EXHIBIT 99.1
GORDON & SILVER, LTD.
WILLIAM M. NOALL, ESQ.
Nevada Bar No. 3549
KATHRYN GRAITGE NOALL
Bar No, 5415
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, Nevada 89109
Telephone; (702) 796-5555
Facsimile: (702) 369-2666
E-Mail: wmn@gordonsilver.com
Attorneys for Debtor
IN THE UNITED STATES BANKRUPTCY COURT FOR THE
DISTRICT OF NEVADA
in re:
Case No: BK-S-01-20141-RCJ
ALADDIN GAMING, LLC, Chapter 11
a Nevada limited liability company,
Debtor. Date: August 5, 2003
_________________________________/ Time: 1:30 p.m.
ORDER GRANTING MOTION TO APPROVE SETTLEMENT AGREEMENT WITH ALADDIN BAZAAR, LLC
PURSUANT TO FED. R. BANKR. P. 9019
The Motion to Approve Settlement Agreement with Aladdin Bazaar, LLC
pursuant to Fed. R. Bankr. P. 9019 (the "Settlement Motion") filed by Debtor in
the above-captioned case was heard and considered by the Court on shortened
notice on August 5, 2003 at 1:30 p.m. William M. Noall, Esq. of Gordon & Silver,
Ltd. appeared on behalf of Debtor and Vincent M. Coscino of Allen Matkins Leek
Gamble & Mallory LLC, appeared on behalf of Aladdin Bazaar, LLC ("Aladdin
Bazaar"). Other counsel's appearances are reflected in the Court's record of the
proceeding.
The Court has read and considered the Settlement Motion and the
evidence in support thereof as well as the argument of counsel at the hearing on
the Settlement Motion. The Court has taken judicial notice of the pleadings,
papers and records in the Court's files respecting the above-captioned case and
affiliated contested matters, including the Bazaar Motion (as defined in the
Settlement Motion).
GORDON & SILVER, LTD.
ATTORNEYS AT LAW
NINTH FLOOR
3906 HOWARD HUGHES PKWY
LAS VEGAS, NEVADA 89109
(702) 796-5555
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Based on the foregoing, and it appearing that no other or further
notice of the Settlement Motion or the hearing held thereon need be given and
after due deliberation and sufficient cause appearing therefor, the Court finds
and concludes as follows:
A. Jurisdiction. This Court has jurisdiction of this matter under
28 U.S.C. Sections 157 and 1334(a). This proceeding (i) arises in the
above-captioned chapter 11 case, (ii) arises under the Bankruptcy Code, and more
particularly under section 105 of the Bankruptcy Code, and (iii) is a "core"
proceeding within the meaning of 28 U.S.C. Section 157(b)(2), with respect to
which this Court may enter final judgments and orders,
B. Notice. Under the circumstances, shortened notice of the
Settlement Motion was proper, timely, adequate and sufficient and was made in
compliance with the Local Bankruptcy Rules and Rules 2002 and 9019 of the
Federal Rules of Bankruptcy Procedure. A reasonable and appropriate opportunity
to object and be heard regarding the relief requested in the Settlement Motion
was afforded to all interested parties.
C. Objections/Responses to Settlement Motion. At the hearing on
the Settlement Motion, all objections or responses to the Settlement Motion were
either resolved or overruled by the Court.
D. Approval of Settlement The Court is fully satisfied and finds
and concludes that Debtor entered into the Aladdin Bazaar Settlement Agreement
(as defined in the Settlement Motion), a true and correct copy of which is
attached hereto and incorporated herein as Exhibit "1" (the "Aladdin Bazaar
Settlement Agreement"), based on Debtor's informed, intelligent, rational and
sound business judgment.
E. The Court further finds and concludes that the likelihood of
Debtor's success in litigation of the various pending disputes with Aladdin
Bazaar as described in the Settlement Motion is uncertain.
F. The Court further finds and concludes that litigation of
Debtor's various pending disputes with Aladdin Bazaar as described in the
Settlement Motion would likely be complex
2
GORDON & SILVER, LTD.
ATTORNEYS AT LAW
NINTH FLOOR
3906 HOWARD HUGHES PKWY
LAS VEGAS, NEVADA 89109
(702) 796-5555
and protracted, and that the bankruptcy estate would incur substantial expense
and suffer lengthy delay in connection with such litigation.
