent and other amounts due hereunder shall be absolute and
unconditional. Lessee shall not be entitled to any abatement or
reductions of, or set-offs against, said Rent or other amounts,
including, without limitation, those arising or allegedly arising
out of claims (present or future, alleged or actual, and
including claims arising out of strict liability in tort or
negligence of Lessor) of Lessee against Lessor under this
Agreement or otherwise. Except as expressly provided herein or
in the Facilities Agreement, this Agreement shall not terminate
and the obligations of Lessee shall not be affected by reason of
any defect in or damage to, or loss of possession, use or
destruction of, any Equipment from whatsoever cause. It is the
intention of the parties that Rents and other amounts due
hereunder shall continue to be payable in all events in the
manner and at the times set forth herein unless the obligation to
do so shall have been terminated pursuant to the express terms
hereof or the Facilities Agreement. Nothing in this Section 2(c)
shall prevent Lessee from pursuing any claims against Lessor in a
separate cause of action.
(d) It is the intention of the parties to comply with any
applicable usury laws. Accordingly, it is agreed that,
notwithstanding any provision to the contrary herein or in any
related document, in no event shall any Operative Document
require the payment or permit the collection of interest in
excess of the maximum amount permitted by Applicable Law. If any
such excess interest is contracted for, charged or received under
any Operative Document, or in the event that all of the principal
balance shall be prepaid, so that under any of such circumstances
the amount of interest contracted for, charged or received under
any Operative Document shall exceed the maximum amount of
interest permitted by Applicable Law, then in such event (1) the
provisions of this Section shall govern and control, (2) neither
Lessee nor any other person or entity now or hereafter liable for
the payment thereof shall be obligated to pay the amount of such
interest to the extent that it is in excess of the maximum amount
of interest permitted by Applicable Law, (3) any such excess
which may have been collected shall be either applied as a credit
against the then unpaid principal balance or refunded to Lessee,
at the option of Lessor, and (4) the effective rate of interest
automatically shall be reduced to the maximum lawful contract
rate allowed under Applicable Law as now or hereafter construed
by the courts having jurisdiction thereof. It is further agreed
that, without limitation of the foregoing, all calculations of
the rate of interest contracted for, charged or received under
any Operative Document which are made for the
purpose of determining whether such rate exceeds the
maximum lawful contract rate, shall be made, to the extent
2
permitted by Applicable Law, by amortizing, prorating, allocating
and spreading in equal parts during the period of the full stated
term of the indebtedness evidenced thereby, all interest at any
time contracted for, charged or received from Lessee or otherwise
by Lessor in connection with such indebtedness; provided,
however, that if any applicable state law is amended or the law
of the United States of America preempts any applicable state
law, so that it becomes lawful for Lessor to receive a greater
interest per annum rate than is presently allowed under
Applicable Law, Lessee agrees that, on the effective date of such
amendment or preemption, as the case may be, the lawful maximum
under the Operative Documents shall be increased to the maximum
interest per annum rate allowed by the amended state law or the
law of the United States of America (but not in excess of the
applicable interest rate contemplated under the Operative
Documents).
(e) All payments payable by Lessee hereunder shall be paid
to Lessor by wire transfer of immediately available funds to
Bankers Trust ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. 50-
260-660, ABA No. ▇▇▇-▇▇▇-▇▇▇, Attention: Account Manager -
Aladdin Gaming, or to such other account as Lessor may direct in
writing; and shall be effective upon receipt. All payments shall
be made not later than 12:00 Noon New York time on the day when
due. If any payment date is not a Business Day, the amount
otherwise due on such date shall be payable on the immediately
succeeding Business Day (provided that such delay shall be
included in calculating the interest due).
(f) Lessee irrevocably waives the right to direct the
application of any and all payments at any time or times
hereafter received by Lessor from or on behalf of Lessee, and
Lessee irrevocably agrees that Lessor shall have the continuing
exclusive right to apply any and all such payments then due and
payable to Obligations of Lessee as Lessor may deem advisable.
In the absence of a specific determination by Lessor with respect
thereto, the same shall be applied in the following order: (1)
then due and payable Fees and expenses of Lessor; (2) then due
and payable interest payments with respect to the Obligations;
(3) Obligations to Lessor other than Fees, expenses and interest
and principal payments; and (4) then due and payable principal
payments with respect to the Obligations. Notwithstanding the
foregoing, prior to the occurrence of an Event of Default, all
payments made by Aladdin Gaming specifically identified as being
made with respect to the Lease Facility shall be applied only to
those Obligations relating to the Lease Facility.
(g) (1) If Lessor shall determine (which
determination shall, upon notice thereof to Lessee, be conclusive
and binding) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank
or other Governmental Authority asserts that it is unlawful, for
Lessor to make, continue or maintain any Funding as, or to
convert any Funding into, a LIBOR Rate Funding, the obligations
of Lessor to make, continue, maintain or convert any such LIBOR
Rate Funding shall, upon such determination, forthwith be
suspended until Lessor shall notify Lessee that the circumstances
causing such suspension no longer exist, and the interest rate
then applicable with respect to the calculation of rent
automatically shall change to the interest rate specified in
Section C.1.(y) of the applicable Schedule, at the end of the
then current Interest Period with respect thereto, or sooner, if
required by such law or assertion.
(2) If Lessor shall have determined that:
(x) Dollar deposits in the relevant amount
and for the relevant Interest Period are not available to Lessor
in its relevant market; or
(y) by reason of circumstances affecting
Lessor's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR Rate
Fundings;
then, upon notice from Lessor to Lessee, the obligations of
Lessor to make or continue any Fundings as, or to convert any
Fundings into, LIBOR Rate Fundings shall forthwith be suspended
until Lessor shall notify Lessee that the circumstances causing
such suspension no longer exist.
(3) Lessee agrees to reimburse Lessor for any
increase in the cost to Lessor of, or any reduction
in the amount of any sum receivable by Lessor in
respect of, making, continuing or maintaining (or
3
of its obligation to make, continue or maintain) any Fundings as,
or of converting (or of its obligation to convert) any Fundings
into, LIBOR Rate Fundings that arises in connection with any
change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision
or request (whether or not having the force of law) of any court,
central bank, regulator or other Governmental Authority, except
for such changes with respect to increased capital costs and
taxes which are governed by sub-parts (g)(5) hereof and 4(b) of
the Agreement, respectively. Lessor shall promptly notify Lessee
in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate Lessor for such
increased cost or reduced amount. Such additional amounts shall
be payable by Lessee directly to Lessor within five (5) days of
its receipt of such notice, and such notice shall, in the absence
of manifest error, be conclusive and binding on Lessee.
Without limiting the foregoing, in the event that, as a
result of any such change, introduction, adoption or the like
described above, the LIBOR Reserve Percentage decreases for
Lessor's LIBOR Rate Fundings, Lessor shall give prompt notice
thereof in writing to Lessee. On the fifth day following
delivery of such notice, the 30-Day LIBOR or 90-Day LIBOR
attributable to Lessor's LIBOR Rate Fundings shall be adjusted to
give Lessee the benefit of such decrease (for so long as such
decrease shall remain in effect).
(4) In the event Lessor shall incur any loss or
expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by Lessor to make, continue or maintain any portion of the
principal amount of any Funding as, or to convert any portion of
the principal amount of any Funding into, a LIBOR Rate Funding)
as a result of:
(x) any conversion or repayment or
prepayment of the principal amount of any LIBOR Rate Fundings on
a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to Section 4 hereof or
otherwise; or
(y) any Fundings not being made as LIBOR
Rate Fundings in accordance with Lessee's request therefor;
then, upon the written notice of Lessor to Lessee, Lessee shall,
within five (5) days of its receipt thereof, pay directly to
Lessor such amount as will (in the reasonable determination of
Lessor ) reimburse Lessor for such loss or expense. Such written
notice (which shall include calculations in reasonable detail)
shall, in the absence of manifest error, be conclusive and
binding on Lessee.
(5) If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of
any court, central bank, regulator or other Governmental
Authority affects or would affect the amount of capital required
or expected to be maintained by Lessor or any Person controlling
Lessor, and Lessor determines (in good faith but in its sole and
absolute discretion) that the rate of return on its or such
controlling Person's capital as a consequence of the Commitment
or the Fundings made by Lessor is reduced to a level below that
which Lessor or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by Lessor to Lessee, Lessee
shall immediately pay directly to Lessor additional amounts
sufficient to compensate Lessor or such controlling Person for
such reduction in rate of return. A statement of Lessor as to
any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on Lessee. In determining such
amount, Lessor may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem
applicable.
(6) In this Section, each reference to Lessor
shall be deemed to include reference to Lessor and each
Participant, and all determinations pursuant to this Section
shall be made by Lessor and each affected Participant.
4
3. DELIVERY AND USE:
(a) All Equipment shall be shipped directly from the
Supplier to Lessee.
(b) The Equipment shall be used, maintained and operated by
Lessee in compliance with the requirements of the Facilities
Agreement.
(c) The parties intend that all Equipment shall at all times
remain personal property of Lessee regardless of the degree of
its annexation to any real property and to the maximum extent
permitted by Applicable Law shall not by reason of any
installation in, or affixation to, real or personal property
become a part thereof.
(d) Lessee shall insure the Equipment in accordance
with the requirements of the Facilities Agreement.
4. EARLY TERMINATION:
On or after the fourth (4th) Rent Payment Date, Lessee may
terminate this Agreement as to all (but not less than all) of the
Equipment described on all Schedules executed hereunder, as of a
Rent Payment Date ("EARLY TERMINATION DATE") upon at least thirty
(30) days' prior written irrevocable notice to Lessor.
On the Early Termination Date, Lessee shall pay to Lessor in
cash the purchase price for the Equipment, determined as
hereinafter provided. The purchase price of the Equipment shall
be an amount equal to the sum of (A) the Termination Value
(calculated as of the Early Termination Date) for the Equipment,
plus (B) that portion of the Prepayment Premium applicable to the
Equipment, plus (C) all Collateral Taxes upon sale, plus (C) all
Rent and other sums due and unpaid as of the Early Termination
Date (including, without limitation, any enforcement costs
incurred by Lessor as a result of the occurrence of an Event of
Default) Upon satisfaction of the conditions specified, Lessor
will transfer, on an AS IS BASIS (except as provided in the
following sentence), all of Lessor's interest in and to the
Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as to the
condition of such Equipment and other matters (except that Lessor
shall warrant that it has conveyed whatever interest it received
in such Equipment free and clear of any lien or encumbrance
created by or arising through Lessor). Lessor shall execute and
deliver to Lessee such Uniform Commercial Code statements of
termination as reasonably may be required in order to terminate
any interest of Lessor in and to the Equipment.
5. END OF LEASE OPTIONS:
Upon the expiration of the Term of each Schedule, Lessee
shall return, or purchase, or extend or renew the Term with
respect to, all (but not less than all) of the Equipment leased
under all Schedules executed hereunder upon the following terms
and conditions.
(a) RENEWAL. If Lessee shall not have exercised its
option to return the Equipment or its purchase option pursuant to
this Section, Lessee shall have the option, upon the expiration
of the Basic Lease Term of the first Schedule to be executed
under this Agreement and/or of the first Renewal Term of the
first Schedule to be executed under this Agreement, to renew the
Agreement with respect to all, but not less than all, of the
Equipment leased under all Schedules executed hereunder for an
additional term of twelve (12) months (each, a "RENEWAL TERM").
Including all Renewal Terms, the maximum term of the first
Schedule to be executed under this Agreement shall be five (5)
years (the Basic Lease Term plus two (2) Renewal Terms) (the
"MAXIMUM LEASE TERM"), and the maximum term of each additional
Schedule shall not exceed the then remaining Maximum Lease Term.
5
(b) PURCHASE. If Lessee shall not have exercised its
extension option or its option to renew this Agreement or its
option to return the Equipment pursuant to this Section, Lessee
shall have the option, upon the expiration of the Term of each
Schedule, to purchase all (but not less than all) of the
Equipment described on all Schedules executed hereunder upon the
following terms and conditions: If Lessee desires to exercise
this option with respect to the Equipment, Lessee shall pay to
Lessor on the last day of the Term with respect to each
individual Schedule, in addition to the scheduled Rent (if any)
then due on such date and all other sums then due hereunder with
respect to the Units of Equipment described on said Schedule, in
cash the purchase price for the Equipment described on such
Schedule, determined as hereinafter provided. The purchase price
of the Equipment shall be an amount equal to the Fixed Purchase
Price of such Equipment (as specified on the Schedule), plus all
Collateral Taxes upon sale and all other reasonable and
documented expenses incurred by Lessor in connection with such
sale, including, without limitation, any such expenses incurred
based on a notice from Lessee to Lessor that Lessee intended to
return any such items of Equipment. Upon satisfaction of the
conditions specified in this Paragraph, Lessor will transfer, on
an AS IS BASIS (except as provided in the following sentence),
all of Lessor's interest in and to the applicable Units of
Equipment. Lessor shall not be required to make and may
specifically disclaim any representation or warranty as to the
condition of such Equipment and other matters (except that Lessor
shall warrant that it has conveyed whatever interest it received
in such Equipment free and clear of any lien or encumbrance
created by or arising through Lessor). Lessor shall execute and
deliver to Lessee such Uniform Commercial Code statements of
termination as reasonably may be required in order to terminate
any interest of Lessor in and to such Equipment.
(c) RETURN. Unless Lessee shall have exercised its
extension option or its purchase option pursuant to this Section,
upon the expiration of the Term of each Schedule, Lessee shall
return all (but not less than all) of the Equipment described on
all Schedules executed hereunder, to Lessor upon the following
terms and conditions: Lessee shall (i) pay to Lessor on the last
day of the Term with respect to each individual Schedule, in
addition to the scheduled Rent then due on such date and all
other sums then due hereunder, a terminal rental adjustment
amount equal to the Fixed Purchase Price of such Equipment, and
(ii) return the Equipment to Lessor in accordance with the
provisions of Annex F attached to the Schedules. Thereafter, upon
return of all of the Equipment described on all Schedules
executed hereunder, Lessor and Lessee shall arrange for the
commercially reasonable sale, scrap or other disposition of the
Equipment. Upon satisfaction of the conditions specified in this
Paragraph, Lessor will transfer to the purchaser, on an AS IS
BASIS (except as provided in the following sentence), all of
Lessor's interest in and to the Equipment. Lessor shall not be
required to make and may specifically disclaim any representation
or warranty as the condition of such Equipment and other matters
(except that Lessor shall warrant that it has conveyed whatever
interest it received in the Equipment free and clear of any liens
or encumbrances created by or arising through Lessor). Lessor
shall execute and deliver to Lessee such Uniform Commercial Code
statements of termination as reasonably may be required in order
to terminate any interest of Lessor in and to the Equipment.
Upon the sale, scrap or other disposition of the Equipment the
sales proceeds with respect to the Equipment sold will be paid
to, and held and applied by, Lessor as follows: Lessor shall
promptly thereafter pay to Lessee an amount equal to the Residual
Risk Amount (as specified in the Schedule) of the Equipment (less
all reasonable costs, expenses and fees, including storage,
reasonable and necessary maintenance and other remarketing fees
incurred in connection with the sale, scrap, or disposition of
such Equipment) plus all net proceeds, if any, of such sale in
excess of the Residual Risk Amount of the Equipment and
applicable taxes, if any.
(d) EXTENSION. If Lessee shall not have exercised its
option to return the Equipment or its purchase option pursuant to
this Section, and provided that Lessee shall have exercised its
option to renew this Agreement pursuant to this Section with
respect to all available Renewal Terms, with Lessor's prior
written consent (which may be withheld at Lessor's sole
discretion) Lessee shall have the option, upon the expiration of
all available Renewal Terms, to extend the Agreement with respect
to all, but not less than all, of the Equipment for an additional
term of twelve (12) months (the "EXTENSION TERM") at a monthly
rental to be paid in arrears on the same day of each month on
which the prior Renewal Term Rent installment was paid, and
calculated as the product of (i) the Capitalized Lessor's Cost,
TIMES (ii) a lease rate factor calculated by Lessor,
6
which when so multiplied times the Capitalized Lessor's Cost,
will result in a product that is equal to the amount necessary to
fully repay to Lessor any unpaid balance of the Capitalized
Lessor's Cost (determined as of the date on which the last
available Renewal Term expired), together with interest thereon
at a rate per annum equal to six hundred twenty-five (625) basis
points over the then current yield to maturity of U.S. Treasury
Notes having a one year maturity, in twelve (12) equal monthly
installments. At the end of the Extension Term, Lessee shall
purchase all, and not less than all, of such Equipment for $1.00
cash, together with all Rent and other sums then due on such date
(including, without limitation, any enforcement costs incurred by
Lessor as a result of the occurrence of an Event of Default),
plus all Collateral Taxes upon transfer and all other reasonable
and documented expenses incurred by Lessor in connection with
such transfer. Upon satisfaction of the conditions specified in
this Paragraph, Lessor will transfer, on an AS IS BASIS (except
as provided in the following sentence), all of Lessor's interest
in and to the Equipment. Lessor shall not be required to make and
may specifically disclaim any representation or warranty as to
the condition of the Equipment and any other matters (except that
Lessor shall warrant that it has conveyed whatever interest it
received in the Equipment free and clear of any lien or
encumbrance created by or arising through Lessor).
(e) NOTICE OF ELECTION. Lessee shall give Lessor
written notice of its election of the options specified in this
Section not less than one hundred eighty (180) days nor more than
three hundred sixty-five (365) days before the expiration of the
Basic Term or any Renewal Term of the first Schedule to be
executed under this Agreement. Such election shall be effective
with respect to all Equipment described on all Schedules executed
hereunder. If Lessee fails timely to provide such notice,
without further action Lessee automatically shall be deemed to
have elected (1) to renew the Term of this Agreement pursuant to
Paragraph (a) of this Section if a Renewal Term is then available
hereunder, or (2) to purchase the Equipment pursuant to Paragraph
(b) of this Section if a Renewal Term is not then available
hereunder.
6. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY INTEREST:
(a) For income tax purposes, Lessor will treat Lessee as the
owner of the Equipment. Accordingly, Lessor agrees (i) to treat
Lessee as the owner of the Equipment on its Federal income tax
return, (ii) not to take actions or positions inconsistent with
such treatment on or with respect to its Federal income tax
return, and not claim any tax benefits available to an owner of
the Equipment on or with respect to its Federal income tax
return. The foregoing undertakings by Lessor shall not be
violated by Lessor's taking a tax position through inadvertence
so long as such inadvertent tax position is reversed by Lessor
promptly upon its discovery. Lessor shall in no event be liable
to Lessee if Lessee fails to secure any of the tax benefits
available to the owner of the Equipment.
(b) To secure the prompt and complete payment, performance
and observance of all of the Obligations, and to induce Lessor to
enter into this Agreement and to lease the Equipment hereunder,
Lessee hereby grants to Lessor a first priority security interest
in all of Lessee's right, title and interest in, to and under the
following, whether now owned or hereafter acquired, and wherever
located: (a) the Equipment leased under and described on the
Schedules; (b) all additions, attachments, accessions,
accessories and accessions thereto, and all substitutions,
replacements or exchange therefor; and (c) all Proceeds thereof;
provided, however, that the foregoing grant of security interest
shall not cover, create a security interest in or attach to any
income generated by the property described in clauses (a) or (b)
above except to the extent resulting from the disposition of such
property.
7. MISCELLANEOUS:
(a) COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. This
Agreement and the other Operative Documents constitute the
complete agreement between the parties with respect to the
subject matter hereof and supersede all prior agreements,
commitments, understandings or inducements (oral or written,
expressed or implied). Neither this Agreement nor any other
Operative Document nor any terms hereof or thereof may
7
be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the
parties hereto.
(b) NO WAIVER. No failure on the part of Lessor, at any
time or times, to require strict performance by Lessee, of any
provision of this Agreement and any of the other Operative
Documents shall waive, affect or diminish any right of Lessor
thereafter to demand strict compliance and performance therewith.
Any suspension or waiver of any Event of Default shall not
suspend, waive or affect any other Event of Default whether the
same is prior or subsequent thereto and whether of the same or of
a different type. None of the undertakings, agreements,
warranties, covenants and representations of Lessee contained in
this Agreement or any of the other Operative Documents and no
Event of Default by Lessee shall be deemed to have been suspended
or waived by Lessor, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized
employee of Lessor if required hereunder and directed to Lessee
specifying such suspension or waiver.
(c) SEVERABILITY. Any provision of this Agreement and the
other Operative Documents which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
(d) CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Operative Documents by specific
reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in any of the other Operative
Documents, the provisions contained in the Facilities Agreement
shall govern and control.
(e) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND THE OBLIGATIONS
ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
LESSEE HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN NEW YORK CITY SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE
OTHER OPERATIVE DOCUMENTS, PROVIDED, THAT LESSOR AND LESSEE
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK CITY AND, PROVIDED,
FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE LESSOR FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF LESSOR. LESSEE EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED
IN ANY SUCH COURT, AND LESSEE HEREBY WAIVES ANY OBJECTION WHICH
LESSEE MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. LESSEE HEREBY WAIVES PERSONAL SERVICE
OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY CERTIFIED MAIL
ADDRESSED TO LESSEE AT THE ADDRESS SET FORTH IN SECTION 15(J) OF
THE FACILITIES AGREEMENT, AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF LESSEE?S ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
8
(f) SECTION TITLES. The Section titles and Table of
Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not
a part of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall,
collectively and separately, constitute one agreement.
(h) TIME OF THE ESSENCE. Time is of the essence of this
Agreement and each of the other Operative Documents. Lessor's
failure at any time to require strict performance by Lessee of
any of the provisions hereof shall not waive or diminish Lessor's
right thereafter to demand strict compliance therewith.
(i) WAIVER OF JURY TRIAL. LESSEE HEREBY UNCONDITIONALLY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
AGREEMENT, ANY OF THE OPERATIVE DOCUMENTS, ANY DEALINGS BETWEEN
LESSEE AND LESSOR RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. The scope
of this waiver is intended to be all encompassing of any and all
disputes that may be filed in any court (including, without
limitation, contract claims, tort claims, breach of duty claims,
and all other common law and statutory claims). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, ANY OPERATIVE DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
(j) FURTHER ASSURANCES. At any time and from time to time,
upon the written request of Lessor and at the sole expense of
Lessee, Lessee shall promptly and duly execute and deliver any
and all such further instruments and documents and take such
further action as Lessor may reasonably deem desirable to obtain
the full benefits of this Agreement and of the rights and powers
herein granted, including (i) using its best efforts to secure
all consents and approvals necessary or appropriate for the
assignment to or for the benefit of Lessor of any license or
contract held by Lessee or in which Lessee has any rights not
heretofore assigned, and (ii) filing any financing or
continuation statements under the Code with respect to the liens
and security interests granted hereunder or under any other
Operative Document. Lessee also hereby authorizes Lessor to file
any such financing or continuation statement without the
signature of Lessee to the extent permitted by Applicable Law.
(k) NOTICES. Any notice, demand, request, consent,
approval, declaration or other communication hereunder shall be
given as specified in Section 15(j) of the Facilities Agreement.
(l) SURVIVAL. The obligations of Lessee under Section 5(c)
hereof which accrue during the Term shall survive the termination
of this Agreement.
(m) QUIET ENJOYMENT. So long as no Event of Default occurs,
neither Lessor nor any Person claiming by or through Lessor shall
interfere with Lessee's right to peaceably and quietly possess
and use the Equipment during the term, subject to the terms and
provisions hereof.
8. CHATTEL PAPER: To the extent that any Schedule would
constitute chattel paper, as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction, no
security interest therein may be created through the transfer or
possession of this Agreement in and of itself without the
transfer or possession of the original of a Schedule executed
pursuant to this Agreement and incorporating this Agreement by
reference; and no security interest in this Agreement and a
Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof,
which shall be identified as the document marked "Original" and
all other counterparts shall be marked "Duplicate".
9
IN WITNESS WHEREOF, Lessee and Lessor have caused this
Master Lease Agreement to be executed by their duly authorized
representatives as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL ALADDIN GAMING, LLC
CORPORATION, FOR ITSELF AND
AS AGENT FOR CERTAIN
PARTICIPANTS
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
10
EXHIBIT NO. 1 TO
MASTER LEASE AGREEMENT
SCHEDULE NO.__________
DATED THIS ___________ DAY OF ____________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
Lessor & Mailing Address: Lessee & Mailing Address:
GENERAL ELECTRIC CAPITAL CORPORATION ALADDIN GAMING, LLC
FOR ITSELF AND AS AGENT FOR CERTAIN Project Development Office
PARTICIPANTS ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
This Equipment Schedule is executed pursuant to, and incorporates
by reference the terms and conditions of, and capitalized terms
not defined herein shall have the meanings assigned to them in,
the Master Lease Agreement identified above (the "Master Lease
Agreement"; said Master Lease Agreement and this Equipment
Schedule being collectively referred to as "Lease"). This
Equipment Schedule, incorporating by reference the Master Lease
Agreement, constitutes a separate instrument of lease.
A. EQUIPMENT.
Pursuant to the terms of the Lease, Lessor agrees to acquire
and lease to Lessee the Equipment listed on Annex A attached
hereto and made a part hereof (individually a "Unit of Equipment"
and, collectively, the "Equipment").
B. FINANCIAL TERMS.
1. Capitalized Lessor's Cost: $__________________________.
2. Basic Lease Term: thirty-six (36) months.
3. Basic Lease Term Commencement Date: the
Construction Completion Date.
4. Renewal Term: each, twelve (12) months.
5. Maximum Lease Term: sixty (60) months.
6. Last Delivery Date: _________________, 2000 [that date
which is twenty-six (26) months after Lessee's Senior
Credit Facility closes] (if no force majeure has then
occurred; provided that such date may be extended for
up to twelve (12) months if a force majeure has then
occurred).