G. The Court finally finds and concludes that the Aladdin Bazaar
Settlement Agreement was entered into by the parties in good faith, is
reasonable, fair and equitable, and that approval of the Aladdin Bazaar
Settlement Agreement is in the best interest of the bankruptcy estate and the
creditors in this case.
Based on the foregoing findings of fact and conclusions of law, and for
such other reasons and on such other grounds as stated by the Court at the
hearing on the Settlement Motion,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
1. The findings of fact and conclusions of law set forth above
and as stated by the Court on the record satisfy the requirements of Rule 7052
of the Federal Rules of Bankruptcy Procedure and Rule 52 of the Federal Rules of
Civil Procedure.
2. Pursuant to section 105 of the Bankruptcy Code and Rule 9019
of the Federal Rules of Bankruptcy Procedure, the Settlement Motion is granted
in its entirety; the Aladdin Bazaar Settlement Agreement and the transactions
contemplated thereby are hereby approved in all respects and shall be fully
binding and effective in accordance with the terms of" the Aladdin Bazaar
Settlement Agreement. Debtor and the other parties to the Aladdin Bazaar
Settlement Agreement are hereby authorized and directed to consummate the
transactions contemplated by the Aladdin Bazaar Settlement Agreement and to lake
any and all actions reasonably necessary or appropriate to effectuate the terms
of the Aladdin Bazaar Settlement Agreement.
3. All parties in interest who received (or were deemed to have
received) notice of the Settlement Motion and did not oppose the Settlement
Motion are hereby deemed to have consented to the granting of the Settlement
Motion and entry of this Order.
4. This Court shall retain jurisdiction to implement and enforce
the terms of the Aladdin Bazaar Settlement Agreement and this Order and to
adjudge any disputes, claims or actions that may arise in connection with the
implementation of the transactions contemplated thereby or hereby.
3
GORDON & SILVER, LTD.
ATTORNEYS AT LAW
NINTH FLOOR
3906 HOWARD HUGHES PKWY
LAS VEGAS, NEVADA 89109
(702) 796-5555
5. This Order shall be effective and enforceable immediately upon
entry. This Order is a final, appealable order. This Order shall be binding upon
and inure to the benefit of Debtor, Aladdin Bazaar, the other parties to the
Aladdin Bazaar Settlement Agreement and all other creditors and parties in
interest.
DATED this 5 day of August, 2003
----------------------------------------
UNITED STATES BANKRUPTCY JUDGE
Prepared and Submitted by
GORDON & SILVER, LTD.
By:
-------------------------------
WILLIAM M. NOALL, ESQ.
Nevada Bar No, 3549
KATHRYN GRAITGE NOALL, ESQ.
Nevada Bar No. 5415
3960 Howard Hughes Parkway, 9th Floor
Las Vegas, Nevada 89109
Telephone: (702) 796-5555
Facsimile: (702) 369-2666
Attorneys for Debtor
4
GORDON & SILVER, LTD.
ATTORNEYS AT LAW
NINTH FLOOR
3906 HOWARD HUGHES PKWY
LAS VEGAS, NEVADA 89109
(702) 796-5555
EXHIBIT 1
TH BAZAAR CENTERS INC.
VIA FACSIMILE AND
U.S. MAIL
212.371.7497
June 20,2003
CONFIDENTIAL SETTLEMENT DOCUMENT
OpBiz, LLC
c/o Bay Harbour Management LC
885 Third Avenue, 34th Floor
New York, NY 10022
Attention: Douglas P. Teitelbaum
Managing Principal
Re: DESERT PASSAGE(R): Aladdin Resort and Casino - OpBiz
Dear Doug:
This letter is to document our legally binding agreement ("Agreement")
between and among: (i) OpBiz, LLC, a Nevada limited liability company ('OpBiz"),
(ii) Aladdin Bazaar, LLC, a Delaware limited liability company ("Bazaar"), (iii)
the "Steering Committee" (consisting of Van Kampen Funds, The Bank of Nova
Scotia, Highland Capital and PPM America), for the Lenders (collectively, the
"Lenders") pursuant to that certain Credit Agreement dated as of February
26,1998, with The Bank of Nova Scotia, as administrative agent, Merrill Lynch
Capital Corporation, as syndication agent and CIBC Oppenheimer Corp., as
documentation agent ("Credit Agreement"), and Aladdin Gaming, LLC ("Gaming"), as
borrower, (iv) General Electric Capital Corporation ("GE Capital"), for itself
only, and (v) by Gaming itself, all of which parties shall indicate their
respective agreement to the terms hereof applicable to them by counter signing a
copy of this letter as indicated below, concerning OpBiz's plans to
purchase/redevelop ("Transaction") the Aladdin Resort and Casino (collectively,
"Hotel"). The parties understand and acknowledge that the agreement of Gaming is
conditioned and contingent upon approval by the United States Bankruptcy Court
for the District of Nevada, Southern Division ("Bankruptcy Court") in Gaming's
Chapter 11 case ("Chapter 11 Case").