7. Stipulated Loss Values: See Annex D.
8. Termination Values: See Annex D.
9. Lessee Federal Employer Identification No.: ▇▇-▇▇▇▇▇▇▇
10. Lessee agrees and acknowledges that the
Capitalized Lessor's Cost of the Equipment as stated on
this Schedule is equal to the fair market value of the
Equipment on the date hereof.
C. TERM AND RENT.
1. Interim Rent. During the Interim Funding Period, Lessee
shall pay rent ("Interim Rent") for each Unit of Equipment in
monthly installments, in arrears, calculated as the product of
the Interim Term Interest Rate, multiplied by the Capitalized
Lessor's Cost of such Unit of Equipment, for the actual number of
days in such period. Lessee shall select the applicable interest
rate with respect to the Interim Funding Period not less than
five (5) Business Days prior to the date on which the initial
Funding is made with respect to the Lease
Facility by written notice to Lessor. The interest
rate option selected by Lessee shall remain in
effect during the Interim Funding Period. Interim Rent
shall be due on the first day of each month during the Interim
Funding Period, commencing on the first day of the calendar month
next succeeding the Lease Commencement Date with respect to such
Unit of Equipment and on the first day of each calendar month
thereafter during the Interim Funding Period (provided, however,
that the final installment of Interim Rent shall be due on the
Basic Term Commencement Date) (each, an "Interim Rent Payment
Date"). All payments of Interim Rent shall be applied to payment
of interest due on the Obligations with respect to the Lease
Facility.
2. Basic Term and Renewal Term Rent. Commencing on the
first day of the fourth calendar month next succeeding the Basic
Term Commencement Date, and on the first day of each tri-monthly
period thereafter (each, a "Rent Payment Date") during the Basic
Lease Term ("Basic Term Rent") and any Renewal Term ("Renewal
Term Rent"), Lessee shall pay rent in tri-monthly installments,
in arrears, in an amount equal to (x) the amount specified on the
attached Basic Term Rent Schedule, plus (y) an amount equal to
the product of the Unamortized Lessor's Cost as of the
immediately preceding Rent Payment Date (after application of the
Rent paid on such date), multiplied by the Basic Lease Term
Interest Rate for the actual number of days in the Interest
Period following such immediately preceding Rent Payment Date.
Said Rent consists of principal and interest components, such
principal components being as provided in the Basic Term Rent
Schedule attached hereto.
3. Contingent Rent. Contingent Rent shall accrue on a tri-
monthly basis and shall be payable by Lessee to Lessor upon
return of the Equipment pursuant to Section 5(c) of the Master
Lease Agreement.
4. Special Definitions. As used herein, the following
terms shall have the following meaning:
"Interim Term Interest Rate" shall be calculated at a
floating rate equal, at the option of Lessee exercised pursuant
to Section C.1. hereof, to either (1) 30-Day LIBOR plus four
hundred seventy-eight (478) basis points, or (2) the Prime Rate
plus two hundred seventy-five (275) basis points; and such spread
shall be fixed throughout the Interim Funding Period; and 30-Day
LIBOR or the Prime Rate, as applicable, will be adjusted monthly
on the first day of each month during the Interim Funding Period,
based on changes thereto as in effect two (2) Business Days
before the first day of such month.
"Basic Lease Term Interest Rate" shall be determined five
(5) Business Days prior to the Basic Lease Term Commencement Date
and shall be calculated at a floating rate equal to the sum of
the Base Index plus an amount (the "Spread") equal to four
hundred seventy-eight (478) basis points; and such Spread shall
be fixed throughout the Lease Term; and the Base Index will be
adjusted tri-monthly on the first day of each tri-monthly period
during the Lease Term, based on changes to the Base Index as in
effect two (2) Business Days before the first day of such tri-
monthly period.
5. Default Rate. So long as any Event of Default shall
have occurred and be continuing, the interest rate applicable to
the Lease Facility shall be increased by two percentage points
(2%) per annum above the then highest rate otherwise applicable
to the Lease Facility.
6. Computations of Interest. All computations of interest
hereunder shall be made (a) on the basis of a three hundred sixty
(360) day year during any period during which rent is calculated
on the basis of 30-Day LIBOR or the Base Index, or (b) on the
basis of a three hundred sixty-five (365) day year during any
period during which rent is calculated on the basis of the Prime
Rate; in each case for the actual number of days occurring in the
period for which such rent is payable. Each determination by
Lessor of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
D. FIXED PURCHASE PRICE AND RESIDUAL RISK AMOUNT
END OF QUARTER FIXED PURCHASE PRICE RESIDUAL RISK AMOUNT
2
expressed as a percent of the Capitalized Lessor's Cost of the
Equipment.
This Schedule is not binding or effective with respect to
the Master Lease Agreement or Equipment until executed on behalf
of Lessor and Lessee by authorized representatives of Lessor and
Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this
Schedule to be executed by their duly authorized representatives
as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL ALADDIN GAMING, LLC
CORPORATION, FOR ITSELF AND
AS AGENT FOR CERTAIN
PARTICIPANTS
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
3
ANNEX A
TO
SCHEDULE NO.__________
DATED THIS _____ DAY OF ________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
[CAPTION]
DESCRIPTION OF EQUIPMENT
Manufacturer Serial Numbers Type and Model of Number of Units Cost per Unit
Equipment
=======================================================================================
Initials:__________ __________
Lessor Lessee
ANNEX B
TO
SCHEDULE NO.__________
DATED THIS _____ DAY OF ________, 199
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
PURCHASE ORDER ASSIGNMENT AND CONSENT
THIS ASSIGNMENT AGREEMENT, dated as of ____________________,
1998 ("AGREEMENT"), between General Electric Capital Corporation,
for Itself and as Agent for Certain Participants, its successors
and assigns ("LESSOR"), and Aladdin Gaming, LLC (together with
its successors and permitted assigns, "LESSEE").
WITNESSETH:
Lessee desires to lease certain equipment ("EQUIPMENT") from
Lessor pursuant to the above schedule and lease (collectively,
"LEASE"). All terms used herein which are not otherwise defined
shall have the meaning ascribed to them in the Lease.
Lessee desires to assign, and Lessor is willing to acquire,
certain of Lessee's rights and interests under the purchase
order(s), agreement(s), and/or document(s) (the "PURCHASE
ORDERS") Lessee has heretofore issued to the Supplier(s) of such
Equipment.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, Lessor and Lessee hereby agree as follows:
SECTION 1. ASSIGNMENT.
(a) Lessee does hereby assign and set over to Lessor all of
Lessee's rights and interests in and to such Equipment and the
Purchase Orders as the same relate thereto including, without
limitation, (i) the rights to purchase, to take title, and to be
named the purchaser in the ▇▇▇▇ of sale for, such Equipment, (ii)
all claims for damages in respect of such Equipment arising as a
result of any default by the Supplier (including, without
limitation, all warranty and indemnity claims) and (iii) any and
all rights of Lessee to compel performance by the Supplier.
(b) If, and so long as, (i) no Event of Default exists, or
(ii) notwithstanding the existence of an Event of Default, Lessee
remains in possession of the Equipment, Lessee shall be, and is
hereby, authorized during the term of the Lease to assert and
enforce, at Lessee's sole cost and expense, from time to time, in
the name of and for the account of Lessor and/or Lessee, as their
interests may appear, whatever claims and rights Lessor may have
against any Supplier of the Equipment.
SECTION 2. CONTINUING LIABILITY OF LESSEE.
It is expressly agreed that, anything herein contained to
the contrary notwithstanding: (a) Lessee shall at all times
remain liable to the Supplier to perform all of the duties and
obligations of the purchaser under the Purchase Orders to the
same extent as if this Agreement had not been executed, (b) the
execution of this Agreement shall not modify any contractual
rights of the Supplier under the Purchase Orders and the
liabilities of the Supplier under the Purchase Orders shall be to
the same extent and continue as if this Agreement had not been
executed, (c) the exercise by the Lessor of any of the rights
hereunder shall not release Lessee from any of its duties or
obligations to the Supplier under the Purchase Orders, and (d)
Lessor shall not have any obligation or liability
under the Purchase Orders by reason of, or
arising out of, this Agreement or be obligated
to perform any of the obligations or duties of Lessee under the
Purchase Orders or to make any payment (other than under the
terms and conditions set forth in the Lease) or to make any
inquiry of the sufficiency of or authorization for any payment
received by any Supplier or to present or file any claim or to
take any other action to collect or enforce any claim for any
payment assigned hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL ALADDIN GAMING, LLC
CORPORATION, FOR ITSELF AND
AS AGENT FOR CERTAIN
PARTICIPANTS
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
CONSENT AND AGREEMENT
Supplier hereby consents to the above assignment agreement
("AGREEMENT") and agrees not to assert any claims against Lessor
or Lessee inconsistent with such Agreement. Supplier agrees that
the Purchase Orders are hereby amended as necessary to provide as
follows:
(a)As between Supplier and Lessor, title to and risk of
loss of the Equipment shall pass to Lessor upon
Lessee's execution of the Certificate of Acceptance for
such Equipment.
(b)Supplier hereby waives and discharges any security
interest, lien or other encumbrance in or upon the
Equipment and agrees to execute such documents as
Lessor may request evidencing the release of any such
encumbrance and the conveyance of title thereto to
Lessor.
(c)Supplier agrees that on and after the date this Consent
is executed it will not make any addition to or delete
any items from the Equipment referred to in the
Agreement without the prior written consent of both
Lessor and Lessee.
(d)Supplier represents that the Equipment has been
accurately labeled, consistent with the requirements of
40 CFR Part 82 Subpart E, with respect to products
manufactured with a controlled (ozone-depleting)
substance.
IN WITNESS WHEREOF, the undersigned has caused this Consent
to be executed this ________ day of ____________________, 199___.
SUPPLIER:
By:___________________________
Name:_________________________
Title:________________________
ANNEX C
TO
SCHEDULE NO.__________
DATED THIS _____ DAY OF __________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
CERTIFICATE OF ACCEPTANCE
To: General Electric Capital Corporation,
for Itself and as Agent for Certain Participants
Pursuant to the provisions of the above Schedule and Master
Lease Agreement (collectively, the "LEASE"), Lessee hereby
certifies and warrants that, as between Lessor and Lessee (a) all
Equipment listed in the related invoice is in good condition and
appearance, installed (if applicable), and in working order; and
(b) Lessee accepts the Equipment for all purposes of the Lease
and all attendant documents; provided, however, that this
Certificate shall not confer any rights upon or inure to the
benefit of any Person other than Lessor and shall not constitute
a waiver of any claims against any Supplier. Capitalized terms
used herein without definition shall have the meanings specified
in the Lease.
Lessee does further certify that as of the date hereof (i)
no Event of Default has occurred and is continuing; and (ii) the
representations and warranties made by Lessee pursuant to or
under the Lease are true and correct on the date hereof.
ALADDIN GAMING, LLC
By:____________________________________
Lessee's Authorized Representative
Dated: __________ ___, 199_
ANNEX D
TO
SCHEDULE NO.
DATED THIS _____ DAY OF _________, 199_
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
STIPULATED LOSS AND TERMINATION VALUE TABLE<1>
RENT PAYMENT STIPULATED LOSS TERMINATION
DATE VALUE VALUE
--------- --------- ---------
Initials__________ __________
Lessor Lessee
=======================
<1>The Stipulated Loss and Termination Value for any unit of
Equipment shall be equal to the Capitalized Lessor's Cost of such
unit multiplied by the appropriate percentage derived from the
above table. In the event that the Lease is for any reason
extended, then the last percentage figure shown above shall
control throughout any such extended term.
ANNEX E
TO
SCHEDULE NO.__________
DATED THIS _____ DAY OF _________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
BASIC TERM RENT SCHEDULE<1>
UNAMORTIZED
RENT PAYMENT DATE PRINCIPAL<1> LESSOR'S COST<1>
----------------- --------- -------------
Initials__________ __________
Lessor Lessee
====================
<1>The Principal and Unamortized Lessor's Cost as of any Rent
Payment Date shall be equal to the Capitalized Lessor's Cost of
such unit multiplied by the appropriate percentage derived from
the above table.
ANNEX F
TO
SCHEDULE NO.__________
DATED THIS _____ DAY OF ____________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF JUNE 26, 1998
RETURN PROVISIONS: Upon the expiration or any termination of the
Term of this Schedule provided that Lessee has elected not to
exercise its extension option or its purchase option pursuant to
Section 9 of the Lease, Lessee shall, at its expense:
(A) (i) Perform any testing and repairs required to place
the Equipment in the same condition and appearance as when
received by Lessee (reasonable wear and tear excepted) and in
good working order for its originally intended purpose; (ii) if
deinstallation, disassembly or crating is required, cause the
Equipment to be deinstalled, disassembled and crated by an
authorized manufacturer's representative or such other service
person as is satisfactory to Lessor; and (iii) return the
Equipment, free and clear of all liens and encumbrances, to a
location within the continental United States as Lessor shall
direct.
(B) Until Lessee fully has complied with the requirements of
Paragraph (A) above, Lessee's Rent payment obligation and all
other obligations under the Agreement shall continue from month
to month notwithstanding any expiration or termination of the
Term. Lessor may terminate such continued leasehold interest
upon ten (10) days' notice to Lessee. In addition to these
Rents, Lessor shall have all of its other rights and remedies
available as a result of this nonperformance.
(C) At least one hundred eighty (180) days and not more than
two hundred forty (240) days prior to expiration or earlier
termination of the Lease, provide to Lessor a detailed inventory
of all components of the Equipment. The inventory should
include, but not be limited to, a listing of model, serial
numbers and size description (length, width, height, diameter)
for all components comprising the Equipment.
(D) At least one hundred eighty (180) days prior to
expiration or earlier termination of the Lease, upon receiving
reasonable notice from Lessor, provide or cause the vendor(s) or
manufacturer(s) to provide to Lessor the following documents:
(1) one set of service manuals, blue prints, process flow
diagrams and operating manuals including replacements and/or
additions thereto, such that all documentation is completely up-
to-date; and (2) one set of documents, detailing equipment
configuration, operating requirements, maintenance records, and
other technical data concerning the set-up and operation of the
Equipment, including replacements and/or additions thereto, such
that all documentation is completely up-to-date.
(E) At least one hundred eighty (180) days prior to
expiration or earlier termination of the Lease, upon receiving
reasonable notice from Lessor, make the Equipment available for
on-site operational inspections by potential purchasers, under
power, and provide personnel, power and other requirements
necessary to demonstrate electrical, mechanical and functionality
of each item of the Equipment.
(F) At least forty-five (45) days prior to expiration or
earlier termination of the Lease, cause the manufacturer's
representative(s) or qualified equipment maintenance provider(s),
acceptable to Lessor, to perform a comprehensive physical
inspection, including testing all material and workmanship of the
Equipment. The authorized inspector should ensure the equipment
is clean and cosmetically acceptable, and in such condition so
that it may be immediately installed and placed into use in a
similar retail store environment. There shall be no missing
screws, bolts, fasteners, etc. The equipment will be free from
all large scratches, marks, gouges, dents, discoloration or
stains. There shall be no evidence of extreme use or
overloading, i.e. bowed or sagging shelves, etc. If during such
inspection, examination and test, the authorized inspector finds
any of the material or workmanship to be defective or the
Equipment not operating within manufacturer's specifications,
then Lessee shall repair or replace such defective material and,
after corrective measures are completed, Lessee will provide for
a follow-up inspection of the Equipment by the authorized
inspector as outlined in the preceding clause.
(G) Have each item of Equipment returned with an in-depth
field service report detailing said inspection as outlined in
Section D of this Annex F. The report shall certify that the
Equipment has been properly inspected, examined and tested and is
operating within the manufacturer's specifications.
(H) Properly remove all Lessee installed markings which are
not necessary for the operation, maintenance or repair of the
Equipment.
(I) Ensure all Equipment and equipment operations conform to
all applicable local, state, and federal laws, health and safety
guidelines.
(J) The Equipment shall be redelivered with all component
parts in good operating condition. All components must meet or
exceed the manufacturer's minimum recommended specifications
unless otherwise specified.
(K) Provide for the deinstallation, packing, transporting,
and certifying of the Equipment to include, but not be limited
to, the following: (1) the manufacturer's representative shall
de-install all Equipment (including all wire, cable and mounting
hardware) in accordance with the specifications of the
manufacturer; (2) each item of the Equipment will be returned
with a certificate supplied by the manufacturer's representative
qualifying the Equipment to be in good condition and (where
applicable) to be eligible for the manufacturer's maintenance
plan; the certificate of eligibility shall be transferable to
another operator of the Equipment; (3) the Equipment shall be
packed properly and in accordance with the manufacturer's
recommendations; and (4) Lessee shall transport the Equipment in
a manner consistent with the manufacturer's recommendations and
practices.
(L) Upon sale of the Equipment to a third party, provide
transportation to any locations anywhere in the continental
United States selected by Lessor.
(M) Obtain and pay for a policy of transit insurance for the
redelivery period in an amount equal to the replacement value of
the Equipment and Lessor shall be named as the loss payee on all
such policies of insurance.
(N) Store the Equipment at the Equipment Location, at
Lessee's sole risk and expense (including maintenance and
insurance), for a period not to exceed nine (9) months.
2
EXHIBIT NO. 2 TO
MASTER LEASE AGREEMENT
AGENCY AGREEMENT
THIS AGENCY AGREEMENT ("Agreement"), dated as of the 26th
day of June, 1998, between GENERAL ELECTRIC CAPITAL CORPORATION,
FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS, its successors
and assigns ("Lessor"), and ALADDIN GAMING, LLC, its successors
and assigns ("Lessee"). Capitalized terms not defined herein
shall have the meanings assigned to them in Annex A to that
certain Facilities Agreement dated as of the date hereof, between
Lessor and Lessee.
RECITALS:
WHEREAS, Lessor and Lessee have entered into the Master
Lease Agreement which contemplates the execution of one or more
Schedules incorporating by reference the terms and conditions of
the Master Lease Agreement. Each Schedule, incorporating by
reference the Master Lease Agreement, is hereinafter referred to
as the "Lease". Pursuant to the Lease, Lessor, as lessor, has
agreed to purchase certain items of equipment and lease such
items of equipment to Lessee, as lessee (all such equipment
leased thereunder is hereinafter collectively referred to as the
"Equipment").
WHEREAS, Lessor and Lessee desire to set forth the basis on
which Lessee shall issue its purchase orders with respect to
equipment which Lessee wishes to be brought under the Lease.
WHEREAS, Lessor desires to appoint Lessee its agent to order
and receive, in the name and on behalf of Lessor, the Equipment.
NOW, THEREFORE, in consideration of the above premises and
the mutual promises contained herein, as well as other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
GENERAL UNDERTAKING
Section 1.01 Ordering of Equipment. From time to time,
Lessee shall issue its purchase orders to, or shall enter into
purchase agreements with, suppliers of equipment (each a
"Supplier" and collectively, the "Suppliers").
Section 1.02 Appointment. Lessor hereby appoints Lessee,
and Lessee hereby accepts such appointment, as the agent of
Lessor, without any fee for acting as such agent, pursuant to the
terms and conditions of this Agreement, for the purpose of
subject to the conditions set forth in Section 2.01 hereof,
accepting Equipment on Lessor's behalf for leasing to Lessee
under the Lease. It is specifically agreed that all of the power
and authority vested to Lessee herein shall be subject to any
modifications as may from time to time be made by Lessor.
Section 1.03 Powers. Except as otherwise may be expressly
provided in this Agreement, Lessee is hereby granted the
authority to act, and hereby agrees to act, on behalf of Lessor
and in the name of Lessor, solely to the extent necessary to
carry out its duties under this Agreement.
Section 1.04 Lease. This Agreement is entered into in
connection with and subject to the terms of the Lease and in the
event of a conflict between the terms of this Agreement and the
Lease, the Lease shall control. Lessee and Lessor may from time
to time hereafter enter into Schedules to the Lease, and it is
the intent of the parties that this Agreement facilitate the
leasing of Equipment under the Lease. NOTHING IN THIS
AGREEMENT SHALL BE OR SHALL BE DEEMED TO BE, A COMMITMENT ON THE
PART OF LESSOR TO EXECUTE OR OTHERWISE ENTER INTO ANY SCHEDULES
AFTER THE DATE OF THIS AGREEMENT.
ARTICLE II
DUTIES OF AGENT
Section 2.01 Equipment Orders.
(a) Lessee, pursuant to the agency granted to it by
Lessor in Article I hereof, may receive, accept and pay for the
Equipment to be leased by Lessor to Lessee pursuant to the Lease.
Upon and as of the date of issuance hereunder by Lessee of a
Purchase Order with respect to Equipment, Lessee shall be
unconditionally obligated to lease such Equipment from Lessor
pursuant to the terms and conditions of the Lease and the
applicable Schedule. Upon and as of the date of acceptance of
the Equipment by Lessee and satisfaction of the conditions
precedent provided for herein and in the Lease, Lessor shall be
unconditionally obligated to purchase such Equipment pursuant to
the terms of the applicable Purchase Order and to lease such
Equipment to Lessee pursuant to the terms and conditions of the
Lease and the applicable Schedule.
(b) Notwithstanding any provision to the contrary
herein, Lessee's ability to act as Lessor's agent hereunder, and
unconditionally to obligate Lessor to purchase Equipment pursuant
to such agency, shall be limited by the following: (1) Lessee
must disclose in writing to all Suppliers that it is ordering the
Equipment as agent for "General Electric Capital Corporation or
its nominee"; (2) all of the Equipment ordered and/or accepted
hereunder must meet at least one of the general description
categories, and must be within the quantity, specific
description, manufacturers, hard/soft cost allocation, and total
cost parameters, contained on Schedule A attached hereto; (3) the
aggregate Purchase Price for all Equipment purchased in
connection with the Lease must be less than, or equal to, the
Capitalized Lessor's Cost specified on Schedule A attached
hereto; (4) the Equipment must be delivered to, and accepted by,
Lessee on or before the Last Delivery Date specified in Schedule
A attached hereto; and (5) the Purchase Price of each unit of
Equipment must not be more than the then current fair market
value of such Equipment. Lessor may refuse to purchase Equipment
pursuant to such agency if Lessor determines, in its sole
discretion, that the foregoing conditions have not been
satisfied; and such refusal shall not constitute a breach by
Lessor hereunder or under the Lease.
(c) Lessee additionally agrees that all Purchase
Orders executed by Lessee shall: (1) not permit passage of title
for the Equipment earlier than such acceptance by Lessee; (2) not
permit the Supplier or any other person or entity to retain any
security interest in, or lien on, any of the Equipment; and (3)
otherwise be on terms and conditions acceptable to Lessor in its
reasonable discretion. Prior to passage of risk of loss to
Lessor of the Equipment under the terms of the Purchase Orders,
Lessee shall insure the Equipment, and provide to Lessor evidence
of insurance, in accordance with the provisions of the Lease.
Section 2.02 Receipt of Equipment. With respect to any
purchase order issued by Lessee pursuant hereto, Lessee agrees to
perform all obligations of the purchaser in the time and manner
required thereby. Without limiting the foregoing, upon receipt
and acceptance by Lessee of any Equipment, Lessee shall execute
and deliver to Lessor a Schedule describing all units of
Equipment so received and accepted by Lessee (together with
evidence of the insurance required by Section 10(e) of the
Facilities Agreement). As between Lessor and Lessee, receipt and
acceptance of any Equipment by Lessee from the Supplier shall be
deemed to be an unconditional and irrevocable acceptance of such
Equipment by Lessee for all purposes of the Lease and the
applicable Schedule; provided that no such receipt and acceptance
shall constitute a waiver of any Claims Lessee or Lessor may have
against any Supplier or any other Person..
ARTICLE III
TERMINATION
Section 3.01 Termination.
(a) If an Event of Default has occurred and is
continuing, Lessor may elect to terminate this Agreement
immediately, which shall be effective upon the receipt
of written notice thereof by Lessee. If Lessee invokes
the protection of any bankruptcy or insolvency law, or
any such law is invoked against or with
2
respect to Lessee or its property, without further action this
Agreement automatically shall terminate. Upon any such
termination Lessor shall have no continuing obligation under
Section 2.03 hereof.
(b) Any termination under this Section 3.01
automatically shall result in the immediate revocation of all
authority vested in Lessee under this Agreement to order, accept
or pay for any Equipment on behalf of Lessor.
IN WITNESS WHEREOF, the parties have caused their duly
authorized representatives to execute and deliver this Agency
Agreement as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL ALADDIN GAMING, LLC
CORPORATION, FOR ITSELF AND
AS AGENT FOR CERTAIN
PARTICIPANTS
By:___________________________ By:_________________________
Name:_________________________ Name:_______________________
Title:________________________ Title:______________________
3
SCHEDULE A TO
AGENCY AGREEMENT
Description of Equipment: furniture, fixtures and equipment
(other than gaming equipment)
Equipment Parameters: See attachments
Aggregate Capitalized Lessor's Cost: $60,000,000.00
Last Delivery Date: ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇ no force majeure has then
occurred; provided that such date may be
extended for up to twelve (12) months if a
force majeure has then occurred).
EXHIBIT NO. 2 TO
FACILITIES AGREEMENT
TERM LOAN NOTE
$_____________________ _________________, 199___
FOR VALUE RECEIVED, the undersigned, ALADDIN GAMING,
LLC ("Borrower"), HEREBY PROMISES TO PAY to the order of GENERAL
ELECTRIC CAPITAL CORPORATION, FOR ITSELF AND AS AGENT FOR CERTAIN
PARTICIPANTS ("Lender"), in lawful money of the United States of
America and in immediately available funds, the amount of
____________________________________ DOLLARS ($________________)
or, if less, the aggregate unpaid principal amount of the
Fundings with respect to the Term Loan Facility (the "Advances")
made by Lender to or on behalf of Borrower pursuant to Section 1
of the Facilities Agreement, together with interest thereon as
hereinafter set forth. All capitalized terms, unless otherwise
defined herein, shall have the respective meanings assigned to
such terms in Annex A to that certain Facilities Agreement dated
as of May ___, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Facilities
Agreement"), between Borrower and Lender.