Please note that this Agreement, and all of our discussions we have had
to date, continue to be strictly confidential in accordance with our
confidentiality agreement dated December 11, 2002. Notwithstanding that fact,
once this Agreement has been fully executed by all parties, then the existence,
terms and conditions of this Agreement may be disclosed by OpBiz in connection
with any offer or bid made by OpBiz in connection with the proposed Transaction
and any related proceedings in the Chapter 11 Case.
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 2
The material agreements concerning OpBiz's Transaction are as follows:
I. CONCESSIONS AND AGREEMENTS REQUESTED BY OPBIZ.
- Approval of Timeshare Development. The Construction,
Operation and Reciprocal Easement Agreement ("REA"),
by and between Gaming and Bazaar (to be assumed by
OpBiz), will be modified to permit OpBiz to develop,
construct and operate, or cause to be developed,
constructed and operated, a condominium/timeshare
project containing up to 800 units (the "Timeshare
Project") on the "Aladdin Music Site" (as defined in
the REA). Bazaar acknowledges that OpBiz intends to
develop, construct and operate the Timeshare Project
on the Aladdin Music Site instead of a music hotel
and related improvements as contemplated by the REA,
and that the REA will be modified to reflect such a
change in plans and the other matters set forth in
this Agreement. Bazaar expressly agrees and
acknowledges that OpBiz or certain of its affiliates
intend to contract with one or more third parties to
own, develop, construct, operate and market the
Timeshare Project and to sell timeshare units (such
third parties, or, if OpBiz is the timeshare
developer, OpBiz, collectively, the "TS Developer").
As of the date of this Agreement, OpBiz intends that
one or more affiliates of Starwood Vacation
Ownership, Inc. ("SVO"), including Westin SVO Nevada,
LLC, will be the TS Developer, and Bazaar hereby
consents to such affiliates of SVO, including Westin
SVO Nevada, LLC, as the TS Developer. Bazaar will
continue to have the right to reasonably approve the
TS Developer's plans and specifications for the
construction and development of the timeshare project
which do not involve physical changes to the Bazaar
Tract to the extent any approval is required under
the REA, (but Bazaar shall not be entitled to require
any future payments for such approvals, construction
delays or similar issues). TS Developer will pay
and/or reimburse Bazaar for all reasonable third
party costs respecting architectural plan review and
the construction issues relating to the
development/operation of the timeshare parcel to the
extent related to the exercise of Bazaar's approval
rights with respect thereto under the REA. If the TS
Developer determines that it needs reserve/exclusive
parking in connection with the timeshare development,
TS Developer will have the right to obtain such
designated parking spaces in the parking garage in an
area and number to be reasonably determined by Bazaar
and the TS Developer in exchange for reasonable
compensation to Bazaar for such designated parking
spaces. In addition, the timeshare project will have
reasonable rights to conduct valet operations in the
parking garage at the TS Developer's sole expense.
Bazaar will have the right to reasonably approve the
staging and construction schedule for the Timeshare
Project in order to assure that such schedule and
Mr, Douglas P. Teitelbaum
June 20,2003
Page 3
construction staging is designed to the extent
commercially practicable to mitigate interruption to
Bazaar's business. In all events, the timeshare
construction project shall be completed not later
than the date required by OpBiz's lenders.
- Change in Theme. Bazaar approves OpBiz's proposed
change in theme of the Hotel to a Planet Hollywood
Hotel & Casino, as conceptually described on Exhibit
A attached hereto, including design elements,
signage, site improvements and lighting having a look
and feel similar in nature to that depicted on
Exhibit A attached hereto (but not necessarily the
same color, configuration or scale), subject to
Bazaar's continuing right to reasonably approve plans
and physical changes to the Hotel to the extent such
approval is required under the REA (but Bazaar shall
not be entitled to require any future payments for
such approvals except as expressly provided for in
this Agreement). The REA will be amended to permit
OpBiz's change in theme as described above, and
similarly shall permit a change in theme of Desert
Passage, if elected by Bazaar; provided that nothing
in this Agreement shall be interpreted to grant any
rights to Bazaar in respect of the "Planet Hollywood"
name, brand or memorabilia to be licensed by OpBiz in
connection with the retheming of the Hotel, except
that Bazaar in its sole discretion may elect to
include the "Planet Hollywood" name as a tag or
locator line in Bazaar's name (e.g., "Desert Passage
[or other name selected by Bazaar that does not
include the "Planet Hollywood" name] at Planet
Hollywood... [Resort and Casino]"). In all events,
the Hotel construction project shall be completed
within the time period required by OpBiz's lenders.
OpBiz will pay and/or reimburse Bazaar for all
reasonable third party costs respecting architectural
plan review and construction issues relating to the
Hotel construction to the extent related to the
exercise by Bazaar of its approval rights with
respect thereto under the REA. Bazaar shall have
reasonable approval rights with respect to
construction phasing within the time periods required
under OpBiz's Credit Agreement provided that such
approvals shall be no more onerous than the
requirement of OpBiz's Credit Agreement.
- Change of Name of Hotel. The REA will be amended to
permit OpBiz's proposed name change of the Hotel to
"Planet Hollywood Hotel and Casino" (or similar
wording). Similarly, the REA will permit Bazaar to
change the name of Desert Passage, if desired by
Bazaar, provided that nothing in this Agreement shall
be interpreted to grant any rights to Bazaar in
respect of the "Planet Hollywood" name, brand or
memorabilia to be licensed by OpBiz in connection
with the retheming of the Hotel/Casino, except that
Bazaar in its sole discretion may elect to include
the "Planet Hollywood" name as a tag or locator line
in Bazaar's name (e.g., "Desert Passage [or other
name selected by
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 4
Bazaar that does not include the "Planet Hollywood"
name] at Planet Hollywood ... [Resort and Casino]").
- Approval of Hotel Operator. Bazaar acknowledges that
OpBiz intends to market and operate the Hotel using
the "Sheraton" brand name, and that OpBiz has entered
into a Management Agreement with Sheraton Operating
Corporation ("Sheraton") for the management and
operation of the Hotel. Bazaar hereby consents to the
management of the Hotel by Sheraton and to the
operation of the Hotel using the "Sheraton" brand
name.
- Changes to Las Vegas Boulevard. Bazaar will
reasonably approve OpBiz's proposed changes to Las
Vegas Boulevard pursuant to plans and drawings to be
submitted to Bazaar. Physical changes to the Bazaar
tract shall continue to be subject to Bazaar's
approval as provided in the REA. If requested by
OpBiz, Bazaar will consent to OpBiz's proposal to
close the south entrance of the casino to Las Vegas
Boulevard. OpBiz will pay and/or reimburse Bazaar for
all reasonable, out-of-pocket third party costs
respecting architectural plan review and construction
issues relating to the Las Vegas Boulevard changes to
the extent related to the exercise by Bazaar of its
approval rights with respect thereto under the REA.
Bazaar shall have reasonable approval rights with
respect to construction phasing within the time
periods required under OpBiz's Credit Agreement
provided that such approvals shall be no more onerous
than the requirements of OpBiz's Credit Agreement.
- Lease of Bazaar Space. OpBiz shall lease from Bazaar
the spaces identified as Bazaar Suite Id No. G-025,
consisting of approximately 14,287 square feet (the
"Ripley Space") and the second level adjacent space
(consisting of approximately 4,900 square feet, and
together with the Ripley Space, the "Leased Space")
on the following terms:
- Rent: $700,000/yr., gross, payable in equal
monthly installments of $58,333.33 per
month, subject to annual CPI adjustment
commencing on the first rent payment
anniversary and annually thereafter.
- Rent Commencement: Rent payments shall
commence on September 1, 2004.
- Term/Renewal Options: Initial term of the
Lease will commence on the closing date of
OpBiz's purchase of the Hotel and continue
for an initial ten (10) year term. Tenant
shall have two ten-year renewal options in
each case at the then adjusted rent subject
to continuing annual CPI adjustment through
each renewal term.