This Term Loan Note is issued pursuant to the
Facilities Agreement, and is entitled to the benefit and security
of the Facilities Agreement, to which reference is hereby made
for a statement of all of the terms and conditions under which
the loans evidenced hereby were made.
Interest on the aggregate unpaid principal amount of
the Advances made by Lender to or on behalf of Borrower evidenced
hereby shall be payable from the date each such Advance is made
through the Interim Funding Period at a floating rate equal to
[30-Day LIBOR plus four hundred seventy-eight (478) basis points]
[the Prime Rate plus two hundred seventy-five (275) basis
points]. [30-Day LIBOR] [The Prime Rate] will be adjusted monthly
on the first day of each month during the Interim Funding Period,
based on changes thereto as in effect two (2) Business Days
before the first day of such month. The principal amount of the
indebtedness evidenced hereby shall be payable in twenty (20) tri-
monthly installments, in arrears, on the first day of each tri-
monthly period during the term of this Note, on the dates and in
the amounts specified on the Amortization Schedule to be attached
hereto on the Construction Completion Date, together with
interest on the outstanding principal balance from the
Construction Completion Date (or, in the case of installments due
after the first installment, from the preceding payment date) at
a per annum interest rate calculated on that date which is five
(5) Business Days prior to the Construction Completion Date, at a
floating rate equal to the sum of the Base Index plus four
hundred seventy-eight (478) basis points; provided that the Base
Index will be adjusted tri-monthly on the first day of each
quarter, based on changes thereto as in effect two (2) Business
Days before the first day of such tri-monthly period.
Upon and after the occurrence of an Event of Default,
this Term Loan Note may, as provided in the Facilities Agreement
and the other Operative Documents, and without demand, notice or
legal process of any kind, be declared and immediately shall
become, due and payable.
Demand, presentment, protest and notice of nonpayment
and protest are hereby waived by Borrower.
THIS TERM LOAN NOTE SHALL BE INTERPRETED, GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE).
ALADDIN GAMING, LLC
By:________________________________
Name:______________________________
Title:_____________________________
2
EXHIBIT NO. 3 TO
FACILITIES AGREEMENT
COLLATERAL SCHEDULE
Type and Model
MANUFACTURER SERIAL NUMBER OF EQUIPMENT NUMBER OF UNITS COST PER UNIT
ALADDIN GAMING, LLC
By:________________________________
Name:______________________________
Title:_____________________________
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "AGREEMENT") is made
and entered into as of the 30th day of June, 1998 by and among
THE BANK OF NOVA SCOTIA ("SCOTIABANK"), a Canadian chartered
bank, as the administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Senior Lenders (as such term is
defined in SECTION 1.1; each capitalized term (whether or not
italicized) when used in this Agreement, including this preamble
and the recitals, shall, except where the context otherwise
requires, have the meaning set forth in SECTION 1.1), GENERAL
ELECTRIC CAPITAL CORPORATION ("GE CAPITAL"), a New York
corporation, for itself and as agent (in such capacity, the "FF&E
AGENT") for the Participants, and ALADDIN GAMING, LLC, a Nevada
limited-liability company ("ALADDIN GAMING").
WITNESSETH:
WHEREAS, Aladdin Gaming is the fee owner of the Site; and
WHEREAS, Aladdin Gaming, Scotiabank, individually and as the
Administrative Agent, various financial institutions
(collectively, the "SENIOR LENDERS"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corporation, as the syndication agent for the Senior Lenders, and
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp., as the documentation agent for the Senior
Lenders, entered into the Senior Credit Agreement pursuant to
which the Senior Lenders agreed, INTER ALIA, to make the senior
credit facility described therein (the "SENIOR CREDIT FACILITY")
available to Aladdin Gaming to finance a portion of the cost of
construction of the Aladdin Hotel and Casino; and
WHEREAS, Aladdin Gaming and GE Capital, individually
and as the FF&E Agent for the Participants, entered into that
certain facilities agreement (as the same may be amended from
time to time, the "FACILITIES AGREEMENT") pursuant to which GE
Capital and the Participants agreed, INTER ALIA, to enter into
(x) the Term Loan Facility with Aladdin Gaming to finance a
portion of the cost of the Gaming Equipment described on the
Collateral Schedules and (y) the Lease Facility with Aladdin
Gaming to finance a portion of the cost of the Equipment leased
under and described on the Equipment Schedules; and
WHEREAS, Aladdin Gaming, the Administrative Agent, on
behalf of the Senior Lenders, and the FF&E Agent,
on behalf of GE Capital and the Participants, wish to enter into
this Agreement in order to set forth certain agreements relating
to (x) the acquisition, operation, management and disposition of
the Equipment leased under and described on the Equipment
Schedules and the Gaming Equipment described on the Collateral
Schedules and (y) the exercise of rights, remedies and options by
the Senior Lenders, GE Capital and the Participants and Aladdin
Gaming.
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINED TERMS. All capitalized terms
(whether or not italicized) when used in this Agreement without
definition shall have the meanings ascribed to such terms in the
Facilities Agreement. The following terms (whether or not
italicized) when used in this Agreement, including its preambles
and recitals, shall, except where the context otherwise requires,
have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"ACQUISITION PRICE" shall mean, on any date, the sum of
(a)(1) the then outstanding principal balance of the Term
Loan Note and (2) all accrued and unpaid interest at the
applicable rate set forth in Section 2 of the Facilities
Agreement through but not including the date that the
Purchaser actually purchases the Interest in the Facilities
in accordance with this Agreement; and
(b) (1) the Unamortized Lessor's Cost for the Equipment
leased under and described in the Equipment Schedules and
(2) all accrued and unpaid Rent, together with interest
thereon at the Default Rate (such Default Rate interest
commencing on the date on which such Rent became due and
ending on the date immediately preceding the date on which
the Purchaser actually purchases the Interest in the
Facilities); and
-2-
(c) all reasonable out-of-pocket expenses incurred by the
FF&E Agent, GE Capital or the Participants, in connection
with such purchase other than attorneys' fees and costs and
expenses and any taxes imposed on the FF&E Agent, GE Capital
or any of the Participants with respect to the transfer and
assignment of the Interest in the Facilities.
"INTEREST IN THE FACILITIES" shall mean the interest of GE
Capital and the Participants in the Facilities, the Facilities
Agreement and the other Operative Documents.
"LOAN DOCUMENTS" is defined in the Senior Credit Agreement.
"PURCHASE DATE" shall mean the date specified in the
Purchase Notice from the Administrative Agent to the FF&E Agent
which shall be no less than 10 Business Days after delivery by
the Administrative Agent of the Purchase Notice in accordance
with SECTION 7.2.
"PURCHASE EVENT" shall mean any one or more of the
following:
(a) the occurrence of an Event of Default under Section 12
of the Facilities Agreement (subject to Schedule A of this
Agreement) and the expiration of the cure rights of the
Senior Lenders under ARTICLE VI;
(b) if the Term Loan Note is not paid in full on the
maturity date (whether on the stated maturity date as set
forth in clause (a) of Section 3 of the Facilities Agreement
or the earlier acceleration of such stated maturity date
pursuant to the Facilities Agreement); or
(c) if all amounts due under the Master Lease Agreement are
not paid upon the expiration of the Term of each Schedule
(whether on the stated expiration date as set forth on the
applicable Schedule or the earlier expiration pursuant to
the Master Lease Agreement).
"PURCHASE NOTICE" shall mean the written notice given
by the Administrative Agent to the FF&E Agent in accordance with
SECTION 7.2 that a Purchase Event has occurred and that the
Purchaser is going to purchase the Interest in the Facilities
from GE Capital and the
-3-
Participants in exchange for the Acquisition Price on the
Purchase Date.
"PURCHASER" shall mean (x) the Administrative Agent,
(y) the Senior Lenders or (z) any nominee or designee of the
Administrative Agent or the Senior Lenders, whichever is
designated to be the purchaser of the Interest in the Facilities
on the Purchase Date, as the context may require.
"SENIOR CREDIT AGREEMENT" shall mean the Credit
Agreement dated as of February 26, 1998, among Aladdin Gaming,
the Senior Lenders, Scotiabank, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and CIBC and as
thereafter from time to time amended, supplemented, amended and
restated or otherwise modified.
"SENIOR CREDIT FACILITY EVENT OF DEFAULT" is an "Event
of Default" as such term is defined in the Senior Credit
Agreement.
"TERMINATION DATE" shall mean the date on which the
parties hereto have performed in all material respects their
obligations hereunder.
SECTION 1.2 CROSS-REFERENCES. Unless otherwise specified,
references in this Agreement to any Article or Section are
references to such Article or Section of this Agreement or such
other specified document, as the case may be, and, unless
otherwise specified, references in any Article, Section or
definition to any item or clause are references to such item or
clause of such Article, Section or definition. Unless otherwise
specified, the words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
ARTICLE II
REPRESENTATIONS AND COVENANTS BY ALADDIN GAMING
SECTION 2.1 STATUS OF THE SENIOR CREDIT FACILITY AND THE
FACILITIES. In order to induce the Administrative Agent and the
FF&E Agent to execute and deliver this Agreement, Aladdin Gaming
makes the representations and warranties set forth below:
(a)(i) the Senior Credit Agreement and all of the other Loan
Documents (A) have been duly authorized by
-4-
all necessary action on the part of Aladdin Gaming, (B) have
been duly executed and delivered by Aladdin Gaming and (C)
constitute the legal, valid and binding obligation of
Aladdin Gaming enforceable against Aladdin Gaming in
accordance with their terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally and by principles of equity), (ii) the maximum
principal amount of the Senior Credit Facility evidenced and
secured by the Senior Credit Agreement and the other Loan
Documents is $410,000,000 (as such amount may be increased
in accordance with the terms of the Senior Credit
Agreement), together with interest and other amounts due
thereon, (iii) as of the date hereof, the outstanding
principal balance of the Senior Credit Facility is
$265,000,000, together with interest thereon, (iv) no Senior
Credit Facility Event of Default exists under the Senior
Credit Agreement or the other Loan Documents (nor has any
event occurred which is continuing and which, with the
giving of notice and/or passage of time, would constitute a
Senior Credit Facility Event of Default under the Senior
Credit Agreement or the other Loan Documents), (v) Aladdin
Gaming has no offsets or defenses to its obligations under
the Senior Credit Agreement or the other Loan Documents and
(vi) Aladdin Gaming has no claims or counterclaims against
the Senior Lenders or the Administrative Agent with respect
to the Senior Credit Facility, the Senior Credit Agreement
or the other Loan Documents;
(b)(i) the Facilities Agreement and the Operative Documents
(A) have been duly authorized by all necessary action on the
part of Aladdin Gaming, (B) have been duly executed and
delivered by Aladdin Gaming and (C) constitute the legal,
valid and binding obligation of Aladdin Gaming enforceable
against Aladdin Gaming in accordance with their respective
terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally and by principles
of equity), (ii) the maximum principal amount of the Lease
Facility is $60,000,000 and the maximum amount of the Term
Loan Facility is $20,000,000, (iii) as of the date hereof,
no portion of the Lease Facility or the Term Loan Facility
has been advanced and no interest is accruing thereon, (iv)
no Event of Default has occurred under the
-5-
Facilities Agreement or the Operative Documents (nor has any
event occurred which, with the giving of notice and/or
passage of time, would constitute an Event of Default under
the Facilities Agreement or the Operative Documents), (v)
Aladdin Gaming has no offsets or defenses to its obligations
under the Facilities Agreement or the Operative Documents
and (vi) Aladdin Gaming has no claims or counterclaims
against GE Capital, individually or as the FF&E Agent, or
any of the Participants with respect to the Lease Facility,
the Term Loan Facility, the Facilities Agreement or the
Operative Documents;
(c) all representations made by Aladdin Gaming in the
Facilities Agreement are true, correct and complete in all
material respects and the Administrative Agent is hereby
entitled to rely thereon; and
(d) all representations made by Aladdin Gaming in the Senior
Credit Agreement as of the date when made were true, correct
and complete in all material respects and the FF&E Agent is
hereby entitled to rely thereon but without any obligation
on the part of Aladdin Gaming to update said representations
and in no event shall this representation be deemed to be a
restatement of said representations as of the date hereof.
SECTION 2.2 COVENANTS BY ALADDIN GAMING. In order to induce
the Administrative Agent and the FF&E Agent to enter into this
Agreement, Aladdin Gaming covenants and agrees that:
(a) it shall look solely to the Senior Lenders and the
Administrative Agent for the performance of all obligations,
covenants and agreements to be performed on the part of the
Senior Lenders under the Senior Credit Agreement and the
other Loan Documents, subject to and upon the conditions set
forth in the Senior Credit Agreement and the other Loan
Documents;
(b) it shall look solely to GE Capital, the Participants and
the FF&E Agent for the performance of all obligations,
covenants and agreements to be performed on the part of GE
Capital and the Participants under the Facilities Agreement
and the Operative Documents, subject to and upon the
conditions set forth in the Facilities Agreement and the
Operative Documents;
-6-
(c) it shall give copies of all notices given or received by
it in connection with the Senior Credit Agreement and the
Facilities Agreement to each of the parties to this
Agreement (other than the party which gave the notice) on
the day that such notice is given by Aladdin Gaming or
within two (2) Business Days after such notice is received
by Aladdin Gaming, as the case may be (all notices shall be
given in the manner set forth in SECTION 9.1); and
(d) it shall deliver to the Administrative Agent (i) the
information set forth in clauses (b)(4), (5), (6), (7) and
(8) of Section 7 of the Facilities Agreement, (ii) copies of
all monthly statements received from the FF&E Agent pursuant
to clause (e) of Section 3 of the Facilities Agreement,
(iii) all financial information required to be delivered to
the FF&E Agent pursuant to clause (a) of Section 10 of the
Facilities Agreement (except for such financial information
which is also required by the Senior Credit Agreement and
delivered in accordance with the terms thereof) and (iv) all
insurance information required by clause (e) of Section 10
of the Facilities Agreement (except for such financial
information which is also required by the Senior Credit
Agreement and delivered in accordance with the terms
thereof).
ARTICLE III
THE LOAN DOCUMENTS
SECTION 3.1 RECORDING AND FILING OF DOCUMENTS. The Loan
Documents have been executed and delivered and, as appropriate,
filed and recorded in the manner described in the Senior Credit
Agreement. The Administrative Agent covenants and agrees that
the Liens and other security interests created and perfected by
the Loan Documents and the filing and recording thereof (if
required) cover only the collateral described in the Loan
Documents and not the Equipment leased under and described on the
Equipment Schedules and the Gaming Equipment described on the
Collateral Schedules. The Administrative Agent, on behalf of the
Senior Lenders, does not have and shall not claim a Lien or other
security interest in or with respect to the Equipment leased
under and described on the Equipment Schedules or the Gaming
Equipment described on the Collateral Schedules.
-7-
SECTION 3.2 PERFORMANCE OF SENIOR CREDIT FACILITY. The FF&E
Agent consents to the payment and performance by Aladdin Gaming
of its obligations under the Senior Credit Facility in accordance
with the terms of the Senior Credit Agreement and the other Loan
Documents.
SECTION 3.3 AMENDMENTS TO THE LOAN DOCUMENTS AND EXERCISE
OF RIGHTS AND REMEDIES. The FF&E Agent covenants and agrees that
the Senior Lenders and Aladdin Gaming may from time to time after
notice to or, if required under this Agreement, obtaining the
consent of the FF&E Agent, GE Capital or the Participants:
(a) extend, amend, modify, supplement, replace and/or renew
the Senior Credit Facility, the Senior Credit Agreement and
the other Loan Documents, as the case may be;
(b) increase the principal amount of the Senior Credit
Facility in accordance with the terms of the Senior Credit
Agreement;
(c) waive any of the terms, covenants and conditions in the
Senior Credit Agreement and the other Loan Documents, in
whole or in part, and grant such indulgences in relation to
the obligations evidenced and secured by the Senior Credit
Agreement and the other Loan Documents as the Administrative
Agent and the Senior Lenders may determine; and
(d) exercise all rights and remedies under the Senior Credit
Agreement and the other Loan Documents and take any action
which may affect all or a portion of the Aladdin Hotel and
Casino including, without limitation, (i) all self-help
remedies under the Senior Credit Agreement and the other
Loan Documents, (ii) all rights (statutory or otherwise)
relating to a sale under power of sale, (iii) accepting a
deed-in-lieu of foreclosure or otherwise take title to the
Premises or (iv) appointing a receiver.
The parties acknowledge and agree that, notwithstanding the
foregoing, none of the FF&E Agent, GE Capital or the Participants
shall be deemed to have consented to the incorporation into the
Facility Agreement or any other Operative Document of any such
extension, amendment, modification, supplement, replacement,
renewal, waiver or grant of indulgence, made by the
Administrative
-8-
Agent with respect to the Senior Credit Facility, the Senior
Credit Agreement and/or the other Loan Documents.
SECTION 3.4 ADMINISTRATION OF SENIOR CREDIT FACILITY.
The FF&E Agent acknowledges that the Administrative Agent is
responsible for monitoring and administering the Senior Credit
Facility. Notwithstanding anything to the contrary in this
Agreement, the Senior Credit Agreement or the Facilities
Agreement, neither the FF&E Agent, GE Capital nor the
Participants shall have any right to participate in any approval,
consent or review process which has been granted to the
Administrative Agent pursuant to the Loan Documents (whether or
not such right to approve, consent or review is expressly granted
to the FF&E Agent or GE Capital and the Participants under the
Facilities Agreement and the other Operative Documents) other
than the approvals and consents listed on SCHEDULE A annexed
hereto and all approvals, consents and waivers made by the
Administrative Agent pursuant to the Loan Documents, other than
the approvals and consents listed on SCHEDULE A annexed hereto,
shall be binding on the FF&E Agent until the expiration of the
period described in SECTION 7.2 during which the Senior Lenders
have the exclusive right to purchase the Facilities, the
Facilities Agreement and the Operative Documents. The right of
GE Capital and the Participants to declare a Default or Event of
Default or terminate their Commitments shall be subject to
SCHEDULE A.
SECTION 3.5 DUE EXECUTION BY THE ADMINISTRATIVE AGENT.
The Administrative Agent represents that this Agreement (x) has
been duly authorized by all necessary action on the part of the
Administrative Agent, (y) has been duly executed and delivered by
the Administrative Agent, and (z) constitutes the legal, valid
and binding obligation of the Administrative Agent enforceable
against it in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity).
SECTION 3.6 NOTICES. The Administrative Agent
covenants and agrees to give the FF&E Agent prompt written notice
of (x) any Senior Credit Facility Event of Default, (y) any act
or condition which, in the Administrative Agent's reasonable
judgment could reasonably be expected to have a "MATERIAL ADVERSE
EFFECT" (as such term is defined under the Senior Credit
Agreement) and (y) the taking of any action described in Section
3.3 of this Agreement but
-9-
only if such action is taken pursuant to a written notice or
written Instrument.
ARTICLE IV
THE TERM LOAN FACILITY AND THE LEASE FACILITY
SECTION 4.1 THE FACILITIES AGREEMENT. The Administrative
Agent agrees that the Operative Documents may be filed and
recorded in the manner and at the time described in the
Facilities Agreement and the Operative Documents. The FF&E Agent
covenants and agrees that the Liens and other security interests
to be created and perfected by the documents evidencing and
securing the Term Loan Facility and the filing and recording
thereof (if required) are to cover only the Equipment leased
under and described on the Equipment Schedules and the Gaming
Equipment described on the Collateral Schedules. The FF&E Agent,
on behalf of GE Capital and the Participants, does not have and
shall not claim a Lien or other security interest in or with
respect to the collateral described in the Loan Documents covered
by the Liens and security interests created thereby. In no event
whatsoever do the Liens and other security interests to be
created and perfected by the documents evidencing and securing
the Facilities attach to any revenues generated by the Aladdin
Hotel and Casino, the Gaming Equipment described on the
Collateral Schedules or the Equipment leased under and described
on the Equipment Schedules (other than proceeds from the
disposition of the such Gaming Equipment or Equipment in
accordance with the documents evidencing and securing the
Facilities). Notwithstanding anything to the contrary in the
Senior Credit Agreement, the Loan Documents, the Facilities
Agreement or the Operative Documents, in no event is there any
intention on the part of the Administrative Agent and the FF&E
Agent to share any collateral or security for their respective
facilities.
SECTION 4.2 DELIVERY OF PAYMENTS TO THE FF&E AGENT. The
Administrative Agent consents to the payment and performance by
Aladdin Gaming of its obligations under the Facilities in
accordance with the terms of the Facilities Agreement and this
Agreement.
SECTION 4.3 CONDITIONS PRECEDENT. The FF&E Agent confirms
for the benefit of the Administrative Agent that the status of
the conditions precedent set forth in clause (a) of Section 7 of
the Facilities Agreement is as follows:
-10-
(a) the conditions precedent in clauses (a)(1), (2), (9),
(10), (11), (12), (13), (14), (17), (19) and (20) have been
satisfied in all respects and shall not be subject to
further review by the FF&E Agent;
(b) the conditions precedent in clauses (a)(3), (5), (6),
(15) and (16) have been satisfied in all respects as of the
date of this Agreement but the status of such conditions
precedent shall be subject to further review by the FF&E
Agent with respect to the initial Funding;
(c) the condition in clause (a)(7) has been satisfied in all
respects as of the date of this Agreement and, although the
status of such condition precedent shall be subject to
further review by the FF&E Agent with respect to the initial
Funding, satisfaction shall be deemed to have occurred if,
on the date of the initial Funding, the nature and status of
the matters set forth in said clause have not materially
changed from the nature and status of such matters on the
date of this Agreement (and the FF&E Agent shall deliver a
notice of any such material change promptly after it has
determined that such change has occurred);
(d) the condition in clause (a)(8) has been satisfied in all
respects as of the date of this Agreement and, although the
status of such condition precedent shall be subject to
further review by the FF&E Agent with respect to the initial
Funding, satisfaction shall be deemed to have occurred if,
on the date of the initial Funding, the Administrative Agent
has not delivered a notice that a Senior Credit Facility
Event of Default has occurred and is continuing (and if any
such notice has been delivered, the provisions of ARTICLES
VI and VII shall apply); and
(e) the conditions in clauses (a)(4) and (18) have not been
satisfied as of the date of this Agreement and remain
subject to further review by the FF&E Agent with respect to
the initial Funding.
SECTION 4.4 DUE EXECUTION BY THE FF&E AGENT. The FF&E Agent
represents that this Agreement (x) has been duly authorized by
all necessary action on the part of the FF&E Agent, (y) has been
duly executed and delivered by the FF&E Agent and (z) constitutes
the legal, valid and binding obligation of the FF&E Agent
enforceable against it in accordance with its terms (except as
such enforceability
-11-
may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally and by principles of equity).
SECTION 4.6 NOTICES. The FF&E Agent covenants and
agrees to give the Administrative Agent prompt written notice of
(x) any Event of Default under the Facilities Agreement or any of
the Operative Documents, (y) any act or condition which, in the
reasonable judgment of the FF&E Agent could reasonably be
expected to have a Material Adverse Effect or result in the
failure of a Funding condition and (y) the delivery of a copy of
the confirmation with Aladdin Gaming pursuant to clause (n) of
Section 10 of the Facilities Agreement (together with a copy of
such confirmation).
ARTICLE V
PERFORMANCE OF OBLIGATIONS BY ALADDIN GAMING
SECTION 5.1 PERFORMANCE UNDER THE FACILITIES AGREEMENT AND
THE OPERATIVE DOCUMENTS. Aladdin Gaming covenants and agrees:
(a) to give prompt notice to the Administrative Agent
of any notice of default given or received with respect to
the Facilities Agreement and any of the Operative Documents,
together with an accurate and complete copy of any such
notice;
(b) at the sole cost and expense of Aladdin Gaming, to
enforce (short of termination of the Facilities Agreement
and the Operative Documents, as applicable) or secure the
performance of the obligations, covenants, conditions and
agreements to be performed by GE Capital, the Participants
and the FF&E Agent under the Facilities Agreement and the
Operative Documents; and
(c) that, without the Administrative Agent's prior
written consent, Aladdin Gaming shall not (i) modify or
amend in any material respect the Credit Facilities
Agreement or the Operative Documents, (ii) terminate the
Facilities Agreement or the Operative Documents or accept a
surrender thereof, (iii) waive, excuse, condone or in any
manner release or discharge GE Capital, the Participants or
the FF&E Agent from any material obligation, covenant,
condition or agreement to be performed by it under the
Facilities
-12-
Agreement or the Operative Documents, (iv) fail to exercise
promptly and diligently material rights that it may have
under the Facilities Agreement or the Operative Documents or
(vi) fail to deliver to the Administrative Agent a copy of
each demand or notice given or received by it relating in
any way to a material provision of the Facilities Agreement
and the Operative Documents.
SECTION 5.2 NO MODIFICATION. Any modification or amendment
of the Facilities Agreement or the Operative Documents which
violates any material term or provision of the Senior Credit
Agreement, the other Loan Documents or this Agreement or the
termination or surrender of the Facilities Agreement or the
Operative Documents without the prior written consent of the
Administrative Agent shall constitute a Senior Credit Facility
Event of Default. Any waiver, release or discharge by Aladdin
Gaming of GE Capital, the Participants or the FF&E Agent from any
material obligation, covenant, condition and agreement to be
performed by any of them under the Facilities Agreement or the
Operative Documents or the failure to exercise promptly and
diligently material rights that Aladdin Gaming may have under the
Facilities Agreement and the Operative Documents without the
prior written consent of the Administrative Agent (which consent
shall not be withheld or delayed if the Administrative Agent
determines in its sole discretion that such waiver, release,
discharge or failure to exercise is commercially reasonable)
shall constitute a Senior Credit Facility Event of Default. The
FF&E Agent hereby confirms that this Section does not violate the
provisions of clause (l) of Section 11 of the Facilities
Agreement.