Mr. Douglas P, Teitelbaum
June 20, 2003
Page 5
- Use-Alterations: Bazaar acknowledges that
OpBiz contemplates demolishing the existing
improvements located in the Leased Premises
and using the Leased Premises to permit the
expansion of the existing hotel and casino
spaces within the Hotel and other uses
ancillary thereto and Bazaar hereby consents
to such use subject to Bazaar retaining the
right to reasonably approve of the
demolition plans to the extent such
demolition affects spaces outside of the
Leased Premises, which consent shall not be
unreasonably withheld. In addition, OpBiz,
shall have the right to create a street
entrance to the Leased Premises and Hotel in
connection with the foregoing.
- TI/Security Deposit. No payment of
construction allowance or similar landlord
subsidy shall be payable to OpBiz, and OpBiz
shall not be required to pay a security
deposit or post a letter of credit.
- Hotel Valet. Bazaar will, when requested by OpBiz,
approve OpBiz's conversion of the Hotel's exclusive
valet parking located under the Hotel to self parking
for guests of the Hotel and will permit the Hotel's
valet program to be located in the parking structure
subject to the parties reasonable review and approval
of the same. OpBiz will pay/and or reimburse Bazaar
for all reasonable third-party parking consultant
costs respecting a review of the Hotel's valet
program.
- Bazaar's Withdrawal of Objections to OpBiz's Bid to
Purchase Hotel. Bazaar will withdraw its pending
objection to OpBiz's proposal to purchase the Hotel
in the Chapter 11 Case and shall make no further or
new objection thereto provided that there is no
default under this Agreement by any party other than
Bazaar. Effective on the "Transfer Date" (as defined
in Section II below) Bazaar will withdraw any
objections to Gaming's disclosure statement or plan
of reorganization, provided that such disclosure
statement or plan of reorganization is consistent
with the provisions of this Agreement.
- Global Settlement. Bazaar, Gaming, OpBiz and the
Lenders, effective as of the "Transfer Date" (as
defined in Section II below), agree to a global
settlement and "walkway" of all claims and issues
which exist between Bazaar and Gaming as of the
Transfer Date (as defined in Section II below) and
any continuing defaults relating thereto, including,
but not limited to, the claims currently subject to
the pending arbitration action between Gaming and
Bazaar, and any appeals of the parking agreement
disputes and all other disputes and alleged defaults
under the REA, without the payment of any additional
consideration not expressly provided for in this
Agreement. Effective as of the "Transfer Date" (as
defined in Section II below) Bazaar shall withdraw
all proofs of claim, release claims for cure damages
and
Mr. Douglas P. Teitelbaum
June 20, 2003
Pages 6
adequate protection, dismiss the appeal of the
Bankruptcy Court decision regarding the parking
agreement, and shall not share in the Creditors Trust
to be created for the benefit of Gaming's unsecured
creditors pursuant to that certain Settlement
Agreement between the Steering Committee, the
official committee of unsecured creditors (the
"Committee"), Gaming and GE Capital. The global
settlement shall resolve any and all claims by or on
behalf of Gaming and/or the Committee, including, but
not limited to, the Committee's alleged causes of
action to avoid any transfers to Bazaar, including
delivery of the fee title to the real estate
underlying the Desert passage Mall and the grant of a
lease to Bazaar on allegedly "below market" terms.
This global settlement shall be effective as of the
Transfer Date and shall include mutual releases of
all existing known or unknown claims and covenants
not to sue, other than enforcement of the terms of
this Agreement and ongoing payment obligations (which
are not currently in default) under the parking
agreement and the REA, Gaming shall promptly bring a
motion to approve this Agreement (and any further
more formal settlement agreement) pursuant to Rule
9019(a) of the Federal Rules of Bankruptcy Procedure.
- Sale of Desert Passage/Hotel. Bazaar, as to Desert
Passage, and Gaming and the Lenders as to the Hotel,
will ensure that any party that succeeds to all or a
portion of each party's respective interest in the
Desert Passage or Hotel, as the case may be,
(directly or indirectly and whether by sale, merger,
consolidation, reorganization, recapitalization or
similar transaction) agrees to be bound by the terms
of this Agreement and acknowledges its obligations to
the other party (OpBiz and the Lenders as to a sale
of Desert Passage and Bazaar as to a sale of the
Hotel) in writing at the time of or prior to any such
transaction.