SECTION 5.3 DEFENSE OF CLAIMS. Aladdin Gaming covenants
and agrees to appear in and defend, at its sole cost and expense,
any action or proceeding arising under, growing out of or in any
manner connected with this Agreement or the obligations, duties
or liabilities of Aladdin Gaming hereunder, and to pay all
reasonable costs and expenses of the Senior Lenders, the FF&E
Agent, GE Capital and the Participants including, without
limitation, reasonable attorneys' fees and costs and expenses, in
any such action or proceeding in which the Senior Lenders, the
Administrative Agent, the FF&E Agent, GE Capital or the
Participants may appear.
-13-
ARTICLE VI
RIGHTS OF THE SENIOR LENDERS
SECTION 6.1 ALADDIN GAMING TO PERFORM OBLIGATIONS. Subject
to the terms of this Agreement, the FF&E Agent, GE Capital and
the Participants shall continue to look solely to Aladdin Gaming
for the performance of all obligations under the Facilities
Agreement and the Operative Documents.
SECTION 6.2 PERFORMANCE BY THE SENIOR LENDERS.
(a) The FF&E Agent agrees that it will not commence the
exercise of any rights, remedies or options under the Facilities
Agreement or the Operative Documents (including the termination
or suspension of performance of its obligations thereunder)
without first giving the Administrative Agent notice and
opportunity to cure as provided for in CLAUSE (B) below, subject
to the provisions of CLAUSES (C) through (E) below ; PROVIDED,
HOWEVER, if such exercise of rights, remedies or options under
the Facilities Agreement or the Operative Documents shall arise
by virtue of (x) a bankruptcy or insolvency of Aladdin Gaming or
(y) an Event of Default under the Facilities Agreement or the
Operative Documents relating to an act, event or condition which
is (1) personal to Aladdin Gaming or any other Person, (2) cannot
be performed or cured by the Senior Lenders or the Administrative
Agent, and (3) the continuation of such Event of Default
materially and adversely interferes with the practical
realization of the rights and benefits provided by the Facilities
Agreement and the Operative Documents (other than the economic
consequences of any judicial, administrative or other procedural
delay), then the FF&E Agent shall not be obligated to give the
Administrative Agent an opportunity to cure and the provisions of
ARTICLE VII shall apply. Notwithstanding the foregoing, there
shall be no obligation on the part of GE Capital and the
Participants to make any Funding during any cure period granted
to the Administrative Agent hereunder until such time as the
Administrative Agent has delivered the notice pursuant to which
the Senior Lenders are electing to exercise their right to cure.
(b) If an event or condition exists which, after the
expiration of any applicable grace, notice and cure periods,
constitutes or will constitute an Event of Default and the FF&E
Agent, GE Capital and the Participants shall
-14-
desire to exercise their remedies under the Facilities Agreement
and the Operative Documents, the FF&E Agent shall give notice to
the Administrative Agent of such Event of Default, specifying in
such notice all then existing Events of Default of which it has
knowledge, such notice to be given in accordance with SECTION
9.1. If the Senior Lenders elect to exercise their right to cure
as herein provided, the Administrative Agent shall, within 10
Business Days after the receipt by it of the notice from the FF&E
Agent referred to in the preceding sentence, deliver to the FF&E
Agent a written notice (with a copy to Aladdin Gaming) stating
that the Senior Lenders have elected to exercise such right to
cure, together with a written statement verifying that on behalf
of the Senior Lenders it will promptly commence to cure in all
material respects all such Events of Default which, if not cured,
would materially and adversely interfere with the practical
realization of the rights and benefits provided by the Facilities
Agreement and the Operative Documents (other than the economic
consequences of any judicial, administrative or other procedural
delay). If the Senior Lenders do not elect to exercise their
right to cure as herein provided, the Administrative Agent shall,
within 10 Business Days after the receipt by it of the notice
from the FF&E Agent referred to herein, deliver to the FF&E Agent
a written notice stating whether or not the Senior Lenders have
elected to purchase the Interest in the Facilities within 15
Business Days in accordance with Article VII of this Agreement.
If the Senior Lenders have elected to purchase the Interest in
the Facilities, the provisions of Article VII shall apply to such
purchase. If the Senior Lenders do not elect to purchase the
Interest in the Facilities within such 15 Business Day period,
the obligation of GE Capital and the Participants to sell the
Interest in the Facilities under ARTICLE VII shall terminate and
the FF&E Agent may commence the exercise of rights, remedies and
options under the Facilities Agreement and the other Operative
Documents.
(c) The Senior Lenders and the Administrative Agent shall
have a period of 30 days after the delivery of the notice by the
Administrative Agent referred to in CLAUSE (B) above in which to
cure all Events of Defaults set forth in such notice from the
FF&E Agent which, if not cured, would materially and adversely
interfere with the practical realization of the rights and
benefits provided by the Facilities Agreement and the Operative
Documents (other than the economic consequences of any judicial,
administrative or other procedural delay); PROVIDED,
-15-
HOWEVER, that if the Event of Default is based upon a failure by
Aladdin Gaming to make a payment to GE Capital and the
Participants which is then due and payable, the Lenders and the
Administrative Agent shall have only 10 days to cure such Event
of Default. In the event any such Event(s) of Default (except
payment defaults) shall be curable but not within such 30-day
period, the FF&E Agent shall not exercise any remedies under the
Facilities Agreement or the Operative Documents if, on behalf of
the Senior Lenders, the Administrative Agent shall, within such
30-day period, initiate action to cure such Events of Default and
proceed diligently to the curing thereof in all material respects
within 60 days after delivery of the notice by the FF&E Agent.
Any curing of any Events of Default under the Facilities
Agreement and the Operative Documents shall not be construed as
an assumption by the Senior Lenders or the Administrative Agent
of any obligations, covenants, or agreements of Aladdin Gaming
under the Facilities Agreement or the Operative Documents.
(d) Notwithstanding anything to the contrary in this
Agreement, the Administrative Agent (or its designee or nominee)
shall have only the right to cure Events of Default set forth in
notices delivered on not more than two (2) occasions during the
term of the Facilities after which time the only right of the
Administrative Agent with respect to subsequent Events of Default
will be to purchase the Interest in the Facilities in accordance
with ARTICLE VII hereof.
(e) If the Senior Lenders elect to exercise their right to
cure as herein provided and the Senior Lenders are unable to cure
in accordance with this Article VI, the Administrative Agent
shall, within 10 Business Days after it has determined that it is
unable to complete such cure, deliver to the FF&E Agent a written
notice stating whether or not the Senior Lenders will purchase
the Interest in the Facilities within 15 Business Days in
accordance with Article VII of this Agreement. If the Senior
Lenders have elected to purchase the Interest in the Facilities,
the provisions of Article VII shall apply to such purchase. If
the Senior Lenders do not elect to purchase the Interest in the
Facilities within such 15 Business Day period, the obligation of
GE Capital and the Participants to sell the Interest in the
Facilities shall terminate.
SECTION 6.3 REMEDIES. The Administrative Agent (or its
designee or nominee) may exercise all rights and remedies
hereunder either in person or by agent and Aladdin
-16-
Gaming shall not impair the exercise thereof by the
Administrative Agent whether under this Agreement, the Facilities
Agreement or the Operative Documents. Neither the exercise of
any rights, remedies or options hereunder nor the commission of
any other act by the Administrative Agent pursuant to this
Agreement shall be deemed to cure or waive any default, or to
waive, modify or affect any notice of default under the Senior
Credit Agreement, or to invalidate any act done pursuant to such
notice.
SECTION 6.4 NO OBLIGATION OF THE SENIOR LENDERS. Neither
the Senior Lenders nor the Administrative Agent shall be
obligated to perform or discharge, nor do they hereby undertake
to perform or discharge, any obligation, duty or liability of
Aladdin Gaming under the Facilities Agreement, the Operative
Documents or this Agreement. Should the Administrative Agent,
individually or on behalf of the Senior Lenders, incur any loss,
cost, claim, demand, expense, liability or damage under the
Facilities Agreement, the Operative Documents or this Agreement,
or in the defense against any claims or demands, the amount
thereof, including reasonable costs and expenses and reasonable
attorneys' fees, together with interest thereon at the rate set
forth in Section 3.2.2 of the Senior Credit Agreement, shall be
secured by the Loan Documents, and Aladdin Gaming shall reimburse
the Administrative Agent therefor immediately upon demand.
SECTION 6.5 INSTRUCTIONS FROM THE ADMINISTRATIVE AGENT.
Aladdin Gaming hereby authorizes and directs the FF&E Agent to
accept performance by the Administrative Agent in accordance with
this ARTICLE VI of Aladdin Gaming's obligations under the
Facilities Agreement and the Operative Documents and during the
performance of such cure rights by the Administrative Agent, its
designee or nominee, to act in accordance with any and all
instructions received therefrom with respect to the Facilities
Agreement, the Operative Documents and this Agreement.
ARTICLE VII
SALE AND PURCHASE OF THE INTEREST IN THE FACILITIES
SECTION 7.1 SALE AND PURCHASE. From and after the date of
this Agreement until the expiration of the period described in
SECTION 7.2, GE Capital and the Participants hereby irrevocably
grant the Administrative Agent, on behalf of the Senior Lenders,
the exclusive right to
-17-
purchase the Interest in the Facilities in exchange for the
Acquisition Price from and after the occurrence of a Purchase
Event. After the occurrence of a Purchase Event and the delivery
of the Purchase Notice in accordance with SECTION 7.2 (with a
copy to Aladdin Gaming), in exchange for the Acquisition Price,
GE Capital and the Participants covenant and agree to sell,
transfer and convey to the Purchaser and the Purchaser, in turn,
shall (x) purchase from GE Capital and the Participants on the
Purchase Date and (y) assume, from and after the Purchase Date,
all of the rights and obligations of GE Capital and the
Participants under the Facilities Agreement and the Operative
Documents arising from and after the Purchase Date. From and
after the Purchase Date, the Purchaser shall be bound under the
Facilities Agreement and the Operative Documents to perform and
observe all of the covenants and obligations on the part of GE
Capital and the Participants thereunder arising from and after
the Purchase Date, and GE Capital and the Participants shall be
relieved and released from all such obligations. In no event
shall any right of offset, defense, claim or counterclaim by
Aladdin Gaming against GE Capital and the Participants be binding
against the Administrative Agent or the Senior Lenders.
SECTION 7.2 PURCHASE NOTICE. The FF&E Agent shall give the
Administrative Agent written notice of the occurrence of one or
more Purchase Events within 10 Business Days after the occurrence
thereof (unless the provisions of Section 6.2 are applicable
thereto in which case such provisions of Section 6.2 shall
apply). The obligation of the FF&E Agent hereunder is a present,
continuing, irrevocable and independent obligation of the FF&E
Agent and is not conditioned upon the performance by Aladdin
Gaming, GE Capital, the Participants or the FF&E Agent of their
respective obligations under the Facilities Agreement or the
Operative Documents whether before, on or after the Purchase
Date. The Purchaser shall have 15 Business Days after delivery
of such notice from the FF&E Agent within which to elect to
purchase the Interest in the Facilities, which election shall be
made by delivery of the Purchase Notice to the FF&E Agent (with a
copy to Aladdin Gaming) prior to the expiration of such 15
Business Day period. If the Purchaser does not elect to purchase
the Interest in the Facilities within such 15 Business Day
period, the obligation of GE Capital and the Participants to sell
the Interest in the Facilities shall terminate.
-18-
SECTION 7.3 FORBEARANCE BY GE CAPITAL AND THE PARTICIPANTS.
From and after the occurrence of an Event of Default and
continuing until the expiration of the period described in
SECTION 7.2 if the Administrative Agent does not timely deliver
the Purchase Notice to the FF&E Agent in accordance with this
Agreement, GE Capital and the Participants covenant and agree
with the Senior Lenders that neither they nor the FF&E Agent,
without the consent of the Administrative Agent, shall (x)
exercise any rights or remedies under the Facilities Agreement or
the Operative Documents (other than the giving of notices or the
declaration of default thereunder) or take any action which may
adversely affect the Facilities including, without limitation,
(1) all self-help remedies under the Facilities Agreement and the
Operative Documents, (2) all rights (statutory or otherwise)
relating to a sale under power of sale, (3) accepting a transfer
of title to any of the Gaming Equipment described on the
Collateral Schedules or any of the Equipment leased under and
described on the Equipment Schedules in lieu of the exercise of
remedies or otherwise taking title thereto, or (4) appointing a
receiver or taking any other action to obtain possession or
control of any of the Gaming Equipment described on the
Collateral Schedule or any of the Equipment leased under and
described on the Equipment Schedules, (y) commence any proceeding
or take any action which might impair the lien or priority of the
Facilities Agreement or hinder or delay payment or performance of
the obligations evidenced and secured by the Facilities
Agreement, or (z) seek to have Aladdin Gaming adjudicated
insolvent or bankrupt or commence any other proceeding under any
reorganization, insolvency or liquidation or similar law in
effect relating to Aladdin Gaming.
SECTION 7.4 PAYMENT OF THE ACQUISITION PRICE. At such time
as payment of the Acquisition Price becomes due hereunder, the
Purchaser shall pay the Acquisition Price to the FF&E Agent on
behalf of GE Capital and the Participants by federal wire
transfer of immediately available funds to the account specified
in clause (b) of Section 3 of the Facilities Agreement or such
other account or accounts as may be specified in writing by the
FF&E Agent.
SECTION 7.5 TRANSFER AND ASSIGNMENT DOCUMENTATION. Upon
receipt of the Acquisition Price, the FF&E Agent shall deliver to
the Purchaser all original executed counterparts of the
Facilities Agreement and the Operative Documents as are then in
the possession of GE Capital and the Participants, together with
such documents and instruments
-19-
as are prepared by the Administrative Agent at its expense, as
reasonably required to effect the conveyance of the Interest in
the Facilities (which documents and instruments shall be
reasonably satisfactory to the FF&E Agent) including, without
limitation (x) an assignment to the Purchaser of the Facilities
Agreement and the Operative Documents, each in recordable form
sufficient to transfer all right, title and interest therein,
(y) UCC Statements of Assignment assigning to the Purchaser the
UCC-1 Financing Statements which have been executed and delivered
by Aladdin Gaming in connection with the Facilities, and (z) such
other documents that the parties deem reasonably necessary or
advisable. The Administrative Agent covenants and agrees to
cause the Purchaser to execute and deliver such documents which
are reasonably necessary in order for GE Capital and the
Participants (acting through the FF&E Agent) to transfer and
assign the Facilities Agreement and the Operative Documents to
the Purchaser. To the extent that any original documents cannot
be located by the FF&E Agent for delivery on the Purchase Date,
the FF&E Agent shall deliver an affidavit to the Purchaser with
respect to any such missing documents which affidavit shall
include a covenant by the FF&E Agent on behalf of GE Capital and
the Participants, to deliver any such missing documents to the
Purchaser if, as and when located by any of them and which shall
include an indemnity by the FF&E Agent on behalf of GE Capital
and the Participants in favor of the Purchaser against any loss,
cost or expense by the Purchaser in the event of any exercise of
rights and remedies by the Purchaser or any other party under
such missing Instrument. The documents transferring and
assigning the Interest in the Facilities to the Purchaser shall
provide, in relevant part, that the FF&E Agent on behalf of GE
Capital and the Participants represent and warrant that (x) GE
Capital and the Participants are the owners of the Facilities,
the Facilities Agreement and the Operative Documents, (y) the
FF&E Agent on behalf of GE Capital and the Participants have all
requisite power and authority to execute and deliver such
documents, and (z) the Facilities, the Facilities Agreement and
the Operative Documents are not subject to any encumbrance,
pledge, hypothecation or security interest whatsoever and shall
otherwise be in form and content reasonably satisfactory to the
Administrative Agent and the Purchaser. Such representations and
warranties shall survive the delivery of the documents
transferring and conveying the Interest in the Facilities, the
Facilities Agreement and the Operative Documents to the
Purchaser.
-20-
ARTICLE VIII
DEFAULTS
SECTION 8.1 DEFAULTS BY THE SENIOR LENDERS, THE FF&E AGENT,
GE CAPITAL AND THE PARTICIPANTS. If the Senior Lenders or the
FF&E Agent, GE Capital or the Participants fail to perform their
respective obligations hereunder after the expiration of
applicable grace, notice or cure periods, at all times thereafter
and until such time as the defaulting Person has performed its
obligations, the non-defaulting Persons shall have all rights,
remedies and options at law and in equity.
SECTION 8.2 DEFAULTS BY ALADDIN GAMING. (a) Any default by
Aladdin Gaming under this Agreement after the giving of notice
and the expiration of a five (5) day cure period shall, at the
option of the Administrative Agent, constitute a default by
Aladdin Gaming under the Senior Credit Agreement and the other
Loan Documents and any Senior Credit Facility Event of Default
shall, at the option of the Administrative Agent, constitute a
default by Aladdin Gaming under this Agreement (without any
additional grace period or opportunity to cure). Upon the
occurrence and during the continuation of a default under this
Agreement by Aladdin Gaming, the Senior Lenders shall have all
rights, remedies and options under the Senior Credit Agreement,
the other Loan Documents and at law and in equity.
(b) Any default by Aladdin Gaming under this Agreement after
the giving of notice the expiration of a five (5) day cure period
shall, at the option of the FF&E Agent, constitute a default by
Aladdin Gaming under the Facilities Agreement and the Operative
Documents and any Event of Default shall, at the option of the
FF&E Agent, constitute a default by Aladdin Gaming under this
Agreement (without any additional grace period or opportunity to
cure). Upon the occurrence and during the continuation of a
default under this Agreement by Aladdin Gaming, GE Capital and
the Participants shall have all rights, remedies and options
under the Facilities Agreement and the Operative Documents and at
law and in equity, subject to the rights of the Senior Lenders
hereunder. To the extent that the Senior Lenders or their
nominee or designee have possession and control of the Aladdin
Hotel and Casino and the FF&E Agent elects to sell the Equipment
or the Gaming Equipment in accordance with clause (b) of Section
12 of the Facilities Agreement, during the period commencing on
the date that
-21-
the Senior Lenders (or their designee or nominee) obtains
possession and control of the Aladdin Hotel and Casino and ending
6 months thereafter, the FF&E Agent shall have the right to sell
the Equipment and the Gaming Equipment at the Aladdin Hotel and
Casino without cost to the FF&E Agent; PROVIDED, HOWEVER, the
Senior Lenders (or their designee or nominee) may relocate all or
a portion of the Equipment and Gaming Equipment to a safe and
secure storage area on or about the Aladdin Hotel and Casino
(provided that in all events the FF&E Agent shall have the right
to inspect the Equipment and the Gaming Equipment and to
demonstrate the operation thereof to potential purchasers) and
shall cause interest which would be due and payable under the
Term Loan Facility and Rent which would be due and payable under
the Lease Facility if the Facilities were in good standing at
such time (without giving effect to any Default Rate, late
payment charge or accelerated payment provision) to be paid until
the earlier of the expiration of such 6-month period or removal
of the Equipment and the Gaming Equipment from the Aladdin Parcel
by the FF&E Agent or other Person (other than the Administrative
Agent).
(c) Subject to the terms and limitations of this Agreement,
no right or remedy conferred upon any Person under this Agreement
is intended to be exclusive of any other right or remedy
contained in this Agreement or any other Instrument and every
such right and remedy shall be cumulative and shall be in
addition to every other right or remedy contained in this
Agreement or such other Instrument as now or hereafter available
to such Person at law or in equity, by statute or otherwise.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. NOTICES. (a) Any notice, demand, request
or other communication which any party hereto may be required or
may desire to give hereunder shall be in writing and shall be
deemed to have been properly given if given in the manner set
forth in Section 15(j) of the Facilities Agreement to the
addresses set forth therein.
-22-
(b) If such notice is to be given to the Administrative
Agent, such notice shall be addressed to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the Administrative Agent may have
furnished in writing to Aladdin Gaming and the FF&E Agent.
(c) If such notice is to be given to the FF&E Agent, such
notice shall be addressed to:
General Electric Capital Corporation
Capital Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇ - 1st Floor
Stamford, Connecticut 06927
Attn: Risk Manager Aladdin Gaming
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the FF&E Agent may have furnished in
writing to Aladdin Gaming and the Administrative Agent.
(d) If such notice is to be given to Aladdin Gaming, such
notice shall be addressed to:
Aladdin Gaming, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as Aladdin Gaming may have furnished in
writing to the FF&E Agent and the Administrative Agent.
SECTION 9.2 ENTIRE AGREEMENT. This Agreement embodies and
constitutes the entire agreement and understanding among the
Senior Lenders, Aladdin Gaming and GE Capital and the
Participants with respect to the subject
-23-
matter of this Agreement, and all other prior agreements,
understandings and statements, oral or written, are merged into
this Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated except in
writing executed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
SECTION 9.3 ESTOPPELS. Aladdin Gaming shall execute and
deliver to the Administrative Agent and the FF&E Agent all instru
ments and certificates as the Administrative Agent or the FF&E
Agent may reasonably request (including, but not limited to,
estoppel certificates certifying to the then current status of
the matters described in this Agreement including, without
limitation, the matters described in SECTION 2.1) to effect,
confirm or assure the rights, remedies and options intended to be
granted to the Senior Lenders and GE Capital and the Participants
under this Agreement.
SECTION 9.4 SEVERABILITY. If any of the provisions of this
Agreement, or the application thereof to any Person or
circumstances, shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such
provisions to Persons or circumstances other than those as to
whom or which it is held invalid or unenforceable, shall not be
affected thereby, and every provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
SECTION 9.5 NO PARTNERSHIP OR JOINT VENTURE. Any provision
hereof to the contrary notwithstanding, the Senior Lenders and GE
Capital and the Participants, by virtue of the issuance of this
Agreement or any action taken pursuant hereto or contemplated
hereby, shall not be deemed to be a partner or joint venturer
with one another or Aladdin Gaming. Aladdin Gaming shall
indemnify and hold the Senior Lenders and GE Capital and the
Participants harmless from and against any and all liabilities,
damages, claims, demands, costs and expenses (including, without
limitation, the costs and expenses of defending or settling any
such claims or demands and all fees and disbursements of legal
counsel engaged or employed by the Senior Lender or GE Capital
and the Participants, as the case may be, in defending or
settling such claims or demands) resulting from the relationship
between the Senior Lenders, GE and
-24-
the Participants or Aladdin Gaming being construed as a part
nership or joint venture.
SECTION 9.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
THE AGREEMENT. All representations and warranties of Aladdin
Gaming contained in this Agreement shall survive the execution
and delivery of this Agreement. This Agreement shall survive the
exercise and enforcement of remedies under the Senior Credit
Agreement, the other Loan Documents, the Facilities Agreement and
the Operative Documents until such time as the parties have
performed their obligations hereunder in all material respects.
SECTION 9.7 GOVERNING LAW; ENTIRE AGREEMENT. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).
SECTION 9.8. COUNTERPARTS. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original.
Section 9.9 CAPTIONS. The captions and headings of the
various Articles and Sections to this Agreement are for
convenience only and are not to be considered as defining or
limiting in any way the scope or intent of the provisions hereof.
SECTION 9.10 FORUM SELECTION AND CONSENT TO JURISDICTION.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE SENIOR LENDERS, THE FF&E AGENT, GE
CAPITAL AND THE PARTICIPANTS OR ALADDIN GAMING IN CONNECTION
HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE
ADMINISTRATIVE AGENT, THE SENIOR LENDERS, THE FF&E AGENT, GE
CAPITAL AND THE PARTICIPANTS AND ALADDIN GAMING HEREBY EXPRESSLY
AND IRREVOCABLY SUBMIT TO THE PERSONAL JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN
OFFICE ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇,
-▇▇-
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, HAS BEEN APPOINTED BY THE BORROWER TO
BE ITS AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF ITS
PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY
OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A
COPY OF SUCH PROCESS TO ALADDIN GAMING IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH PARTY HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT
SUCH SERVICE ON ITS BEHALF. IN ADDITION TO THE FOREGOING, EACH
PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN
OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 9.1. EACH PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY
HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
SUCH PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT, THE SENIOR CREDIT AGREEMENT, THE OTHER LOAN
DOCUMENTS, THE FACILITIES AGREEMENT AND THE OPERATIVE DOCUMENTS.
SECTION 9.11 WAIVER OF JURY TRIAL. THE ADMINISTRATIVE
AGENT, THE SENIOR LENDERS, THE FF&E AGENT, GE CAPITAL AND THE
PARTICIPANTS AND ALADDIN GAMING HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE SENIOR LENDERS, THE FF&E AGENT, GE
CAPITAL AND THE PARTICIPANTS AND ALADDIN GAMING IN CONNECTION
HEREWITH OR THEREWITH. EACH SUCH PERSON ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF THIS AGREEMENT) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE
AGENT, THE SENIOR LENDERS, THE FF&E AGENT, GE CAPITAL AND THE
PARTICIPANTS AND ALADDIN GAMING ENTERING INTO THIS AGREEMENT.
-26-
SECTION 9.12 NO THIRD PARTY BENEFICIARIES. The provisions
of this Agreement are for the benefit of the Senior Lenders and
GE Capital and the Participants (and the successors and assigns
of the Senior Lenders and GE Capital and the Participants) and no
provision hereof is intended to benefit or inure to the benefit
of any other Person.
-27-
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
ADMINISTRATIVE AGENT
THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By:_________________________________
Name:
Title:
FF&E AGENT
GENERAL ELECTRIC CAPITAL
CORPORATION, as the FF&E Agent
By:_________________________________
Name:
Title:
ALADDIN GAMING
ALADDIN GAMING, LLC, a Nevada
limited-liability company
By:_________________________________
Name:
Title:
-28-
SCHEDULE A
A. APPROVALS AND CONSENTS BY THE FF&E AGENT
Prior to the time that the Facilities have been fully Funded, the
Administrative Agent shall have the right to make all approvals
and grant all consents under the Senior Loan Documents with
respect to the construction of the Aladdin Hotel and Casino which
approvals and consents shall be binding on the FF&E Agent, GE
Capital and the Participants to the extent that the FF&E Agent,
GE Capital and the Participants have the right to grant an
approval or consent in a corresponding section of the Facilities
Agreement; PROVIDED, HOWEVER, the FF&E Agent shall have the right
to make the approvals set forth below:
1. Approval of the certificate of the Construction
Consultant to be provided pursuant to Section 7(a)(18)
of the Facilities Agreement which approval will not be
withheld or delayed if the form of such certificate is
in the form attached to the Engagement Letter dated
January 28, 1998 from Rider ▇▇▇▇(NV)L.L.C. to The Bank
of Nova Scotia and State Street Bank and Trust Company,
as trustee.
2. Approval of use of proceeds pursuant to
Section 10(i)(2) of the Facilities Agreement; PROVIDED,
HOWEVER, so long as no Event of Default exists under
the Facilities Agreement (after giving effect to cure
rights granted to the Administrative Agent pursuant to
this Agreement), the FF&E Agent will permit Aladdin
Gaming to make the election granted to it pursuant to
Section 10(i)(1) of the Facilities Agreement (which
election by Aladdin Gaming shall be subject to the
terms of the Senior Credit Agreement).
3. Approval of an amendment to the Construction Benchmark
Schedule after giving effect to the provisions of
Section 11(o) of the Facilities Agreement.
4. Approval of an amendment, modification, or waiver of
the Opening Requirements as set forth in Section 11(q)
of the Facilities Agreement which
-29-
approval shall not be unreasonably withheld or delayed.
B. FUNDING CONDITIONS
1. The obligation of Aladdin Gaming to make the
representations in the Operative Documents, other than
the representations under Sections 8(a), 8(b), 8(c),
8(d), 8(e), 8(f), 8(g), 8(n), 8(o), 8(p), 8(s) and 8(y)
of the Facilities Agreement, will not constitute a
failure to satisfy the funding condition in Section
7(b)(1) or constitute a Default or Event of Default if
the Administrative Agent has waived the obligation of
Aladdin Gaming to make the corresponding representation
in the Senior Credit Agreement.
2. The obligation of Aladdin Gaming to make the
representation under Section 8(t) of the Facilities
Agreement or to perform the covenant in Section 10(r)
of the Facilities Agreement will not constitute a
failure to satisfy the funding condition in Section
7(b)(1) or constitute a Default or Event of Default if,
after giving effect to the provisions of Sections C. 3
and C. 4.d of this Schedule A, the Main Project Budget
is "In Balance" as such term is defined for purposes of
said Sections.
3. The obligation of Aladdin Gaming to make
representations regarding LCI, LCNI, Bazaar Holdings,
Holdings, the Trust, Aladdin Music, AMH, any other
Aladdin Party, the Energy Project Provider, the Energy
Project Guarantor, the Design Builder, Fluor, the
Architect of Record, each Major Contractor and each
other Person (other than Aladdin Gaming) to a Material
Main Project Document or a Transaction Document will
not constitute a failure to satisfy the funding
condition in Section 7(b)(1) or constitute a Default or
Event of Default if the Administrative Agent has waived
the obligation of Aladdin Gaming to make the
corresponding representation in the Senior Credit
Agreement.
4. Except for LCI with respect to the initial Funding
only, a material adverse change with respect to any
Person (other than Aladdin Gaming) or a change which
has a Material Adverse Effect
-30-
on any Person (other than Aladdin Gaming) will not
constitute a failure to satisfy the funding condition
in Section 7(b) or constitute a Default or Event of
Default if the Administrative Agent has waived the
obligation of Aladdin Gaming to make the corresponding
representation in the Senior Credit Agreement.
5. The condition in Section 7(b)(3) of the Facilities
Agreement shall be deemed to be satisfied if, on the
date of the applicable Funding, the conditions in
clauses 3, 4, 5, 6, 14, 15 and 16 (with respect to
Aladdin Gaming only) have been satisfied by Aladdin
Gaming in all material respects.
6. The representations to be made by Aladdin Gaming in the
certificate to be delivered by it pursuant to Section
7(b)(8) of the Facilities Agreement shall be subject to
the application of this Section B.
7. The representation deemed to be made by Aladdin Gaming
upon the request and acceptance of the proceeds of any
funding shall be subject to the application of this
Section B.
C. BREACHES OF COVENANTS BY ALADDIN GAMING
1. Prior to the initial Funding, the FF&E Agent, GE
Capital and the Participants shall have no right to
declare any Default or Event of Default under the
Operative Documents except for an Event of Default
under Section 12(a)(1) of the Facilities Agreement
(after giving effect to the cure rights granted to the
Administrative Agent pursuant to this Agreement).
2. A breach by Aladdin Gaming of the representations in
the Facilities Agreement, other than the
representations under Sections 8(a), 8(b), 8(c), 8(d),
8(e), 8(f), 8(g), 8(n), 8(o), 8(p), 8(s) and 8(y) of
the Facilities Agreement, will not be a Default or
Event of Default under the Facilities Agreement or have
to be cured by the Administrative Agent so long as such
breach does not materially and adversely interfere with
the practical realization of the rights and benefits
-31-
provided by the Facilities Agreement and the Operative
Documents.
3. For purposes of determining compliance by Aladdin
Gaming with the representation in Section 8(t) of the
Facilities Agreement, the Main Project Budget shall be
deemed to be "In Balance" for purposes of this
Agreement only if (x) the amount required to bring the
Main Project Budget "In Balance" does not exceed
$5,000,000 or (y) such amount is greater than
$5,000,000, the Unallocated Contingency Balance equals
or exceeds the amount required to bring the Main
Project Budget In Balance. Notwithstanding the
foregoing, the Borrower expressly agrees that it shall
be required to satisfy the "In Balance" requirement in
the Senior Credit Facility in addition to the
requirement set forth herein and that the "In Balance"
requirement set forth in the Senior Credit Agreement is
not modified or amended hereby.
4. Breaches by Aladdin Gaming of the covenants listed
below shall be deemed cured by the Administrative Agent
as follows:
a. Breach by Aladdin Gaming of its obligations
under Section 10(a), 10(f) or 10(g) of the
Facilities Agreement shall be deemed cured by the
Administrative Agent upon delivery by the
Administrative Agent of information obtained by it
from Aladdin Gaming pursuant to the Senior Credit
Agreement.
b. Any waiver, reduction or adjustment by the
Administrative Agent of the FF&E Reserves required
by the Senior Credit Agreement shall be binding on
the FF&E Agent, GE Capital and the Participants.
c. Until such time as the Administrative Agent
has declared an Event of Default under the Senior
Credit Agreement for breach of the covenant under
the Senior Credit Agreement that corresponds to
Section 10(q) of the Facilities Agreement, the
FF&E Agent, GE Capital and the Participants shall
have no right to declare a Default or Event of
Default under the Facilities Agreement for
-32-
such breach and all waivers by the Administrative
Agent shall be binding on the FF&E Agent, GE
Capital and the Participants. Notwithstanding the
foregoing, the FF&E Agent, GE Capital and the
Participants shall have the right to declare a
Default or Event of Default if a breach of said
Sections results in a material alteration of the
capital structure of Aladdin Gaming, materially
impairs the ability of Aladdin Gaming to perform
its monetary obligations under this Agreement when
due or results in a material deviation of the
nature or scope of the Aladdin Casino and Hotel
from that which is presently contemplated.
d. For purposes of determining compliance by Aladdin
Gaming with the covenant in Section 10(r) of the
Facilities Agreement the Main Project Budget shall
be deemed to be "In Balance" for purposes of this
Agreement if (x) the amount required to bring the
Main Project Budget "In Balance" does not exceed
$5,000,000 or (y) such amount is greater than
$5,000,000, the Unallocated Contingency Balance
equals or exceeds the amount required to bring the
Main Project Budget "In Balance". In either such
case, the FF&E Agent, GE Capital and the
Participants shall have no right to require any
payment by Aladdin Gaming of any such amount. If
the amount required to bring the Main Project
Budget "In Balance" exceeds $5,000,000 and the
Unallocated Contingency Balance is less the amount
required to bring the Main Project Budget "In
Balance", Aladdin Gaming shall be deemed to have
performed its obligation to bring the Main Project
Budget "In Balance" under Section 10(r) if it
deposits with the Administrative Agent in
accordance with the Senior Credit Agreement an
amount equal to the excess of such amount over
$5,000,000 or the Unallocated Contingency Balance,
whichever is less. Notwithstanding the foregoing,
the Borrower expressly agrees that it shall be
required to satisfy the "In Balance" requirement
in the Senior Credit Facility in addition to the
covenant set forth in the Facilities
-33-
Agreement and that the "In Balance" requirement
set forth in the Senior Credit Agreement is not
modified or amended hereby.
e. No Event of Default will be declared under the
Facilities Agreement for breach of
Section 12(a)(10) if there is a transfer by
Aladdin Gaming in lieu of foreclosure to a Person
which falls within the definition of "Purchaser".
-34-
EXHIBIT NO. 5 TO
FACILITIES AGREEMENT
CERTIFICATE RE: SOURCES OF FUNDING
The undersigned, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereby
certifies, in his capacity as Treasurer of
Aladdin Gaming, LLC, that attached hereto as
Exhibit A is a true and correct copy of the
estimated "Sources and Uses of Funds" for the
development, construction, equipping and
opening of the Aladdin Hotel and Casino.
IN WITNESS WHEREOF, this certificate has
been executed as of the 30th day of June,
1998.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
SOURCES AND USES OF FUNDS
The estimated sources and uses of funds for the development,
construction, equipping and opening of the Aladdin are as follows
(in millions):
SOURCES USES
----------------------------------------------- -------------------------------------------------
Bank Credit Facility $410.0 Hotel and Casino $295.6
FF&E Financing 80.0 Off-Site Improvements 6.8
Senior Discount Notes due 2010 115.0 Reimburseable Site Work Expenses 14.2
Land Contribution 150.0 Furniture, Fixtures and Equipment and
Cash Contribution 57.0 Gaming Equipment 107.5
Anticipated Site Work Reimbursement 14.2 Land 135.0
Retire Existing Debt 74.5
Capitalized Interest, Net 44.0
Pre-Opening Costs and Expenses 16.9
Reimbursement of Predevelopment Costs 3.9
Working Capital 15.0
Construction and FF&E Contingency 31.8
Land Investment in Music Project 15.0
Cash Equity Investment in the Music
Project 21.3
Financing Fees and Expenses 44.7
------ ------
Total Sources $826.2 Total Uses $826.2
====== ======
The Company entered into the Bank Credit Facility with the
Bank Lenders. The Bank Credit Facility, which closed
concurrently with the closing of the Offering, consists of
three separate term loans. Term A Loan comprises a term
loan of $136.0 million and matures seven years after the
initial borrowing date. Term B Loan comprises a term loan
of $114.0 million and matures eight and one-half years
after the initial borrowing date. Term C Loan comprises a
term loan of $160.0 million and matures ten years after
the initial borrowing date. The Term B Loan and Term C
Loan were funded on the Issue Date into the Cash
Collateral Account, and subject to satisfaction of the
conditions in the Disbursement Agreement, are expected to
be drawn down beginning approximately four months after
the Issue Date. It is anticipated that the Company will
begin to draw down the Term A Loan, subject to
satisfaction of the conditions in the Disbursement
Agreement, approximately 21 months after the Issue Date.
See "Risk Factors - Drawn Down of Funds Under Funding
Transactions." All of the Loans will convert from
construction loans into amortizing loans on the Conversion
Date. The Company has the option to pay interest at
either LIBOR or Scotiabank's ABR, in each case plus
certain margins. See "Description of Certain Indebtedness
and Other Obligations - Bank Credit Facility."
The Company entered into a commitment letter with the FF&E
Lender for provision of the FF&E Financing. The FF&E
Financing consists of $60.0 million of operating leases
and $20.0 million in loans and is expected to be used by
the Company to obtain the Gaming Equipment and Specified
Equipment. See "Description of Certain Indebtedness and
Other Obligations - FF&E Financing."
Represents the gross proceeds of the Offering, which, net
of expenses of approximately $8 million, were contributed,
together with approximately $8 million in cash received
pursuant to the London Clubs Contribution, by Holdings to
the Company in exchange for Series A Preferred Interests.
The land on which the Aladdin, the Music Project and the
Plant will be built, including adjacent land of
approximately 0.8 acres, comprises a total of
approximately 22.75 acres (the "Contributed Land") and was
contributed to the Company by Holdings in exchange for
Common Membership Interests. The Contributed Land has an
appraised fair market value of $150.0 million (book value
of $33.6 million as of December 31, 1997). Approximately
18 acres of the Contributed Land, having an appraised fair
market value of $135.0 million, will be retained by the
Company and approximately 4.75 acres of the Contributed
Land, having an appraised fair market value of $15.0
million, will be used for the Music Project.
Represents (i) a $50.0 million cash contribution by London
Clubs in exchange of 25% of the Holdings Common Membership
Interests and (ii) a $7.0 million deemed equity
contribution by the Issuer in exchange for Holdings Common
Membership Interests, consisting of certain pre-
development costs incurred by AHL in 1996, 1997 and 1998.
Pursuant to the Site Work Agreement, the Company has
agreed to complete the construction of, among other
things, the Mall Shared Space, construction of which will
commence prior to the initial funding of the Mall
Financing. Bazaar has agreed to reimburse the Company for
up to $14.2 million (including interest) of the costs
associated with such construction upon the completion of
the Mall Shared Space. See "Certain Material Agreements -
Construction, Operation and Reciprocal Easement Agreement
and Related Agreements."
Represents (i) the guaranteed maximum price of
construction of the Aladdin pursuant to the Design/Build
Contract of $267.0 million, less the contingency allowance
of $6.8 million and expected reimbursement from Bazaar of
$13.6 million (net of approximately $0.6 million of
interest) as set forth in note (6) above; (ii)
approximately $35 million for theming the Aladdin; (iii)
$11.7 million for professional fees and disbursements; and
(iv) $2.3 million for permits and taxes. See "Risk
Factors - Completion of the Mall Project and the Music
Project." The Design/Build Contract contains financial
incentives for the Design/Builder to complete the Aladdin
within the construction budget and in a timely manner, as
well as liquidated damages payable to the Company for
certain unexcused delays. See "Risk Factors - Risks of
New Construction," "Risks Under Design/Build Contract and
Fluor Guaranty" and "Certain Material Agreements -
Design/Build Contract."
Represents the cost of off-site improvements, including
overhead pedestrian walkways and widening of certain
streets, for those parts of the Project Site on which the
Aladdin will be built.
Includes $26.5 million of gaming equipment and $81.0
million of furniture, fixtures and other equipment
consisting of new furniture and equipment other than
gaming equipment).
Represents the appraised fair market value of the land on
which the Aladdin and the Plant will be built, together
with adjacent land of approximately 0.8 acres.
Represents the retirement on the Issue Date of $68.7
million of existing indebtedness on the Contributed Land
with an interest rate of LIBOR plus 650 bps and $5.8
million of existing debt owed by the Trust to GW Vegas,
assumed by the Company as part of Holdings' equity
contribution to the Company.
Represents capitalized gross interest under the Bank
Credit Facility of $57.4 million and capitalized gross
interest of $2.4 million from leasing expenses in
connection with the FF&E Financing, from the date of the
Offering until the estimated completion of the Aladdin in
the first four months of the year 2000, net of interest
income anticipated to be earned upon the investment in
cash equivalents of the funds (assumed to be at 5% per
annum) from the proceeds of the Offering and the proceeds
of the Term B Loan and Term C Loan.
Represents $3.0 million of certain predevelopment costs
incurred by AHL and reimbursed at closing and up to $0.9
million of certain predevelopment costs expected to be
incurred and reimbursed over the expected construction
period.
Represents cash on hand, inventories, deposits and other
cash balances required for the opening of the Aladdin.
Comprises (i) the $6.8 million contingency included in the
guaranteed maximum price set forth in the Design/Build
Contract and (ii) the $25.0 million general project
contingency.
Represents the appraised fair market value of the
approximately 4.75 acres of land on which the Music
Project will be built, which land will be contributed by
the Company to AMH in exchange for common membership
interests in AMH.
Represents cash to be contributed by the Company to AMH
for common membership interests in AMH.
Represents fees in connection with the organization of the
Company and the financing of the Aladdin, including
approximately $8 million for expenses incurred in
connection with the Offering.
EXHIBIT NO. 6 TO
FACILITIES AGREEMENT
RIDER ▇▇▇▇ (NV) L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
January 28, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Relationship Manager
General Electric Capital Corporation, for
itself and as agent for certain participants
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
First Floor
Stanford, CT 06927
State Street Bank and Trust Company, as trustee
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Aladdin Project
Ladies and Gentlemen:
This letter sets forth the understanding with respect to the
engagement of Rider ▇▇▇▇ (NV) L.L.C. (the "CONSTRUCTION
CONSULTANT") by (i) The Bank of Nova Scotia (the "ADMINISTRATIVE
AGENT"), in its capacity as the Administrative Agent for a group
of lenders (collectively, the "LENDERS"), and (ii) State Street
Bank and Trust Company (the "INDENTURE TRUSTEE"), in its capacity
as the Indenture Trustee for certain noteholders (the
"NOTEHOLDERS"). The Construction Consultant will act as the
construction consultant for the Lenders and the Noteholders in
connection with that certain disbursement agreement (the
"DISBURSEMENT AGREEMENT") to be entered into by Aladdin Gaming,
LLC (the "BORROWER"), Aladdin Gaming Holdings, LLC, The Bank of
Nova Scotia, in its capacity as the Disbursement Agent under the
Disbursement Agreement (the "DISBURSEMENT AGENT"), the
Administrative Agent, the Indenture Trustee, and an investment
intermediary which has not yet been identified. The Disbursement
Agreement will provide, in relevant part, for the Disbursement
Agent to make advances of (x) loans (the "LOANS") to be made by
the Lenders to the
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 2
Borrower from time to time in accordance with the terms of the
credit facility (the "SENIOR CREDIT FACILITY") and (y) the
proceeds of the sales of certain notes (the "SENIOR DISCOUNT
NOTES") to the Noteholders. The Senior Credit Facility is
secured, INTER ALIA, by that certain hotel and casino complex
(the "MAIN PROJECT") to be located on a portion of the site of
the existing Aladdin Hotel and Casino in Las Vegas, ▇▇▇▇▇ County,
Nevada. In addition to the Senior Credit Facility and the Senior
Discount Notes, the Borrower expects to enter into an additional
facility with General Electric Capital Corporation, for itself
and as the agent for certain participants (collectively, the
"FF&E LENDERS") to finance the acquisition of certain equipment
(the "FF&E") to be used in connection with the Main Project.
The Construction Consultant hereby accepts the engagement
and agrees to perform the scope of work (the "SCOPE OF WORK")
described in EXHIBIT A annexed hereto in connection with the Main
Project. The Construction Consultant agrees to perform the Scope
of Work in accordance with generally accepted consulting services
consistent with customary industry standards applicable to
projects such as the Main Project and shall complete the Scope of
Work in a timely manner and in accordance with the Disbursement
Agreement, which agreement shall be in form and content
satisfactory to the Construction Consultant. The Construction
Consultant represents that it has not been engaged by the
Borrower, any direct or indirect affiliates of the Borrower or
any other person or entity involved in the Project (other than
the Administrative Agent (for the benefit of the Lenders) and the
Trustee (for the benefit of the Noteholders)) and that it has no
relationship with any of the foregoing which would create a
conflict of interest hereunder. The Construction Consultant also
represents that it has the necessary expertise to perform the
Scope of Work to the standards set forth herein and otherwise to
fulfill its obligations hereunder and that it will act, at all
times, in the best interests of the Lenders and the Indenture
Trustee. The Construction Consultant shall also maintain (at the
expense of the Borrower), at all times, all necessary competent
personnel to fulfill its obligations hereunder. Additionally,
the Construction Consultant covenants that it will cooperate with
all other independent consultants identified as such by the
Administrative Agent and/or the Indenture Trustee in connection
with the Main Project.
The Disbursement Agreement contemplates that the proceeds of
the Senior Discount Notes will be advanced under the Disbursement
Agreement before any of the Loans are made. Accordingly, the
Construction Consultant shall follow the directions of the
Disbursement Agent, on behalf of the Indenture Trustee,
consistent with the Scope of Work during such time that the
proceeds of the Senior Discount Notes are being advanced. After
the proceeds of the Senior Discount Notes have been fully
advanced, the Construction Consultant shall follow the directions
of the Disbursement Agent, on behalf of the Administrative Agent,
until such time that the Administrative Agent has provided
written notice to the Construction Consultant that the Senior
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 3
Credit Facility has been indefeasibly repaid in full or the
Borrower has otherwise been discharged of its obligations under
the documents evidencing and securing the Senior Credit Facility.
Each of the FF&E Lenders acknowledges that the Construction
Consultant was, and continues to be, engaged by the
Administrative Agent and the Indenture Trustee for the sole
benefit of the Lenders and the Noteholders in accordance with
this letter and that the Construction Consultant shall be
responsible only to the Administrative Agent (for the benefit of
the Lenders) and the Indenture Trustee (for the benefit of the
Noteholders) and shall have no duty whatsoever to perform any
services for, or provide any information to, the FF&E Lenders,
except as expressly set forth in this letter. All communications
between the FF&E Lenders and the Construction Consultant
regarding the Scope of Work shall be made solely through the
Disbursement Agent and the Construction Consultant shall follow
only the directions of, and shall make all inquiries solely to,
the Disbursement Agent (in accordance with the immediately
preceding paragraph and consistent with the Scope of Work). The
Construction Consultant shall issue the Construction Consultant's
Report (as defined in EXHIBIT A) and the Certificates and
Monitoring Reports (as defined in EXHIBIT A) directly to the
Disbursement Agent, the Administrative Agent, and the Indenture
Trustee on behalf of the Lenders and the Noteholders; in
addition, the Construction Consultant shall issue a copy of the
Construction Consultant's Report and the Certificates and
Monitoring Reports to the FF&E Lenders and the FF&E Lenders shall
be entitled to rely thereon; PROVIDED, HOWEVER, any comments or
other communications by the FF&E Lenders with respect to the
Construction Consultant's Report and/or the Certificates and
Monitoring Reports shall be made to the Construction Consultant
by the Disbursement Agent only. The FF&E Lenders acknowledge and
agree that the delivery of the Construction Consultant's Report
and the Certificates and Monitoring Reports in accordance with
the terms of EXHIBIT A will satisfy the conditions with respect
to reports required from the Construction Consultant set forth in
that certain Commitment Letter from General Electric Capital
Corporation to the Borrower (the "FF&E COMMITMENT").
Notwithstanding the foregoing, each of the Administrative Agent,
the Lenders, the Indenture Trustee, the Noteholders, the
Disbursement Agent and the FF&E Lenders shall have the individual
right to maintain a cause of action against the Construction
Consultant involving negligence by the Construction Consultant in
the preparation and delivery of the Construction Consultant's
Report and the Certificates and Monitoring Reports. Each of the
FF&E Lenders acknowledges and agrees that the Construction
Consultant's Report and the Certificates and Monitoring Reports
that are delivered to it are intended solely for the use of the
FF&E Lenders to assist in evaluating the progress of construction
of the Main Project and the use thereof for any other purpose or
by any other entity is prohibited without express written
permission from both the Construction Consultant and the
Disbursement Agent.
Notwithstanding anything to the contrary in this letter, the
Construction Consultant agrees that the Certificates and
Monitoring Reports shall include the certificates and reports
required by the
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 4
FF&E Lenders under the FF&E Commitment and the financing
documents contemplated by the FF&E Commitment and by the
Disbursement Agent under the Disbursement Agreement so long as
such certificates and reports are consistent with the Scope of
Work. The Certificates and Monitoring Reports shall include,
without limitation, the certification required to be made by the
Construction Consultant six months prior to completion of the
Project in order for the FF&E Lenders to enter into the interim
financing arrangements described in the FF&E Commitment. The
FF&E Lenders agree that such certificate shall be substantially
in the form annexed hereto as EXHIBIT C. Each of the FF&E
Lenders agrees to be bound by the determinations and conclusions
of the Construction Consultant made in accordance with the terms
hereof.
Each of the Administrative Agent, the Disbursement Agent,
the Noteholders, the Lenders, the Indenture Trustee and the FF&E
Lenders agrees that the Construction Consultant shall be the only
construction consultant with respect to the Main Project unless
the Administrative Agent, in its sole discretion, terminates such
engagement in accordance with this letter and engages a new
construction consultant in accordance with the terms of the
Credit Agreement, which agreement shall be in form and content
satisfactory to the Construction Consultant. Notwithstanding the
foregoing, the Indenture Trustee and/or the FF&E Lenders may
engage its own construction consultant so long as it pays all
costs and expenses of such separate consultant in connection with
such engagement but such construction consultant shall have no
right to participate in the making of the determinations or
conclusions to be made by the Construction Consultant pursuant
hereto or issuing the Construction Consultant's Report, the
Certificates and Monitoring Reports, and/or the certificate in
the form annexed hereto as EXHIBIT C but the foregoing shall not
limit the right of such construction consultant to comment on or
communicate with the Construction Consultant regarding any matter
hereunder.
For purposes hereof, the Construction Consultant shall
perform the foregoing requirements as an independent contractor
and nothing contained herein shall constitute the formation of a
joint venture or an employer/employee or agency relationship
among the Lenders, the Indenture Trustee, the Noteholders, the
Administrative Agent, the FF&E Lenders and/or the Construction
Consultant.