II. BAZAAR'S SETTLEMENT.
As the sole and exclusive consideration to Bazaar (other than such
additional consideration expressly set forth in this Agreement), without which
Bazaar would not have executed this Agreement, the parties agree to the
following:
- Cash Flow Note. On the "Transfer Date" as hereinafter
defined, Gaming will cancel the existing subordinated
non-negotiable promissory note (together with any
accrued but unpaid payments) between Bazaar, as
maker, and Gaming, as payee, dated November 20, 2000
in exchange for, among other consideration,
settlement of Bazaar's claims in the existing
arbitration between Bazaar and Gaming. No further
payments shall be required by Bazaar pursuant to such
note as of the date hereof.
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 7
- Aladdin Bazaar Holdings. Reference is made to that
certain Assignment Agreement (the "Trust Assignment")
dated September 30, 2002 between BNY Asset Solutions
LLC on behalf of the Lenders and Aladdin Bazaar
Holdings, LLC, the Trust under Article Sixth U/W/O
Sigmund Sommer and certain affiliates thereof (the
"Sommer Trust Entities") pursuant to which Assignment
Agreement Aladdin Bazaar Holdings, LLC transferred to
the Lenders its right to receive the "Minimum
Distribution" and "Additional Distributions," as used
or defined in that certain Settlement Agreement
("Settlement Agreement"), dated September 30, 2002,
between the Lenders (other than BFC Capital, Inc.)
and the Sommer Trust Entities (all of such right,
title and interests held by the Lenders in the
Minimum Distribution, the Additional Distributions
and all rights arising directly or indirectly out of
the Trust Assignment are hereinafter referred to as
"Lender Bazaar Interest"). On the Transfer Date the
Steering Committee (which Steering Committee Lenders
hold not less than 60% of the Lender Bazaar Interest)
will transfer their respective Lender Bazaar Interest
to an affiliate of Trizec (to be designated by
Trizec), free and clear of all liens and claims, as
is and without warranties or representations (except
as hereinafter expressly set forth), in exchange for
among other consideration settlement of Bazaar's
claims arising in the existing arbitration between
Bazaar and Gaming and as further described in the
paragraph captioned "Global Settlement." In addition,
the Steering Committee will use its best efforts to
cause the other Lenders to do the same. Bazaar will
provide the Steering Committee with an accounting of
any "Minimum Distribution" or "Additional
Distribution" and other payments received in respect
of such assigned interest. In the event that Lenders
holding more than 7.5%, in the aggregate of the
Lender Bazaar Interests (the "Maximum Retained Lender
Bazaar Interest") do not agree on or before August
13, 2003 to transfer their Lender Bazaar Interest to
Bazaar, then Bazaar shall have the right to be
exercised no later than thirty days after such date,
as described below, to elect, in its sole and
absolute discretion, to have this entire Agreement
automatically deemed to be null and void ab initio
and of no further force and effect.
The "Transfer Date" shall mean the earlier of (i) the
date of entry of the Bankruptcy Court order
confirming Gaming's Bankruptcy plan of
reorganization, and the expiration of any applicable
appeal period, or (ii) the entry of a Bankruptcy
Court order approving the terms of this Agreement,
and the expiration of any applicable appeal period,
In the event the Purchase and Sale Agreement (the
"Purchase Agreement"), dated April 23, 2003, between
OpBiz and Gaming is terminated or the purchase does
not close for any reason, Bazaar hereby agrees and
consents to any proposed re-theming and name change
of the Hotel, and successor hotel
Mr, Douglas P. Teitelbaum
June 20, 2003
Pages 8
operator, approved by the Lenders in connection with
the sale of the Hotel by Gaming to another buyer (or
sale of the Hotel by the Lenders if the Lenders
succeed to Gaming's ownership interest in the Hotel).
Effective immediately upon the execution of this
Agreement and continuing thereafter until the
Transfer Date, Bazaar and Gaming agree to forbear
from prosecuting or taking any further action in
connection with the pending arbitration and all other
actions and disputes between the parties, without
waiver of any rights or remedies, other than the
appeal of the Parking Agreement order or any other
matter which may be "jurisdictional" in nature and
required in order to preserve the parties respective
rights in the event that the Transfer Date does not
occur. The forbearance provided in the preceding
sentence shall be effective immediately upon the
execution of this Agreement. The arbitration, appeal
and all other actions between the parties shall be
dismissed with prejudice concurrently upon the
Transfer Date with the assignment to Bazaar of the
Cash Flow Note and the Lender Bazaar Interest.