In consideration of the performance of the Scope of Work
contemplated by this engagement letter, the Construction
Consultant shall be paid the compensation and the costs and
expenses set forth on EXHIBIT B attached hereto. All amounts to
be paid to the Construction Consultant in accordance with this
engagement letter shall be the responsibility of the Borrower;
PROVIDED, HOWEVER, this engagement is for the benefit of the
Lenders and the Noteholders and the Construction Consultant shall
be responsible only to the Lenders and the Noteholders as its
clients in all respects, and shall have no duty whatsoever to
perform any services for, or provide any information to, the
Borrower. In the event that the Borrower breaches its obligation
to pay any amount due to the
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 5
Construction Consultant hereunder, the Construction Consultant
shall have the right, after FIFTEEN (15) days prior written
notice to the Administrative Agent, to cease any further
performance of the Scope of Work; PROVIDED, HOWEVER, that the
Lenders, the Noteholders and/or the Disbursement Agent may make
such payments on behalf of the Borrower in which case the
Construction Consultant shall continue performance of the Scope
of Work hereunder. The Construction Consultant shall submit all
invoices for the Scope of Work performed in accordance with this
engagement letter to the Disbursement Agent ▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, with a copy to the Indenture
Trustee c/o State Street Bank and Trust Company, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Corporate Trust Department. The
Construction Consultant shall submit an invoice by the FOURTH
(4th) day of each calendar month for actual work performed and
costs and expenses incurred during the immediately prior calendar
month. After the Disbursement Agent has approved each such
invoice, the Disbursement Agent shall promptly forward such
approved invoice to the Borrower for payment with a request that
payment of such approved invoice shall be made within FIFTEEN
(15) days after submission by the Disbursement Agent.
By signing below, the Borrower hereby agrees to indemnify
the Construction Consultant and its officers, directors,
employees, and agents (the "INDEMNIFIED PARTIES") against all
losses, liabilities, expenses, claims and damages of any nature
suffered or incurred by the Indemnified Parties (including
reasonable costs of defense, settlement or enforcement hereof and
reasonable attorneys' fees therefor) arising out of or in
connection with their performance of the Scope of Work and its
other duties contemplated by this engagement letter, except to
the extent resulting from the gross negligence, fraud or willful
misconduct of any of the Indemnified Parties. In any action or
proceeding brought by a third party with respect to which an
Indemnified Party is entitled to indemnification hereunder, the
Borrower shall be entitled to assume the defense of any such
action or proceeding with counsel reasonably satisfactory to the
Indemnified Party and the Borrower. Upon assumption by the
Borrower of the defense of any such action or proceedings, the
Indemnified Party shall have the right to participate in such
action or proceeding and to retain its own counsel but the
Borrower shall not be liable for any legal fees and costs and
expenses of such other counsel or the fees and disbursements of
other providers of professional services subsequently incurred by
such Indemnified Party in connection with the defense thereof
unless (i) the Borrower has agreed to pay such fees and expenses,
(ii) the Borrower has failed to employ counsel reasonably
satisfactory to the Indemnified Party and the Borrower in a
timely manner, or (iii) the Indemnified Party has been advised by
counsel that there are actual or potential conflicting interests
between the Borrower and the Indemnified Party, including
situations in which there are one or more legal defenses
available to the Indemnified Party that are different from or
additional to those available to the Borrower; PROVIDED, HOWEVER,
that the Borrower shall not, in connection with any one such
action or proceeding or separate but substantially similar
actions or proceedings arising out of the same
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 6
general allegations, be liable for the legal fees and expenses of
more than one separate firm of attorneys at any time for all
Indemnified Parties except to the extent that local counsel
(limited to one separate firm of attorneys in each applicable
jurisdiction), in addition to its regular counsel, is required in
order to defend effectively against such action or proceeding.
The Borrower shall not consent to the terms of any compromise or
settlement or any action or proceeding defended by the Borrower
in accordance with the foregoing without the prior consent of the
Construction Consultant, unless such compromise or settlement (i)
includes an unconditional release of the Construction Consultant
from all liability arising out of such action or claim and (ii)
does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of the
Construction Consultant. The Borrower shall not be required to
indemnify the Construction Consultant for any amount paid or
payable by the Construction Consultant in the settlement of any
action, proceeding or investigation without the written consent
of the Borrower. The provisions hereof relating to
indemnification shall survive the expiration or earlier
termination of this engagement letter.
The Construction Consultant hereby agrees to the use of (or
reference to) any report or any other document prepared pursuant
to this engagement letter in connection with a public offering of
securities in connection with the contemplated financing of the
Main Project and acknowledges that all reports and documents
prepared by the Construction Consultant pursuant to this
engagement may be reviewed by the Lenders, the Noteholders, the
Disbursement Agent, the Administrative Agent, the Indenture
Trustee, the FF&E Lenders and their respective successors and
assigns. It is understood and agreed that any use by the
Construction Consultant of its proprietary computer software,
methodology, procedures or other proprietary information in
connection with the Scope of Work hereunder shall not give the
Borrower, the Lenders, the Noteholders, the Disbursement Agent,
the Administrative Agent, the Indenture Trustee or the FF&E
Lenders any rights with respect to such proprietary computer
software, methodology, procedures or other proprietary
information.
The Construction Consultant shall not be deemed in default
of any provision hereof or be liable for any delay, failure in
performance, or interruption of service resulting directly or
indirectly from acts of God, civil or military authority, civil
disturbance, war, strikes or other labor disputes, fires, other
catastrophes, or other force beyond your reasonable control,
whether or not such event may be deemed foreseeable; PROVIDED,
HOWEVER, any failure to perform on the part of the Construction
Consultant due to the Construction Consultant's lack of funds
shall constitute a default hereunder.
In connection with this engagement, the Construction
Consultant covenants and agrees to comply in all material
respects with applicable laws and regulations, now or hereafter
in effect.
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 7
This engagement letter (a) has been duly executed and
delivered on behalf of the Construction Consultant and
constitutes the legal, valid, binding and enforceable obligation
of the Construction Consultant, except to the extent that
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally or by general
equitable principles or public policy considerations; (b) sets
forth the entire understanding of the parties hereto with respect
to the subject matter hereof and supersedes and cancels any prior
communications, understandings and agreements among the parties
with respect to such subject matter; (c) may be terminated with
or without cause by the Disbursement Agent upon FIFTEEN (15) days
written notice to the Construction Consultant (the Construction
Consultant shall be compensated for all work performed to the
termination date, together with reimbursable costs and expenses
then due); (d) may not be amended or modified except in a writing
signed by each of the parties hereto; (e) may be signed in
counterparts, each of which shall constitute an original and all
of which together shall constitute one and the same agreement;
and (f) shall be governed and construed in accordance with the
laws of the State of New York. Neither this engagement letter
nor any interest herein, nor any claim hereunder, shall be
assigned, transferred or delegated by the Construction
Consultant. Each of the parties to this engagement letter hereby
irrevocably consents
No additional text on this page
The Bank of Nova Scotia
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 7
to the non-exclusive jurisdiction of the courts of the State of
New York or the United States Federal Court sitting in the
Borough of Manhattan, City and State of New York over any action
or proceeding arising out of or relating to this engagement
letter and to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to
such party, and each of the parties to this engagement letter
hereby irrevocably agrees that all claims in respect of any such
action or proceeding may be heard in such State of New York or
Federal Court. EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY
JURY.
To confirm your agreement to the foregoing, please sign the
enclosed copies of this engagement letter in the space indicated
and return one copy to each of the Administrative Agent, the
Disbursement Agent, the Indenture Trustee, the Borrower, the
Construction Consultant and each of the FF&E Lenders.
Very truly yours,
RIDER ▇▇▇▇ (NV) L.L.C.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------------
▇▇▇▇ ▇▇▇▇
Principal
ACCEPTED AND AGREED:
THE BANK OF NOVA SCOTIA
and the Administrative Agent and the
Disbursement Agent
By: ________________________
Name:___________________
Title:__________________
Date: January ___, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 7
to the non-exclusive jurisdiction of the courts of the State of
New York or the United States Federal Court sitting in the
Borough of Manhattan, City and State of New York over any action
or proceeding arising out of or relating to this engagement
letter and to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to
such party, and each of the parties to this engagement letter
hereby irrevocably agrees that all claims in respect of any such
action or proceeding may be heard in such State of New York or
Federal Court. EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY
JURY.
To confirm your agreement to the foregoing, please sign the
enclosed copies of this engagement letter in the space indicated
and return one copy to each of the Administrative Agent, the
Disbursement Agent, the Indenture Trustee, the Borrower, the
Construction Consultant and each of the FF&E Lenders.
Very truly yours,
RIDER ▇▇▇▇ (NV) L.L.C.
By:______________________
▇▇▇▇ ▇▇▇▇
Principal
ACCEPTED AND AGREED:
THE BANK OF NOVA SCOTIA
and the Administrative Agent and the
Disbursement Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇▇
Title: _______________
Date: January 28, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 8
ALADDIN GAMING LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
& Secretary
Date: February 26, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND TRUST COMPANY
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, 1998
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, 1998
CREDIT SUISSE FIRST BOSTON
CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 8
ALADDIN GAMING LLC
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ BANK AND TRUST COMPANY
as Trustee and Not Individually
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Date: February 26, 1998
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, 1998
CREDIT SUISSE FIRST BOSTON
CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
General Electric Capital Corporation
State Street Bank and Trust Company, as trustee
January 28, 1998
Page 8
ALADDIN GAMING LLC
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND TRUST COMPANY
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, 1998
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ Gruig
--------------------------------
Name: ▇▇▇▇▇▇ Gruig
Title: Sr. Risk Manager
Date: January 28, 1998
CREDIT SUISSE FIRST BOSTON
CORPORATION
By:_________________________________
Name:___________________________
Title:__________________________
Date: January ___, 1998
EXHIBIT A
SCOPE OF WORK
I. CONSTRUCTION CONSULTANT'S REPORT
The Construction Consultant shall prepare the Construction
Consultant's report (the "CONSTRUCTION CONSULTANT'S REPORT") for
the Aladdin Hotel and Casino stating, among other things, that
(a) the Construction Consultant has reviewed the Main Project
Documents, the Plans and Specifications, and other material
information deemed necessary by the Construction Consultant for
the purpose of evaluating whether the Main Project can be
constructed and completed in the manner and time frame
contemplated by the "OPERATIVE DOCUMENTS" (as such term is to be
defined in the Disbursement Agreement, which agreement shall be
in form and content satisfactory to the Construction Consultant;
each capitalized term in this Exhibit not otherwise defined shall
have the meaning in the Disbursement Agreement) and (b) based on
its review of such information, the Construction Consultant is of
the opinion that the Main Project can be constructed in the
manner contemplated by the Operative Documents and, in
particular, that the Main Project can be constructed and
completed in accordance with the Operative Documents and the
"PLANS AND SPECIFICATIONS" within the parameters set by the "MAIN
PROJECT SCHEDULE" and the "MAIN PROJECT BUDGET". The
Construction Consultant's Report shall include a due diligence
review which:
A. Analyzes and critiques the Main Project Budget, the
Main Project Schedule and the Plans and Specifications on a
material line item basis.
B. Reviews the design concepts of the Main Project and
major equipment components and will compare the same with
standard industry practice. It is understood that the
Construction Consultant in no way approves or disapproves
any technical aspect of the design documents or maintains
any liability as to the application or function of the Main
Project.
C. Reviews applicable permitting and licensing
requirements as provided by or on behalf of the Borrower for
construction and operation of the Main Project. With
respect to permits and licenses not in place prior to the
commencement of construction of the Main Project, the
anticipated requirements and schedule indicating major
milestones, if available, will be reviewed. Any
deficiencies and limitations noted will be identified.
1
II. CONSTRUCTION MONITORING AND CERTIFICATION
On an ongoing basis until "COMPLETION" has been achieved, the
Construction Consultant shall perform the following duties,
including, without limitation, providing the reports and
certificates described below (the "CERTIFICATES AND MONITORING
REPORTS"):
A. The Construction Consultant will review all relevant
Main Project Documents and amendments thereto, including the
"DESIGN/BUILD CONTRACT" between Fluor ▇▇▇▇▇▇, Inc. ("FLUOR")
and the Borrower. The Construction Consultant will provide
comments and recommendations, as appropriate, including an
evaluation of the contracting methodology associated with
the Main Project. The Construction Consultant will also
review and comment on (a) the suitability of the major
subcontractors and suppliers engaged from time to time to
perform the work and/or supply the equipment or materials
and (b) the prices under such subcontracts.
B. The Construction Consultant will assist with all
technical matters as required with respect to the
Disbursement Agent's responsibilities under the Disbursement
Agreement.
C. The Construction Consultant will review, analyze and
critique the Main Project Budget, the Main Project Schedule
and the Plans and Specifications and all amendments thereto.
The Construction Consultant will, on an ongoing basis,
evaluate the construction process in view of the Main
Project Budget, the Main Project Schedule and the Plans and
Specifications; PROVIDED, HOWEVER, that such evaluation will
be based upon information provided to the Construction
Consultant and visual observation of the Main Project's
progress.
D. The Construction Consultant will review the design
concepts of the Main Project and major equipment components
and will compare the same with standard industry practice.
It is understood that the Construction Consultant in no way
approves or disapproves of any technical aspect of the
design documents or maintains any liability as to the
application or function of the Main Project.
E. The Construction Consultant will review applicable
permitting and licensing requirements as provided by the
Borrower for construction and operation of the Main Project.
For permits and licenses not in place from time to time, the
anticipated requirements and schedule indicating major
milestones, if available, will be reviewed. Any
deficiencies and limitations noted will be identified.
F. The Construction Consultant will review the status of
the existing construction documents at each stage of the
Main Project.
G. The Construction Consultant will interact and
communicate directly with the Borrower, Tishman Realty &
Construction Co., Inc., the owner's representative and Main
Project coordinator, Fluor ▇▇▇▇▇▇, Inc., the Main Project
Architect and the other
2
contractors on a regular basis as may be required to monitor
the progress of the construction and identify potential
problems.
H. The Construction Consultant will review all requests
submitted by the Borrower for an advance of proceeds of the
Senior Discount Notes and/or the Loans, as applicable, all
proposed change orders proposed by the Borrower and all
other certificates submitted by the Borrower from time to
time in accordance with the Disbursement Agreement and the
Credit Agreement relating to the construction of the Main
Project. The Construction Consultant will perform its
obligations related to certifications promptly and in any
event within the time limits specified by the Disbursement
Agreement and the Credit Agreement, as applicable. The
Construction Consultant will evaluate the same for accuracy
and compliance with the terms of the Disbursement Agreement
and the Credit Agreement, as applicable, in each case to the
extent within the Construction Consultant's scope of
expertise. In performing its obligations hereunder, the
Construction Consultant shall be entitled to rely, whenever
it deems reasonably appropriate, on information and
certifications provided by third parties including the
Borrower.
I. The Construction Consultant will monitor construction
of the Main Project, which shall include monthly reports to
the Lenders with regard to construction progress and the
possibility of significant cost overruns or schedule delays.
In addition, the Construction Consultant will monitor and
report on the overall Main Project organization and
management.
J. Without limiting the specificity of the foregoing, the
Construction Consultant agrees to review the Disbursement
Agreement and the Credit Agreement as and when completed and
to perform the scope of work in accordance therewith and
agrees, for the benefit of the Lenders and the Noteholders,
to take all actions, execute and deliver all certificates
and perform all other duties and obligations of the
Construction Consultant thereunder, including, without
limitation, completing, executing and delivering each of the
certificates required thereby within the time periods set
forth therein.
3
EXHIBIT B
COMPENSATION
1. Initial Construction Consultant's Report:
Construction Analysis Flat Fee: $175,000
Any work in the Initial Construction Consultant's Report
not included in the fee for the Construction Analysis will
be charged at agreed lump sum fees or billed on a time
expended basis at the Construction Consultant's hourly
rates, which are as follows:
$/hour
------
Principal 137.50
Project Manager/Scheduler 110.00
Senior Architectural/Structural
Quantity
Surveyor/Estimator 95.00
Quantity Surveyor/Estimator 85.00
Technical Assistance/Support 50.00
The above fees include provision of four unbound and three
bound copies of each report.
2. Personnel Expenses:
The Construction Consultant will provide the project
personnel at their individual direct personal expense with a
fixed lump sum fee per month (which lump sum fee includes up
to 45 hours of work per week per employee) according to the
following schedule of personnel assigned to the Main
Project, for the duration of the assignment. A Principal's
time (to be involved in the Main Project an average of 50
hours per month) will be charged separately in accordance
with the hourly rates set forth in PARAGRAPH 1 above. Other
staff who will be involved on an "as needed-limited time
basis" will also be charged separately in accordance with
the hourly rates set forth in PARAGRAPH 1 above.
NUMBER OF PERSONNEL ASSIGNED FULL-TIME MONTHLY FEE
-------------------------------------- -----------
Initial two (2) employees $22,700
One (1) additional employee, total of three (3) $32,700
One (1) additional employee, total of four (4) $40,000
Each additional employee - a monthly fee beyond four $8,000
employees to be mutually agreed to between the
Construction Consultant and the Disbursement Agent
or its successors.
The Construction Consultant will initially staff the Main
Project with two (2) people and additional personnel will be
added, as required in the future, to maintain the project
requirements, as mutually agreed upon by the Construction
Consultant and the Administrative Agent or its successors.
Time billed per employee per week in excess of 45 hours will
be billed at 150% of such employee's hourly rates set forth
in PARAGRAPH 1 above.
3. Reimbursable and Out-of-Pocket Expenses:
All of the Construction Consultant's reasonable travel
(outside a 50-mile radius of the Construction Consultant's
Las Vegas office), subsistence and housing expenses incurred
during personnel relocation (which shall be subject to the
prior approval of the Administrative Agent) and
miscellaneous costs associated with this assignment and
out-of-pocket expenses will be reimbursed at cost. It is
the Construction Consultant's intention to assign to Las
Vegas those personnel primarily working on this assignment.
The costs associated with any relocation of the Construction
Consultant personnel will
be consistent with corporate policies on project relocation
and will be consistent with the relocation budget which has
been approved by the Disbursement Agent and the Borrower.
2
EXHIBIT C
CONSTRUCTION CONSULTANT'S SIX MONTH CERTIFICATE
RIDER ▇▇▇▇ (NV) L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Date]
The Bank of Nova Scotia, as the Administrative
Agent and the Disbursement Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
State Street Bank and Trust Company, as trustee
Corporate Trust Department
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇ - First Floor
Stamford, CT 06927
Re: Aladdin Hotel and Casino, Las Vegas, Nevada
Ladies and Gentlemen:
Reference is made to the Disbursement Agreement (the
"DISBURSEMENT AGREEMENT") dated as of February 26, 1998
among Aladdin Gaming, LLC, as the Borrower, The Bank of Nova
Scotia, as the Administrative Agent, the Disbursement Agent
and the Initial Investment Intermediary, and State Street
Bank and Trust Company, as the Indenture Trustee. Each
capitalized term not otherwise defined herein shall have the
meaning ascribed to such term in the Disbursement Agreement.
Pursuant to Section 2.2.3(b) of the Disbursement
Agreement and to Section 7(a)(18) of the Credit Facilities
Agreement to be entered into between GECC, for itself and as
the agent for certain participants, and the Borrower, the
Construction Consultant certifies as follows:
1
1. The Construction Consultant has reviewed the
Disbursement Agreement to the extent necessary to
understand the defined terms contained therein and to
provide the certification herein.
2. In the absence of events such as material and
equipment delivery delays, labor difficulties,
unusually adverse weather conditions, acts of war
directly affecting the Complex, the untimely failure of
major equipment components, or other abnormal events
which are prejudicial to normal construction and
installation, the Conversion Date is likely to have
occurred within six months from the date of this
certificate.
IN WITNESS WHEREOF, the Construction Consultant has
executed this Construction Consultant's Certificate as of
the date first above written.
RIDER ▇▇▇▇ (NV) L.L.C.
By:______________________
Name:
Title:
2
ANNEXES, SCHEDULES AND EXHIBITS
TO
FACILITIES AGREEMENT
between
GENERAL ELECTRIC CAPITAL CORPORATION,
FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS
and
ALADDIN GAMING, LLC
June 26, 1998
INDEX OF ANNEXES AND SCHEDULES
Annex A - Definitions
Annex B - Schedule of Closing Documents
Annex C - Insurance Requirements
Annex D - Executed Senior Credit Agreement
Disclosure Schedule
ANNEX A
to
Facilities Agreement
Dated as of June 26, 1998
DEFINITIONS
Capitalized terms used in the Facilities Agreement shall
have (unless otherwise provided elsewhere in the Facilities
Agreement) the following respective meanings when used in the
Operative Documents. Unless otherwise specified, all references
to Sections shall be deemed to refer to Sections of the
Facilities Agreement.
"AFFILIATE" shall mean, with respect to any Person, (i) each
Person that, directly or indirectly, owns or controls, whether
beneficially, or as a trustee, guardian or other fiduciary, five
percent (5%) or more of the Stock having ordinary voting power in
the election of directors of such Person, (ii) each Person that
controls, is controlled by or is under common control with such
Person or any Affiliate of such Person or (iii) each of such
Person's officers, directors, joint ventures and partners. For
the purpose of this definition, "CONTROL" of a Person shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or
otherwise.
"AGENCY AGREEMENT" shall mean that certain Agency Agreement
substantially in the form of Exhibit No. 2 to the Master Lease
Agreement executed between GE Capital and Aladdin Gaming.
"AGREEMENT" shall mean the Facilities Agreement to which
this ANNEX A is attached and of which it forms a part, including
all annexes, schedules and exhibits attached or otherwise
identified thereto, restatements and modifications and
supplements thereto and any appendices, attachments, exhibits or
schedules to any of the foregoing, and shall refer to this
Agreement as the same may be in effect at the time such reference
becomes operative, provided, however that any reference to the
Schedules to this Agreement shall be deemed a reference to the
Schedules as in effect on the Closing Date or in a written
amendment thereto executed by the parties.
"ALADDIN GAMING" shall mean Aladdin Gaming, LLC, a Nevada
limited liability company.
"ALADDIN HOTEL AND CASINO" shall mean that certain first
class and full service hotel of approximately 2,600 rooms and a
one hundred sixteen thousand square foot casino to be constructed
on the Subject Property located in Las Vegas, Nevada.
"APPLICABLE LAW" shall mean any law, rule, regulation,
ordinance, order, code, common law, interpretation, judgment,
directive, decree, treaty, injunction, writ, determination,
award, permit or similar decision of any Governmental Authority
that is applicable to and binding upon Aladdin Gaming or GE
Capital, including (without limitation) the Nevada Gaming Laws.
"AS IS BASIS" shall have the meaning assigned to it in
SECTION 10(I)(L)(B).
"BASE INDEX" shall mean 90-Day LIBOR in effect from time to
time.
"BASIC LEASE TERM" shall mean (i) with respect to any
Equipment listed on a Schedule dated on or prior to the Basic
Lease Term Commencement Date, the period commencing on the Basic
Lease Term Commencement Date and expiring three (3) years
thereafter, and (ii) with respect to any Equipment listed on a
Schedule dated after the Basic Lease Term Commencement Date, the
period commencing on the date of such Schedule and expiring three
(3) years after the Basic Lease Term Commencement Date.
"BASIC LEASE TERM COMMENCEMENT DATE" shall mean the first
day of the calendar month next succeeding the Construction
Completion Date.
"BASIC LEASE TERM INTEREST RATE" shall mean that per annum
interest rate calculated pursuant to Section C.4. of the
applicable Schedule to the Master Lease Agreement.
"BASIC TERM RENT" with respect to each Unit of Equipment
shall have the meaning assigned to it in Section C.2. of the
applicable Schedule to the Master Lease Agreement.
"BAZAAR HOLDINGS" shall mean Aladdin Bazaar Holdings, LLC, a
Nevada limited liability company.
"BREAKAGE LOSS" shall include LIBOR and other funding
breakage costs, if any, and may be determined by reference to the
standard International Swap Dealers Association calculation for
"Loss."
"BUSINESS DAY" shall mean any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be
closed in the States of Nevada, New York or Maryland, and if the
applicable Business Day relates to the determination of any
Interest Period or the interest rate therefor, such term also
shall exclude any day on which trading is not carried on by and
between banks in U.S. Dollars in the London interbank market.
"CAPITAL EXPENDITURES" shall mean all payments or accruals
(including Capital Lease Obligations) for any fixed assets or
improvements or for replacements, substitutions or additions
thereto, that have a useful life of more than one (1) year and
that are required to be capitalized under GAAP.
"CAPITAL LEASE" shall mean, with respect to any Person, any
lease of any property (whether real, personal or mixed) by such
Person as lessee that, in accordance with GAAP, either
would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person or
2
otherwise be disclosed as such in a note to such balance sheet,
other than, in the case of Aladdin Gaming, any such lease under
which Aladdin Gaming is the lessor.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any
Capital Lease, the amount of the obligation of the lessee
thereunder that, in accordance with GAAP, would appear on a
balance sheet of such lessee in respect of such Capital Lease or
otherwise be disclosed in a note to such balance sheet.
"CAPITALIZED LESSOR'S COST" shall mean, with respect to the
Equipment listed on Annex A to any Schedule, the acquisition
cost of the Equipment specified on such applicable Schedule.
"CASUALTY OCCURRENCE" shall have the meaning assigned to it
in SECTION 10(I).
"CASUALTY PAYMENT DATE" shall have the meaning assigned to
it in SECTION 10(I)(L)(B).
"CLAIM" shall have the meaning assigned to it in
SECTION 10(M).
"CLOSING DATE" shall have the meaning assigned to it in
SECTION 7(A)(1).
"CODE" shall mean the Uniform Commercial Code codified as
Nevada Revised Statutes (NRS) Chapter 104, as the same may, from
time to time, be in effect in the State of Nevada; provided,
however, in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of
Agent's security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than
the State of Nevada, the term "Code" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to
such provisions.
"COLLATERAL" shall mean the property, real or personal,
tangible or intangible, now existing or hereafter acquired, that
may at any time be or become subject to a security interest or
Lien in favor of GE Capital to secure the Obligations, including
(without limitation) the Gaming Equipment.
"COLLATERAL SCHEDULE" shall mean, collectively, each
schedule describing the Gaming Equipment as to which a Funding
under the Term Loan Facility is to be made, delivered by Aladdin
Gaming to GE Capital pursuant to SECTION 7(B)(7).