If the Purchase Agreement is terminated or the
purchase does not close for any reason, Bazaar and
the other parties to this Agreement agree to execute
an agreement substantially similar to the provisions
of this Agreement with any other purchaser of the
Hotel approved by the Lenders.
The transfer of the Lender Bazaar Interest to Bazaar
shall not limit, impair or otherwise affect any
rights or remedies of the Lenders or Gaming against
the Sommer Trust Entities or London Clubs
International PLC, including, without limitation, the
Bazaar Minimum Distribution Guarantee or the Security
Agreement provided under the Settlement Agreement. In
connection with the transfer of the Lender Bazaar
Interests, the Lenders shall warrant only that the
Lenders (i) have the right to receive the Minimum
Distribution under the Trust Assignment, and under
the Trust Assignment the Sommer Trust Entities are
contractually obligated to pay over to the Lenders
the Additional Distributions immediately following
receipt thereof, (ii) have not transferred the Lender
Bazaar Interest to any other party, and (iii) have
not encumbered their interest in the Lender Bazaar
Interests.
- Gaming Liens on Bazaar Tract. Gaming hereby agrees
(subject to Bankruptcy Court approval) to (i)
continue to defend/contest all Gaming liens on the
Bazaar tract, including, but not limited to, the
Korte-Bellew mechanic's lien and shall pursue the
current litigation at its sole cost to its conclusion
(including any and all appeals) and further agrees
that any settlement will include the full release of
such lien (including any and all subcontractor liens)
from Bazaar's tract, and (ii) Bazaar and Gaming agree
to provide reasonable cooperation and assistance to
the other on all mechanics' lien litigation,
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 9
including, but not limited to, providing third-party
reports respecting the Flippens Trenching mechanic's
lien.
Except as otherwise provided in this Agreement, in no event shall
Bazaar be entitled to receive any further consideration for the exercise by
OpBiz of its rights granted hereunder.
Notwithstanding anything to the contrary in this Agreement, in the
event (i) a court should determine that any provision set forth in this Article
II is void or otherwise unenforceable, (ii) Gaming and OpBiz notwithstanding
their best efforts, are not able to obtain final approval by the Bankruptcy
Court (and expiration of any applicable appeal period) of this Agreement on or
before August 31, 2003, or (iii) Lenders holding more than the Maximum Retained
Lender Bazaar Interest fail to transfer their Lender Bazaar Interest to Bazaar
on the Transfer Date as described above, or Gaming fails to cancel the cash flow
note on the Transfer Date, then in the sole and absolute discretion of Bazaar,
Bazaar can elect to have this entire Agreement automatically deemed to be null
and void ab initio and of no further force and effect.
III. OPERATIONAL ISSUES.
- Gaming, OpBiz and Bazaar agree to work together to
create a mutually beneficial operating environment.
OpBiz and Bazaar agree to work through these issues
together with overall planning and customer flow
issues to reasonably accomplish the goal of
re-theming the Hotel and improving the traffic flow
between the Hotel and the Desert Passage. Bazaar and
OpBiz agree to work together in an effort to find
mutually beneficial marketing opportunities,
including but not limited to the following: OpBiz
(from and after the closing date of OpBiz's purchase
of the Hotel) agrees to provide to Bazaar at no
charge in-room advertising on in-room promotional
materials, Bazaar's restaurants listed in the in-room
dining guide, as well as promotions designated on the
Hotel's in-room TV programming.
IV. BANKRUPTCY/SETTLEMENT DISCUSSIONS.
- As you are aware, Bazaar has filed with the
bankruptcy court certain objections to the proposed
sale of the Hotel and may raise additional objections
prior to the sale hearing (collectively, the
"Objections"). Until this Agreement has been fully
executed by all parties and delivered to Bazaar,
Bazaar expressly reserves all of its Objections and
nothing contained in this letter or said during our
discussions should be interpreted in any way so as to
constitute a waiver of any Objections or an admission
that any of the Objections is without merit. Quite to
the contrary, please be advised that Bazaar fully
intends to continue to assert the Objections and will
take all steps to preserve the Objections unless and
until this Agreement has been fully executed by all
parties and delivered to Bazaar. In that regard, this
letter and
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 10
our discussions constitute settlement discussions
and, as such, they are inadmissible under Rule 408 of
the Federal Rules of Evidence in any proceeding
whatsoever, including in connection with Gaming's
sale motion, unless and until this Agreement has been
fully executed by all parties and delivered to
Bazaar.