"COLLATERAL TAXES" shall mean all Taxes, including interest
and penalties thereon, which at any time may be levied, assessed
or imposed by any foreign or Federal, state or local authority
upon or with respect to GE Capital or Aladdin Gaming by reason of
the Collateral (or the purchase, ownership, delivery, leasing,
possession, use or operation thereof) or any Operative Documents
(or any rentals, payments or receipts thereunder) during or with
respect to the Lease Term or the Term Loan Period.
3
Notwithstanding anything in the first paragraph of this
definition, the term "Collateral Taxes" shall not mean or
include:
(i) Taxes (other Taxes that are, or are in the
nature of sales, use, rental, transfer or property
Taxes) that are based upon or measured by net income or
which constitute franchise Taxes imposed on GE Capital,
except such Taxes which are payable in connection with
any indemnification or reimbursement obligation of
Aladdin Gaming under the Facilities Agreement which is
expressly stated to be on an after-tax basis;
(ii) Taxes upon or with respect to GE Capital by
reason of the Equipment (other than the Gaming
Equipment) to the extent, but only to such extent, they
relate to any act, event or omission that occurs, or
relates to a period, after the Lease Term and the
return of such Equipment;
(iii) Taxes upon or with respect to GE Capital
by reason of the Gaming Equipment to the extent, but
only to the extent, they relate to any act, event or
omission that occurs, or relates to a period, after the
Term Loan Period;
(iv) Taxes for so long as, but only for so long
as, such Taxes are being contested in accordance with
the provisions of SECTION 4 , provided that the
foregoing shall not limit Aladdin Gaming's obligations
under SECTION 4 to advance to GE Capital amounts with
respect to Taxes that are being contested in accordance
with SECTION 4 or any expenses incurred by GE Capital
in connection with such contest;
(v) any interest or penalties imposed on GE
Capital as a result of a breach by GE Capital of its
obligations under SECTION 4 or otherwise as a result of
GE Capital's failure to file any return or other
documents timely and as prescribed by applicable law;
provided that this clause (v) shall not apply (1) if
such interest or penalties arise as a result of a
position taken or requested to be taken by Aladdin
Gaming in a contest controlled by Aladdin Gaming, or
(2) if such failure is attributable to a failure by
Aladdin Gaming to fulfill its obligations under the
Facilities Agreement with respect to any such return;
(vi) Taxes imposed upon GE Capital with respect to
any voluntary transfer, sale or other voluntary
disposition of any interest in any Collateral or any
part thereof (other than a transfer in connection with
(1) Aladdin Gaming's exercise of its option to purchase
the property or cause an early termination, or (2) the
occurrence of an Event of Default);
(vii) Taxes imposed on GE Capital, to the
extent GE Capital actually receives a credit (or
otherwise has a reduction in liability for Taxes) in
respect thereof against Taxes that are not indemnified
under SECTION 4;
4
(viii) Taxes imposed against or payable by GE
Capital resulting from, or that would not have been
imposed but for, the gross negligence or willful
misconduct of GE Capital;
(ix) Taxes imposed against or payable by GE
Capital resulting from, or that would not have been
imposed but for a breach by GE Capital or any Affiliate
thereof of any representations, warranties or covenants
set forth in the Operative Documents (unless such
breach is caused by Aladdin Gaming's breach of its
representations, warranties or covenants set forth in
the Operative Documents);
(x) Taxes to the extent resulting from GE
Capital's failure to comply with the provisions of
SECTION 4, which failure precludes or materially
adversely affects the ability to conduct a contest
pursuant to SECTION 4(B) (unless such failure is caused
by Aladdin Gaming's breach of its obligations);
(xi) Taxes which are included in acquisition costs
if and to the extent actually paid;
(xii) Taxes that would have been imposed in
the absence of the Lease Facility and Term Loan
Facility and Taxes imposed on or with respect to or
payable as a result of activities of GE Capital or an
Affiliate thereof unrelated to the transactions
contemplated by the Operative Documents;
(xiii) Taxes imposed on or with respect to or
payable by GE Capital resulting from, or that would not
have been imposed but for the existence of, any Lien on
the Equipment created by or through GE Capital or an
Affiliate thereof and not caused by acts or omissions
of Aladdin Gaming, unless required to be removed by
Aladdin Gaming; and
(xiv) Taxes imposed against or payable by a
direct or indirect successor, transferee, or assign of
GE Capital to the extent that the aggregate amount of
such Taxes exceeds the aggregate amount of such Taxes
that would have been imposed against or payable by GE
Capital (or, if less, that would have been subject to
indemnification under SECTION 4); provided, however,
that this exclusion (xiv) shall not apply to a direct
or indirect successor, transferee or assignee that
acquired its interest as a result of a transfer while
an Event of Default shall have occurred and is
continuing.
"COMMITMENT" shall mean the commitment of GE Capital to make
Fundings to Aladdin Gaming pursuant to SECTION 1 in the aggregate
principal amounts specified therein.
"CONSTRUCTION COMPLETION DATE" shall mean the date of
issuance of a temporary or permanent certificate of occupancy
with respect to the Aladdin Hotel and Casino.
5
"CONSTRUCTION CONSULTANT" shall mean Rider ▇▇▇▇ (LA) L.L.C.
or its successors and assigns approved by GE Capital.
"CONTINGENT RENT" shall be calculated as the product of (a)
eighty-five percent (85%) of any per annum increase in the
Consumer Price Index for all Items as published by the Department
of Labor Bureau of Economics and Statistics reported during the
preceding calendar quarter, and (b) the Capitalized Lessor's Cost
of the Equipment, PLUS an amount to be determined based on the
differential between (1) the average annual revenues generated at
the Aladdin Hotel and Casino for the period from November 1,
1992, through November 18, 1997, and (2) the average annual
revenues generated at the Aladdin Hotel and Casino for the period
from the Construction Completion Date through and including the
subsequent sixty (60) months; provided, however, that the maximum
Contingent Rent shall not exceed that amount calculated as the
following specified percentage of the Capitalized Lessor's Cost
of the Equipment: if the Equipment is returned at the end of
three (3) years, 13.66%; if the Equipment is returned at the end
of four (4) years, 6.36%; and if the Equipment is returned at the
end of five (5) years, 4.40%.
"DEFAULT RATE" shall have the meaning assigned to it in
SECTION 2(E).
"DOL" shall mean the United States Department of Labor or
any successor thereto.
"DOLLARS" and "$" shall mean lawful money of the United
States of America.
"EARLY TERMINATION DATE" shall have the meaning assigned to
it in Section 4 of the Master Lease Agreement.
"ENVIRONMENTAL CLAIM" shall mean any accusation, allegation,
notice of violation, claim, demand, abatement or other order or
direction (conditional or otherwise) by any Governmental
Authority or any Person for Personal Injury (including sickness,
disease or death), tangible or intangible property damage, damage
to the environment or other adverse effects on the environment or
for fines, penalties or restrictions resulting from or based upon
any release.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local
laws, statutes, ordinances, orders and regulations, now or
hereafter in effect, and in each case as amended or supplemented
from time to time, and any applicable judicial or administrative
interpretation thereof relating to the regulation and protection
of human health, safety, the environment and natural resources
(including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws
include, but are not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Secs. 9601 ET SEQ.) ("CERCLA"); the Hazardous Material
Transportation Act, as amended (49 U.S.C. Secs. 1801 ET SEQ.);
the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. Secs. 136 ET SEQ.); the Resource Conservation
and Recovery Act, as amended (42 U.S.C. Secs. 6901 ET SEQ.)
("RCRA"); the Toxic Substance Control Act, as amended (15 U.S.C.
Secs. 2601 ET SEQ.); the Clean Air Act, as amended (42 U.S.C.
Secs. 740 ET SEQ.); the Federal Water Pollution Control Act,
6
as amended (33 U.S.C. Secs. 1251 ET SEQ.); the Occupational
Safety and Health Act, as amended (29 U.S.C. Secs. 651 ET SEQ.)
("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C.
Secs. 300(f) ET SEQ.), and any and all regulations promulgated
thereunder, and all analogous state and local counterparts or
equivalents and any transfer of ownership notification or
approval statutes.
"ENVIRONMENTAL LIABILITIES AND COSTS" shall mean all
liabilities, obligations, responsibilities, remedial actions,
removal costs, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including, without
limitation, all reasonable fees, disbursements and expenses of
counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest
incurred as a result of any claim, suit, action or demand by any
Person or entity, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or
common law (including, without limitation, any thereof arising
under any Environmental Law, permit, order or agreement with any
Governmental Authority) and which relate to any health or safety
condition regulated under any Environmental Law or in connection
with any other environmental matter or Release, threatened
Release, or the presence of a Hazardous Material.
"EQUIPMENT"shall have the meaning assigned to it in Section
1(a) of the Master Lease Agreement.
"EQUIPMENT SCHEDULE" or "SCHEDULE" shall have the meaning
assigned to it in Section 1(a) of the Master Lease Agreement.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974 (or any successor legislation thereto), as amended
from time to time, and any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to Aladdin
Gaming, any trade or business (whether or not incorporated) under
common control with Aladdin Gaming and which, together with
Aladdin Gaming, are treated as a single employer within the
meaning of Section 414(b), (c), (m) or (o) of the IRC.
"ERISA EVENT" shall mean, with respect to Aladdin Gaming,
any Subsidiary thereof or any ERISA Affiliate, (i) a Reportable
Event with respect to a Title IV Plan or a Multiemployer Plan;
(ii) the withdrawal of Aladdin Gaming, any Subsidiary thereof or
any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a) (2) of ERISA; (iii) the
complete or partial withdrawal of Aladdin Gaming, any Subsidiary
thereof or any ERISA Affiliate from any Multiemployer Plan; (iv)
the filing of a notice of intent to terminate a Title IV Plan or
the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (v) the institution of proceeding to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (vi)
the failure to make required contributions to a Qualified Plan;
or (vii) any other event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA.
7
"EVENT OF DEFAULT" shall have the meaning assigned to it in
SECTION 12(A).
"EXECUTIVE OFFICERS" shall mean the Chairman, President,
Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, Executive Vice President(s), Senior Vice President(s),
Vice President, Treasurer, Controller and Secretary of Aladdin
Gaming.
"EXTENSION TERM" shall have the meaning assigned to it in
Section 5(d) of the Master Lease Agreement.
"FACILITIES" shall have the meaning assigned to it in
SECTION 1(B).
"FEES" shall mean the fees due to Agent and GE Capitals as
set forth in SECTION 15(B) or otherwise pursuant to the Operative
Documents.
"FF&E RESERVE" shall have the meaning assigned to it in
SECTION 10(D).
"FINANCIALS" shall mean the financial statements referred to
in SECTION 10(A).
"FISCAL MONTH" shall mean any of the monthly accounting
periods of Aladdin Gaming.
"FISCAL QUARTER" shall mean any of the quarterly accounting
periods of Aladdin Gaming.
"FISCAL YEAR" shall mean the fiscal year of the relevant
Person, which in the case of Aladdin Gaming shall be the 12-month
period of Aladdin Gaming ending December 31 of each year.
Subsequent changes of the fiscal year of Aladdin Gaming shall not
change the term "Fiscal Year," unless GE Capital shall consent in
writing to such change.
"FUNDING" shall mean each funding of a portion of the Term
Loan pursuant to the Term Loan Facility or of a portion of the
Capitalized Lessor's Cost of the Equipment acquired pursuant to
the Lease Facility, and in each case to be applied to the
acquisition cost of the Collateral in accordance with the terms
of the Facilities.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time as set
forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, which are applicable to the
circumstances as of the date of determination or, if applicable,
in the United Kingdom as in effect from time to time.
"GAMING EQUIPMENT" means all equipment and supplies used in
the operation of a casino, including, without limitation, slot
machines, gaming tables, cards, dice, gaming chips,
player tracking systems, and all other gaming devices (as
defined in NRS 463.0155), cashless wagering systems (as
8
defined in NRS 463.014) and associated equipment (as defined in
NRS 463.0136), as described on the Collateral Schedule.
"GE CAPITAL" shall mean General Electric Capital
Corporation, a New York corporation.
"GOVERNMENTAL AUTHORITY" shall mean any nation or
government, any state or other political subdivision thereof, and
any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"GUARANTY OF PERFORMANCE AND COMPLETION" shall mean that
certain Guaranty of Performance and Completion by the Trust Under
Article VI u/w/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LCI and Bazaar Holdings in favor
of each of the Administrative Agent (defined therein) and the
lenders under the Senior Credit Facility.
"GUARANTY OF PERFORMANCE AND COMPLETION (NOTEHOLDERS)" shall
mean that certain Guaranty of Performance and Completion by the
Trust, LCI and Bazaar Holdings in favor of the Noteholders with
respect to Holdings' Senior Discount Notes and the Contingent
Guarantor (defined therein).
"HAZARDOUS MATERIAL" shall mean a Hazardous Substance and/or
a Hazardous Waste.
"HAZARDOUS SUBSTANCE" shall mean any element, material,
compound, mixture, solution, chemical, substance, or pollutant
within the definition of "hazardous substance" under
Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sec. 9601(14);
petroleum or any fraction, byproduct or distillation product
thereof; asbestos, polychlorinated biphenyls, or any radioactive
substances; and any material regulated as a hazardous substance
by any jurisdiction in which any Aladdin Gaming owns or operates
or has owned or operated a facility.
"HAZARDOUS WASTE" shall mean any element, pollutant,
contaminate or discarded material (including any radioactive
material) within the definition of Section 103(6) of the Resource
Conservation and Recovery Act, 42 U.S.C.A. Sec. 6903(6); and any
material regulated as a hazardous waste by any jurisdiction in
which any Aladdin Gaming owns or operates or has owned or
operated a facility, or to which any Aladdin Gaming sends
material for treatment, storage or disposal as waste.
"HOLDINGS" shall mean Aladdin Gaming Holdings, LLC, a Nevada
limited liability company.
"INDEBTEDNESS" of any Person shall mean (i) all indebtedness
of such Person for borrowed money or for the deferred purchase
price of property or services (including, without limitation,
reimbursement and all other obligations with respect to surety
bonds, letters of credit and bankers' acceptances, whether or not
matured, but not including obligations to trade creditors
incurred in the ordinary course of business), (ii) all
obligations evidenced by notes, bonds, debentures or
similar instruments, (iii) all indebtedness created or
arising under any conditional sale or other title
retention agreements with respect to property
acquired by such Person ( even though the rights and remedies
9
of the seller or GE Capital under such agreement in the event of
default are limited to repossession or sale of such property),
(iv) all Capital Lease Obligations, (v) all Guaranteed
Indebtedness, (vi) all Indebtedness referred to in clause (i),
(ii), (iii), (iv) or (v) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property
(including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness, (vii) the
Obligations, and (viii) all liabilities under Title IV of ERISA.
"INDEMNIFIED PERSON" shall have the meaning assigned to it
in SECTION 10(P).
"INTERCREDITOR AGREEMENT" shall mean that certain
Intercreditor Agreement dated as of June 26, 1998, by and among
GE Capital and the lenders under the Senior Credit Facility.
"INTEREST PERIOD" shall mean, in the case of the
determination of any 30-Day LIBOR or 90- LIBOR, a period of one
(1) or three (3) month(s) as applicable; provided, that (i) in
the event an Interest Period would end on a day which is not a
Business Day, such Interest Period shall be deemed to end on the
immediately succeeding Business Day unless such extension would
cause such Interest Period to end in the next calendar month, in
which case such Interest Period shall be deemed to end on the
immediately preceding Business Day, (ii) any Interest Period
which begins on a day for which there is no numerically
corresponding day in the calendar month in which such Interest
Period ends, shall, subject to clause (iii) below, expire on the
immediately preceding Business Day and (iii) no Interest Period
may extend beyond the Termination Date.
"INTERIM FUNDING PERIOD" shall mean the period from the date
on which the Funding is made with respect to the Facilities until
the Basic Lease Term Commencement Date.
"INTERIM RENT" shall have the meaning assigned to it in
Section C.1. of each Schedule to the Master Lease Agreement.
"INTERIM RENT PAYMENT DATE" shall have the meaning assigned
to it in Section C.1. of each Schedule of the Master Lease
Agreement.
"INTERIM TERM INTEREST RATE" shall mean that per annum
interest rate calculated pursuant to Section C.4. of the
applicable Schedule to the Master Lease Agreement.
"INVESTMENT" shall mean, for any Person (a) the acquisition
(whether for cash, property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of any other Person or
any agreement to make any such acquisition; (b) the making of any
deposit with, or Funding, loan or other extension of credit to,
any other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person); and (c) the
entering into of any Guaranteed Indebtedness of, or other
contingent obligation with respect to, Indebtedness
10
or other liability of any other Person and (without duplication)
any amount committed to be Fundings, lent or extended to such
Person.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any
successor thereto.
"KEEP-WELL AGREEMENT" shall mean that certain Keep-Well
Agreement by Holdings, LCI and Bazaar Holdings.
"LCI" shall mean London Clubs, International PLC, a company
registered in England and Wales.
"LEASE" shall have the meaning assigned to it in the first
paragraph of the Schedule.
"LEASE COMMENCEMENT DATE" shall have the meaning assigned to
it in Section 2(a) of the Master Lease Agreement.
"LEASE FACILITY" shall have the meaning assigned to it in
Section 1(a).
"LEASES" shall mean all of those leasehold estates in real
property now owned or hereafter acquired by Aladdin Gaming, as
lessee.
"LEASE TERM" shall mean the Basic Lease Term and all
available Renewal Lease Terms.
"LESSEE" shall have the meaning assigned to it in the first
paragraph of the Master Lease Agreement.
"LESSOR" shall have the meaning given to it in the first
paragraph of the Master Lease Agreement.
"LIBOR RATE FUNDING" shall mean any Funding as to which the
interest rate is calculated by reference to 30-Day LIBOR or 90-
Day LIBOR.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest
Period, the reserve percentage (expressed as a decimal) equal to
the maximum aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking
into account any transitional adjustments or other scheduled
changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable
to assets or liabilities consisting of or including "Eurocurrency
Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such
Interest Period.
11
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge,
claim, security interest, easement or encumbrance, or preference,
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including, without limitation,
any lease or title retention agreement, any financing lease
having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"MASTER LEASE AGREEMENT" shall have the meaning assigned to
it in SECTION 1(A).
"MATERIAL ADVERSE EFFECT" shall mean a material adverse
effect on (i) the business, assets, operations, prospects, or
financial condition of Aladdin Gaming taken as a whole, (ii)
Aladdin Gaming's ability to pay or perform its obligations under
the Operative Documents, (iii) the Collateral or GE Capital's
Lien on the Collateral or the priority of any such Lien, or
(iv) the rights and remedies of GE Capital under this Agreement
and the other Operative Documents.
"MAXIMUM LEASE TERM" shall have the meaning assigned to it
in Section 5(a) of the Master Lease Agreement.
"MEMBERSHIP INTERESTS" shall mean, with respect to any
Person which is a limited liability company, the membership
interests or the limited liability company interests, as the case
may be of such Person.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Section 4001(a) (3) of ERISA, and to which Aladdin
Gaming or any ERISA Affiliate is making, is obligated to make,
has made or been obligated to make, contributions on behalf of
participants who are or were employed by any of them.
"NEVADA GAMING AUTHORITIES" means, collectively, the Nevada
Gaming Commission, the Nevada State Gaming Control Board and all
state and local governmental and regulatory authorities
regulating gaming activities in the State of Nevada and its
political subdivisions.
"NEVADA GAMING LAWS" means all laws pursuant to which any
Nevada Gaming Authorities possess regulatory, licensing or permit
authority over gaming activities in the State of Nevada,
including, without limitation, the Nevada State Gaming Control
Act, codified as NRS Chapter 463, as the same may, from time to
time, be in effect in the State of Nevada and the regulations of
the Nevada Gaming Commission promulgated thereunder, as amended
from to time.
"NOTEHOLDERS" shall mean the holders of Senior Discount
Notes issued in connection with the Senior Credit Facility.
"NRS" means the Nevada Revised Statutes, as the same may,
from time to time, be in effect in the State of Nevada.
12
"OBLIGATIONS" shall mean all loans, Fundings, debts,
liabilities and obligations for the performance of covenants,
tasks or duties or for payment of monetary amounts (whether or
not such performance is then required or contingent, or amounts
are liquidated or determinable) owing by Aladdin Gaming to GE
Capital, and all covenants and duties regarding such amounts, of
any kind or nature, present or future, whether or not evidenced
by any note, agreement or other instrument, arising under any of
the Operative Documents. This term includes, without limitation,
all principal, interest (including, without limitation, interest
which accrues after the commencement of any case or proceeding
referred to in SECTIONS 12(A)(7) or (8)), all Fees, Taxes,
expenses, attorneys' fees and any other sum chargeable to Aladdin
Gaming under any of the Operative Documents.
"OFFERING MEMORANDUM" shall have the meaning assigned to it
in SECTION 7(A)(9).
"OPERATING LEASE" shall mean any lease of real or personal
property, or mixed property, which is not a Capital Lease.
"OPERATIVE DOCUMENTS" shall have the meaning assigned to it
in SECTION 2(F).
"OTHER TAXES" shall have the meaning assigned to it in
SECTION 4(C).
"PARTICIPANT" shall have the meaning assigned to it in
SECTION 13(B)(2).
"PAYMENT DATE" shall mean any Rent Payment Date or any date
on which an installment of interest or of principal and interest
is due under the Term Loan Note.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any successor thereto.
"PENSION PLAN" shall mean an employee pension benefit plan,
as defined in Section (3) (2) of ERISA (other than a
Multiemployer Plan), which is not an individual account plan, as
defined in Section 3 (34) of ERISA, and which Aladdin Gaming or,
if a Title IV Plan, any Subsidiary of Aladdin Gaming or any ERISA
Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed
by any of them.
"PERMITTED ENCUMBRANCES" shall mean the following
encumbrances: (i) Liens for taxes or assessments or other
governmental Taxes or levies, either not yet due and payable or
to the extent that nonpayment thereof is permitted by the terms
of SECTION 10(B) of the Facilities Agreement; (ii) pledges or
deposits securing obligations under workmen's compensation,
unemployment insurance, social security or public liability laws
or similar legislation; (iii) liens securing the Senior Credit
Facility; (iv) deposits securing public or statutory obligations
of Aladdin Gaming; (v) inchoate and unperfected workers',
mechanics', suppliers' or similar liens arising in the ordinary
course of business; (vi) carriers', warehousemen' s or other
similar possessory liens arising in the ordinary course of
business and securing indebtedness not yet due and payable in an
outstanding aggregate amount not in excess of $5,000,000 at any
time; (vii) deposits securing, or in lieu of, surety, appeal or
customs bonds in proceedings to which Aladdin Gaming
is a party; (viii) any attachment or judgment lien,
13
unless the judgment it secures shall not, within thirty (30) days
after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged
within thirty (30) days after the expiration of any such stay;
and (ix) zoning restrictions, easements, licenses, or other
restrictions on the use of real property or other minor
irregularities in title (including leasehold title) thereto, so
long as the same do not materially impair the use, value, or
marketability of such real property, leases or leasehold estates.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or
department thereof).
"PLAN" shall mean, with respect to Aladdin Gaming or any
ERISA Affiliate, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which Aladdin Gaming maintains,
contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"PREPAYMENT DATE" shall have the meaning assigned to it in
Section 2(e)(1).
"PREPAYMENT PREMIUM" shall mean that amount calculated as
the product of the Premium Percentage and (A) the original
Capitalized Lessor's Cost of the Equipment (in the case of
Collateral leased pursuant to the Master Lease Agreement), or (B)
the original outstanding principal balance of the Term Loan Note
(in the case of Collateral described on the Collateral
Schedules), as applicable.
"PREMIUM PERCENTAGE" shall mean the following specified
percentage: if prepayment occurs on the 3rd through 6th payment
date, 2%; if prepayment occurs on the 7th through 12th payment
date, 1%; and if prepayment occurs after the 12th payment date,
0%.
"PRIME RATE" shall mean the prime rate of interest as
published in THE WALL STREET JOURNAL on the date of
determination.
"PROCEEDS" shall mean "proceeds," as such term is defined in
the Code and, in any event, shall include, with respect to any
Person, (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to such Person from time to time
with respect to any of its property or assets, (ii) any and all
payments (in any form whatsoever) made or due and payable to such
Person from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any
part of such Person's property or assets by any governmental
body, authority, bureau or agency (or any person acting under
color of governmental authority), (iii) any recoveries by such
Person against third parties with respect to any litigation or
dispute concerning any of such Person's property or assets, and
(iv) any and all other amounts from time to time paid or payable
under or in connection with any of such Person's property or
assets, upon disposition or otherwise.
14
"PROJECTIONS" shall mean Aladdin Gaming's projected pro-
forma income statements, balance sheets and cash flow statements
for five (5) years.
"QUALIFIED PLAN" shall mean an employee pension benefit
plan, as defined in Section 3(2) of ERISA, which is intended to
be tax-qualified under Section 401(a) of the IRC, and which
Aladdin Gaming, and Subsidiary thereof or any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to
on behalf of participants who are or were employed by any of
them.
"RELEASE" shall mean, as to any Person, any release or any
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or
migration of a Hazardous Material into the indoor or outdoor
environment by such Person (or by a person under such Person's
direction or control), including the movement of a Hazardous
Material through or in the air, soil, surface water, ground water
or property; but shall exclude any release, discharge, emission
or disposal in material compliance with a then effective permit
or order of a Governmental Authority.
"RENEWAL LEASE TERM" shall mean up to two (2) one-year
renewal periods commencing at the expiration of the Basic Lease
Term.
"RENEWAL TERM" shall have the meaning assigned to it in
Section 5(a) of the Master Lease Agreement.
"RENEWAL TERM RENT" shall have the meaning assigned to it in
Section C.2. of the Schedule.
"RENT" shall have the meaning assigned to it in Section 2(a)
of the Master Lease Agreement.
"RENT PAYMENT DATE" with respect to any Unit of Equipment
shall have the meaning assigned to it in Section C.2. of the
applicable Schedule to the Master Lease Agreement.
"REPLACEMENT ITEM" shall have the meaning assigned to it in
SECTION 10(J)(9).
"REPORTABLE EVENT" shall mean any of the events described in
Section 4043(b) (1), (2), (3), (5), (6), (8) or (9) of ERISA.
"RESPONSIBLE OFFICER" shall mean the President, any Vice
President, the Treasurer, the Chief Financial Officer and any
other officer of Aladdin Gaming directly responsible for the
consummation of the Transaction and/or the operation of the
Aladdin Hotel and Casino.
"RESTRICTED PAYMENTS" shall have the meaning assigned to it
in SECTION 11(F).
"RETIREE WELFARE PLAN" shall refer to any Welfare
Plan providing for continuing coverage or benefits
for any participant or any beneficiary of a
participant after such participant's termination of
15
employment, other than continuation coverage provided pursuant to
Section 4980B of the IRC and at the sole expense of the
participant or the beneficiary of the participant.
"SCHEDULE OF DOCUMENTS" shall mean the schedule attached
hereto as ANNEX B, including all appendices, exhibits or
schedules thereto, listing certain documents and information to
be delivered in connection with the Operative Documents and the
transactions contemplated thereunder.
"SENIOR CREDIT AGREEMENT" shall mean that certain U.S.
$410,000,000 Credit Agreement dated as of February 26, 1998,
among Aladdin Gaming, various financial institutions, The Bank of
Nova Scotia, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation and CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corp. in the form attached hereto as ANNEX D.
"SENIOR CREDIT FACILITY" shall heave the meaning assigned to
it in SECTION 7(A)(8).
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on
a particular date, that on such date (a) the fair value of the
property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value
of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the
amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"SPREAD" shall have the meaning assigned to it in SECTION
2(C) of the Facilities Agreement and Section C.4. of the Schedule
to the Master Lease Assignment.
"STIPULATED LOSS VALUES" shall be calculated as specified on
Annex D to the Schedule.
"STOCK" shall mean all shares, options, warrants, general or
limited partnership interests, participation or other equivalents
(regardless of how designated) of or in a corporation,
partnership or equivalent entity whether voting or nonvoting,
including, without limitation, common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended).
"SUBJECT PROPERTY" shall mean that certain real property
located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇.
"SUBSTITUTED ITEM" shall have the meaning assigned to it in
SECTION 10(J)(9).
16
"SUPPLIER" shall have the meaning assigned to it in Section
1(a) of the Master Lease Agreement.
"TAXES" shall mean all taxes, charges, fees, levies or other
like assessments, including, without limitation, income, gross
receipts, excise, real and personal and intangible property,
sales, use, transfer, withholding, license, payroll, stamp,
documentary, recording, ad valorem and franchise taxes imposed by
the United States, or any state, local or foreign taxing
authority or subdivision or agency thereof, and such term shall
include any interest, penalties or additions to tax attributable
to such assessments.
"TERM" shall have the meaning assigned to it in Section 2(a)
of the Master Lease Agreement.
"TERM LOAN" shall mean the loan evidenced by the Term Loan
Note.
"TERM LOAN FACILITY" shall have the meaning assigned to it
in SECTION 1(B).
"TERM LOAN NOTE" shall have the meaning assigned to it in
SECTION 3(B).
"TERM LOAN PERIOD" shall mean the period from the
Construction Completion Date until the date on which all
obligations of Aladdin Gaming with respect to the Term Loan
Facility have been satisfied in full.
"TERMINATION DATE" shall mean the date on which all
Obligations have been satisfied in full.
"TERMINATION VALUES" shall be calculated as specified on
Annex D to the Schedule.
"TITLE IV PLAN" shall mean a Pension Plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA.
"TRANSACTION DOCUMENTS" shall mean the Operative Documents
and each document executed in connection with the Senior Credit
Facility.
"TRUST" shall mean the Trust Under Article VI u/w/o ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
"UNAMORTIZED LESSOR'S COST" shall mean: (a) during the
Interim Funding Period, the aggregate Capitalized Lessor's Cost
of the Equipment leased under the Equipment Schedule, and (b)
during the Lease Term, the amount calculated as specified on
Annex E to the applicable Schedule.
"UNFUNDED PENSION LIABILITY" shall mean, at any time, the
aggregate amount, if any, of the sum of (i) the amount by which
the present value of all accrued benefits under each Title IV
Plan exceeds the fair market value of all assets of such Title IV
Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for
each such Title IV Plan using the actuarial assumptions in effect
under such Title IV Plan, and (ii) for a period of five (5)
17
years following a transaction reasonably likely to be covered by
Section 4069 of ERISA, the liabilities (whether or not accrued)
that could be avoided by Aladdin Gaming or any ERISA Affiliate as
a result of such transaction.
"UNIT OF EQUIPMENT" shall have the meaning assigned to it in
Section 1(a) of the Master Lease Agreement.
"WELFARE PLANS" shall mean any welfare plan, as defined in
Section 3(1) of ERISA, which is maintained or contributed to by
Aladdin Gaming or any ERISA Affiliate.
"WITHDRAWAL LIABILITY" shall mean, at any time, the
aggregate amount of the liabilities, if any, pursuant to
Section 4201 of ERISA, and any increase in contributions pursuant
to Section 4243 of ERISA with respect to all Multiemployer Plans.
"30-DAY LIBOR" shall mean, for any Interest Period, the rate
per annum (rounded upwards to the nearest 1/16th of one
percentage point, if necessary) equal to the quotient obtained by
dividing (i) the offered rate for U.S. Dollar deposits for a
thirty (30) day period appearing on Telerate page 3750 (or as
quoted by such other reference source as may be designated by the
Agent in writing) as of 11:00 a.m. (London time), on the day that
is two (2) Business Days prior to the beginning of such Interest
Period (but if at least two such rates appear on such page or are
so quoted at such time, the offered rate for such Interest Period
shall be the arithmetic mean of such rates), by (ii) a percentage
equal to one (1) minus the LIBOR Reserve Percentage.
"90-DAY LIBOR" shall mean, for any Interest Period, the rate
per annum (rounded upwards to the nearest 1/16th of one
percentage point, if necessary) equal to the quotient obtained by
dividing (i) the offered rate for U.S. Dollar deposits for a
ninety (90) period appearing on Telerate page 3750 (or as quoted
by such other reference source as may be designated by the Agent
in writing) as of 11:00 a.m. (London time), on the day that is
two (2) Business Days prior to the beginning of such Interest
Period (but if at least two such rates appear on such page or are
so quoted at such time, the offered rate for such Interest Period
shall be the arithmetic mean of such rates), by (ii) a percentage
equal to one (1) minus the LIBOR Reserve Percentage.
Capitalized terms used in the Facilities Agreement without
definition shall have the meaning assigned to such terms in the
Senior Credit Agreement as in effect on the date hereof.
Any accounting term used in the Facilities Agreement shall
have, unless otherwise specifically provided herein, the meaning
customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall
in no way be construed to limit the foregoing. All other
undefined terms contained in the Facilities Agreement shall,
unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of
Nevada to the extent the same are used or defined
therein. The words "herein," "hereof" and "hereunder"
18
or other words of similar import refer to the Facilities
Agreement as a whole, including the annexes, exhibits and
schedules thereto, as the same may from time to time be amended,
modified or supplemented, and not to any particular section,
subsection or clause contained in the Facilities Agreement.
Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the
singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the
feminine and the neuter.
19
ANNEX B
to
FACILITIES AGREEMENT
Dated as of June 26, 1998
SCHEDULE OF CLOSING DOCUMENTS
The obligation of GE Capital to make the initial Funding is
subject to satisfaction of the condition precedent that GE
Capital shall have received the following, each, unless otherwise
specified below, dated the Closing Date, in form and substance
satisfactory to GE Capital and its counsel, unless otherwise
specified below:
(a) OPERATIVE DOCUMENTS. The Facilities Agreement,
the Master Lease Agreement and the Term Loan Note payable to the
order of GE Capital, duly executed by Aladdin Gaming.
(b) AGENCY AGREEMENT. The Agency Agreement duly
executed by Aladdin Gaming.
(c) SECURITY DOCUMENTS.
(i) Acknowledgment copies of proper Financing
Statements (Form UCC-l) (the "FINANCING STATEMENTS") duly
filed under the Uniform Commercial Code, in all
jurisdictions as may be necessary or, in the opinion of GE
Capital, desirable to perfect the Lien created by the
Operative Documents;
(ii) Certified copies of Requests for Information
(Form UCC-3), or other evidence satisfactory to GE Capital,
listing the Financing Statements referred to in paragraph
(i) above and all other effective financing statements which
name Aladdin Gaming (under its present name, any previous
name or any trade or doing business name) as debtor and
which are filed in the jurisdictions referred to in
paragraph (i) above, together with copies of such other
financing statements (none of which shall cover the
Collateral);
(iii) Evidence of the completion of all other
recordings and filings as may be necessary or, in the
opinion of and at the request of GE Capital, desirable to
perfect the Lien created by the Operative Documents.
(d) BOARD RESOLUTIONS AND INCUMBENCY CERTIFICATES. A
certificate of the Secretary or an Assistant Secretary of Aladdin
Gaming certifying (A) the resolutions adopted by the managers of
Aladdin Gaming approving each Operative Document to which Aladdin
Gaming is a party and the transactions contemplated hereby and
thereby, (B) all documents evidencing other necessary
action by Aladdin Gaming and required governmental and
third party approvals with respect to each such
Operative Document, and (C) the names and true signatures of the
authorized managers and officers of Aladdin Gaming.
(e) ORGANIZATIONAL DOCUMENTS AND GOOD STANDING
CERTIFICATES. Each of the following documents:
(i) the organizational documents of Aladdin
Gaming as in effect on the Closing Date, certified by the
Secretary of State of Nevada as of a recent date, together
with a bring-down certificate from such Secretary of State
in the form of a telex or telecopy dated the Closing Date
(if the Closing Date is more than thirty (30) days after the
date of original certification), and the operating agreement
of Aladdin Gaming as in effect on the Closing Date,
certified by the Secretary, Assistant Secretary or other
appropriate officer of Aladdin Gaming; and
(ii) a good standing certificate for Aladdin
Gaming from the Secretary of State of Nevada as of a recent
date, together with a bring-down certificate in the form of
a telex or telecopy dated the Closing Date.
(f) SOLVENCY. A certificate in form and substance
satisfactory to GE Capital, signed by Aladdin Gaming's chief
financial officer, certifying as to the Solvency of Aladdin
Gaming after giving effect to the entering into of the Operative
Documents, the making of the initial Funding hereunder and the
other transactions contemplated hereby.
(g) ENVIRONMENTAL AUDIT. An environmental review and
audit report with respect to the Subject Property satisfactory in
all respects to GE Capital from an independent firm acceptable to
GE Capital, together with copies of all existing environmental
reviews and audits and other information pertaining to actual or
potential environmental claims as GE Capital may require.
(h) PRO FORMA BALANCE SHEET. A pro forma balance
sheet of Aladdin Gaming prepared in accordance with GAAP giving
effect to the making of the initial Funding hereunder and the
other transactions contemplated by the Operative Documents as if
such transactions had occurred on April 27, 2000.
(i) FINANCIAL STATEMENTS. Copies of the financial
statements described in SECTION 7(A)(20) of the Facilities
Agreement.
(j) PROJECTIONS. Copies of the Projections in form
and substance satisfactory to GE Capital.
(k) CAPITAL EXPENDITURES BUDGET. A capital
expenditures budget for Aladdin Gaming in form and substance
satisfactory to GE Capital.
2
(l) LEGAL OPINIONS. (i) An opinion of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., special counsel to Aladdin Gaming,
in form and substance satisfactory to GE Capital (which shall
include an opinion as to enforceability of the Operative
Documents under New York law); (ii) an opinion of local counsel
for Aladdin Gaming in the State of Nevada, in form and substance
satisfactory to GE Capital, as to (1) validity and perfection of
Liens and other matters, and (2) such other matters incident to
the transactions contemplated hereby as GE Capital reasonably may
require; and (iii) not more than two (2) bring-downs of such
opinions as and to the extent reasonably required by Lessor in
connection with an assignment or participation pursuant to
Section 13(b) of the Facilities Agreement.
(m) APPRAISAL. An appraisal obtained at Aladdin
Gaming's expense in form and substance, and by an appraiser,
satisfactory to GE Capital, substantiating the Equipment's
remaining useful economic life and requisite values at selected
points throughout the Basic Lease Term and Renewal Lease Terms,
including GE Capital's residual value assumptions.
3
ANNEX C
to
FACILITIES AGREEMENT
Dated as of June 26, 1998
INSURANCE REQUIREMENTS
Aladdin Gaming shall, without cost to GE Capital or Participants,
maintain or cause to be maintained on its behalf in effect at all
times the types of insurance required by the following provisions
together with any other types of insurance as commonly secured by
similar operations, in form acceptable to GE Capital, required
hereunder, with insurance companies rated "A-" or better, with a
minimum size rating of "VIII," by Best's Insurance Guide and Key
Ratings (or an equivalent rating by another nationally recognized
insurance rating agency of similar standing if Best's Insurance
Guide and Key Ratings shall no longer be published), or other
insurance companies of recognized responsibility satisfactory to
GE Capital, until all obligations of Aladdin Gaming pursuant to
the Operative Documents has been fully discharged. GE Capital
shall be named as first loss payee/mortgagee on all policies with
respect to the Collateral of a first party nature, with such
policies endorsed to the effect that all loss proceeds will be
made payable to GE Capital.
I. Post Construction. During the period commencing from
Completion, Aladdin Gaming shall at its sole cost and expense
obtain and maintain the following insurance:
a. Commercial General Liability. Commercial general
liability insurance for the Project, written on "occurrence"
policy forms, including coverage for premises operations,
products, completed operations, broad form property damage,
blanket contractual liability, independent contractor's and
personal injury, with no exclusions for explosion, collapse and
underground perils, with primary coverage limits of no less than
$1,000,000 for injuries or death to one or more persons or damage
to property resulting from any one occurrence and a $2,000,000
aggregate limit. The commercial general liability policy shall
also include a severability of interest clause and a cross
liability clause in the event more than one entity is a "named
insured" under the commercial general liability policy.
Deductibles in excess of $50,000 shall be subject to review and
approval by GE Capital.
b. Automobile Liability. Automobile liability
insurance, including coverage for owned, non-owned and hired
automobiles for both bodily injury and property damage and
containing appropriate no-fault insurance provisions or other
endorsements in accordance with Nevada legal requirements, with
limits of no less than $1,000,000 per accident with respect to
bodily injury, property damage or death.
c. Workers Compensation. Workers compensation
insurance and employer's liability or Stop Gap liability, with a
limit of not less than $1,000,000, and such other forms
of insurance which Aladdin Gaming is required by
Nevada law to provide for the Project, providing
statutory benefits and covering loss resulting from injury,
sickness, disability or death of the employees of Aladdin Gaming.
d. Pollution Legal Liability. Sudden and accidental
pollution legal liability insurance in an amount not less than
$1,000,000. Such coverage can be included in the commercial
general liability policy or provided separately. Claims made
coverage forms are acceptable.
e. Property and Boiler & Machinery. From and after
the date of Completion, "all risk", as such term is used in the
insurance industry, property insurance with flood and earthquake
(including sinkhole and subsidence) and on an "agreed amount"
basis and providing (i) coverage for the Project, including
removal of debris, insuring the buildings, structures, machinery,
equipment, facilities, fixtures and other properties constituting
a part of the Project in a minimum amount not less than the full
replacement value of the Project ($310,000,000). The following
sublimits, to the extent they are less than the full replacement
value of the Project, are permitted with respect to the following
perils: flood ($100,000,000), earthquake ($100,000,000), transit
and off-site storage (greater of replacement cost of assets at
risk or $1,000,000) and debris removal $10,000,000).
Such policy shall include a replacement cost endorsement (no
co-insurance) with no deduction for depreciation. Unless
provided under the all risk policy, boiler and machinery coverage
on a "comprehensive" basis including break down and repair with
limits not less than the full replacement cost of the insured
objects. In the event the all risk coverage and the boiler and
machinery coverage is not written within the same policy each
policy shall contain a joint loss agreement.
The policy/policies shall include increased cost of
construction coverage, debris removal, and building ordinance
coverage to pay for loss of "undamaged" property which may be
required to be replaced due to enforcement of local, state, or
federal ordinances subject to a sublimit of $10,000,000. All
such policies may have deductibles of not greater than
$1,000,000 per loss with the exception of earthquake ($500,000)
and flood ($500,000), to the extent commercially available.
f. Business Interruption. Aladdin Gaming shall also
maintain or cause to be maintained with respect to the Project
business interruption insurance on an "all risk" basis, including
boiler and machinery, in an amount equal to satisfy policy
coinsurance conditions, but with limits not less than the
equivalent to eighteen (18) months' projected revenues less
allowable insurance company expenses of a non-continuing nature.
Such coverage shall include a twelve (12) month extended period
of indemnity. The deductible or waiting period shall not exceed
thirty (30) days. Aladdin Gaming shall also maintain or cause to
be maintained expediting or extra expense coverage in an amount
not less than $2,500,000.
g. Umbrella/Excess Liability. Umbrella Excess
Liability Insurance of not less than $100,000,000 per occurrence
and in the aggregate during operations. Such coverages shall be
on a per occurrence basis and over and above coverage provided by
the policies described in SECTION I(A), (B) and (C) above, whose
limits shall apply toward the $100,000,000 limit set forth in
this section. If the policy or policies provided under this
SECTION I(G) contain(s) aggregate limits applying to other
2
operations of Aladdin Gaming, other than the Project, and such
limits are diminished below $95,000,000 by any incident,
occurrence, claim, settlement or judgment against such insurance
which has caused the insurer to establish a reserve, Aladdin
Gaming, within five (5) business days after knowledge of such
event shall inform GE Capital, and within ten (10) business days
after request therefor by GE Capital, Aladdin Gaming shall
purchase an additional umbrella/excess liability insurance
policy(ies) satisfying the requirements of this SECTION I(G) in
an amount determined by GE Capital.
h. Aircraft Liability. Aircraft liability, to the
extent exposure exists, in an amount not less than $25,000,000
for all owned, non-owned and hired aircraft, fixed wing or
rotary, used in connection with the construction or operation of
the Project.
i. Other Insurance. Such other or additional
insurance (as to risks covered, policy amounts, policy provisions
or otherwise) as GE Capital may reasonably request provided that
such insurance and such amounts are then commonly insured against
with respect to similar properties in Las Vegas.
II. Insurance Carried by Third Parties. Aladdin Gaming
shall impose the following insurance requirements upon the
following third parties:
a. Contracts and Subcontracts. In addition to the
foregoing, Aladdin Gaming shall include, and shall cause its
contractors and subcontractors to include, in each contract or
subcontract a provision that the contractor or subcontractor
shall procure and maintain the insurance coverage set forth in
SECTION I(A), (B) and (C) above. GE Capital may require that
such limits be increased with respect to any particular contract
based upon the services to be performed. All such contracts must
contain a waiver of subrogation rights against Aladdin Gaming and
GE Capital, contractual indemnification in favor GE Capital and
Aladdin Gaming and must state that coverage (except for Workers'
Compensation coverage) carried in primary with respect to any
other policies carried by Aladdin Gaming and GE Capital and such
insurance shall name Aladdin Gaming and GE Capital as additional
insureds. Such insurance shall continue in force until all of
the obligations of such contractor or subcontractor are
fulfilled. Prior to the commencement of any work under the
applicable contract or subcontract, Aladdin Gaming shall obtain
and forward to GE Capital proper evidence of such insurance from
such contractors and subcontractors.
b. Ground Lessees and Major Space Lease Tenants. In
addition to the foregoing, Aladdin Gaming shall include a
provision in every Ground Lease and Major Space Leases that the
ground lessee or space lessee shall procure and maintain the
insurance coverages set forth in SECTIONS I(A), (B) and (C)
above, as well as the following:
i. Property and Boiler Machinery. "All risk",
as such term is used in the insurance industry, property
insurance and on an "agreed amount" basis and providing (1)
coverage for the Improvements on such ground lessee's
premises or within such Space Lessee's space,
3
including all personal property in a minimum amount not less than
the full replacement value of such improvements and personal
property.
ii. Business Interruption. Ground Lessees or
Major Space Lessees shall also maintain or cause to be maintained
with respect to their respective businesses business interruption
insurance on an "all risk" basis, including boiler and machinery,
in an amount equal to satisfy policy coinsurance conditions, but
with limits not less than the equivalent to twelve (12) months
projected revenues less allowable insurance company expenses of a
non-continuing nature. Such coverage shall include a twelve (12)
month extended period of indemnity. The deductible or waiting
period shall not exceed thirty (30) days.
GE Capital may require that such limits be increased with respect
to any particular Ground Lease or Space Lease based upon the
services to be performed. All such leases must contain a waiver
of subrogation rights against Aladdin Gaming and GE Capital,
contractual indemnification in favor GE Capital and Aladdin
Gaming and must state that coverage (except for Workers
Compensation coverage) be carried primarily with respect to any
other policies carried by Aladdin Gaming and GE Capital and such
insurance shall name Aladdin Gaming and GE Capital as additional
insureds. Such insurance shall continue in force for the term
of such Ground Lease or Space Lease. Prior to the commencement
of any such Ground Lease or Space Lease, Aladdin Gaming shall
obtain and forward to GE Capital proper evidence of such
insurance from such ground lessees and Space Lessees.
III. General Conditions. The conditions set forth below
apply to Aladdin Gaming until the Obligations under the Operative
Documents are fully satisfied.
a. All property, cargo, boiler & machinery and
business interruption/delay in opening insurance coverage shall
be on such form (including the form of the loss payable clauses)
as shall be acceptable to GE Capital (which acceptance shall not
be unreasonably withheld).
b. Aladdin Gaming shall submit certified copies of
all policies received pursuant to the requirements of this
Exhibit to GE Capital for its review and approval.
c. All policies wherein GE Capital and the
Participants have an insurable interest shall insure the
interests of GE Capital and the Participants as well as Aladdin
Gaming and shall name GE Capital and Participants as additional
insureds, unless GE Capital and the Participants are named as an
insured under the policy.
d. All policies covering the Collateral shall name GE
Capital as First Loss Payee/Mortgagee in accordance with CP 12 18
(06/95) or equivalent, Lender's Loss Payable Endorsement, and
shall provide that any payment thereunder for any loss or damage
with respect to the Collateral shall be made to GE Capital.
e. Each policy shall waive subrogation against GE
Capital and the Participants.
4
f. Each such policy shall provide that if such
insurance is to be canceled, terminated or materially changed for
any reason whatsoever, the insurers (or their representatives)
will promptly notify Aladdin Gaming and GE Capital, and any such
cancellation, termination or change shall not be effective until
sixty (60) days (ten (10) days for nonpayment of premium) after
receipt of such notice by GE Capital.
g. In the event that Aladdin Gaming fails to respond
in a timely and appropriate manner (as reasonably determined by
GE Capital) to take any steps necessary or reasonably requested
by GE Capital to collect from any insurers for any loss covered
by any insurance required to be maintained by this Annex, GE
Capital shall have the right to make all proofs of loss, adjust
all claims and/or receive all or any part of the proceeds of the
foregoing insurance policies, either in its own name or the name
of Aladdin Gaming; provided, however, that Aladdin Gaming shall,
upon GE Capital's request and at Aladdin Gaming's own cost and
expense, make all proofs of loss and take all other steps
necessary or reasonably requested by GE Capital to collect from
insurers for any loss covered by any insurance required to be
obtained by this Annex.
h. On or before December 30th of each year, Aladdin
Gaming shall furnish to GE Capital a certificate signed by an
Authorized Representative of Aladdin Gaming or authorized
insurance representative, showing the insurance then maintained
by or on behalf of Aladdin Gaming pursuant to this Annex and
stating that such insurance complies in all material aspects with
the terms hereof, together with a statement of the premiums then
due, if any. In the event that at any time the insurance as
herein provided shall be reduced or cease to be maintained, then
(without limiting the rights of GE Capital hereunder in respect
to the Event of Default which arises as a result of such failure)
GE Capital may at its option maintain the insurance required
hereby and, for such event, Aladdin Gaming shall reimburse the GE
Capital upon demand for the cost thereof together with interest
thereon at a rate per annum equal to the Default Rate, but in no
event shall the rate of interest exceed the maximum rate
permitted by law.
i. In the event that any policy is written on a
"claims-made" basis and such policy is not renewed or the
retroactive date of such policy is to be changed, Aladdin Gaming
shall obtain for each such policy or policies the broadest basic
and supplemental extended reporting period coverage or "tail"
reasonably available in the commercial insurance market for each
such policy or policies and shall provide GE Capital with proof
that such basic and supplemental extended reporting period
coverage or "tail" has been obtained.
5
ANNEX D
to
FACILITIES AGREEMENT
Dated as of June 26, 1998
[Executed Senior Credit Agreement]
DISCLOSURE SCHEDULE
to
FACILITIES AGREEMENT
Dated as of June 26, 1998
ITEM 8(G) - LITIGATION
Reference is hereby made to the litigation discussed on page 80
of the Registration Statement, attached hereto.
ITEM 8(H) - EXISTING SUBSIDIARIES
See attached organizational chart.
ITEM 8(J) - TAXES
There exists a potential tax liability that may result from
liabilities to which the land is subject exceeding the tax basis
of the land, a liability which may be approximately $1,000,000.
ITEM 8(K) - EMPLOYEE BENEFIT PLANS
None
ITEM 8(L) - ENVIRONMENTAL MATTERS
None
ITEM 8(M) - INTELLECTUAL PROPERTY
The loss of the right to use the ▇▇▇▇ "Aladdin" would result in a
material adverse effect in the financial condition, operations,
assets, business or properties of Aladdin Gaming, the other
Aladdin Parties and LCNI.
ITEM 8(X) - LABOR DISPUTES
None
ITEM 8(AA) - LIST OF CURRENT INSURANCE COVERAGES
See attached summary.
ITEM 15(H) - AUTHORIZED SIGNATURES
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
7