V. FURTHER ASSURANCES; PARTIES INTENDING TO NOW BE FULLY BOUND.
- Further Assurances. Each party to this Agreement
agrees that it will, at any time and from time to
time following the date hereof, do, execute,
acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered, all such
further acts, deeds, assignments, conveyances, and
assurances as may reasonably be required for the
better implementation of the agreements set forth in
this Agreement including, without limitation,
entering into such amendments to the REA and any
other recorded documents in recordable form
incorporating the provisions of this Agreement or as
shall be reasonably requested by a party, and that
such REA amendment and any other recorded documents
shall be entered into and recorded on the Transfer
Date or as soon as practicable thereafter.
Notwithstanding the foregoing, each party to this
Agreement acknowledges and agrees that each party
intends to be fully and legally bound by the
agreements set forth herein.
- No Presumption. Although the provisions of this
Agreement were drafted primarily by Bazaar, the
parties agree that such fact shall not create any
presumption, construction or implication favoring the
position of either OpBiz or Bazaar. The parties
hereto represent that each of them has been advised
by counsel as to the contents of this Agreement. The
parties hereto hereby agree that money damages would
not be a sufficient remedy for a breach by either
party of this Agreement, and hereby consent to
enforcement of the terms hereof by specific
performance.
- Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall constitute
an original, and all of which, taken together, shall
constitute one and the same agreement binding upon
the parties hereto. In addition, properly executed
authorized signatures may be transmitted via
facsimile and upon receipt, shall constitute an
original signature.
- Jurisdiction; Attorneys' Fees. Each party hereby
consents to the jurisdiction of the State and Federal
courts sitting in the County of Las Vegas (except
that actions or claims by or against Lenders or
Gaming shall be brought in the Gaming bankruptcy
court), applying Nevada law in any action or claim
arising out of this Agreement (except where
arbitration is otherwise required
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 11
or provided under any applicable agreement), and the
prevailing party in such proceeding shall be entitled
to recover reasonable attorneys' fees and costs.
- Severability. If any provision of this Agreement
shall be determined to be void by any court of
competent jurisdiction, then such determination shall
not affect any other provision of this Agreement, and
all such other provisions shall remain in full force
and effect. It is the intention of the parties hereto
that, if any provision of this Agreement is capable
of two constructions, one of which would render the
provision void and the other of which would render
the provision valid, then the provision shall have
the meaning that renders it valid.
- Assignment. This Agreement may not be assigned by a
party hereto without the prior written consent of the
other party hereto; provided that (i) OpBiz may
assign its rights and obligations hereunder to an
affiliate of, or successor entity to, OpBiz that is
formed to carry out the Transaction, and (ii) Bazaar
may assign its rights and obligations hereunder to an
affiliate of, or successor entity to, Bazaar that is
formed to acquire Desert Passage.
Please sign the signature block below evidencing your agreement to the
foregoing terms and thereafter, return the same to me. In the meantime, please
free to call me directly at 858-546-3211 if you have any questions or additional
issues which you would like to discuss.
Sincerely
ALADDIN BAZAAR, LLC, a Delaware
limited liability company
By: TH Bazaar Centers Inc., a Delaware
Corporation, its managing member
By: ________________________________
Wendy M. Godoy,
Senior Vice President and
Chief Financial Officer
WMG:lad
Enclosures
pc: Casey Wold
Michael Escalante
Mr. Douglas P. Teitelbaum
June 20, 2003
Page 12
Agreed and Accepted this
____day of June, 2003.
OpBiz, LLC, a
Nevada limited liability company
By:
-----------------------
Name: ROBERT EARL
Title: CO-MEMBER
THE STEERING COMMITTEE FOR GAMING'S LENDERS:
BY:
-------------------------------
Howard Tiffen, Chairman
"GE Capital"
By: GENERAL ELECTRIC CAPITAL CORPORATION
By:
---------------------------
Name: CARL PETERSON
TITLE: SENIOR RISK ANALYST
Agreed, subject to approval of the Bankruptcy Court:
"Gaming"
By: ALADDIN GAMING LLC
By:
-------------------------------
Name: William Jimmins
Title CEO Aladdin gaming, LLC
[PICTURE OF LAS VEGAS GOES HOLLYWOOD]
EXHIBIT A
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[PICTURE OF PLANET HOLLYWOOD BUILDING]
EXHIBIT A
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